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Utah Business

California wants our hydrogen (we don’t)

California wants our hydrogen (we don’t)

Located in Delta, Utah, the Intermountain Power Project is a coal-fired power plant commissioned decades ago to serve 35 municipal electric companies and rural cooperatives. Although the project is operated by a political subdivision of the state of Utah, and located in the state, the majority of the power generated by the IPP serves southern California, including the city of Los Angeles. 

Or, it did.

Seven years ago, as California continued to advance its state-level climate and energy policies, it became apparent that the project’s largest customers would be barred from purchasing coal-fired power in the near future, according to IPP spokesman John Ward. Rather than accept its eventual fate, the IPP drew up plans to decommission the existing coal-fired power plant and replace it with a gas-fired plant that would take advantage of an old, but unconventional fuel: hydrogen. 

As things currently stand, the IPP is set to burn a blend of hydrogen and natural gas, starting at 30 percent hydrogen in 2025 and progressing to 100 percent over the next 20 years, as the fuel becomes more readily available. 

Utah could become a hydrogen hub

There’s nothing particularly new about hydrogen itself, says Ward. What is new, is the notion that hydrogen power could play an important role in the future of power production as the world continues to move toward carbon-free electricity. 

This is the reason why energy industry leaders around the world currently have their eyes turned to Utah. The IPP not only represents one of the first power plants to consider hydrogen as a source for fuel—it also plans to spur the production and storage of large quantities of hydrogen. 

Given Utah’s central location, some in the industry, such as the Green Hydrogen Coalition, have begun to envision a future where Utah sits at the center of a regional network with hydrogen pipelines branching out of it like spokes on a wheel, accelerating decarbonization efforts throughout the western US and upwards into Canada.

But the extent to which Utah becomes a true hub for hydrogen production, experts say, depends not only on whether the world accepts broader use of this traditionally niche fuel—but also on local attitudes toward hydrogen, and whether other local projects such as the Inland Port create local demand for the alternative fuel. 

If that happens, industry leaders say that Utah could come out of the coming renewable energy revolution as one of the winners, where new energy technologies create new jobs and spur economic growth. If it doesn’t, then Utah’s energy producing-communities will likely realize the future they fear as jobs and revenue are sucked away by more proactive states.

“To the extent that a state like Utah becomes a hydrogen producer and exports to other states, that will be a net job increase,” says Al Cioffi, business development manager for hydrogen fuel cell manufacturer Plug Power. “If the clean revolution passes us by, we stand to lose plenty of jobs. We ought to be in a position where we not only retain those jobs, but if we get out ahead of this thing, we can be net exporters.”

Utah expressed interest, alongside much of the nation, in hydrogen in the late 2000s, but back then the interest was focused primarily on hydrogen as a potential alternative fuel for vehicles, says Laura Nelson, executive director of the Green Hydrogen Coalition, and former director of Utah’s Governor’s Office of Energy Development.

“Hydrogen really showed up as a great opportunity” for zero-emission vehicles around 2005, Nelson says. “We weren’t on the EV path yet. Nobody was talking about batteries, 100 percent electric vehicles. We hadn’t talked about that for a hundred years, even though some of the first vehicles were electric.”

Hydrogen fell by the wayside, Nelson says, as EVs made their dramatic entrance into the market, and because deploying an entirely new fueling network and related infrastructure cost more than EV charging stations. But as the conversation about decarbonization has expanded to include heavy industry, hydrogen is making a comeback.

Demand has emerged from industries with a need for high-intensity heat the likes of which batteries simply can’t sustain—like steel or concrete production. Natural gas utilities, too, are looking to hydrogen as a way to use existing pipelines and appliances to heat homes and buildings without the carbon emissions. And then, of course, there are the energy and electricity producers themselves.

The emerging interest in hydrogen from the energy and utility sector is tied directly to the rise in renewable energy production. These resources remain intermittent—you can’t generate power when the sun isn’t shining and the wind isn’t blowing. This isn’t new, but dramatic declines in the cost of wind and solar generation over the past decade mean these resources are now among the cheapest sources of energy, often outcompeting fossil fuels. 

