Hydrogen as a replacement energy carrier is quickly advancing in the power and energy industry—the question is, will solar follow?
Development of solar power generation at commercial scale has quickly advanced to a mature industry over the past 5 to 10 years. Gigawatts worth of solar modules have been installed across most states in the U.S. Now, hydrogen as a replacement for fossil fuels is being suggested as a means of extensive decarbonization of sectors such as power generation, transportation, and heavy manufacturing. The generation of green—or low to carbon free—hydrogen from water is one of the leading methods being explored. It is rapidly growing as its own industry and is being embraced by many independent power producers (IPP).
The generation of green—or low to carbon free—hydrogen from water is one of the leading methods being explored. It is rapidly growing as its own industry and is being embraced by many independent power producers (IPP)
Production of green hydrogen to support decarbonization of many different sectors and associated industries will necessitate the power source to be clean, low carbon generation. Tax credits for low carbon hydrogen production will be the primary incentive for at least the next decade. The tax credits, as defined by 45V (i.e., Title 26, Section 45V of the Internal Revenue Code) are based on the kilograms of carbon equivalent created per kilogram of hydrogen produced.
The current draft rules express three pillars of 45V that will dictate how clean hydrogen production is powered, including:
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Regionality: the renewable energy source powering hydrogen must be in the same Balance Authority or Department of Energy Transmission Needs Zones.
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Additionality (or incrementality): powered by new renewables constructed within 36 months preceding the hydrogen plant's operation (there is a 5-10% carve out for existing low carbon sources).
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Time Matching: starting in 2028, the projects must match power use hour per hour from a clean energy source.
If promulgated as-is, the proposed 45V additionality rule will require new renewable or green power generation to support hydrogen production. It must match hydrogen generation on an hourly basis. Hydrogen production facilities cannot use the grid’s renewable power capacity that is older than three years, as by using this power for hydrogen production rather than using it to provide power to homes and businesses will require additional power generation to serve the grid—and in at least the short term that is likely to be fossil fuel-powered generation. This defeats the purpose of broad-based decarbonization efforts.
Early adopters are looking at clipped solar and curtailed wind to support power generation for green hydrogen, depending on pricing. Fulfilling the power needs of the nearly 100 proposed hydrogen production facilities will need purpose-built solar to support the industry's growth as it rapidly commercializes in the next decade. Recent green power additions to the grid are still an option, but will need to be replaced with additional green power sources to avoid using fossil fuels.
Solar and hydrogen present an ideal partnership. Solar can go just about anywhere hydrogen can. It can be scaled to the size of the hydrogen production facility to promote efficiency and cost control, and it can be deployed relatively quickly compared to other forms of renewable, clean energy. Wind does not present the same ease of siting and scalability, and wind takes much longer to build.
Solar also pairs well with energy storage such as batteries or other forms of storage. This will enable time matching to continue into non-solar production hours of the day, further increasing the efficiency of hydrogen plants. The solar plant can be scaled in nameplate capacity to charge the batteries or allow concurrent hydrogen production powering at all hours by a green power source. When there is extra, unused power, the solar power can be sold to the grid like a merchant power plant, further increasing the efficiency and cost effectiveness of the operation.
Is the growth of green hydrogen an opportunity for solar power growth? Today, they certainly look well matched, but time will tell with the evolution of the 45V rules and the growth of the hydrogen market.
