Green Hydrogen Draws Major Investment and Development

Hydrogen is one of the most abundant substances on Earth and can readily be used as a clean burning fuel. Challenges facing the technology include first generating the hydrogen, and then storing it under pressure for future use. Green hydrogen is made by using renewable energy sources (such as solar or wind) to split water into hydrogen and oxygen, instead of creating hydrogen from fossil fuels (known as gray or blue hydrogen). The process is known as electrolysis, and it is more expensive than producing gray or blue hydrogen. However, green hydrogen could provide long-term storage for renewable energy. Recent hikes in natural gas prices, exacerbated by the war in Ukraine, is spurring many countries to pursue new energy sources.

The challenges facing green hydrogen are many. It must be liquified for shipping, which means chilling it to negative 252.87 degrees Celsius (near absolute zero). It is also extremely flammable.

BP PLC is a 40.5% stake holder in a $30 billion green hydrogen project in Australia called the Asian Renewable Energy Hub. The project will cover 2,500 square miles in the Outback and generate up to 26 gigawatts of power.

The South African country of Namibia, famous for strong winds and sunlight, created a project development company called Hyphen Hydrogen Energy (Pty) Ltd. to create and operate green hydrogen production facilities, including a $9.4 billion project that it is hoped will produce 300,000 metric tons per year from five gigawatts of renewable energy by 2030.

In late 2023, the Biden administration announced plans to award $7 billion in grants for creation of seven regional hubs to produce green hydrogen as part of the 2021 infrastructure law. The hubs are located in California, Gulf Coast, Midwest, Pacific Northwest, Appalachia, Heartland and Mid-Atlantic. A number of major energy companies are already involved in the hubs, including Exxon Mobil and Chevron, as well as hydrogen producers Air Products and Chemicals, Air Liquide and Plug Power. Collectively, they are expected to add $40 billion in investment to the hubs.

NextEra Energy intends to invest up to $20 billion in clean energy projects designed to support green hydrogen production. In May 2023, the firm and fertilizer manufacturer CF Industries Holdings announced the development of a 100-megawatt green hydrogen facility in Oklahoma in addition to 450-megawatts of green energy production adjacent to it.

In rural Australia, a consortium of firms led by BP plans to build a solar and wind hub capable of producing 26 gigawatts of clean energy to be used to manufacture green hydrogen. The site, which is located in the Outback in the northwestern corner of the country, will have as many as 1,743 wind turbines, 10 million+ solar panels and cover a parcel of land roughly eight times the size of Manhattan.

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