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Several Regional Groups Seek Hydrogen Hub Funding

Two consortiums in the Appalachian region have submitted concept papers to the U.S. Department of Energy in the competition for a share of $7 billion allocated to develop hydrogen hubs around the country. Pennsylvania’s entry is the DNA H2Hub project, which is a partnership among the Team PA Foundation, Shell, and Equinor, and will focus on producing “blue” hydrogen from natural gas using carbon capture to reduce emissions, for use in decarbonizing industrial and manufacturing operations. U.S. Steel has expressed interest in being an end user. Team PA has taken the role of lead applicant. The second group seeking funding is the Appalachian Regional Clean Hydrogen Hub (ARCH2), backed by the state of West Virginia and EQT Corporation, the nation’s largest natural gas producer, Battelle, and GTI Energy. That project is expected to be centered in West Virginia while expanding its impact through cooperative efforts in Ohio, Pennsylvania, and Kentucky. The U.S. Department of Energy is looking to award the money contained in last year’s bipartisan infrastructure law that could fund up to 10 regional clean hydrogen hubs, defined as “a network of clean hydrogen producers, potential clean hydrogen consumers and connective infrastructure located in close proximity” to be sited across the country. At least one hub is expected to be located in Appalachia. While the DOE is not releasing details of the proposals, or the number received, due to “procurement sensitivities,” a DOE spokesperson provided the following statement: “For these concept papers, the private sector response was overwhelming and covered all technological solutions and every region of the country. The request for federal funds was roughly eight times the size of DOE’s $7 billion solicitation. The most remarkable aspect of the responses was the willingness of the applicants to propose investments, in aggregate, of more than $150 billion of their own capital alongside the DOE. This, in our opinion, is an irrefutable indication that the private sector agrees with Congress and the DOE that hydrogen – the “Swiss Army Knife” of energy, is ready to lift off to full commercial scale. “DOE looks forward to receiving the full applications by April 7, 2023 and selecting applicants during the summer of 2023.” Pennsylvania recently took action to bolster its effort, with the Legislature approving a bill to provide tax credits for companies that use natural gas and hydrogen in their operations for at least 20 years. The legislation provides $2 billion in subsidies over those 20 years. Two other projects in Pennsylvania and Ohio have also submitted concept papers. The Great Lakes Clean Hydrogen Partnership, which will primarily serve Ohio and Michigan, is expected to use nuclear energy to produce clean hydrogen for industrial and manufacturing end users. In addition to the Team PA DNA proposal, the Wolf administration supports a proposal led by the City of Philadelphia and partners, called the Mid-Atlantic Clean Hydrogen Hub (MACH2), which will focus on Southeast Pennsylvania, Delaware, and Southern New Jersey.

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