The Department of Energy has launched a $1 billion clean-hydrogen initiative aimed at convincing producers of the fuel that there will be buyers, according to E&E News’ ENERGYWIRE (subscription).
What’s going on: Energy Secretary Jennifer Granholm said that the program seeks “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,” according to the piece.
How it could work: While initiative details will be released “at a later date,” the agency—which will start its search this summer or fall for an outside entity to implement the program—said there were several possible ways for the money to be spent, including the following:
- Pay-for-difference: “The DOE could sign ‘pay-for-difference’ contracts that guarantee a specified price for low-carbon hydrogen,” and if the producer cannot sell to a buyer at that price, the government would pay the difference.
- Fixed-level support: “Alternatively, DOE could offer a fixed level of support for sales of low-carbon hydrogen or simply fund feasibility studies for potential hydrogen buyers who are unsure if it would be suitable for them.”
Challenges ahead: The lack of guaranteed buyers for low-carbon hydrogen is probably the largest single obstacle in the way of the burgeoning industry, a source told the news outlet.
- What’s more, retrofitting facilities to use hydrogen can be complicated for many companies.
- To help in that effort, the DOE last year said it would award as much as $7 billion for hydrogen “hubs,” clusters of local clean-hydrogen storage, transportation and consumption.