Aboitiz receives another award for financing for its Tiwi and Makban geothermal plant

Inflation Reduction Act Energy Credits help households electrify with tax credits and rebates for heat pumps, EVs, rooftop solar, battery storage, and efficiency upgrades, cutting utility bills, reducing carbon emissions, and accelerating home electrification nationwide.

Key Points

Federal incentives offering tax credits and rebates for heat pumps, EVs, solar, and efficiency to cut emissions.

✅ 30% rooftop solar and storage credit; $2,000 annual cap for heat pumps

✅ Up to $7,500 EV tax credit; price, income, and assembly rules apply

✅ Low-income rebates and discounts available via states starting mid-2023

Earlier this year, Congress passed the biggest climate bill in history — cloaked under the name the “Inflation Reduction Act,” a historic climate deal by any measure.

Starting in the new year, the bill will offer households thousands of dollars to transition over from fossil-fuel burning heaters, stoves and cars to cleaner versions as renewable electricity accelerates. On Jan. 1, middle-income households will be able to access over a half-dozen tax credits for electric stoves, cars, rooftop solar and more. And starting sometime in mid-2023, lower-income households will be able to get upfront discounts on some of those same appliances — without having to wait to file their taxes to get the cash back. This handy online tool shows what you might be eligible for, depending on your Zip code and income.

But which credits should Americans focus on — and which are best for the climate? Here’s a guide to the top climate-friendly benefits of the Inflation Reduction Act, and how to access them.

Heat pumps — the best choice for decarbonizing at home

Tax credit available on Jan. 1: 30 percent of the cost, up to $2,000

Income limit: None

Ah, heat pumps — one of the most popular technologies of the transition to clean energy and to net-zero electricity systems. “Heat pump” is a bit of a misnomer for these machines, which are more like super-efficient combo air conditioning and heating systems. These appliances run on electricity and move heat, instead of creating it, and so can be three to five times more efficient than traditional gas or electrical resistance heaters.

“For a lot of people, a heat pump is going to be their biggest personal impact,” said Sage Briscoe, the federal senior policy manager at Rewiring America, a clean-energy think tank. (Heat pumps have become so iconic that Rewiring America even has a heat pump mascot.)

Heat pumps can have enormous cost and carbon savings. According to one analysis using data from the National Renewable Energy Laboratory, switching to a heat pump can save homeowners anywhere from $100 to $1,200 per year on heating bills and prevent anywhere from 1 to 8 metric tons of carbon dioxide emissions per year. For comparison, going vegan for an entire year saves about 1 metric ton of CO2 emissions.

But many consumers encounter obstacles when switching over to heat pumps. In some areas, it can be difficult to find a contractor trained and willing to install them; some homeowners report that contractors share misinformation about heat pumps, including that they don’t work in cold climates. (Modern heat pumps do work in cold climates, and can heat a home even when outdoor temperatures are down to minus-31 degrees Fahrenheit.) Briscoe recommends that homeowners look for skilled contractors who know about heat pumps and do advance research to figure out which models might work best for their home.

Electric vehicles — top choice for cutting car emissions

Tax credit available on Jan. 1: Up to $7,500 depending on the make and model of the car

Income limit: <$150,000 for single filers; <$300,000 for joint filers

If you are like the millions of Americans who don’t live in a community with ample public transit, the best way to decarbonize your transport, as New Zealand's electricity transition shows, is switching to an electric car. But electric cars can be prohibitively expensive for many Americans.

Starting Jan. 1, a new EV tax credit will offer consumers up to $7,500 off the purchase of an electric vehicle. For the first few months, Americans will get somewhere between $3,751 and $7,500 off their purchase of an EV, depending on the size of the battery in the car.

There are limitations, per the new law. The vehicles will also have to be assembled in North America, where Canada's electricity progress is notable, and cars that cost more than $55,000 aren’t eligible, nor are vans or trucks that cost more than $80,000. This week, the Internal Revenue Service provided a list of vehicles that are expected to meet the criteria starting Jan. 1.

Beginning about March, however, that $7,500 credit will be split into two parts: Consumers can get a $3,750 credit if the vehicle has a battery containing at least 40 percent critical minerals from the United States (or a country that the United States has a free-trade agreement with) and another $3,750 credit if at least 50 percent of the battery’s components were assembled and manufactured in North America. Those rules haven’t been finalized yet, so the tax credit starting on Jan. 1 is a stopgap measure until the White House has ironed out the final version.

