Paul Rodden • Season: 2024 • Episode: 333
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Welcome to The Hydrogen Podcast!
In episode 333, The Arches hub signs with the doe. What are the details, and what does this mean for the future of US hydrogen development? I’ll go over this news and give my thoughts on today’s hydrogen podcast.
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Transcript:
The Arches hub signs with the doe. What are the details, and what does this mean for the future of US hydrogen development? I’ll go over this news and give my thoughts on today’s hydrogen podcast.
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.
In an article in the LA Times, California’s billion dollar hydrogen hub project is approved, but not without controversy. Russ Mitchell writes, the leaders of California’s embryonic hydrogen hub announced Wednesday that they have signed a contract with the U.S. Department of Energy worth billions. The California hub is part of a $7-billion federal project to build the infrastructure for a “clean” hydrogen economy to replace fossil fuels and reduce greenhouse gas emissions. The California hub — known as ARCHES, or the Alliance for Renewable Clean Hydrogen Energy Systems — will net $1.2 billion of that federal money, with plans to bring in another $11.2 billion in private investment.
California was awarded hub status in October. Private participants include oil and gas companies, labor unions, fuel cell makers, electric utilities, truck manufacturers and more. A hydrogen hub is a network of hydrogen production plants, trucks and pipelines for distribution, and customers that include long-haul fuel cell trucks and buses, port equipment and electric generators. ARCHES is the first of seven U.S. regional hubs to sign a contract with the Department of Energy. In a news release, ARCHES Chief Executive Angelina Galiteva called the hub “a monumental step forward in the state’s effort to achieve its air qualify, climate and energy goals, while improving the health and well-being of Californians, and creating green jobs across the state.” ARCHES board member Bill Burke was even more effusive: The hub’s creation serves as “a testament to our collective dream of a sustainable future where clean energy and equal opportunity uplift every community and provide equitable advancement for the future of our workforce.
Together, we are planting seeds of change and nurturing a brighter, more inclusive tomorrow.” Whether ARCHES can deliver remains to be seen. Clean hydrogen is enormously expensive, with prices far too high to compete against fossil fuels in a competitive market economy. The aim is to subsidize the cost of hydrogen fuel until the industry reduces costs and grows big enough to stand on its own. Galiteva said hydrogen fuel prices could be competitive by 2032. Some environmentalists are wary of hydrogen, claiming it’s not as clean as its proponents make it out to be. That issue is sure to be debated as ARCHES moves forward. Depending on how the hydrogen is made, it could provide cleaner energy alternatives for hard-to-decarbonize sectors, such as steelmaking and cement production.
California’s hydrogen projects will be located around the state, though heavily concentrated in the Central Valley. Trucks and pipelines will carry hydrogen to end users. The money will be handed out to dozens of individual, although tightly coordinated, projects. They’ll include 10 hydrogen production sites, truck fueling stations, replacement of diesel-powered cargo-handling equipment at the state’s major ports and experimental prototypes for uses such as ocean shipping. ARCHES said 220,000 well-paying jobs will be created, with special attention to disadvantaged communities. The hub “will create thousands of union careers while providing continued employment for for existing skilled and trained union members,” said Chris Hannan, president of the State Building and Construction Trades Council of California and a member of the ARCHES board. Reduction in local pollutants will result in $2.95 billion per year in decreased healthcare costs, ARCHES said.
ARCHES is not a government body but a public-private partnership. It’s registered as a limited liability company, or LLC, with four partners: the California Governor’s Office of Business and Economic Development, the University of California system, the State Building and Construction Trades Council of California and the Renewables 100 Policy Institute. And the press release on July 18 for ARCHES said this, California’s renewable hydrogen hub officially launches. On July 17,the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) and the United States Department of Energy (DOE) officially announced the signing of a landmark $12.6 billion agreement, including up to $1.2 billion from the DOE and $11.4 billion in public and private matching funds, to build and expand clean energy infrastructure across California.
This transformative investment, which will directly reduce California’s reliance on fossil fuels, marks a major step forward in the state’s efforts to achieve a carbon-neutral economy by 2045 and follows California’s selection last October as one of seven awardees of the DOE’s Regional Clean Hydrogen Hubs (H2Hubs)–catalyzing a national network of clean hydrogen producers, consumers, and connective infrastructure.
ARCHES is the first of the seven H2Hubs to officially sign their agreement with the DOE. “I was proud to help secure $1.2 billion of federal investments through the Bipartisan Infrastructure Law to build a hydrogen hub right here in California,” said Senator Alex Padilla (D-Calif.). “The path to achieving California’s ambitious clean energy goals runs through ARCHES, and I’m excited to see the California Hydrogen Hub kickoff with this initial round of funding. California is leading the nation with the first hydrogen hub to sign a cooperative agreement, and we will continue to lead by decarbonizing goods movement, the energy sector, and heavy industry.” The overall investment, starting with $30 million for the first tranche of funding out of the total project federal cost share of up to $1.2 billion, is projected to create over 220,000 well-paying jobs.
