Kansas chasing ‘transformative’ regional hydrogen hub

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A private-public partnership is looking to help Kansas take a historic step toward expanding the clean energy economy with a regional hub for producing hydrogen that would reduce the country’s dependence on fossil fuels.

A trade association that promotes the development of renewable energy is working with the Kansas Geological Survey and the University of Kansas to land a $1.2 billion federal grant for a regional hydrogen hub.

The U.S. Department of Energy is seeking proposals for a $7 billion program that is intended to help reach President Joe Biden’s goal of a 100% clean electrical grid by 2035 and net-zero carbon emissions by 2050.

The agency is planning to fund six to 10 regional clean hydrogen hubs across the country that are intended to help states benefit from clean energy investments, good-paying jobs and energy security.

“The hydrogen hub project is a potentially transformative opportunity for the state because it has the potential to create a whole new sector of green technology and a lot of high-paying jobs in regions of the state that may not have had those opportunities before,” said Lt. Gov. David Toland.

The Biden administration’s vision is to make the hubs the first step toward creating a national network of clean hydrogen producers and customers that could open the door to a new clean hydrogen economy.

Hydrogen has been used in industry for more than a century and now there’s an effort under way nationally to produce more of it more cleanly.

It’s been compared to a Swiss Army knife because it can be used in many different ways.

The idea was born out of the Infrastructure Investment and Jobs Act that allocated $62 billion for the U.S. Department of Energy, including $9.5 billion for production of clean hydrogen.

The money sought by the Kansas coalition would create a “hydrogen hub,” a network of clean hydrogen producers, potential clean hydrogen consumers, and related infrastructure connecting the two in close proximity to each other in a region.

The goal is to replace the use of fossil fuels in some sectors of the economy and open the door to what is known as the hydrogen economy.

“As the U.S. looks to reduce greenhouse gas emissions, there are sectors that are hard to replace fossil fuels directly with wind and solar power,” said Joseph Majkut, director of the Energy Security and Climate Change Program for the Center for Strategic and International Studies.

“It turns out that there are multiple ways to produce hydrogen, which can be an effective energy storage medium and energy carrier without producing a lot of greenhouse gas emissions,” Majkut said.

The goal of the program, he said, is to produce “clean hydrogen,” which can come from a fossil-fuel base where the carbon emissions are captured and stored or from electricity generated from something such as wind or solar power.

“What this program does is provide funding so that hydrogen production can be as clean as possible,” he said.

Enter Kansas and its vast capacity to produce wind energy that could be used to produce hydrogen as a new energy source.

The coalition, which includes the Advanced Power Alliance, is seeking $1.2 billion in federal funding that would be matched by public and private investment.

The goal would be to produce clean hydrogen that powers rail and truck transportation, produces ammonia for fertilizer for farmers and can be used in making cement, steel or other types of industrial products.

The coalition believes that Kansas has a leg up in the race for the funding as it competes against nearly 80 other projects that are seeking a slice of the $7 billion in funding.

“Kansas has all of the competitive advantages that make us perfect for the hydrogen economy in our state,” said Kimberly Svaty, public policy director for the Advanced Power Alliance.

“The hydrogen economy is taking the resources that we already have and putting them to additional use, which creates more jobs and investment in our state,” Svaty said.

She said a regional hydrogen hub could lower costs for farmers who need fertilizer and produce less costly energy resources for manufacturing hydrogen-based products and for heavy transportation, such as rail and trucking.

In Kansas, the plan would be to use wind, nuclear and solar power to produce hydrogen at a low cost that would benefit the Kansas economy.

“We have an abundance of clean energy that we can produce hydrogen from,” Svaty said.

The vision for the hub is to create a “robust hydrogen network in Kansas that supports a wide range of economic activity and acts as a central hub for the future national hydrogen infrastructure,” the coalition said in a paper explaining the idea.

“We see a future where clean transportation fuels, chemical manufacturing, and energy sources improve life for all Americans — one where clean hydrogen can be produced and stored in the Great Plains as part of a national hydrogen network,” the group said.

The U.S. Department of Energy received 79 so-called concept papers from across the country laying out plans for a hydrogen hub.

Various coalitions from across the county submitted papers seeking about $60 billion in federal funding, substantially more than the $7 billion available.

Additionally, organizers of those applications propose an additional $157 billion in capital investment.

The agency has already started winnowing down the field by telling project organizers whether they were “encouraged” or “discouraged” from moving ahead with the application.

