June 09, 2022 • Paul Rodden • Season: 2022 • Episode: SIS08
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INTERVIEW THP08: Mike Lewis / H2@Scale in Texas and Beyond – The Most Comprehensive Hydrogen Hub Plan That Every Country Should Follow In The Future.
Special Interview Series – Mike Lewis / H2@Scale in Texas and Beyond – In today’s interview Mike Lewis joins me to share his fascinating research on a comprehensive hydrogen hub plan for Texas that every country should emulate. His research is funded by the U.S. Department of Energy’s H2@Scale program and Mike and his team have done an excellent and thorough job breaking down everything you need for hydrogen infrastructure.
Just to give you an understanding of how important this hydrogen hub model is, take a look at some of the project partners that have agreed to take part in his project’s research: Unique Electric Solutions, Department of Energy, Gas Technology Institute, WM, Frontier Energy, Texas gas service, SoCal Gas, Toyota, Shell, Mitsubishi Heavy Industries, Powercell AD Sweden, Air Liquide, Chevron, Conoco Phillips, McDermott International, and Chart Industries to name a few. This model for the future of hydrogen hubs is well thought out and well funded and the research will help shape the hydrogen landscape for years to come.
This is a must listen podcast in my opinion and I recommend everyone in the hydrogen industry share this with their colleagues so that we can all work together to build up the hydrogen industry.
Thank you for listening and I hope you enjoy the podcast. Please feel free to email me at info@thehydrogenpodcast.com with any questions. Also, if you wouldn’t mind subscribing to my podcast using your preferred platform… I would greatly appreciate it.
Respectfully,
Paul Rodden
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Transcript:
Paul Rodden
Hello, everyone, this is Paul Rodden. And I want to welcome you back to the hydrogen podcast. I have a very special guest for the show today. And what he’s going to talk about is a game changer for the hydrogen industry. There was a hydrogen project started in Texas in 2020 that utilize the h2 at scale funding from the US Department of Energy. The project’s goal was to bring hydrogen industry leaders together to design build and operate the first dedicated renewable hydrogen network. The project will also be able to leverage Texas’s extensive resources which wind power, solar power, underground salt dome storage formations, hydrogen pipelines, natural gas infrastructure, international port operations, and a large concentrated industrial infrastructure to help in the creation of this network. As a project is coming to its conclusion. I feel that it’s vitally important to understand what we’ve learned from this. And I asked Mike Lewis, the head of the H2@Scale in Texas and Beyond program to come on the podcast and discuss its importance. I think what Mike and his team have done is successfully model the future infrastructure requirements for the hydrogen industry. And based on everything I’ve heard, they have a pretty good blueprint. So enough of me talking, let’s cue up the theme song and dive right into the interview. So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen. And this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast. Okay, welcome back. Today I’m talking with Mike Lewis. He’s the principal investigator and a Senior Research Engineer at the Center for electro mechanics at UT Austin. Mike has over 20 years of experience in advanced research and technology development, and is currently focused on alternative fuels for transportation and stationary power applications. With a large focus on hydrogen power and energy systems. He’s spearheading the H2@Scale in Texas and beyond project. And in my opinion, his research has led to some interesting breakthroughs for the hydrogen industry. Welcome, Mike. It is great to have you on the podcast.
Michael Lewis
Thanks, Paul. Thanks for having me, my first time on the podcast. So I’m very excited to do this. Thanks.
Paul Rodden
So if you can tell us a little bit about your background and what led you to oversee the H2@Scale in Texas and beyond project?
Michael Lewis
Sure, yeah. So I’m a mechanical engineer by training, I get my undergrad and master’s degree at the University of Texas here in Austin. I’ve been with the Center for electro mechanics here at UT for all my career, I guess, over 20 years now as a researcher even started here as a student as an undergrad student, kind of through a co op or internship program with the university. But in the mid 2000s, around 2006, I got assigned to our first hydrogen related project that it put in that installed the first hydrogen fueling station in Texas, and really the only one ever installed in Texas if you discount one’s FOR FORKLIFTS that are operated by Walmart HEB and others in the state as far as a kind of a vehicle size fueling station, primarily the only one that’s ever been in Texas. Along with that came a bus demonstration project, having that station in place that a lot of our ongoing research since then, over the last 15 years at this point, much of that was focused on different vehicle technologies, doing a lot of vehicle demonstration projects, developing first of their kind fuel cell vehicles. We we demonstrated a couple of transit buses along the way the Federal Transit Administration funding part of the national fuel cell Bus program and those are operated with our local transit agency. More recently, we developed the first prototype parcel delivery van that ran on a fuel cell hybrid powertrain. This was a Department of Energy sponsor project, we worked with an OEM that was working on electrifying that vehicle platform during phase one to build a prototype version that ran on hydrogen. I now in phase two of that project, that company Unique Electric Solutions as their name is building 15 More of those vehicles. They’re being deployed and operated by UPS in California, Southern California primarily at this point, but along the way beyond vehicles, we also found ourselves applying our the Center for electro mechanics, knowledge of motors and generators and electric machine designs to other things like compressors and Expanders for hydrogen infrastructure, right. It’s not just about the vehicles we along the way we realize there’s there’s, you know, the fueling stations need work in advanced research. And historically, the Center for electro mechanics had done a lot of electric machine design and work and We tried to apply that to see how we can improve the drive mechanisms for compressors, as well as expanders. And in for the expander, we would be using that to pre cooled gas at a fueling station before it goes before it’s dispensed into the to the vehicle. Those are projects that we’ve been working on for a several years now, that all started with an RPE grant for actually a natural gas compressor, not not a hydrogen one. But those were in partnership with Gas Technology Institute, which has been a great partner throughout all all of our hydrogen research, they actually were the ones that helped us install the very first fueling station that I mentioned earlier as well. But that has kind of all led us to this point with this hydrogen at scale project, right? So just kind of that fundamental background and different aspects of hydrogen technology, and trying to bring it together into this hydrogen scale ecosystem or proto hub, as we’re kind of more recently terming it, you know, how does all the infrastructure come together? Different end users? You know, how do you put it all together? What does this hydrogen hub look like? Effectively? You know, when we wrote this proposal, we were proposing a small scale hydrogen hub before hydrogen hub funding became available, or anybody was talking about hydrogen hubs.
