The Biden administration’s Environmental Protection Agency is proposing to aggressively reduce carbon dioxide emissions from fossil-fueled electric power plants over the next 20 years, based on the authorities in the 1990 Clean Air Act Amendments. For many observers, the EPA plan proposes technological prestidigitation, pre-and-post combustion. Post-combustion control is carbon capture and sequestration from flue gases for coal and gas plants. Pre-combustion control depends on hydrogen as a fuel.
At the time of the EPA’s regulatory rollout, the Arnold and Porter law firm commented, “For the proposal to stand up to judicial scrutiny, it will likely be critical for the EPA to show that the technologies it relied on in setting its standards ― in particular CCS and hydrogen ― have been adequately demonstrated.
The EPA approach calls for use of carbon capture and sequestration, primarily aimed at coal-fired units, and “low greenhouse gas hydrogen” aimed primarily at plants using natural gas. The first article in this two-part series focused on the risks involved with carbon capture and sequestration.
Hydrogen, however defined, also poses significant technological, engineering, and economic hurdles. The EPA creates a new hydrogen label: “low greenhouse gas hydrogen” or “low GHG hydrogen,” as distinct from more familiar nomenclature that gives colors to hydrogen based on its origin: black hydrogen, gray hydrogen, blue hydrogen, pink hydrogen, and green hydrogen.
Arnold and Porter notes, “EPA proposes to define ‘low-GHG hydrogen’ narrowly, including only hydrogen with an emissions intensity of no greater than 0.45 kgCO2e/kgH2.” This definition tracks the requirements of section 45 tax credits in the administration’s massive Inflation Reduction Act, which is the first major U.S. legislation aimed at responding to global warming. The legal analysis adds that this definition “likely would only include ‘green’ hydrogen produced from electrolysis using renewable electricity sources.”
There’s the technological and economic hurdle. Using electricity from wind and solar to make hydrogen as a boiler fuel is problematical, as there is currently little capacity to make hydrogen from the wind and sun, or to transport or store it in volumes necessary to fuel conventionally natural gas-fired plants. The issue of cost is largely unknown.
A recent Foreign Policy article outlined: “H2 is presented by its advocates as a Swiss army knife of the energy transition, a versatile adjunct to the basic strategy of electrifying everything. The question is whether H2 solutions, though they may be technically viable, make any sense from the point of view of the broader strategy of energy transition, or whether they might in fact be an expensive wrong turn.”
The Foreign Policy article continues: “Using hydrogen as an energy store is hugely inefficient. With current technology producing hydrogen from water by way of electrolysis consumes vastly more energy than will be stored and ultimately released by burning the hydrogen. Why not use the same electricity to generate the heat or drive a motor directly? The necessary electrolysis equipment is expensive. And though hydrogen may burn cleanly, as a fuel it is inconvenient because of its corrosive properties, its low energy per unit of volume, and its tendency to explode. Storing and moving hydrogen around will require huge investment in shipping facilities, pipelines, filling stations, or facilities to convert hydrogen into the more stable form of ammonia.”
The administration barely acknowledges these realities, although it is surely aware of them. A key to meeting the EPA rules for hydrogen used to substitute for natural gas in power plant likely will hinge on the Treasury Department. The landmark Inflation Reduction Act section 45V provides for a hydrogen production tax credit. The details have set off a lobbying battle between environmental groups and oil and gas industry forces over the definition of what hydrogen will qualify for the tax credits.
Environmentalists are pushing for what they describe as the requirement for “three pillars” of a successful tax credit: “additionality,” “deliverability,” and “hourly matching.” The oil and gas industry is pushing for a looser definition,
Additionality is a requirement that new, dedicated renewable generation be used to make hydrogen qualified for the production tax credit. The pro-hydrogen website GH2 explains, “Some green hydrogen projects are ‘off-grid’, i.e., they have their own dedicated supply of renewable electricity. However, a substantial proportion of green hydrogen projects are ‘on-grid’, adding to the demand for electricity, often in cases where renewable energy supplies are limited. The concern is that the additional demand from green hydrogen production will reduce renewable energy consumption in other sectors (which can use renewable energy more efficiently).…”
Deliverability means that the hydrogen produced for the tax credit is the hydrogen delivered to the generating station, not just hydrogen produced at the electrolyzer.
Hourly matching means not counting hydrogen production for the credit when renewable electricity is not available. The goal is to assure that the hydrogen is produced from electricity generated by wind and solar sources, not generally from the grid, which includes fossil generation when renewable production is not available. The Natural Resources Defense Council and the Clean Air Task Force in April sent a letter to the Treasury Department outlining their views of the need for rigor in analyzing tax credit applications.
An April analysis from the Center on Global Energy Policy observes, “The government needs to choose between prioritizing domestic emissions reductions by setting up strict emissions accounting rules for project to quality for the highest level of the [production tax credit], or prioritizing the rapid deployment and improvements of a technology that can help drive the global energy transition.”
On the other hand, the policy center analysis notes, “Opponents of strict accounting rules argue against saddling hydrogen producers with the challenges of procuring new clean electricity at all hours or operating at a low load factor, which could stifle the deployment of electrolysis-basis hydrogen.”
The administration, through policies adopted by Treasury, EPA, and the Energy Department, which is funding much of the hydrogen infrastructure development, will face a complex and intertwined technology, economic, and policy conundrum as it attempts to tease out a coherent carbon dioxide reduction policy.
It is also well to remember that hydrogen, for its many virtues, including the fact that burning it to make electricity produces no CO2, is not entirely pollution free. Burning hydrogen produces oxides of nitrogen.
–Kennedy Maize
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