At full build out, it is estimated that ARCHES DOE projects will result in $2.95 billion per year in decreased healthcare costs due to improved air quality, particularly along transportation corridors. “The Department of Energy’s announcement to fund ARCHES is a monumental step forward in the state’s efforts to achieve its air quality, climate and energy goals, while improving the health and wellbeing of Californians and creating new green jobs across the state,” said Angelina Galiteva, CEO, ARCHES. “We are grateful to the DOE for its commitment to building a sustainable hydrogen ecosystem and marketplace and look forward to working with our project partners, stakeholders and diverse communities throughout the state to make this project a success.”
Spearheaded by Governor Newsom, California’s bold climate policies, including the California Climate Crisis Act (AB 1279), the 2022 Scoping Plan for Achieving Carbon Neutrality, the Executive Order on Zero-Emission Vehicles, and the forthcoming all-of-government Hydrogen Market Development Strategy, all work together to send strong signals about the critical role of hydrogen in decarbonizing the state’s economy. Each of the selected ARCHES projects will play a significant role in improving air quality and public health in many underserved communities throughout California.
ARCHES projects will span statewide, covering the full hydrogen lifecycle from production to use, including, but not limited to:
Renewable Hydrogen Production – More than 10 sites will produce enough clean renewable hydrogen to fuel the projects below and kickstart the buildout of the greater hydrogen ecosystem. Ports of Long Beach, Los Angeles & Oakland – These projects will replace diesel-powered cargo-handling equipment with hydrogen fuel cell equivalents and associated fueling infrastructure, reducing emissions and community health impacts while reimagining large-scale transportation operations.
Heavy Duty Trucks and Transit Buses – ARCHES plans to build over 60 hydrogen fueling stations to enable over 5,000 Class 6-8 fuel cell electric trucks and over 1,000 fuel cell electric buses–directly replacing diesel fuel with a zero emission option in our City streets and freeways across the State and making the air in California’s most impacted communities healthier to breathe.
Clean Power – Both the Los Angeles Department of Water and Power and Northern California Power Agency will transition key power plants to 100 percent renewable hydrogen. Distributed fuel cells will be used to support grid operations throughout the state and to provide resilience in key regions of the state, including on the Federally Recognized reservation of the Rincon Band of Luiseño Indians.
Scripps Marine Vessel – A first-of-its-kind hydrogen-powered 140-foot, 50-person marine research vessel will use liquid hydrogen to replace tens of thousands of gallons of diesel fuel per year. The vessel will convert 75 percent of its emissions to be fossil-free, significantly reducing CO2 emissions and demonstrating a sustainable path forward for smaller water and harbor crafts. In the coming weeks, ARCHES will be announcing additional projects and partners who will receive Hub funding.
ARCHES, in collaboration with communities, stakeholders and policymakers, remains committed to ensuring an equitable transition to renewable hydrogen. The projects selected are focused on delivering direct benefits to communities with the highest pollution burdens, with robust community engagement and innovative systems to ensure the program delivers on its promises. Okay, so a monster announcement that should have every hydrogen hub stakeholder excited about moving forward, and it makes sense that California is the first hub to engage with the DOE as they are really the only state to have a hydrogen economy. You can make the argument for Texas and Louisiana, Gulf Coast area, but that’s primarily for use in the oil and gas industry. I’m also not surprised that this announcement was made before the 45v regulations have been put into effect since the arches hub will strictly use electrolytic hydrogen.
My big question is, where is this $11.4 billion going to come from? That’s a hefty amount to estimate for investments, unless they already have signed agreements. We also don’t know when the first tranche will be distributed or how the 220,000 jobs described will be placed, but this is a very solid step forward in kick starting the hydrogen hubs.
This news comes nearly three months after the ribbon cutting ceremony of the h2 at scale hydrogen Research and Demonstration Facility at the University of Texas in Austin, and while I believe most hub projects will need to wait on clarity from the US Treasury before signing with the DOE, this does show that large projects are getting funded and moving forward, and that funding is important, as I realized something during my time at the Northwest Regional GAWDA conference I attended last week, some of the US companies at the conference are currently exporting their products to Europe, which has been placing certain restrictions on how those goods can be developed. Clean hydrogen is a large factor in that and these subsidies help these companies make that transition.
So congratulations to ARCHES on this monumental step forward. Let’s hope that more hubs follow suit sooner than later.
All right, that’s it for me, everyone. If you have a second, I would really appreciate it. If you could leave a good review on whatever platform it is that you listen to Apple podcasts, Spotify, Google, YouTube, whatever it is, that would be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at info@thehydrogenpodcast.com. So until next time, keep your eyes up and honor one another.
Hey, this is Paul. I hope you liked this podcast. If you did and 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. I very much appreciate it. Have a great day.