Paul Rodden
That is incredible, I mean, one, I just being in Texas, I love that all this is getting developed here in state and you’re able to just push this
Michael Lewis
Oh, yeah, tell me about it. I had plenty of projects that were deployed in California along the ways. And so bringing one to Texas was definitely part of our motivation. When we proposed for this h2 scale project.
Paul Rodden
I’m really I’m really, just so thrilled that you’re able to do that. So if we can, can we do a deep dive into the project? What is H2@Scale in Texas and Beyond? And how did the How did the project come together?
Michael Lewis
Well, sure, the the project came together through a Department of Energy funding opportunity announcement, you know, over the last few years, they you know, every year, every funding cycle, they they sponsoring h2 scale demonstration projects of some sort. And people were doing various things. So we responded to one of those in 2019, with their with that announcement. And with that announcement, they had a focus on, you know, renewable hydrogen generation, also using hydrogen for data centers, you know, so just kind of looking at the feedback that we saw in the announcement from DOE, got to thinking and brainstorming what we could do for a demonstration project in Texas, and at UT Austin. And the demonstration project that we currently have, it will be at the JJ pickle research campus, which is part of the University of Texas in Austin. It’s in North Austin, not not the downtown teaching campus. So there’s land available, and there’s room to do large scale experiments such as this project. And, you know, with the end, the idea that we had in mind was to try to incorporate as much of the hydrogen at scale concepts as we could into one project, one one, you know, one ecosystem. So in the, you know, the DOE had funded a lot of demonstrations, but it’s, you know, they tend to be kind of do some electrolysis, and partner with fueling or something. And we wanted to, you know, we’d looked at the back concept for each tooth scale, that kind of the graphic that most people might be familiar with, all the bubbles are circles around it. And we’re like, what are this can we do on campus? How much you know, how could magically model this kind of system that’s illustrated here in this graphic? So what you know, we can make hydrogen from different sources, right? So if we have natural gas, we can put it in electrolysis, can we do that? How do we make both of those renewable for this demonstration project, just knowing the funding constraints and so forth. So for example, you know, we’ll be using renewable natural gas with our steam methane reformers that will be part of the demonstration project. Now, that is not trucked in renewable natural gas, but it is including industry partners who are responsible for that industry. And so for example, its its waste management, I think they go by just WM now is providing the landfill gas and one gas or Texas gas services is taking that gas onto their pipeline system. And then of course, that’s what feeds eventually feeds our campus, but they’re covering the cost of doing all that that’s not a cost to the project for that so that that helps us in a way that gets us that renewable feed pathway. On the electrolysis side we’ll have a couple of electrolysis pieces of equipment as part of the demonstration project as well it would be cost prohibitive to put in big solar arrays and wind farms to power that system. So we are monitoring existing assets and then replicating their power output profiles as you know as the feed the power feed into the electrolysis equipment. So we get that temporal variation over time, and can study how that impacts our ability to generate hydrogen and store that Add energy and use it later. So okay, so that so that was the generation side of it. But then now what have are in uses for the hydrogen, right? There are multiple uses all throughout industry. But what would be feasible in on this campus? Well, vehicles, we can bring in vehicles. So we reached out to Toyota, they’re going to partner with us and provide a small fleet of Toyota Mirai’s for the project demonstration, which is super exciting. And it’ll be kind of really the first, you know, beyond forklifts, you know, the first real kind of fleet to be operated in, in Texas, I say, fleet, it’ll be on the order of seven vehicles, maybe 10. Not not a lot of them. But yeah, it’ll be, it’ll be super great. We hope that we think that’s a very visible part of the product that will bring a lot of PR and support to it. But the big thing that we had on this campus that the you know, I mentioned earlier to DOE was interested in hydrogen for data centers, is the campus hosts, the Texas Advanced Computing Center. I think this changes probably about every six months, but at one time, it was the largest supercomputing system in the country. I think every university upgrades their systems every few months. And so that continually revolves, and they may or may not be at this point. So all the hydrogen we’re generating here, part of its going to be used to fuel the vehicles will have dispensers for those, but the majority of its going to actually be used in a stationary fuel cell power system that will be connected to the Texas Advanced Computing Center, we’re specifically targeting a portion of that computing center that was installed as part of another research project funded by the Japanese partly funded by the Japanese government actually, where they were wanting to study DC distribution within data centers to see what efficiency gains can be had there, which is especially important if you think about if it gets tied to solar generation or fuel cells, which are already DC power sites. So that particular Computing Center has a large solar array attached with it has DC distribution throughout it. And that’s the part that we’re tying into for this demonstration. So the entire Computing Center consumes megawatts of power, right, lots of power fuel cell for this project, going to be putting out 100 kilowatts, but its size specifically for that unit, the peak power draw of that portion of the data center is about 100 kilowatts, pulls, on average, probably closer to 40 kilowatts, and then there’s a 250 kilowatt solar array that supports it. But we’re going to tie in the hydrogen generation aspects into all that now see how you know, how much of that solar? Can you really capture how much you can really decarbonize that portion of the data center throughout this project. So we’ve done some modeling of that. And we may we can talk about that a little bit later on here in the project. But I think there’s we’re finding out some interesting things there.