Joe Britton, the executive director of the EV industry group Zeta, said that means there will likely be a wider group of vehicles eligible for the full tax credit in January and February than there will be later in 2023. Because of this, he recommended that potential EV owners act fast in 2023.

“I would be buying a car in the first quarter,” he said.

Rooftop solar — the best choice for generating clean energy

Tax credit available now: 30 percent of the cost of installation, no cap

Income limit: None

For those who want to generate their own clean energy, there is always rooftop solar panels. This tax credit has actually been available since the Inflation Reduction Act was signed into law in August 2022. It offers a tax credit equal to 30 percent of the cost of installing rooftop solar, with no cap. According to Rewiring America, the average 6 kilowatt solar installation costs about $19,000, making the average solar tax credit about $5,700. (The Inflation Reduction Act also includes a 30 percent tax credit for homeowners that need to upgrade their electricity panel for rooftop solar, and a 30 percent tax credit for installing battery storage to support the shift toward carbon-free electricity solutions.)

Solar panels can save homeowners tens of thousands of dollars in utility bills as extreme heat boosts electricity bills and, when combined with battery storage, can also provide a power backup in the case of a blackout or other disaster. For someone trying to move their entire home away from fossil fuels, solar panels become even more enticing: Switch everything over to electricity, and then make the electricity super cheap with the help from the sun.

For people who don’t own their own homes, there are other options as well. Renters can subscribe to a community solar project to lower their electricity bills and get indirect benefits from the tax credits.

Tips, tricks and words of caution
There are many other credits also coming out in 2023: for EV chargers (up to $1,000), a boon for expanding carbon-free electricity across the grid, heat pump water heaters (up to $2,000), and even cash for sealing up the doors and windows of your home (up to $1,200).

The most important thing to know, Briscoe said, is whether you qualify for the upfront discounts for low- and moderate-income Americans — which won’t be available until later in 2023 — or the tax credits, which will be available Jan. 1. (Try this tool.) If going the tax credit route, it’s better to spread the upgrades out across multiple years, since there is an annual limit on how many of the credits you can claim in a given year. And, she warned, it is not always going to be easy: It can be hard to find the right installers and the right information for how to make use of all the available government resources.

Related News

• Electricity Forum News

• Climate Change News

Canada Distributed Energy faces disruption as solar, smart grids, microgrids, and storage scale utility-scale renewables, challenging centralized utilities and accelerating decarbonization, grid modernization, and distributed generation across provinces like Alberta.

Key Points

Canada Distributed Energy shifts from centralized grids to local solar, wind, and storage for reliable low-carbon power.

✅ Morgan Solar and Enbridge launch Alberta Solar One, 13.7 MW.

✅ Optical films boost panel efficiency, lowering cost per watt.

✅ Strong utilities slow adoption of microgrids and smart grids.

By Nick Waddell

Disruption is coming to electricity generation but Canada has become a laggard when it comes to not just adoption of alternative energy sources but in moving to a more distributed model of electricity generation. That’s according to Mike Andrade, CEO of Morgan Solar, whose new solar project in conjunction with Enbridge has just come online in Alberta, a province known as a powerhouse for both green and fossil energy in Canada.

“There’s a lot of inertia to Canada’s electrical system and I don’t think that bodes well,” said Andrade, who spoke on BNN Bloomberg on Thursday. 

“Canada is one of the poorest places for uptake of solar, as NEB data on solar demand indicates,” Andrade said, “I believe a lot of it has to do with the fact that we have strong provincial utilities that have their mandates and their chosen technologies.”

Alberta Solar One, a 13.7 MW power facility near Lethbridge, Alberta, had its unveiling this week amid red-hot solar growth in Alberta that shows no sign of slowing. It’s a 36,500-panel farm constructed by Enbridge in a quick six-month turnaround as part of the power company’s pledge to become a carbon-free generator by 2050. Along with solar, Enbridge has made big investments in offshore and onshore wind farms in the United States, while also producing so-called green hydrogen at an Ontario plant.

Private company Morgan Solar considers the Alberta Solar One project as the first utility-scale validation of its technology, which uses optical films to redirect light onto photovoltaic cells to further power production. 

