Delaware hydrogen hub wins $750M fed grant

NEWARK – A coalition of states including Delaware has won $750 million in the federal H2Hubs grant program to support research, production and distribution of clean hydrogen gas, potentially supporting tens of thousands of jobs.

The selection, set to be highlighted by President Joe Biden at a press conference in Philadelphia on Friday, marks a significant boost to the mid-Atlantic region’s work on clean hydrogen, including a number of Delaware companies and sites.

Researchers have increasingly come to believe that hydrogen, the most abundant element in the universe, could be a carbon-free fuel source of the future, powering commercial vehicles, ships and planes without harming the environment. For that to happen, however, the production of hydrogen through the splitting of water molecules in a process known as electrolysis would need to become more efficient, and a nationwide distribution network would need to be established.

The U.S. Department of Energy (DOE) has set a “hydrogen shot” goal of lowering clean hydrogen cost by 80% to $1 per 1 kilogram in one decade. To advance toward that goal, the Biden administration dedicated up to $7 billion toward the H2Hubs program for the development of regional clean hydrogen hubs, where industry and research universities would expand work on clean hydrogen fuel.

Among the authors of the H2Hubs program was U.S. Sen. Tom Carper, who chairs the Senate Environment and Public Works Committee. He told Delaware Business Times that he was extremely bullish on the value of hydrogen as a renewable energy source.

“These hydrogen hubs are our future – not just for our economy, but for our planet,” he said, noting that greenhouse gas emissions driving climate change is worsening the heat waves, wildfires, floods and more that have plagued the country this year. “Is this crisis real? Yes, it is. And I think that even among my Republican friends in the Senate, I think they’ve come to believe that it’s real.”

Nationwide, many regions and states banded together to increase their odds of being chosen as one of up to 10 hub sites. Delaware joined with southeastern Pennsylvania and southern New Jersey to form the Mid-Atlantic Clean Hydrogen Hub (MACH2), a nonprofit entity that will receive and distribute funding.

The DOE reportedly received about 80 concept papers for hubs around the country. After a review, MACH2 was one of just 33 chosen to submit a full application and one of seven selected for funding.

“This is a big deal. Hydrogen is a clean fuel of the future, one of the ways we can pollute less. Our region has been chosen for a federal infusion of hundreds of millions of dollars that will create thousands of jobs and show how hydrogen can be made, transported and used in a real-world way,” Gov. John Carney said in a statement announcing the selection. “Delaware companies and institutions have already led on hydrogen and now will play a big role in the Mid-Atlantic Clean Hydrogen Hub. When we have talked about the opportunities for Delaware from the Bipartisan Infrastructure Law championed by President Biden and our congressional delegation, this has been one of the big ones and we got it. I’m looking forward to getting to work with our partners in the region.”

The $750 million grant is about 17% smaller than the $900 million for which the coalition applied, but represents an enormous investment into advancing the work in the region. The hub includes 24 partners to date, including private companies, public entities including transit departments and airports, and labor unions, that would invest upward of $2 billion in the project too.

The funding could potentially support 20,000 jobs in the region, according to congressional officials, and all MACH2 projects will be constructed with project labor agreements – MACH2 was scored as the most union-supportive hub applications. All clean hydrogen production will come from renewable energy, nuclear energy, and capturing wastewater emissions, with no fossil fuel extraction, according to the coalition.

“Today is a monumental day for Delaware and its role in the future of our nation’s clean energy economy. Delaware possesses the resources, infrastructure, and workforce that make it an ideal location for one of the country’s first hydrogen hubs, and I’m glad the Department of Energy has recognized these strengths by selecting the Mid-Atlantic Clean Hydrogen Hub,” said Sen. Chris Coons, who has lobbied the U.S. Department of Energy about Delaware’s strengths in the hydrogen industry. “MACH2 will create a new generation of good-paying jobs for Delawareans, support new industries that can work hand-in-hand with our universities and leading businesses, and ensure that the First State plays a leading role in reducing our nation’s carbon footprint. I am proud to have advocated tirelessly for this proposal and can’t wait to see these projects come to fruition.”

Delaware has been helping build the region’s case for landing the funding for more than a year, hosting Labor and Energy Cabinet secretaries at a summit here last summer and launching the Center for Clean Hydrogen, backed by the University of Delaware and Chemours, among others.

Companies like Air Liquide, PBF Energy and Bloom Energy have been working on hydrogen production and storage while W. L. Gore & Associates, Chemours, DuPont, and Versogen have been working on membranes that are integral to electrolysis. Others like Compact Membrane Systems have been working on carbon capture that could help transition from natural gas-powered electrolysis to renewable energy sources.

Dora Cheatham, executive director of the Delaware Sustainable Chemistry Alliance, helped to write the MACH2 proposal and said she was “absolutely thrilled” to find out that it had been selected for funding, noting it was much smaller than other competing proposals.

One of the biggest advantages that MACH2 had in the federal competition is one of its oldest: a decades-old pipeline infrastructure built for now defunct petroleum plants that could be converted into a “hydrogen highway.”

The Delaware City Refinery owned and operated by New Jersey-based PBF Energy will figure prominently into the MACH2 plans. The company aims to create a plant in Delaware City capable of producing upward of 137 megatons of clean hydrogen a day, according to the MACH2 concept proposal.

Initial projections are that 85 tons of clean hydrogen could be produced and used by companies and entities in the mid-Atlantic region in the early stage of development, which can replace an equivalent amount of daily natural gas combustion. It could reach over 600 tons per day once fully scaled up.

Some of that production would likely go to help support the adoption of hydrogen fuel by long-haul truckers, an industry that could benefit from the fast-fueling, long-lasting energy. Air Liquide, a French chemical company that has its U.S. Innovation Center in Glasgow, is exploring the buildout of eight fueling stations along the Interstate 95 corridor that could help create an environment here that currently only exists in California.

Cheatham said that PBF and Chesapeake Utilities would be involved with the production of hydrogen in Delaware and that public transit entity DART Transit, chemical manufacturer Croda and the DuPont Experimental Station had all expressed an interest in using the gas for energy.

The federal funding is not guaranteed, as MACH2 organizers must now develop a 10-year plan for how they aim to disseminate the funding for the federal government. It will reportedly be doled out over four phases, with ground being broken for new production plants in the second phase.

Original Publish: https://delawarebusinesstimes.com/news/delaware-hydrogen-hub-win/