Paul Rodden
I think I mean, I love how you’re addressing the traditional utilization of hydrogen in you know, the you got the Mirai fleet coming in, but also like that your are looking into power generation for datacenters. I love that application for hydrogen to you. Because usually, it’s always been those diesel generators, as those power backups.
Michael Lewis
for sure, for sure. Yeah. And having, you know, yeah, and we’re taking it beyond even backup, there’s a lot of talk in the industry of fuel cells replacing the backup diesel generators, but we think there’s potential for them to even be sort of more of a role than just the backup generator, you know, there’s, there’s opportunities. Well, what we’re seeing in the data for that, we’ll just dive into it, why wait I guess. Looking at the data from the data center over a one year period, right to solar generation, its power consumption, the sun doesn’t shine all day long, right. But they’re definitely when it is out and it is working for you were there stranded solar power, stranded solar energy being wasted, you know, all throughout the year, the data center is not running at that high of power output, so it cannot consume it. So there’s opportunity to store that energy in the form of hydrogen or maybe even a battery as well, right, any whatever hydrogen, whatever energy storage mechanism you want to look at, we’ve looked at batteries and hydrogen so far, but then we also notice in the data that there’s the power center load peaks off and on right, it’ll see peaks of 100 kilowatts, but then it goes down to more of an average or base load, right? In our analysis, there’s an opportunity to peak shave with a fuel cell power system, as well as load shift or or recapture that kind of wasted solar energy, you know, so beyond the fuel cell being operating just for backup power and placing that diesel generator, which probably doesn’t get used very much anyway, right? Yeah. I don’t know the utilization, how often they have to kick those on in a data center. But we see the you know, looking at the economics and you know, how much you can save an energy and demand charges and so forth using electrolysis to make hydrogen fuel cells and provide power we see an opportunity where it kind of pays for itself, it’s not a slam dunk right now for sure. You know, it’s gonna take kind of like a 20, you know, 15-20 year life, it’ll kind of breakeven, you know, you, you can save money in your total energy costs, because you’re capturing that excess solar, but then we size the fuel cell to provide, you know, to kind of supplement the grid power, right. So we’re not disconnecting the data center from the grid. But we are looking at like a control system for the fuel cell that turns on and provides power whenever the load becomes, say, more than 50 kilowatts at the data center. So it can provide that peaking power that you need throughout the day, or throughout the year. And so not only you’re getting the energy, energy benefit, right, because you’re capturing better solar energy, but you’re also reducing your peak power. So your demand charges are a big cost factor for for everyone, right? Just about it’s talked about a lot with electric vehicle charging, right, especially heavy duty vehicle, charging transit, buses, and so forth. So you start combining those energy savings with the peak power demand savings, and that kind of adds up and starts to pay for the systems over the life of the systems. And then of course, you have the extra benefit of reducing emissions, and then back to the diesel generator, right? If you’ve size that fuel cell to, you know, be able to do the peak power requirements, in this case, 100 kilowatts. Now, that’s also your backup supply, as long as you have hydrogen storage on hand. Right? Yeah. So. So we think there’s more utility for those for that hydrogen system partnered with these data centers, rather than just backup power. So that’s something we hope to prove and demonstrate on as part of this project.
Paul Rodden
I really look forward to seeing those results, too.
