Wednesday, July 5, 2023
- DOE plans $1 billion investment in demand-side initiative for H2Hubs.
- NOI and RFI released to refine approach and identify best practices.
- Initiative seeks to address clean hydrogen market uncertainty.
- Investment aims to boost hydrogen economy with potential for 100,000 jobs by 2030.
- Six to ten H2Hubs to be selected for up to $7 billion funding later this year.
Unedited Press Release Text:
Biden-Harris Administration to Jumpstart Clean Hydrogen Economy with New Initiative to Provide Market Certainty And Unlock Private Investment
Demand-Side Initiative Will Help Advance Clean Hydrogen Hubs and Support President Biden’s Investing in America Agenda for Building a Clean Energy Economy and Creating Good-Paying Jobs
WASHINGTON, D.C. — As part of Bidenomics and President Biden’s Investing in America agenda, the U.S. Department of Energy (DOE) today released a Notice of Intent (NOI), which includes a Request for Information (RFI), to invest up to $1 billion in a demand-side initiative to support the Regional Clean Hydrogen Hubs (H2Hubs). Funded by President Biden’s Bipartisan Infrastructure Law, the H2Hubs program will help form the foundation of a national clean hydrogen network vital to reducing emissions from some of the most energy-intensive sectors of our economy, including industrial and chemical processes and heavy-duty transportation. Today’s announcement will help ensure both producers and end users in the H2Hubs have the market certainty they need during the early years of production to unlock private investment and realize the full potential of clean hydrogen. Achieving commercial-scale clean hydrogen deployment is critical to creating good-paying jobs and new economic opportunities in communities across the nation while also enabling our long-term decarbonization objectives.
“Ensuring America is the global leader in the next generation of clean energy technologies requires all of us — government and industry — coming together to confront shared challenges, particularly lack of market certainty for clean hydrogen that too often delays progress,” said U.S. Secretary of Energy Jennifer M. Granholm. “That’s why DOE is setting up a new initiative to help our private sector partners address bottlenecks and other project impediments — helping industry unlock the full potential of this incredibly versatile energy resource and supporting the long-term success of the H2hubs.”
Clean hydrogen — a versatile and flexible energy carrier that can be produced with low or zero carbon emissions — offers substantial economic benefits and will help create tens of thousands of new, good-paying jobs across the country, particularly in underserved and energy communities. According to DOE’s Pathways to Commercial Liftoff: Clean Hydrogen report, America’s growing hydrogen economy has the potential to add 100,000 net new direct and indirect jobs by 2030. By enabling the development of diverse, domestic clean energy pathways across multiple sectors of the economy, clean hydrogen will strengthen American energy independence and accelerate the American manufacturing boom that has already created over 800,000 jobs since President Biden took office.
Developing a hydrogen demand-side initiative is critical to ensuring the early commercial viability of a H2Hub given that demand formation for a new energy source typically lags creation of reliable supply. This new initiative will support the growth and sustainability of the H2Hubs program by providing the revenue certainty that hydrogen producers require to attract private sector investment. It will also help meet the needs of end users who often prefer the flexibility to purchase hydrogen on shorter-term contracts and require confidence in the long-term availability of clean hydrogen before making critical, long-term investments.
The NOI, which includes a Request for Information on the program’s design, will help DOE refine and validate its approach to provide demand-side support for the hubs to enter the clean hydrogen market and will identify the best approach to engaging and potentially involving private sector institutions in the organization, capitalization, and execution of the implementing entity’s mandate. To help inform the design of a demand-side support mechanism for the H2Hubs program, the NOI seeks public input on potential benefits and risks, operating models, governance structures, and equipped implementing partners. The NOI is also informed by DOE’s dialogue with the energy industry, clean energy investment firms, nonprofit entities, non-governmental organizations, and public response from the demand-side request for information issued in spring 2022 and from DOE’s Pathways to Commercial Liftoff Report on clean hydrogen. Based on demonstrated performance and experience gained with the H2Hubs demand-side support mechanism, DOE may consider similar mechanisms for other technologies and clean energy products in the future.
Funded by the President’s Bipartisan Infrastructure Law and managed by DOE’s Office of Clean Energy Demonstrations with support from the Office of Energy Efficiency and Renewable Energy, the H2Hubs are a critical component of the Biden-Harris Administration’s deep commitment to invest in America’s workforce, jumpstart local economic growth, and create good-paying jobs while strengthening America’s role as a clean energy leader.
Later this year, the Biden-Harris Administration will announce the selection of six to 10 H2Hubs for a combined total funding of up to $7 billion in federal funding—one of the most historic clean energy investments in history and a cornerstone of President Biden’s vision to achieve carbon-free grid by 2035 and net-zero emissions by 2050. The proposed mechanism outlined in the NOI will help connect the H2Hubs to prospective purchasers — providing durable demand and sufficient customers for the Hubs while also supporting President Biden’s whole-of-government approach to building a strong clean hydrogen economy.
Read the full Notice of Intent and Request for Information here.