“We use an advanced modelling system and a variety of tools to design very simple optical systems that can be easily inserted into a panel,” Andrade said. “They cost less and bring down the cost per watt. It captures light that would otherwise miss the cells and so you get more power per cell area than any other commercial technology at this point.”

Like renewables in general, solar energy has been thrust into the spotlight as governments worldwide aim to make good on their climate change and emissions pledges, with analyses showing zero-emissions electricity by 2035 is possible in Canada, and convert power generation from fossil fuels to alternative sources. 

The market has paid attention, too, driving up values on renewable energy stocks across the board, including solar stocks, as provinces like Alberta explore selling renewable energy into broader markets. Last year, the Invesco Solar ETF, which tracks the MAC Global Solar Energy Index, soared 234 per cent, while Canadian companies with solar assets like Algonquin Power and Northland Power have been winners over the past few years.

Canadian cleantech companies involved in the solar power sector have also fared well, with names like UGE International (UGE International Stock Quote, Chart, News, Analyst. Financials TSXV:UGE), Aurora Solar and 5N Plus (5N Plus Stock Quote, Chart, News, Analysts, Financials TSX:VNP) having attracted investor attention of late.

Currently, part of the push in alternative energy involves the move from centralized to a more distributed picture of power generation, where solar panels, wind turbines and small modular nuclear reactors can operate close to or within sources of consumption like cities.

But Andrade says Canada has a lot of catching up to do on that front, especially as its current system seems devoted to maintaining the precedence of large, centralized power production — along with the utility companies that generate it.

“Canada is going to be left with this big, old fashioned hub and spoke model, and that’s increasingly going to be out-competed by a distributed grid, call them smart grids or micro grids,” Andrade said.

“That’s the future that solar is going to drive along with storage, and I personally don’t think Canada is prepared for it, not because we can’t do it but because regulatory and incumbency is holding us back from doing that,” he said.

“We pay our utilities, saying, ‘You invest capital and we’ll give you a fixed return on capital.’ Well, guess what? You’re going to get large, centralized capital projects which are going to get big central generation hub and spoke distribution,” Andrade said.

Ahead of the Canadian federal government’s tabling next week of its first budget in two years, many in the energy sector will be taking notes on the Liberal government’s investments in the so-called green recovery after the economic downturn, with renewable energy proponents hoping for further support, noting Alberta’s renewable energy surge could power thousands of jobs, to shift Canada’s resource sector away from fossil fuels.

By comparison, President Biden in the US recently unveiled his $2-billion infrastructure plan which put precedence on greening the country’s power grid, encouraging the adoption of electric vehicles and supporting renewable resource development, and Canadian studies suggest 2035 zero-emission power is practical and profitable as well across the national grid. 

On disruption in power generation, Andrade said there are parallels to be drawn from information technology, which has historically made a point of discarded outdated models along the way.

“I was at IBM, and they had the mainframe business and that got blown up. I also worked with Nortel and Celestica and they got blown up —and it wasn’t due to having better central hub and spoke systems. They got beat up by this distributed system,” Andrade said. 

“The same thing is going to happen here and the disruption is coming in electricity generation as well,” he said.

About The Author - Nick Waddell

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

Related News

• Electricity Forum News

• Renewable Energy News

Harbour Air Electric Seaplane completes a point-to-point test flight, showcasing electric aircraft innovation, zero-emission short-haul travel, H55 battery technology, and magniX propulsion between Vancouver and Victoria, advancing sustainable aviation and urban air mobility.

Key Points

Retrofitted DHC-2 Beaver testing zero-emission short-haul flights with H55 batteries and magniX propulsion.

✅ 74 km in 24 minutes, Vancouver to Victoria test route

✅ H55 battery pack and magniX electric motor integration

✅ Aims to certify short-haul, zero-emission commercial service

A seaplane airline in Vancouver says it has achieved a new goal in its development of an electric aircraft.

Harbour Air Seaplanes said in a release about its first electric passenger flights timeline that it completed its first direct point-to-point test flight on Wednesday by flying 74 kilometres in 24 minutes from a terminal on the Fraser River near Vancouver International Airport to a bay near Victoria International Airport.

"We're really excited about this project and what it means for us and what it means for the electric aviation revolution to be able to keep pushing that forward," said Erika Holtz, who leads the project for the company.