The Kansas coalition was one of 33 applicants that was encouraged to move ahead with its application, which is due April 7.

A total of $33.5 billion in proposals were encouraged to move forward, while $27.8 billion were discouraged.

However, the line of demarcation between encouraged and discouraged doesn’t preclude a coalition from submitting a full application.

Projects were discouraged for many reasons, but one of the most common reasons was that they focused on only one element of the hub.

Projects were also discouraged that would depend on technologies unready for commercial scale demonstrations and had components that were not suited to help catalyze a national clean hydrogen network.

The projects ultimately will be evaluated in part on the extent to which they reduce emissions of greenhouse gases compared to current technologies.

A goal of the Kansas project is to produce carbon-free hydrogen and ammonia for regional use.

Organizers say the Kansas hub will prevent the release of more than 1.4 million tons of carbon dioxide annually from an equal volume of ammonia produced from steam methane.

They believe it can potentially reduce carbon emissions by nearly 8 million tons each year.

While the Department of Energy won’t release any details about competing proposals submitted for consideration, there have already been public reports revealing who’s seeking the funding.

The applications come from a cross-section of states with Democratic and Republican governors, including neighboring Oklahoma and Colorado.

Last year, Arkansas, Louisiana and Oklahoma formed a partnership to seek money for a hydrogen hub.

It was recently encouraged by the Department of Energy to move ahead.

Colorado, New Mexico, Utah and Wyoming also have agreed to work together — teaming with academic, research, industry and community partners — to develop a regional clean hydrogen hub.

The four-state partnership also recently received word that it was encouraged to move ahead.

Meanwhile, New York has joined with Connecticut, Massachusetts and New Jersey along with corporations and universities to go after money for a hydrogen hub.

“Expanding the hydrogen market is critical to New York’s aggressive pursuit of clean-energy alternatives that will supercharge our economy and advance our climate goals,” Democratic New York Gov. Kathy Hochul said last year.

“Coalitions like this one serve as a model to the nation on the collaboration that is required to meet this moment and bring us closer to a carbon-neutral future,” Hochul said in a statement.

Republican Oklahoma Gov. Kevin Stitt, who lost out on Panasonic to Kansas last year, said he wants his state to become the “nation’s heartland for hydrogen.”

“Oklahoma believes in a more-of-everything energy approach,” Stitt said in a statement.

“By leaning into the hydrogen future with our partners, we can further diversify our nation’s energy portfolio and start meeting American demand with American energy,” Stitt said.

Meanwhile, a coalition of Southeastern utilities from six states including Duke Energy, Louisville Gas & Electric Company, Georgia Power and the Tennessee Valley Authority are seeking funding for a regional hydrogen hub as well.

In Houston, a coalition of organizations and companies — including Amazon, Chevron, ExxonMobil, Shell and the University of Texas — are seeking to accelerate the development of hydrogen energy by landing money for a regional hub.

The petrochemical industry on the Texas Gulf Coast produces about a third of the hydrogen used in the United States and more than half of the country’s pipelines committed for moving hyrdogren are located in the region.

The hubs program funded with the infrastructure bill is just a start and can’t rely on long-term support from the Department of Energy, said Majkut, from the Center for Strategic and International Studies.

The hub model, he said, connects clean hydrogen producers to consumers and its productive use in the economy.

“If you’re ever going to have clean hydrogen play a big part of the U.S. economy, that’s not going to be by long-lasting DOE support. That’s not what this program is for,” he said.

“It’s meant to create connections between firms, universities, public-private partnerships that will allow this economy to grow over time by linking producers and consumers.”

Majkut notes at that at some point the DOE funding will run out although it’s possible Congress would extend the program.

He notes that there are a variety of tax credits available for hydrogen production that complements the money allocated in the infrastructure bill.

“Administered well, there is great potential in the U.S. making key investments in clean hydrogen,” Majkut said.

“We know that it is going to be very helpful for reducing greenhouse emissions over the long term,” he said.

“There are all sorts of strategic reasons why we want to get involved in producing the technology in the business models that will help clean energy grow,” he said.

Suzanne Baker, stakeholder engagement specialist for H2Hubs at the Department of Energy, said the program was never intended to fund the hubs forever.

“The goal is not subsidize industry. The goal is to get industry to a point where the technology is mature,” Baker said in an interview.

Regardless, Majkut said the history of regional economic development and innovation policy is mixed in the United States.

“How this program gets administered by the DOE, how it earns buy in from states and from communities in which it is operating are all going to be critically important to its long-term success,” he said.