Connect with us

Published

on

A rendering of a hydrogen energy storage gas tank for clean electricity solar and wind turbine facility.3d rendering

Vanit Janthra | Istock | Getty Images

One of the most generous tax credits in Biden’s landmark climate bill, the Inflation Reduction Act, is the production tax credit for making hydrogen, which is worth as much as $100 billion.

When hydrogen is used in a fuel cell to generate electricity, water is the only by-product. Generating energy from hydrogen this way does not create carbon dioxide, one of the primary greenhouse gases that causes global warming. Also, hydrogen is a vehicle for storing energy over long periods of time.

Hydrogen is already produced at scale for use in making fertilizer and in the petrochemical industry. But more recently, hydrogen is being seen as a way to decarbonize industries like maritime shipping, long-haul trucking, steel-making, industrial heating, and aerospace. Also, its capacity as an effective way of storing energy makes it attractive for renewable energy sources, like wind and solar, which are inherently intermittent — wind turbines make energy when the wind blows, and solar panels make energy when the sun shines.

However, the only way hydrogen can be a viable solution for reducing carbon emissions is if it can be produced without releasing greenhouse gas emissions. By and large, that’s not the case today.

The proposed tax credit, 45V, is meant to turbocharge the production of low-emissions hydrogen. It’s now up to the Treasury to figure out how to implement it — and that’s the tricky part. The debate centers around how best to write rules that make sure that the hydrogen produced is actually clean so that it can be used as a climate-mitigation tool.

“The IRA’s section 45V production tax credit is the most generous clean hydrogen subsidy in the world,” Jesse Jenkins, professor of macro-scale energy systems at Princeton University, told CNBC.

“But without proper implementation, 45V could backfire, wasting a tremendous opportunity for the United States to become a global leader in new clean industries and causing a significant increase in domestic emissions that imperil U.S. climate goals.”

An Hydrogen prototype GenH2 truck of the Daimler Truck Holding AG arrives at his destination in Berlin, on September 26, 2023, after completing 1047kms with one liquid hydrogen full tank.

John Macdougall | Afp | Getty Images

The adjudication of the hydrogen tax credit has become about more than just the hydrogen tax credit, too. It could also set important precedents for how the government decides electricity used from the grid is really “clean.”

“The hydrogen debate is at its surface level about defining clean hydrogen production, but more fundamentally it’s about what an individual actor needs to do to credibly claim that their electricity consumption is clean,” Wilson Ricks, who works in Jenkins’ Zero-carbon Energy systems Research and Optimization research lab at Princeton, told CNBC.

“Hydrogen is the first time the US government has been forced to directly address the question of verifying clean electricity inputs, so whatever framework it endorses here could set a very strong example for other emissions accounting systems going forward,” Ricks said.

There’s a lot of money on the line and while the details of the debate get a bit wonky, the debate itself represents a larger and more ideological fault line about how the United States should built its clean economy: One side says we should focus on emissions reductions from the outset, while the other says the foundation should be built and scaled quickly and perfected later.

“We have now entered a new phase in the clean energy transition, whereby new solutions and operational paradigms are necessary to accommodate an increasingly renewable grid and catalyze decarbonization. The clean hydrogen tax credits are a major opportunity, and juncture, to start shaping that new phase in the right way,” Rachel Fakhry, the policy director for emerging technologies at the Natural Resources Defense Council, told CNBC.

How clean is ‘clean,’ and how is that decided?

Hydrogen is the simplest element and the most abundant substance in the universe, but hydrogen atoms do not exist on their own on Earth. Hydrogen atoms are generally stuck to other atoms — like for example in water, H2O — and so creating sources of pure hydrogen on Earth requires energy to break those molecular bonds.

In the energy business, people refer to hydrogen by an array of colors to as shorthand for how it was produced. The different methods produce varying amounts of CO2.

The amount of the hydrogen tax credit, which is available for 10 years, depends on the emissions generated in making hydrogen. If hydrogen is produced without releasing any carbon emissions, the tax credit is maxed out at $3 per kilogram of hydrogen. The tax credit scales down proportionally based on the quantity of emissions released.

One way of making hydrogen is with a process called electrolysis, when electricity is passed through a substance to force a chemical change — in this case, splitting H2O into hydrogen and oxygen. To make hydrogen with electrolysis, hydrogen producers may use electricity from the larger energy grid. The electricity on the grid comes from many sources, some clean, like a solar farm, and some dirty, like from a coal-fired plant. On the electric grid, all that electricity gets mixed together.

