The recently published International Energy Agency (IEA) 2023 Global Hydrogen Review highlighted factors constraining growth in the hydrogen economy including rising financing costs, insufficient infrastructure and delayed as well as disjointed hydrogen policy regimes from country to country. These challenges, as well as a steep technological learning curve, cannot be minimized and delayed tax guidance for the US Inflation Reduction Act is a tangible and highly impactful example of the issues at hand.
While the IEA rightly bemoans a hydrogen industry that isn’t growing fast enough to meet net zero targets for 2050, the report also shows that growth in absolute terms is still very strong with hydrogen production capacity in development up ~100% year over year. Moreover, September saw a surge in capital commitment and spending activity consistent with the IEA’s call for more rapid implementation. As the combined force of regulation, incentives, market dynamics and technological advancement slowly evolves in favor of clean hydrogen, five large scale projects with high caliber sponsorship attracted capital or capital commitments that will push development towards completion:
*Chevron acquired a majority stake in Delta ACES, one of the largest and most mature hydrogen projects under development in the US. The project will help California manage renewable energy loads and comprises green hydrogen production and salt cavern storage. Mitsubishi Heavy Industries is also a partner on the project and production of the electrolyzers by HydrogenPro is already underway.
*Electric Hydrogen signed an agreement to supply its containerized 100MW electrolyzer to New Fortress Energy’s Zero Parks green hydrogen plant in Texas. New Fortress Energy has a 100% offtake agreement already in place with OCI Global for the production of ammonia.
*HH2E advanced its initial German green hydrogen project with an order for 93WMh of high-capacity sodium sulfur batteries produced by BASF that will help manage electricity flows into 120MW of electrolyzers previously ordered from Nel.
*Salzgitter engaged engineering firm ANDRITZ to deliver a 100MW green hydrogen plant for purposes of green steel production in Germany. Salzgitter has already ordered a direct reduction plant and electric arc furnace for the project and HydrogenPro will supply the electrolyzers.
*Galp reached final investment decision on a 100MW green hydrogen plant at the site of its refinery in Sines, Portugal. Technip Energies has been engaged as EPC and Plug Power will supply the electrolyzers.