According to the US Energy Information Administration, renewable energy now represents the majority of new generation capacity installed in the US. This trend means many regions are now on track to at times produce far more energy than they consume, leading utilities and electric producers to ask what they could do with this excess power. The answer, for some, is hydrogen. By using excess wind and solar energy to power electrolysis, which splits water into its atomic components of oxygen and hydrogen, power companies could produce a valuable byproduct that could be sold off to industrial customers, or perhaps used as a fuel to fire the power plants themselves.

This is essentially the plan at the IPP. By lucky coincidence, Ward says, the original coal-fired power plant was constructed on top of the largest salt dome in the western US. Industry has used salt caverns to store hydrogen for decades, and the salt dome beneath the IPP has already drawn substantial interest from Mitsubishi, which has a corporate division focused on hydrogen.

On top of this, the IPP is already connected to a network of high-voltage power lines that could distribute not only the power IPP generates, but also has the capacity to absorb over a thousand megawatts of additional energy generation, according to Ward. This could facilitate the development of wind and solar projects adjacent to the existing power plant.

“We can take that energy that would otherwise be curtailed, use electrolysis to convert to hydrogen, and store it in the salt cavern,” Ward says. “We can make power in the spring or fall, put it in the cavern and store it until the summer or winter, and bring it out when it’s needed…. You’ve got everything you need here.”

The Navajo Nation could lead hydrogen production

The new IPP power plant, Ward says, will employ fewer people than the original coal plant. Gas plants simply aren’t as labor-intensive to operate. Yet he and others believe that the project will become an economic driver for Utah and for the many surrounding states as the IPP’s investments in necessary hydrogen infrastructure spur the production of excess fuel.

“We haven’t decided where the hydrogen will come from, but I am guessing we are not going to be the ones making the hydrogen,” Ward says. “We are the off-taker for someone else’s hydrogen production, but that makes us the anchor tenant, if you will. That’s what gets the ball rolling.”

While many believe excess hydrogen will go to industrial applications like steel production or mining, Roxana Bekemohammadi, executive director of the Western States Hydrogen Alliance, believes there will be demand from transportation as well. For shipping operations to maintain optimal profit margins, heavy-duty vehicles need to remain in motion as much as possible—waiting for a commercial vehicle to charge is costly. Batteries, Bekemonhammadi says, don’t have the ability to support near-continuous operation. Hydrogen does.

This transformation has already begun in Europe, where government and business leaders are investing trillions of dollars in hydrogen infrastructure, Bekemohammadi, says. And it’s begun here in the US on the West Coast, particularly in California, where seaports have begun to convert to hydrogen-based fuels and fueling stations are going up to supply hydrogen-powered semi-trucks. Arizona and Nevada have talked of building a hydrogen highway connecting their states with supply lines from California. And according to Bekemohammadi, Utah is the next stop on the map.

This is where Big Navajo Energy, a prospective Utah producer of hydrogen, enters the scene. Determined to find a means of replacing the loss of coal, oil, and gas jobs on tribal lands, Big Navajo Energy entered the solar energy industry about nine years ago, according to company president Dory Peters. But with hydrogen, Peters says, the company hopes to use some of its existing natural gas assets to begin supplying truckers making use of the emerging hydrogen highway—which happens to be quite conveniently located for the Navajo company.

“We feel we’re right in the corridor of providing the fuel as this hydrogen highway is being built out, and of course we have an abundance of feedstock we can utilize to create hydrogen,” Peters says. “This economy will serve the Navajo Nation—a new industry, a green industry, creating jobs and a tax base that hasn’t been afforded this area.”

Big Navajo Energy’s hydrogen won’t come from electrolysis, at least not at first. Rather, steam methane reforming, which uses heat and water to separate hydrogen from natural gas. Some of this natural gas, Peters says, is not connected to existing pipelines, making it an ideal candidate. In another scenario, he says, the company plans to capture methane that is vented off the tribal nation’s oil and gas wells and turn that waste product into a byproduct to be sold to nearby customers. The process envisioned by Peters would also involve capturing the water and CO2 released during this process and injecting it into greenhouses where vegetables can be produced to help the tribe achieve greater food security.