Michael Lewis
But you know, back to the project, how this came together? Yes. How do we incorporate as much as you know, the the DOE H2@Scale vision and show how this entire ecosystem comes together? Right? How they can how the systems interplay with one another, right? So, you know, beyond just putting in the equipment, we’re having a small small hydrogen distribution network with it, right? Do all the electrical interconnections? How does having a large baseload consumer of hydrogen, such as the data center help to make the production more economical, more efficient, more effective, such that we have relatively affordable fueling for vehicles? Right. So I think that whole ecosystem needs to come together to get economies of scale up and such and make it affordable across all parts of industry or the economy where hydrogen can play a role. But with all that said, that’s the project we ended up with, I’ll say, I started shopping this around with our partners that became part of the project, both other researchers like GTI, Frontier Energy as our prime on the project, but then a slew of industrial partners, that everyone really wanted to do a demonstration project in the port Houston, or Gulf Coast region of Texas. Yeah. And that makes sense, right? That’s where the hydrogen economy already is in Texas, you know, hundreds of miles of pipelines, all the infrastructures in place. And we’ll get get to this at some point during this interview, too. But that’s where all the interest is in Texas today. Right are a lot of interest is there. So we actually proposed with this project. And this is sort of the Beyond part of the project in the title beyond the just the demonstration, we wanted to take a deep dive into what the hydrogen economy might look like in Texas in the future, right, the clean hydrogen energy economy, right, we already have a hydrogen energy economy, Houston’s already a hydrogen hub. It’s just not a clean one. So several researchers here at UT are working on developing kind of in depth, techno economic models. They’re kind of, you know, optimization models built on a network model, like a geospatial model of Texas, that’s going to build out hubs basically, think of a hub or node as different cities and regions within Texas, allowing them to decide based on whatever industry they have there, whether those industries are adopting hydrogen or not, maybe they’re building out hydrogen pipelines, maybe it’s adding hydrogen generation throughout the state. But trying to let this model kind of smartly help to help us make decisions on where, how that hydrogen economy should grow in Texas, and obviously, a big part of it a bit is is on the Gulf Coast, or where we’re centering things, and that’s kind of the heartbeat of that model where it starts from, but anyway, we we added that part into the project scope, just to we could be better prepared for you know, what we didn’t know at the time but as basically the bipartisan infrastructure bill spending for hydrogen hubs, right. Yeah. So that’s allowed kind of fortuitous timing. We did not foresee that coming. But here it is. And we’re we’re working as fast as we can on that to get that work rolled out and published, get some results there.
Paul Rodden
So when you We’re dealing with the Department of Energy. Did they have specific questions that they wanted answered? They just kind of let you take the lead on how you’re going to model out your hydrogen infrastructure in the study?
Michael Lewis
Yeah. So, yeah, they always they have their targets and goals in mind. Right? For sure. They, they do a lot of work. They’re their labs. And, you know, as I said, they wanted to, you know, one of their emphasis with that particular funding opportunity was data center. So we tried to listen to that and respond to that. But when it came to like our project demonstration, and even even the modeling side, you know, one of the one of the metrics we’re being judged on is the cost of hydrogen, that would feed a vehicle cost of hydrogen at the dispenser. So you know, a lot of their research shows that kind of an ultimate target or goal would be $4 per kilogram. And maybe that’s quickly changing in today’s energy landscape. Maybe that’s, like $5 per kilogram. So that’s an example of something right? They, they, they do set up metrics and milestones for us to achieve, and that that’s a particular one there, right. So through the demonstration, you know, all the costs, you know, of operating that system, do we you know, are we going to be able to deliver, effectively $4 per kilogram to the Mirai’s? Yeah, yeah. And that might, that’s gonna be kind of hard, right? If you take real today’s costs of all that equipment, right? And then that beyond part of the project, we we, for shorthand, call it the port, Houston model, or port Houston study. That’s one that was one of our early metrics in the first year of the project, which we just wrapped up this past January, was to show a pathway for $4 per kilogram, at the pump for, say, fuel cell trucks. And, you know, the model shows that right now today, you know, in Texas, we’re estimating you’re not going to be there, you’re going to be double that. In most locations of Texas. We’re getting some advantages in
Paul Rodden
When you consider California. you are at $16. Oh, yeah. Yeah.
Michael Lewis
Not bad. No, no, exactly. Yeah, yeah. So that, you know, $8, give or take, you know, and that’s really the cost. That’s not maybe necessarily the price somebody’s going to charge you for, right. But but we we get some benefits of the local infrastructure, right, that we already have here. Also, you know, making electric hydrogen from electrolysis, and the ERCOT grid is cheaper than California electric rates, and much of the world. So there are some cost advantages in Texas just right from the start. But to get to that, $4, right, there’s going to be, you know, advances in technology where, you know, the efficiency of the electrolyzers, or whatever the economies of scale that bring down the cost of the system, and then really, maybe at the end of the day, its policies, or some type of policy might have to close that gap. And those policies are being proposed today. Right? There’s right $3 production tax credits being proposed. Hopefully those get passed. But if the if all those things are some portion of all those pathways line up with reasonable kind of assumptions on improvements in technology and cost. Yeah, we do see there’s a path to getting to that $4. And that’s what we showed doe through through that analysis. Back in January, as we were crossing over ending that first year. And moving into our second budget period,
Paul Rodden
Our fingers crossed that you, I think you’ll hit that number. And you know, there’s also new material discoveries for fuel cells that can also lower the costs, I think there’s there’s a lot of opportunity to get those initial costs down outside of just economies of scale and government intervention, too. So we’ll we’ll see how that plays out. So we’ve kind of we talk a little bit about the hydrogen that you’re making now, where you’re thinking it might be going, what are your thoughts on the distribution capabilities of hydrogen? Do you see delivery methods like pipelines, or a combination of pipelines, trucking, your modular units being set up on location? I’m also curious about your thoughts on our ability to convert the existing natural gas pipeline infrastructure can use it for hydrogen? Is it a good use of our resources to just blend it? Should we revamp the entire infrastructure to make it more hydrogen friendly? What are your thoughts on that?