So the debate over the 45V tax credit has become acutely focused on accounting for how the electricity hydrogen producers use from the grid is accounted for. If the energy used to make hydrogen is not actually clean, then hydrogen is not really a climate solution.

Some hydrogen industry stakeholders want the Treasury to implement strict electricity accounting standards to maximize the likelihood that the tax credits only go to hydrogen that is produced with the least possible amount of emissions.

Others want the Treasury to implement very flexible standards so the hydrogen industry can grow as fast as possible as quickly as possible, then focus on emissions reduction once it’s scaled.

Energy used from the grid to power electrolysis to make clean, “green hydrogen” must meet three accounting standards in order to ensure that it is actually produced in a clean way, according to Jenkins from Princeton. These standards have become known as the “three pillars:”

  • Additionality. The electricity has to come from newly-built sources of clean electricity, meaning it is additional clean energy being added to the grid for the purpose of making hydrogen.
  • Regional deliverability. The clean electricity added to the grid has to be able to physically travel from the additional clean energy source to the electrolysis facility, meaning it is regionally deliverable electricity.
  • Hourly matching. The additional and deliverable clean electricity that powers electrolyzers has to be accounted for on an hourly basis. If the electricity is accounted for on an annual basis, then electrolyzers used to generate hydrogen could be running when additional clean energy is not regionally available — when the wind isn’t blowing and the sun isn’t shining, for example. That means those electrolyzers could be powered by fossil fuels.

“We call these requirements ‘pillars’ because all three are structurally critical: remove any one and the whole ‘clean’ hydrogen house comes tumbling down,” Jenkins told CNBC.

Peer-reviewed modeling work by our group and follow-up studies by other academics have shown that simply plugging electrolyzers into the grid would produce hydrogen with embodied emissions twice as bad as ‘grey’ hydrogen produced from fossil methane. In fact, even an electrolyzer getting just 2% of its electricity from natural gas plants or less than 1% from coal would violate the strict statutory emissions requirements to claim the $3 per kilogram subsidy,” Jenkins said.

Taking sides

Some companies in the hydrogen industry, including electrolyzer producer Electric Hydrogen, clean energy company Intersect Power, industrial heat and power company Rondo, and grid carbon data provider Singularity have publicly pleaded for the Treasury to adopt these “three pillars” of strict electricity accounting for the 45V hydrogen tax credit.

Digital generated image of wind turbines, solar panels and Hydrogen containers standing on landscape against blue sky.

Andriy Onufriyenko | Moment | Getty Images

Air Products, an 80-year old company that sells gases and chemicals for industrial uses, also supports the three pillars of additionality, regional deliverability and hourly matching for the 45V tax credits. Air Products operates in about 50 countries around the globe, has over 200,000 customers, over 110 production facilities around the globe for hydrogen, and already has over 700 miles of dedicated hydrogen pipelines.

“We’ve been producing, distributing, dispensing hydrogen for over 60 years,” Eric Guter, a vice president of hydrogen production at Air Products, told CNBC in a video interview at the end of August.

“If we don’t deliver on the emissions reduction, we will lose the confidence of society in hydrogen and the energy transition. And as a long-term provider of hydrogen, it’s important to us that we get it right and preserve the integrity of the energy transition and the hydrogen industry.”

Josef Kallo, founder and chief executive officer of H2FLY, beside the HY4 liquid hydrogen powered electric aircraft at Maribor airport in Slovenia, on Thursday, Sept. 7, 2023. The aircraft, developed by H2FLY and partners, uses liquid hydrogen to power a hydrogen-electric fuel cell system.

Bloomberg | Bloomberg | Getty Images

Air Products already has two projects under construction that will be compliant with the three-pillars approach. Air Products is part owner of the NEOM Green Hydrogen Company, which is currently building a plant at Oxagon, Saudi Arabia, and which will be three pillars complaint. It’s also part owner of a mega-scale renewable-power-to-hydrogen project in Wilbarger County, Texas.

The European Union will need to import hydrogen, and has already decided to institute the “three pillars” in its hydrogen accounting, Guter told CNBC. So Air Products wants hydrogen produced in the United States to meet international standards.

“Otherwise our products won’t qualify or they will be taxed at the EU border for imports,” Guter said. “We’re talking about a global liftoff, not just U.S. liftoff, of the hydrogen market.”

On the other side of the debate, utility company and energy giant NextEra wants the Treasury to accept annual — as opposed to hourly — matching RECs as sufficiently specific.

