Virginia Leads the Way in Green Hydrogen Adoption
The Biden infrastructure plan, launched last month in Pittsburgh, includes a great deal of financial and policy investment around green energy in general, and green hydrogen in particular, as a way to lower carbon emissions and enable the US to meet its commitments to climate change targets. But the state of Virginia is already a few steps ahead.
Among other measures, President Biden promised investment to update electric grid infrastructure; fund innovation in advanced hydrogen electrolyzers that enable lower-cost, green hydrogen production; to incentivize the development and adoption of electric and fuel-cell-based vehicles; and to encourage high-polluting industries to adopt decarbonization methods. A total of $100 billion has been allocated to stabilizing and modernizing the electric grid infrastructure to prevent a repeat of power outages like those that made headlines in Texas last winter, and affected Virginia residents as recently as a few weeks ago.
Virginia takes the initiative
All of this should be welcome news for Virginia residents, whose leaders have already decided to invest in hydrogen, and are already some way down the road to decarbonizing our electricity sector. In April 2020, Virginia’s General Assembly made it the first state to pass a law requiring electricity companies to become carbon-neutral. The historic Virginia Clean Economy Act compels Dominion Energy and Appalachian Power, the state’s two largest utilities companies, to close their carbon-emitting plants by 2045, and commits to refusing to grant carbon allowances to any power plants as of 2050.
Back in September, a deal between Mitsubishi Power Americas Inc., Danskammer Energy LLC, Balico LLC, and EmberClear laid the groundwork for a new hybrid power plant in Virginia. The Mitsubishi Hydaptive power and energy plants use hybrid turbines that can change from using natural gas to green hydrogen as soon as fuel supplies become available. Following a successful pilot program in Utah, the proposed Balico plant will generate 1,600 megawatts of fuel for Virginians. Similar plants are on the way for New York and Ohio. Now other electricity companies are following suit, with Puget Sound Energy signing a deal with Mitsubishi Power as part of its goal to replace coal-based power generation with carbon-zero alternatives.
Virginia’s thought leaders are even exploring a more ambitious target of achieving a carbon-free grid by 2035, just 14 years from now. It will require concerted effort to situate solar panels and wind turbines in brownfield locations, train new workers in the skills needed for green energy production and distribution, and more foresight from utilities companies to prevent them from sinking more money into the dead end that is fossil fuel energy production.
Virginia’s coal plants are already losing money, and have been for years. Unfortunate investments in natural gas plants are also going to be a drag on ratepayers for years to come, but that needn’t slow things down. Wind and solar power in the state are moving ahead and the cost of green power is dropping all the time. Virginia has a lot of potential for offshore wind energy production, and electricity providers are waiting for new areas of ocean to be designated for turbine fields.
A new project in Europe could light the way for Virginia’s green power market, as the hydrogen electrolyzer company ITM Power has joined a consortium to develop the first offshore wind-powered hydrogen plant. The plant will use excess energy from wind turbines to power the production of green hydrogen, thereby lowering the cost of production and enabling green hydrogen to compete in terms of price with natural gas. With miles of coastline suitable for offshore wind farms, the combination of clean wind energy and green hydrogen could be a winner for Virginia.
Nationwide advances in green hydrogen
Green hydrogen is the climate-friendly fuel of choice for a number of energy companies who are working to lower their carbon emissions. It’s energy-dense in nature, enabling long-duration discharge cycles that gather excess energy and release it later at times and places of peak demand. The stable fuel cells offer long-term reliability in delivering sufficient electricity to large areas as demand fluctuates. Additionally, hydrogen is abundantly available across the planet as a compound with oxygen, and as technology evolves, the cost and effort involved in isolating hydrogen molecules through electrolysis, storing and transporting the hydrogen, and compressing it into fuel cells to be released as energy, is continuously falling.
Across the country, tech and fuel companies are reading the room and taking steps to advance the development of green hydrogen fuel production, distribution, and adoption, forming the beginnings of a hydrogen network in the US. In Louisiana, Optimized Process Designs and Koch Project Solutions are joining together with Fidelis Infrastructure’s Gron Fuels portfolio company to build a renewable energy production complex that covers green hydrogen production as well as renewable diesel and aviation fuels and biogenic carbon capture. It intends to produce the equivalent of 1,000 megawatts of green hydrogen energy.
Plug Power, one of the leading green hydro stocks, recently announced plans to join with Brookfield Renewable to build a 100% renewable energy-powered green hydrogen plant in south-central Pennsylvania. This follows the announcement a few months ago about the development of a green hydrogen production facility and electric substation in New York. Meanwhile, Plug Power announced another alliance, this time with BAE systems, to develop hydrogen-based fuel cell engines for transit bus fleets across North America. Together, the companies hope to build a scalable system for zero-emissions public transportation.
The winds of change are strong enough to push even some of the biggest oil and gas giants towards clean energy initiatives. Gas producer Chevron USA signed a memorandum of understanding with the carmakers Toyota Motor North America, Inc. to form a strategic alliance that will explore the demand for light and heavy-duty fuel cell electric vehicles (FCEVs), research hydrogen-powered transportation, and support the development of a hydrogen infrastructure.
National and local interests intersect with green hydrogen
With analysts predicting that the hydrogen industry could grow over 9% CAGR to be worth over $300 billion by 2027, hydro stocks are already attracting investor attention. Virginia’s leadership and President Biden share a concern about the need to reduce carbon emissions and agree that this could provide an opportunity for economic growth on a local and national scale. With support from federal and state government, we think the shift to green hydrogen looks appealing.
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“Hydrogen Market value to hit $300 billion by 2027, Says Global Market Insights Inc.” April 06, 2021, Global Market Insights, Inc. https://www.globenewswire.com/news-release/2021/04/06/2204782/0/en/Hydrogen-Market-value-to-hit-300-billion-by-2027-Says-Global-Market-Insights-Inc.html