Michael Lewis
Okay, well, there was a lot in that question.
Paul Rodden
Oh, it was a bit of a loaded.
Michael Lewis
Yeah. So well, maybe we’ll go backwards with a little bit on the, you know, blending into the gas pipeline network. You know, I think that’s very interesting. There’s, there’s potential there. They’re also just a lot of questions there. Right? And to what degree we can do this, and, you know, they’re the, you know, this is definitely not an area of my expertise, the natural gas pipeline network, but the more I work on this project to learn about it, you know, there there’s so many different types of pipes, so many different materials, Age of them everything. It’s, you know, it’s a complicated it’s aging system, to what degree we can just put some relatively The high concentration of hydrogen in that pipeline network, I think is largely to be determined. There’s still research needed in that space. You know, it could be a great way to quickly decarbonize. But I think you might want to be smart, though, to about if you’re going to do that, what part of that distribution system you’re going to do the blending yet, right? Yeah, does it? You know, does it really? Do you focus more on just industrial end cases or end users? Do you need hydrogen pipe to your house, for example, if your home runs on natural gas, that that in itself is a pretty controversial topic to begin with? Right? There’s there’s a case to be made for electrifying homes entirely. Yeah, that that could be very interesting. I’ll say one thing that we’ve looked at with respect to this is maybe an end use application of lending. We have a white paper that we published on this as in support of kind of the port Houston modeling work, right? Well, as we’re, you know, we’re not ready to publish our full findings here. But we’ve been publishing small snippets in white papers over the past year, but one of those is looking at blending hydrogen into the natural gas feed to a natural gas power plant, right. But in that case, we we said, you know, this is a great application. There’s a lot of unknowns and uncertainties around how you blend hydrogen with the natural gas pipeline network, and whether or not you can use it. But we know in the port Houston area right now and the Houston Gulf Coast region, there’s an extensive network of hydrogen pipelines. And all, you know, a large percentage of their gas power plants are in very close proximity to those those those hydrogen pipelines. So we take a step back and said, hey, you know, what’s in the near term, right? Where we’re trying to focus on what makes sense in the five years to implement, right, what some of this modeling effort will in the near term, we don’t have to worry about blending in the entire gas network, let’s just run a spur line from these gas power plants there, a lot of them are located within five kilometers. So it’s not an unreasonable distance to cover. And what are the impacts and costs associated with that? You know, what, you know, if you start blending 5% 10%, up to 30%, hydrogen, what does that mean for co2 emissions? And, you know, obviously, you’re gonna pay more for that hydrogen, because it is more expensive than natural gas. Yeah, that hydrogen does also have to come from a clean source, right? If it’s business as usual gray hydrogen today, it makes no sense, the amendments are greater. So we do have to find that source of clean hydrogen. But that’s an easy pathway to quickly have a big impact on co2 emissions in the Houston area, like a 5% blend is something like removing 500,000 cars from the road effectively.
Paul Rodden
Yeah, it’s not, it’s not insignificant.
Michael Lewis
And that’s just 5%. And all the gas power plants there today likely can take that blend right away, you don’t need to upgrade the turbine technology, as we started talking about 30% blends. Yeah, now you need a new gas turbine, more than likely, but at 30%. Now you’re removing like 2 million cars from the road end use scenario. And there’s only like 11 million registered cars in Houston. So that’s a big percentage of cars. So there’s a great opportunity for doing that blending. And it’s great case to be made. Now, how about the whole pipeline network? I don’t know. But in the near term, we can start, you know, doing this in the end applications where it makes sense where some of this hydrogen infrastructure exists.
Paul Rodden
Well, that I mean, that really does go to something that I talked about a lot. And that’s, I like the thought of this as an energy transition instead of a light switch. So it’s little, little things like that really do add up to a big difference, right. And that’s where I think that a lot of the industry should start looking into are these small, little changes, the five to 10% blending, it’s a big, you know, it’s a small add, but it can really add up in the long run. So I like hearing answers like that to really promote that transit.