Harbour Air, founded in 1982, uses small propeller planes to fly commercial flights between the Lower Mainland, Seattle, Vancouver Island, the Gulf Islands and Whistler.

In the last few years it has turned its attention to becoming a leader in green urban mobility, as seen with electric ships on the B.C. coast, which would do away with the need to burn fossil fuels, a major contributor to climate change, for air travel.

In December 2019, a pilot flew one of Harbour Air's planes — a more than 60-year-old DHC-2 de Havilland Beaver floatplane that had been outfitted with a Seattle-based company's electric propulsion system, magniX — for three minutes over Richmond.

Since then, the company has continued to fine-tune the plane and conduct test flights in order to meet federally regulated criteria for Canada's first commercial electric flight, showing it can safely fly with passengers.

Harbour Air's new fully electric seaplane flew over the Fraser River for three minutes today in its debut test flight.
Holtz said flying point-to-point this week was a significant step forward.

"Having this electric aircraft be able to prove that it can do scheduled flights, it moves us that step closer to being able to completely convert our entire fleet to electric," she said.

All the test flights so far have been made with only a pilot on board.

Vancouver seaplane company to resume test flights with electric commercial airplane
The ePlane will stay in Victoria for the weekend as part of an open house put on by the B.C. Aviation Museum before returning to Richmond.

A yellow seaplane flies over a body of water with the Vancouver skyline visible in the background.
A prototype all-electric floatplane made by B.C.'s Harbour Air Seaplanes on a test flight in Vancouver in 2021. (Harbour Air Seaplanes)
Early in Harbour Air's undertaking to develop an all-electric airplane, experts who study the aviation sector said Harbour Air would have to find a way to make the plane light enough to carry heavy lithium batteries and passengers, without exceeding weight limits for the plane.

Werner Antweiler, a professor of economics at UBC's Sauder School of Business who studies the commercialization of novel technologies around mobility, said in 2021 that Harbour Air's challenge would be proving to regulators that the plane was safe to fly and the batteries powerful enough to complete short-haul flights with power to spare.

In April 2021 Harbour Air partnered with Swiss company H55 to incorporate its battery technology, reflecting ongoing research investment to limit weight and improve the distance the plane could fly.

Shawn Braiden, a vice-president with Harbour Air, said the company is trying to get as much power as possible from the lightest possible batteries, a challenge shared by BC Ferries' hybrid ships as well. 

"It's a balancing act," he said.

In December, Harbour Air announced it had begun work on converting a second de Havilland Beaver to an all-electric airplane, copying the original prototype.

The plan is to retrofit version two of the ePlane with room for a pilot plus three passengers. If certified for commercial use, it could become one of the first all-electric commercial passenger planes operating in the world.

Seth Wynes, a post-doctoral fellow at Concordia University who has studied how to de-carbonize the aviation industry, said Harbour Air's progress on its eplane project won't solve the pollution problem of long-haul flights, but could inspire other short-haul airlines to follow suit, alongside initiatives like electric ferries in B.C. that expand low-carbon transportation. 

"It's also just really helpful to pilot these technologies and get them going where they can be scaled up and used in a bunch of different places around the world," he said. "So that's why Harbour Air making progress on this front is exciting."

Related News

• Electricity Forum News

• EV Infrastructure News

USDA Rural Clean Energy Programs drive climate-smart infrastructure, energy efficiency, and smart grid upgrades, delivering REAP grants, renewable power, and cost savings that boost rural development, create jobs, and modernize electric systems nationwide.

Key Points

USDA programs funding renewable upgrades, efficiency projects, and grid resilience to cut costs and spur rural growth.

✅ REAP grants fund renewable and efficiency upgrades

✅ Smart grid loans strengthen rural electric resilience

✅ Projects cut energy costs and support good-paying jobs

When rural communities lean into clean energy, the path to economic prosperity is clear. Cleaner power options like solar and electric guided by decarbonization goals provide new market opportunities for producers and small businesses. They reduce energy costs for consumers and supports good-paying jobs in rural America.

USDA Rural Development programs have demonstrated strong success in the fight against climate change, as recent USDA grants for energy upgrades show while helping to lower energy costs and increase efficiency for people across the nation.

This week, as we celebrate Earth Day, we are proud to highlight some of the many ways USDA programs advance climate-smart infrastructure, including the first Clean Energy Community designation that showcases local leadership, to support economic development in rural areas.