The company planned to break ground on its first methane capture and reforming project last year, but was delayed by the outbreak of COVID-19, says Peters. Were it not for the pandemic, Big Navajo Energy would be producing hydrogen right now.

While California’s hydrogen highway is Big Navajo Energy’s future target, for now Peters says that the majority of their customers are located on the Wasatch Front. That may not seem as exciting as driving a regional logistics revolution, but hydrogen advocates say the key to achieving broader adoption of hydrogen will require greater use of the fuel right here in Utah.

There is no demand for hydrogen in Utah

Outside of Utah, New York-based Plug Power has begun to glimpse the possibilities driven by hydrogen fuel.

“Our core business is material handling for logistics, transportation, and manufacturing,” says Al Cioffi, Plug Power business development manager. The company’s customers, he says, include Walmart, Kroger, BMW,  and other “people like that, who are moving goods around for delivery, or moving things around in manufacturing locations.”

These companies are purchasing zero-emission hydrogen-powered forklifts for their facilities. Because traditionally powered forklifts would produce too much pollution for an indoor environment―effectively killing the workers―the industry has long relied on electric lead acid batteries, which could be removed to facilitate charging. 

“What’s extraordinary about that was [it] was not a zero-emission-driven decision, because the vehicle was already zero emissions,” Cioffi says. “The decision was because a fork truck is a heavy-duty, continuous operation vehicle, and they looked at it and said we could improve by adopting hydrogen over batteries.”

That line of business may seem critical to the development of a zero-emission Inland Port, but Cioffi says Plug Power currently has no plans to expand to Utah. When he looks at a map depicting the company’s 5-year plan to build enough plants to produce 1,000 tons of hydrogen per day all across the nation, “there is a big hole in Utah.” 

This isn’t because Plug Power has no interest in Utah, Cioffi says, but rather because there is no appreciable demand for hydrogen in the state. “The Inland Port is a significant draw, but they’ve got to adopt the equipment,” Bekemohammadi,says. “There has to be some sort of demand in the state as well to bring some of these jobs in.”

The sort of chicken-and-egg relationship between demand and infrastructure development highlights the need for government intervention, as could take place at the Inland Port, to get the ball rolling. As seen in the late 2000s, consumers and even businesses will not invest in hydrogen fuel unless there is sufficient infrastructure available to make use of such investments. Private infrastructure development, she says, won’t happen unless there is an existing customer base.

This need for government action spurred Bekemohammadi, to work with Utah Representative Melissa Ballard (R-North Salt Lake), this past session to pass a bill creating tax incentives for hydrogen production in the state. Although the bill was ultimately successful, Bekemohammadi, says they ran into opposition from state leaders who see hydrogen as tied to California and environmentalism—and therefore as something that’s out to kill Utah jobs and energy production.

“The barrier for us is having the state understand that one project does not define the hydrogen landscape,”  Bekemohammadi says, “and that Utah has a potential to be a leader in this space.”

The question is no longer whether the world will transition to a low-carbon economy; it’s already happening. Now Bekemohammadi says, the US sits at a critical juncture between pursuing economy-wide electrification or implementing alternative fuel sources, with many jurisdictions passing building codes that prohibit the use of natural gas and other fossil fuels.

This means new homes and buildings won’t have the infrastructure needed to use gaseous fuels in the future. If we continue down this path, Bekemohammadi says, it’s not just Utah that could be left behind—society writ large would need a massive, and expensive, expansion of the electrical grid. Or if hydrogen is adopted in the absence of a proactive approach, retrofitting these all-electric buildings to receive hydrogen could also prove costly. 

“It’s really just about waking up a bunch of folks and saying if we’re going to do this, let’s do this now,” she says.

Emma Penrod is a journalist based in rural Utah who covers science, technology, business and environmental health. She writes a weekly water politics newsletter at pactio.us/host/emma-penrod and Tweets about the latest science and industry news @EmaPen. When she's not writing, reading or researching, she's hunting sagebrush-scented air fresheners.

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