Michael Lewis
Yeah, the other cool thing that result about that particular paper was, you know, I think shortly after we published our white paper, I think it was Stanford did a publication, they published a study of looking if you took all the natural gas out of homes in the US, what does it mean for emission savings and so forth. And if I remember correctly, the equivalent number of cars, let’s just put it in that kind of context was about the same, but that’s like, all the homes in the US getting rid of natural gas versus just, you know, this one little region of the power plants but but those power plants, it makes sense, right? You don’t see nearly as much gas at your home. It takes a lot of homes equal to power plant, right, exactly. But yeah, but you know, you can focus on one small region and have a super great impact versus trying to do something very large scale and you know, electrifing all homes. Right? Yeah. So, but it goes to your point of transition. Right, you can take steps along the way as we’re working towards the eventual end goal here. And I guess going back to your question about hydrogen transmission or distribution, yeah, the To what degree you can blend is an open question. Right now there’s research to what degree you can repurpose pipelines. My understanding is, there is a era of pipeline in the ground right now, that would be suitable. Yeah. But there are a lot of era’s of pipe ground like, Oh, no pipeline installed in this decade versus the other, that is just a slightly different material. So I think, you know, there is an opportunity to pick and choose and can you piece together the the right era’s, era pipeline, and make a network quickly? The alternative is just building dedicated pipelines or something. We’ve also looked at another white paper study, you kind of had this, this question, you know, how do you do this distribution? And of course, there’s Trucking is a pathway. But typically, it all depends upon the distance and the quantities right? There’s a point where gas use truck delivery makes sense, where liquid truck delivery makes sense. But at some point, if your quantities are high enough for distance was long enough, the pipeline is more cost effective method. But a question we had in doing the port Houston study, part of the project was, how will we make green hydrogen for that area for that region? Right? How do we clean up the hydrogen? You know, as I said, with the gas power plants, it needs to be clean hydrogen, right? So what would you do for electrolysis and, you know, the first thought is a power purchase agreement with the wind farm in West Texas. And we make the hydrogen locally in Houston with electrolysis. And, you know, it’s green, you know, even though you know, you’re still connected to the grid, but you put in your PPA, and you can get the green credit for it. And, yeah, this is all intuitively naturally, that’s kind of what we thought made sense. But then we started questioning Well, maybe it’s cheaper and easier to put an electrolysis facility out in West Texas. But if you do that, okay, now you need a hydrogen pipeline. But we we dove into the economics of that and capacities, efficiencies and all and published a white paper of these results. But effectively, it is more cost effective, we believe, to invest in that pipeline. That’s, that’s well, you know, that’s long term, right? Big picture down the road, near term? No, right. For one electrolysis facility, putting in a big pipeline is going to make sense. But you know, if you could fill up that pipeline, right to capacity, effectively, the cost of a pipelines from West Texas to the Gulf Coast region is about a third of the cost, it would be to put in the number of electrical transmission lines and corridors from West Texas to Houston to power that electrolysis equipment. So the two models are you generate the power in West Texas and do electrolysis on site and then pipeline hydrogen, or you transmit the electrons from West Texas to Houston. And it was kind of a surprising result, right? I think, intuitively, I expected the electrical transmission to be the best path forward. But one of the the kind of the discriminator, there’s just really the energy density of the two, two methods of transport the power line versus the pipeline, because it’s not just one pipeline versus one power line, if that was the case, or the power line would be more cost effective. But it’s actually one pipeline versus five electrical transmission corridors. So you know,
Paul Rodden
especially with hydrogen being so low density.
Michael Lewis
Right, right. And you you’re still you still have it in that pipeline. It’s several 100, maybe 1000 psi. Yeah. Just like all the pipelines today are. But yeah, that’s that’s the discriminant you just need a lot of copper to transmit that the amount of electricity you would need to kind of better off just keeping the electricity out there and converting, converting into hydrogen and transporting it that way. And if that were to ever happen, right, that pipeline doesn’t have to be just green hydrogen right? Now, you can look at that same model for SMR. Based hydrogen. Why put all the natural gas in a pipeline, send it to Houston and make hydrogen down there? If you maybe it makes sense to make the hydrogen in West Texas and now that pipeline is hydrogen, at least it’s a cleaner gas. Right? If if it leaks that’s a whole nother controversial topic as well. I don’t know if we want to get into that. But on the surface, you know what one could say it’s better than leaking methane. But recent EDF reports or studies are questioning that due to hydroxyl radicals and things that Yeah, well, hydrogen can have a secondary effect for greenhouse gas emissions. We’ll see how that how those studies all pan out. There’s, I think there’s a lot of research to be done there to address those questions. And, you know, they bring up valid points and but we gotta investigate all that further. But anyway, once that if that pipeline were in place, you could be making hydrogen from various forms using all the resources in West Texas get it to the Gulf Coast. And you’ve not only can it supply that industry that’s already there in the Houston region, but we’re already a big exporter of energy right port of Corpus Christi has LNG terminals for exporting LNG, right? Suddenly, we’re setting ourselves now up to even be big exporter of hydrogen to the rest of the world or East Coast, West Coast, whatever it might be.
Paul Rodden
So we talked briefly and you had mentioned briefly about some of your partners, and some of the backers that you have from what you’ve said, what I understand Frontier Energy, GTI, Texas gas service, SoCal Gas, you mentioned Toyota, shell, Mitsubishi Heavy Industries, Air Liquide, Powercell Sweden, they’re all involved in this project.