Advancing Energy Efficiency in Rural Massachusetts

Prior to receiving a Rural Energy for America Program (REAP) grant from USDA, Little Leaf Farms in the town of Devens used a portable, air-cooled chiller to cool its greenhouses. The inefficient cooling system, lighting and heating accounted for roughly 20 percent of the farm's production costs.

USDA Rural Development awarded the farm a $38,471 REAP grant to purchase and install a more efficient air-cooled chiller. This project is expected to save Little Leaf Farms $51,341 per year and will replace 798,472 kilowatt-hours per year, which is enough energy to power 73 homes.

To learn more about this project, visit the success story: Little Leaf Farms Grows Green while Going Green | Rural Development (usda.gov).

In the Fight Against Climate Change, Students in New Hampshire Lead the Way

Students at White Mountains Regional High School designed a modern LED lighting retrofit informed by building upgrade initiatives to offset power costs and generate efficient energy for their school.

USDA Rural Development provided the school a $36,900 Economic Impact Initiative Grant under the Community Facilities Program to finance the project. Energy upgrades are projected to save 92,528 kilowatt-hours and $12,954 each year, and after maintenance reduction is factored in, total savings are estimated to be more than $20,000 annually.

As part of the project, the school is incorporating STEM (Science, Technology, Math and Engineering) into the curriculum to create long-term impacts for the students and community. Students will learn about the lighting retrofit, electricity, energy efficiency and wind energy as well as climate change.

Clean Energy Modernizes Power Grid in Rural Pennsylvania

USDA Rural Development is working to make rural electric infrastructure stronger, more sustainable and more resilient than ever before, and large-scale energy projects in New York reinforce this momentum nationwide as well. For instance, Central Electric Cooperative used a $20 million Electric Infrastructure Loan Program to build and improve 111 miles of line and connect 795 people.

The loan includes $115,153 in smart grid technologies to help utilities better manage the power grid, while grid modernization in Canada underscores North America's broader transition to cleaner, more resilient systems. Central Electric serves about 25,000 customers over 3,049 miles of line in seven counties in western Pennsylvania.

Agricultural Producers Upgrade to Clean Energy in New Jersey

Tuckahoe Turf Farms Inc. in Hammonton used a REAP grant to purchase and install a 150HP electric irrigation motor to replace a diesel motor. The project will generate 18.501 kilowatt-hours of energy.

In Asbury, North Jersey RCandD Inc. used a REAP grant to conduct energy assessments and provide technical assistance to small businesses and agricultural producers in collaboration with EnSave.

Related News

• Electricity Forum News

• Renewable Energy News

U.S. Renewable Energy Forecast 2024 will see wind and solar power surpass one-fourth of electricity generation, EIA projects, as coal declines, natural gas dips, and clean energy capacity, grid integration, and policy incentives expand.

Key Points

EIA outlook: renewables at 26% of U.S. power in 2024, led by wind and solar as coal declines and gas share dips.

✅ Wind and solar hit 18% combined, surpassing coal's 17%.

✅ Natural gas dips to 37% as demand rebounds modestly.

✅ Coal plant closures accelerate amid costs, emissions, and age.

Renewable energy is poised to reach a milestone, after a record 28% in April this year, as a new government report projects that wind, solar and other renewable sources will exceed one-fourth of the country’s electricity generation for the first time, in 2024.

This is one of the many takeaways from the federal government’s Short Term Energy Outlook, a monthly report whose new edition is the first to include a forecast for 2024. The report’s authors in the Energy Information Administration are expecting renewables to increase in market share, while natural gas and coal would both decrease.

From 2023 to 2024, renewables would rise from 24 percent to 26 percent of U.S. electricity generation; coal’s share would drop from 18 percent to 17 percent; gas would remain the leader but drop from 38 percent to 37 percent; and nuclear would be unchanged at 19 percent.

It was a big deal in 2020 when generation from renewables passed coal for the first time in 130 years over a full year. Coal made a comeback in 2021 and then retreated again in 2022 as renewables surpassed coal in generation. The ups and downs were largely the result of fluctuations in electricity demand during and then after the Covid-19 pandemic.

