Climate Tech

US green hydrogen production, storage gets boost

The Department of Energy is backing a project in Utah with a $504 million loan that will convert renewable energy to hydrogen
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Francis Scialabba

· 5 min read

Last month, The Department of Energy’s Loan Programs Office (LPO) issued its first loan for clean-energy tech since 2014, when “Happy” by Pharrell Williams was annoying everyone at the top of the Billboard 100.

The LPO, which is tasked with financing emerging technologies that are ready to scale, guaranteed a loan of $504.4 million to the Advanced Clean Energy Storage (ACES) project in Utah that will convert renewable energy to hydrogen and store it in two massive salt caverns.

Green hydrogen is one piece of the clean-energy puzzle. It has potential applications in hard-to-decarbonize sectors like shipping and aviation, but it can also play a role in deploying more renewable energy. The ACES project, a joint venture between Magnum Development and Mitsubishi Power Americas, will be the largest green hydrogen facility in the world, according to the project’s website, and could pave the way for other clean-hydrogen projects like it in the US.

“As we continue to ramp up our installations of renewables, we’re also going to have to ramp up the supporting technologies that help integrate that,” Michael Ducker, chief operating officer at ACES Delta and head of hydrogen infrastructure at Mitsubishi Power Americas, told Emerging Tech Brew.

While batteries can store renewable energy for hours at a time, hydrogen provides for months-long storage that can save excess wind and solar energy produced in low-demand periods, like the spring and fall, and deploy it when there is more need for heating or cooling homes, for example.

This seasonal storage of excess power generation is one application of hydrogen where “the numbers really work well,” Jigar Shah, director of the LPO, told Emerging Tech Brew. “If this unit wasn’t built, some of those solar and wind farms would have been just told to shut down during the spring [and] in the fall, because there’s nowhere to put the power.”

How it works

This project is focused on using hydrogen for long-term storage of renewable energy to support the power grid in the Western US.

The facility will use electrolyzers to convert electricity and water into hydrogen, eliminating the emissions created by splitting hydrogen from natural gas, which is how most of today’s hydrogen is produced.

ACES will store hydrogen in two salt caverns that are able to hold up to 300 GWh of energy. That’s 5x the battery storage capacity installed globally in 2021 and enough to power ~335,000 US homes for a month.

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Salt caverns have been used to store hydrogen, as well as helium and natural gas, since the 1980s, but this project uses proven storage methods for a new purpose, Ducker said.

“The previous uses of hydrogen predominantly were for industrial gas, for refinery needs, those different applications,” he said. “But now we’re looking to use it to help better integrate renewable energy into the grid.”

ACES is working with Intermountain Power Agency (IPA), which plans to convert a nearby coal-fueled power plant into one that uses gas turbines to generate electricity from a mix of natural gas and hydrogen. IPA expects to begin fueling this power plant with 30% hydrogen and 70% natural gas in 2025 and Mitsubishi Power Americas is working on a next-generation gas turbine that will allow for 100% hydrogen no later than 2045.

“When we’re running on 100%, hydrogen, effectively, you’re producing water vapor out of the stack,” Ducker said of the combustion process.

To reach fast-approaching climate goals on clean energy, renewable installations need to ramp up quickly and so does the tech that supports their integration into the grid.

Mitsubishi Power is working on the technological advancements for gas turbines themselves to be able to run on 100% hydrogen, Ducker said. By switching out parts of the combustors in these turbines, the transition from natural gas to clean hydrogen can happen gradually without a massive overhaul of the energy infrastructure. It aims to test the tech in 2025 and eventually install it for IPA.

ACES could eventually supply clean hydrogen to other sectors as well, Ducker said. With high natural gas prices, clean hydrogen could make more financial sense as a feedstock for ammonia or other chemicals, Shah said.

The site will nearly double the entire global capacity for clean-hydrogen production, which stands at more than 300 megawatts today. ACES alone will include 220MW of electrolyzers.

The amount of storage at ACES also represents a significant global increase, adding the equivalent of 9 million barrels of hydrogen storage to the existing capacity, which is currently less than 15 million barrels around the world, Ducker told us.

“By funding this project, there’s probably 12 more salt domes around the West that people are looking to replicate this project into, and those projects may end up using fully commercial debt,” Shah said. “But it’s going to happen because we did the first deal to catalyze the space.”

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