Assessing Green Hydrogen Projects if ACP’s’ Green Hydrogen Framework is Adopted
After reviewing the American Clean Power Associations (ACP) proposed framework for green hydrogen, we thought it might be interesting to look at a few green hydrogen projects on our list and determine if they would pass or fail the framework. Naturally, this is merely our assessment based on what we currently know of the projects and how we interpret the ACP’s proposal. Also, we don’t know what the Treasury Department will ultimately put forth for its framework in August or if projects will adjust based on the guidelines.
Air Products Texas: Pass
Though we think serious questions remain around who the off takers will be for Air Products’ green hydrogen project in Wilbarger County, Texas, the current proposal does appear to meet the definition of green hydrogen under the ACP’s framework. Given that AES is expected to build 1.4 gigawatts (GW) of new renewable generation, as we understand it, to support the hydrogen plant, it seems as though the additionality requirement would be easily met for this project. Further, as the generation for the project is located within the same balancing authority, in this case ERCOT, the regionality stipulation would also be achieved. Finally, we assume it would be more than reasonable to assume that the output of the renewable facilities, while highly variable, could be designed to match on an annual basis with the hydrogen plant’s consumption. Now, where all the hydrogen goes and how it gets there is another story entirely, but from the perspective of the green hydrogen framework ACP put forth, we think Air Products’ North Texas plant would “pass”.
Plug Power New York: Fail
Even though Plug’s New York project on the Niagara River has received a healthy amount of support from the State of New York, it wouldn’t likely meet the green hydrogen framework set forth by ACP. In our view, utilizing existing hydroelectric generation would cause Plug’s project to fail the requirement of additionality. Perhaps Plug Power could find a way around this likely sticking point, as the requirements of time matching and regionality would be met by the New York project. Of course, what the federal government ultimately decides, and not what the ACP proposed, will determine if Plug New York can dip into additional subsidies beyond the generous support it has already received.
Douglas PUD Wells Dam: Pass
Similar to Plug Power’s New York project, the Douglas County Public Utility District (PUD) is planning to install an electrolyzer at Wells Dam to turn hydropower into hydrogen via electrolysis. However, the Wells Dam electrolyzer plans to utilize “excess” hydropower generated when the water must be spilled to assist in fish migration. Given that the ACP rules would provide an exception for additionality if excess renewable generation is available on the grid, we think the Douglas County PUD’s hydrogen project would likely be considered green under the proposed framework.
CF Industries/NextEra Verdigris: Pass
CF and NextEra have a memorandum of understanding to develop a green hydrogen plant in Verdigris, Oklahoma. Given that the facility would utilize 100 megawatts (MW) of electrolysis capacity backed by 450 MW of dedicated renewable generation, it appears that Verdigris would meet the “three pillars” of green hydrogen set forth in the ACP framework.