The new report indicates that coal doesn’t have another comeback in the works. This fuel, which was the country’s leading electricity source less than a decade ago, is declining as many coal-fired power plants are old and economically uncompetitive. Coal plants continue to close, and developers aren’t building new ones because of concerns about high costs and emissions, a trend underscored when renewables became the second-most prevalent source in 2020 across the U.S.

The growth in renewable energy is coming from wind and solar power, with wind responsible for about one-third of the growth and solar accounting for two-thirds, the report says, and combined output from wind and solar has already exceeded nuclear for the first time in the U.S. Other renewable sources, like hydropower and biomass, would be flat.

In fact, the growth of wind and solar is projected to be so swift that the combination of just those two sources would be 18 percent of the U.S. total by 2024, which would surpass coal’s 17 percent.

A key variable is overall electricity consumption. EIA is projecting that this will fall 1 percent in 2023 compared to 2022, due a mild summer. Then, consumption will increase 1 percent in 2024.

If demand was rising more, then natural gas power would likely gain market share because of gas power plants’ ability to vary their output as needed to respond to changes in demand.

I asked Eric Gimon, a senior fellow at the think tank Energy Innovation, what he thinks of these latest numbers.

He said wind and solar have gotten so big that it almost makes sense to track them as their own categories as opposed to lumping them into the larger category of renewables. He expects that the government will do this sometime soon.

Also, he thinks the projected increases for wind and solar, while substantial, are still smaller than those resources are likely to grow.

“My experience over the last 10 years is that the EIA tends to have flattish forecasts,” he said, meaning the federal office has underestimated the actual growth.

Some energy analysts have criticized EIA for being slow to recognize the growth of renewables. But much of the criticism is about the Annual Energy Outlook, which has numbers going out to mid-century, even as the U.S. is moving toward 30% from wind and solar by the end of the decade. The Short Term Energy Outlook, with numbers going one year into the future, has been more reliable.

Gimon said EIA is “kind of like your conservative uncle” in its forecasts, so it’s notable that the office expects to see a significant uptick in wind and solar.

Even so, he thinks the latest Short Term Energy Outlook should be read as the lower end of the range of potential increase for wind and solar.

For him to be right, the wind and solar industries will need to figure out solutions to the challenges they’ve been having in obtaining parts; they will need to make progress in dealing with local opposition to many projects and in having enough interstate power lines to deliver the electricity. And, new policies like the Inflation Reduction Act will need to have their desired effect of encouraging projects through the use of tax incentives.

It’s not much of a stretch to imagine that clean energy industries will make some progress on all of those fronts.

Related News

• Electricity Forum News

• Renewable Energy News

U.S. Clean Hydrogen Hubs aim to scale production, storage, transport, and use as DOE and the Biden administration fund regional projects under the infrastructure law, blending green and blue hydrogen, carbon capture, renewables, and pipelines.

Key Points

Federally funded regional projects to make, move, and use low-carbon hydrogen via green, blue, and pink routes.

✅ $7B DOE funding via infrastructure law

✅ Mix of green, blue, pink hydrogen pathways

✅ Targets 10M metric tons annually by 2030

New details are emerging about the Biden administration’s landmark plans to build out a U.S. clean hydrogen industry.

On Friday, the Department of Energy named the seven winners of $7 billion in federal funds to establish regional hydrogen hubs. The hubs — funded through the infrastructure law — are part of the administration’s efforts to jump-start an industry it sees as key to achieving climate goals like the goal of 100 percent clean electricity by 2035 set by the administration. The aim is to demonstrate everything from the production and storage of hydrogen to its transport and consumption.

“All across the country, from coast to coast, in the heartland, we’re building a clean energy future here in America, not somewhere else,” President Joe Biden said while announcing the hubs in Philadelphia.

From 79 initial proposals, DOE chose the following: the Mid-Atlantic Hydrogen Hub, Appalachian Hydrogen Hub, California Hydrogen Hub, Gulf Coast Hydrogen Hub, Heartland Hydrogen Hub, Midwest Hydrogen Hub and Pacific Northwest Hydrogen Hub.

Many of the winning proposals are backed by state government leaders and industry partners, and by Southeast cities that have ramped up clean energy purchases in recent years as well. The Midwest hub, for example, is a coalition of Illinois, Indiana and Michigan — supported by politicians like Illinois Gov. J.B. Pritzker (D), as well as such companies as Air Liquide, Ameren Illinois and Atlas Agro. The mid-Atlantic hub is supported by Democratic members of Congress representing the region, including Delaware Sens. Chris Coons and Tom Carper and Rep. Lisa Blunt Rochester.