“Starting with annual matching would boost green hydrogen investment and lead to greater overall decarbonization potential, allowing the industry to develop the first wave of hydrogen projects and build industry knowledge. If an hourly matching is enacted too early, it will limit U.S. green hydrogen investment, production and the country’s ability to lower emissions, and stifle innovation,” Phil Musser, vice president of federal government affairs at NextEra Energy, told CNBC in a written statement from.   

So, too, does the Clean Hydrogen Future Coalition, which is a trade group representing a diversity of stakeholders from BP to Duke Energy, Exxon Mobile, General Electric, Siemens Energy, American Clean Power, Shell and more. The Clean Hydrogen Future Coalition also says that no additionality should be required for companies looking to produce clean hydrogen, meaning companies do not have to be responsible for putting “additional” clean energy on the grid to get access to the tax credit.

“We’re not suggesting that we should do this indefinitely,” Shannon Angielski, president of the Clean Hydrogen Future Coalition, told CNBC in a video interview at the end of August. “Rather, let the industry start to make investments in that full ecosystem, send signals throughout that supply chain to make investments, and enable an industry to get seeded with the tax credits, and then over time, become more restrictive.”

The Clean Hydrogen Future Coalition proposes becoming more restrictive in those electricity accounting standards starting in 2030. The electricity accounting systems for monitoring electricity usage on a more granular level is not robust and standardized enough on a federal level, Angielski said, for hourly matching electricity accounting to be required.

But technology does exist to allow hourly matching, Wenbo Shi, the CEO of Singularity, told CNBC. His company makes that technology.

“Hourly and even sub-hourly clean energy matching is not only technologically feasible, but it is already being implemented and used by many. The barrier to adoption is not technology, but policy,” Shi told CNBC.

There are also barriers to getting additional sources of clean energy on the electric grid, Angielski told CNBC. For example, interconnection queues, which are the lines power generators have to wait on to apply to get new sources of clean energy connected to the grid, are years long and make the additionality requirement a barrier for the hydrogen industry.

“What we don’t want to do is wait to be able to actually start investing in low-carbon hydrogen,” Angielski said.

But Ricks doesn’t think there needs to be such a rush.

“The ‘order of operations’ for the energy transition has always been a subject of debate in the policy world: should we use our resources to push rapid near-term decarbonization, or instead support scale-up of nascent technologies that we think we’ll need in the future? Supporters of lax rules for hydrogen subsidies have sought to frame the debate in this way, but in this case it is a false choice,” Ricks told CNBC. “The hydrogen subsidies are large enough to support scale-up even with strict rules, and the absence of these rules would likely drive significant excess emissions for decades — hardly a near-term impact.”

Fakhry from the NRDC says it’s very possible that the IRA is going to incentivize more hydrogen than needed for the clean energy transition, especially depending on how the Treasury dictates the rules.

“It’s really hard to say if there will be excess or not. What we can say for sure is if the rules are very, very lax and hydrogen production can happen anywhere without any guardrails, then yes, we will have a lot of hydrogen production that will go to fairly bad end uses,” Fakhry told CNBC.

How Biden's climate plan could steal business from Europe

Continue Reading

Environment

The first giant 15 MW turbine is up at Germany’s largest offshore wind farm

Published

on

By

The first giant 15 MW turbine is up at Germany’s largest offshore wind farm

Germany’s largest offshore wind farm under construction, EnBW’s He Dreiht, just hit a big milestone: The first enormous turbine is now up in the North Sea.

He Dreiht – which means “it spins” in Low German – is using Vestas’s massive 15 megawatt (MW) turbines, the first project in the world to install them. Just one spin of one of the rotors can generate enough electricity to power four households for an entire day.

When it’s finished, He Dreiht will have 64 mega turbines cranking out 960 megawatts (MW) of clean power – enough to supply around 1.1 million homes. And it’s being built without any government subsidies.

EnBW, one of Germany’s major energy companies, has been working in offshore wind for more than 15 years, but He Dreiht is their biggest project yet. “It will play a key role in helping us to significantly grow our renewable energy output from 6.6 GW to over 10 GW by 2030,” said Michael Class, who heads up EnBW’s generation portfolio development.

Advertisement – scroll for more content

The project is a win for Vestas, too. “With the installation of the first V236-15.0 MW, we have reached an important milestone for both the He Dreiht project and our offshore ramp-up, which helps Germany build a more secure, affordable, and sustainable energy system,” said Nils de Baar, president of Vestas Northern & Central Europe.