Michael Lewis
The all those people are involved in then some I almost hate to start listing off everyone but Chevron’s has joined our project, Conoco Phillips. Those are two examples of oil, oil and gas companies that recently formed low carbon teams, right, which is a shift for jumping on that ship to Yeah, shift for that entire industry. And as in developing their low carbon teams, hydrogens part of that mix, right. And they wanted to join onto the project to to learn from us maybe even expand our scope, a little bit of things that we’re looking into, and maybe what their particular business interests but we’ve had, the crazy thing about this project is we proposed it in 2019. May 2019, I think was about the timeframe, when we turned in this proposal. Hydrogen was the thing back then, but it wasn’t, wasn’t as hot as it is today. Let’s just say Yeah, we were given our award notification in August of that year of 2019. It then took us about another year to get under contract with DOE, which is just typical. That’s just how it works. But over that next year, the buzz around hydrogen changed, like, instantly. As soon as we got our award announcement, we had industry partners calling us up wanting to chat wanting learn more about the project. And I think it was the aspect of it being done in Texas. That was the exciting thing to these folks. So these are all everyone’s major players in the hydrogen business are in and around it in some manner. Right? They all we have partners now on the industry partners on the project that are covering the entire value stream of hydrogen, right, from production to the distribution to the end uses to people making the electrolyzers or the fuel cells or, or what have you, right, Mitsubishi Heavy Industries was one of our first partners to join after the fact right after we got the proposal award, some of our partners were on from the beginning, waste management, one gas Toyota Air Liquide was on from the beginning. But Mitsubishi came on afterwards. They wanted and they’re involved in all sorts of things with hydrogen business, right? Whether it’s electrolyzers, or gas turbines that can run hydrogen blends, but they wanted to, you know, they they have a headquarters in the Houston area. They think there’s big opportunities for hydrogen in Texas. I mentioned we’re using a wind farm in the demonstration part of the project. Well, they came on board and said, Hey, rather than using somebody else’s wind farm, why don’t you use ours, we have an asset in West Texas, we’ll provide you the data from that wind farm, and let you replicate that for your demonstration project. Also, we’d love to understand more about how that wind farm asset to make hydrogen use hydrogen, what role would hydrogen have for it? That’s something that they were interested in. So that’s been part of the modeling side of the product, as well as taking a dive into how does a wind farm make hydrogen and use hydrogen? Or sell it or whatever the case might be? Yeah, but we even have a partner on the project. McDermott International, you know, who’s basically they’re the guys you need a refinery built. They’re the ones that go build a refinery. Right. So they’re looking at this like, well, you know, our next refineries are going to be hydrogen plants. Yeah. So they’re coming in just to learn from the project. And all these partners are bringing funding to the project to help support our activities. Most DoE projects like this require cost share. So they’re helping us satisfy the cost share the costs match to the project as well, which is, which we’re very grateful for Chart Industries is another one that joined, right. So they’re the liquefaction business of natural gas. Yeah, their next business is liquid hydrogen, right? So they’re doing they’re already doing work with liquid hydrogen tanks and how you might distribute it. So they’re a big part of the project too. And, and it what it’s also been great for the project on that, especially that modeling side is having all these partners throughout the entire value stream of hydrogen is, you know, that model is only as good as the data we have going into it right at the end of the day. So that’s providing us a great network to vet our assumptions against power building the model, but the cost metrics or efficiencies or any of that. So they’ve all been very willing partners there in helping us make sure that it’s a realistic model, right? Sometimes, you know, you build models like this and thinking like an academic year, whatever, the engineer working on this for us, he’s the one who pointed out to me that to give him all the credit, his name’s Josh Rhodes, he’s like, You go build a model. And you have to go, you go find a reference for your inputs. And then you try to dig into where their references came from. And it came from the the previous version of that same report just three years earlier. There you go. Look at that. One is from the report three years prior to that. So having the industry feedback into this part of the project, I think is going to be very valuable, helps us gain more confidence in the results that we’ll be seeing from.
Paul Rodden
That’s great. Yeah. And, you know, as we wrap up here, I’ve got one one more question that I’m really interested to get your insights on. But before I do that, there are there are news, there’s news blips coming out, every now and then about different nations setting up their own hydrogen hubs and how it’s supposed to look, I have never heard or seen anything as comprehensive as this one. That’s I think one of the reasons why I’m so excited about it. It’s again, I’m so glad that it’s kind of in our backyard here. And we’re getting it moving forward. But I’ve I’ve never seen any other hub announcement with so many partners involved, you know, so many different industries getting involved. And you were talking about hydrogen liquefaction partners, oil and gas entities, renewable energy, everyone’s coming together. And it’s like this kind of Nirvana approach to to the next energy phase. And I just want to give you my congratulations for setting up such an amazing project.
