Electric utilities and independent power producers are positioned as key players to help speed cost reductions for green hydrogen, a fuel predicted to become pivotal in decarbonizing the U.S. economy, experts said Feb. 10.
The opportunity lies in co-locating renewable power facilities with electrolyzers — energy-intensive systems that break water into hydrogen and oxygen through a process called electrolysis — to produce a carbon-free liquid fuel that contains about one-third of the same energy as natural gas.
“We’ve got to cover the cost delta right now right to get green hydrogen competitive, but we forget that with natural gas or other fuels, they have to be shipped,” Matt Valle, vice president of development for Florida Power & Light Co., said during a panel discussion hosted by the National Association of Regulatory Utility Commissioners. “But if it’s effectively free to get the electrons on-site because you already have service there, it’s really just the cost of the capital on the site and that could help accelerate the reduction and close that cost gap even faster.”
Looking forward, Valle said he sees a future where the U.S. West, Midwest and southeastern states are producing so much renewable energy on some days that they simply will not have enough lithium-ion battery capacity to store all of that excess power. On those days, generators that would otherwise be curtailed can be paired with electrolyzers to produce green hydrogen, which can shift energy between seasons, Valle said.
“There will be days when you don’t have enough batteries to store all of the energy,” Valle said. “Hydrogen really starts to make sense, and there’s a crossover point at a certain duration of storage, when you effectively would be curtailing renewable energy in the future, but you can otherwise direct that into hydrogen, which will be your long term storage.”
Florida Power & Light, a NextEra Energy Inc. subsidiary, is expected to bring a $65 million pilot project online in 2023. The…generating facility will feature three small combustion turbines where the utility plans to experiment with different blends of green hydrogen at first.