He Dreiht is located about 85 kilometers (53 miles) northwest of Borkum and 110 kilometers (68 miles) west of Helgoland. At peak times, more than 500 workers will be out at sea building the farm, using a fleet of more than 60 ships. EnBW’s offshore team in Hamburg is running the show.

The installation process is a major operation. The 64 foundations were already set in the seabed last year. Parts for the turbines are loaded onto the installation vessel Wind Orca in Esbjerg, Denmark, and shipped out in a 12-hour journey to the construction site. From there, the turbines are lifted into place. Meanwhile, crews are also working on internal wind farm cabling.

A partner consortium made up of Allianz Capital Partners, AIP, and Norges Bank Investment Management owns 49.9% of the shares in He Dreiht.

Read more: Trump admin halts $5 billion NY offshore wind project mid-build


To limit power outages and make your home more resilient, consider going solar with a battery storage system. In order to find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and you share your phone number with them.

Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

Tesla gives update on Tesla Semi factory, says on track for volume production in 2026

Published

on

By

Tesla gives update on Tesla Semi factory, says on track for volume production in 2026

Tesla has released a quick update about its Tesla Semi factory in Nevada. It says that it is on track for volume production of the electric semi truck in 2026.

The Tesla Semi was first scheduled to go into production in 2019, but it has faced numerous delays.

Now, it appears that there is finally some momentum to bring it to volume production.

For the last two years, Tesla has been working to build a new factory next to Gigafactory Nevada, where it builds the battery packs and drive units for most of its electric vehicles built in North America.

Advertisement – scroll for more content

Today, Tesla released a “progress update on the factory, confirming that it finished building and it’s now working on deploying the production lines:

Tesla had previously mentioned aiming for volume production by 2025, but it is now only talking about starting production toward the end of the year and ramping up next year.

The automaker reiterated its planned production capacity of 50,000 units.

We recently reported that an early Tesla Semi customer, Ryder, stated that the electric truck program is experiencing more delays and a price increase described as “dramatic.”

They now expect to take deliveries of their first trucks later in 2026 and said that the price has increased “dramatically,” leading them to scale back their pilot program from 42 to 18 Tesla Semi trucks.

When originally unveiling the Tesla Semi in 2017, the automaker mentioned prices of $150,000 for a 300-mile range truck and $180,000 for the 500-mile version. Tesla also took orders for a “Founder’s Series Semi” at $200,000.

However, Tesla didn’t update the prices when launching the “production version” of the truck in late 2022. Price increases have been speculated, but the company has never confirmed them.

FTC: We use income earning auto affiliate links. More.

Continue Reading

Environment

Vietnamese solar giant Boviet opens first US factory in North Carolina

Published

on

By

Vietnamese solar giant Boviet opens first US factory in North Carolina

Vietnamese solar panel maker Boviet Solar just opened the doors to its first US factory — a huge new PV module plant in Greenville, North Carolina.

The company dropped $294 million into the state-of-the-art facility, which will pump out Boviet’s Gamma Series monofacial and Vega Series bifacial solar panels. They’re using advanced PERC and N-Type solar cell tech, which basically means these panels are built to deliver higher efficiency and better performance across residential, commercial, industrial, and utility-scale projects.

The Greenville factory’s first phase is now online with an annual PV module output capacity of 2 gigawatts (GW). For Phase 2, which is scheduled to come online in the second half of 2026, Boviet will invest another $100 million to add 600,000 square feet and ramp up to another 2 GW. It will make high-efficiency solar cells.

Once both phases are complete, Boviet’s campus will cover more than 1 million square feet of manufacturing and R&D space. It’s one of the biggest clean energy manufacturing projects North Carolina has ever seen.

Advertisement – scroll for more content

The jobs impact is significant, too. The first phase will create 460 skilled local jobs. Phase 2 is expected to add another 908, bringing the total to over 1,300 direct jobs, plus nearly 2,000 more indirect jobs across the region. That’s good news for Pitt County’s economy, real estate market, and workforce training programs.

“This facility is not just creating jobs, but creating opportunity, innovation, and a stronger foundation for eastern North Carolina,” said Senator Kandie Smith. Governor Josh Stein added that Boviet Solar’s move shows how North Carolina is leading the way in clean energy growth.

Read more: Thomas Built Buses debuts its next-gen electric school bus


If you’re an electric vehicle owner, charge up your car at home with rooftop solar panels. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing on solar, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them. 

Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –ad*

FTC: We use income earning auto affiliate links. More.

Continue Reading

Trending