Michael Lewis
Thank you. Yeah, well, we’re very excited about it on a kind of right time, right place. In a way, we I think there’s one thing this project also has done is brought together all these people, but with these upcoming hydrogen hub opportunities and announcements, right? It’s just giving a lot of visibility to Texas. You know, that was our hope. When we wrote the proposal, I think doE’s hope too was in funding that get this interest really spawned in Texas. And I think I think it did from from that perspective, I believe, they’re just as proud of the project as well, and the amount of industry interest that is generated. And it’ll be very interesting to see how things develop over the next year, or several years, right. And when you next five years as different hydrogen hubs are announced throughout the country, and the crazy thing is, we didn’t realize we were working on a hydrogen hub project at the time, right? Just we, in a way, I kind of laugh about what it felt like we’re a little bit ahead of the game in developing this project, right. But then, suddenly, now the game is like, way up. Right. So we’re, you know, as I mentioned, we’re year one in the project, the modeling side of things, we hope to wrap up by the end of this year and get a report out on that. We do have a lot of white papers that we’ve published, a handful of those already sort of related to the projects, those are at a just Google h2@UT, you’ll come to a university wide website, hydrogen researchers. There’s a featured publications link or something in there.
Paul Rodden
I ask where where people can find your your findings?
Michael Lewis
Yeah, yeah.So just Google h2 at UT, it’ll pop up and you’ll be able to browse that site. And then there’s a lot of information of other researchers and things going on at UT and the hydrogen space that don’t necessarily involve us. The Bureau of Economic Geology is a big one, right? So these are the guys that knew underground storage oil and gas reservoirs and everything. So they’re forming an industry led partnership group right now to look at the opportunities for hydrogen storage beyond just salt domes, right? Yeah. You look at what other types of basins make sense, depleted reservoirs, or whatever the case might be. And Texas is rich with all that, for sure.
Paul Rodden
So the last question, I asked everyone this and I think you’re uniquely suited to have a very good viewpoint on it. What’s your vision of the future for hydrogen?
Michael Lewis
That’s, that’s a tough one. Right? Like, how far how far in the future? Right? Yeah, I guess I just come back to it. I think it’s futures. It’s, it’s an energy carrier, right? I think quite simply, it’s an energy carrier. We want to meet all of our goals by 2050, or whatever the date is for your co2 emissions goals, right? Like global warming, climate change. I think hydrogen is going to be a part of that. Right? As we all have our power generation as we go to renewables, right. Everyone knows about the temporal variations and how do you balance power and right you know, California has a problem with too much renewables being generated at times and this kind of wasting power. And if it’s not hydrogen, I don’t know what it is. That is capturing that in Energy. It could be batteries, right? Batteries, I think are much lower scale. But I think about like, how do you capture the breeze? How do you capture sunlight? Yeah, bottle it. Right? Yeah, and not just bottled it and use it there but bottled it and ship it elsewhere. Right. Right. How else do you do that if it’s not hydrogen? So that’s that’s kind of how I seen and and I say hydrogen, that could also be ammonia, it could be methanol, right? It could be a bunch of different carriers once you get it kind of to that hydrogen point. But that’s, that’s, it’s that energy. Curious how you’re going to capture that sunlight? How do you bottle it? And I think that’s, that’s our best answer at this point. So that’s what I think its big future. And then once you have that, where do you use it? Where does it make sense, right? Yeah, I think get in gas turbines for power generation is going to be a path. Lots of industries that need heating, right? Steel cement, if you can get that cost down and make it affordable, then you offer this opportunity, this new energy carrier effectively to be a new fuel for for different applications. Where does it go in transportation that’s a little iffy, right? By now, it makes a lot of sense and heavy duty, maybe less so in light duty, but it’s heavy duty ramps up and brings up economies of scale. Maybe we all want to start driving fuel cell vehicles and forget about the battery vehicle. They become a thing of the past. Yeah. Although it only takes the next latest and greatest battery to change all that too for transportation. Right. Yeah. So that’s a big unknown. For me, I think the idea that always come back to is just how do you capture that breeze or the sunlight and export it across the world?
Paul Rodden
I mean, I love that. How do you this? This is how we bottle sunlight. I love that.
Michael Lewis
Yeah. So that’s what that’s what I see the future of hydrogen, it’s that are a bunch of electrical transmission lines.
Paul Rodden
Like hydrogen better, transmits. Awesome. This has been an incredible conversation. I’m so appreciative for the time and effort that you put in to helping to create this, this blueprint and shaping the future of the hydrogen economy. Thank you for taking the time with me today. I really appreciate it. I look forward to hopefully having many more of these conversations.
Michael Lewis
Sure, for sure. Well, hopefully, maybe we can do something in person when the demo is up and running, or just, you know, maybe maybe a follow up when we publish a report on the modeling side of things.
Paul Rodden
We’ll be there. All right. All right, everyone. I would like to thank Mike for joining me today to discuss his views on the hydrogen industry. He has an absolute wealth of information and we are eagerly awaiting the h2@scale report to be published so we can discuss it more on the podcast. Thanks again. Hope y’all have a great day. Take care of thanks again, Mike.
Michael Lewis
Thank you.
Paul Rodden
Hey, this is Paul. I hope you liked this podcast. If you did want to hear more. I’d appreciate it if you would either. Subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening very much. Appreciate it. Have a great day.