The administration hopes the hubs will produce 10 million metric tons of “clean” hydrogen annually by 2030. But much about the projects remains unknown — including how trends like cheap batteries for solar could affect clean power supply — and dependent on negotiations with DOE.

A win for ‘blue’ hydrogen?
Nearly all hydrogen created in the U.S. today is extracted from natural gas through steam methane reformation. The emissions-intensive process produces what is known as “grey” hydrogen — or “blue” hydrogen when combined with carbon capture and storage.

Four recipients — the Appalachian, Gulf Coast, Heartland and Midwest hydrogen hubs — include blue hydrogen in their plans, though the infrastructure law only mandated one.

That has drawn the ire of environmentalists, who argue blue hydrogen is not emissions-free, partly because of the potential for methane leaks during the production process.

“This is worse than expected,” Clean Energy Group President Seth Mullendore said after the recipients were announced Friday. “The fact that more than half the hubs will be using fossil gas is outrageous.”

Critics have also pointed out that many of the industry partners backing the hub projects include oil and gas companies. The coalitions are a mix of private-sector groups — often including renewable energy developers — and government stakeholders. Proposals have also looped in universities, utilities, environmental groups, community organizations, labor unions and tribal nations, among others.

“The massive build out of hydrogen infrastructure is little more than an industry ploy to rebrand fracked gas,” said Food & Water Watch Policy Director Jim Walsh in a statement Friday. “In a moment when every political decision that we make must reject fossil expansion, the Biden administration is going in the opposite direction.”

The White House has emphasized that roughly two-thirds of the $7 billion pot is “associated” with the production of “green” hydrogen, which uses electricity from renewable sources. Two of the chosen proposals — in California and the Pacific Northwest — are making green hydrogen their focus, reflecting advances such as offshore green hydrogen being pursued by industry leaders, while three other hubs plan to include green hydrogen alongside hydrogen made with natural gas (blue) or nuclear energy (pink).

Many hubs plan to use several methods for hydrogen production, and globally, projects like Brazil's green hydrogen plant highlight the scale of investment, but the exact mix may change depending on which projects make it through the DOE negotiations process. The Midwest hub, for example, told E&E News it’s pursuing an “all-of-the-above” strategy and has projects for green, blue and “pink” hydrogen. The mid-Atlantic hub in southeastern Pennsylvania, Delaware and New Jersey will also generate hydrogen with nuclear reactors.

Energy Secretary Jennifer Granholm has described clean hydrogen as a fresh business opportunity, especially for the natural gas industry, which has supported the concept of sending hydrogen to market through its pipeline network. Lawmakers like Sen. Joe Manchin (D-W.Va.) — who said the Appalachian hub will make West Virginia the “new epicenter of hydrogen” — have pushed for continuing to use natural gas to make hydrogen in his state.

“Natural gas utilities are committed to exploring all options for emissions reduction as demonstrated by the 39 hydrogen pilot projects already underway and are eager to participate in a number of the hubs,” said American Gas Association President and CEO Karen Harbert in a statement Friday.

Green hydrogen also has faced criticism. Some groups argue that the renewable resources needed to produce green hydrogen are limited, even with sources such as wind, solar and hydropower technology, so funding should be reserved for applications that cannot be easily electrified, mostly industrial processes. There also is uncertainty about how the Treasury Department will handle hydrogen made from grid electricity — which can include power from fossil fuel plants — in its upcoming guidance on the first-ever tax credit for clean hydrogen production.

“Even the cleanest forms of hydrogen present serious problems,” Walsh said. “As groundwater sources are drying up across the country, there is no reason to waste precious drinking water resources on hydrogen when there are cheaper, cleaner energy sources that can facilitate a real transition off fossil fuels.”

But Angelina Galiteva, CEO of the hub in drought-prone California, said hydrogen will enable the state “to increase renewable penetration to reach all corners of the economy,” noting parallel initiatives such as Dubai's solar hydrogen plans that illustrate the potential.

“Transitioning to renewable clean hydrogen will pose significantly less stress on water resources than remaining on the current fossil path,” she said.

Related News

• Electricity Forum News

• Renewable Energy News