The Biden administration has cooked up a plan to lead the world in hydrogen production. But analysts worry that buyers may not follow suit. To shore up demand, the Energy Department is sinking $1 billion into efforts to assuage potential hydrogen customers’ fears about future availability and price fluctuations, writes David Iaconangleo. The administration plans to award as much as $7 billion this fall to build the nation’s first clean hydrogen hubs, with the hope of eventually creating a national network of low- to zero-carbon hydrogen. President Joe Biden’s climate law also offers a generous subsidy for clean hydrogen production and billions of dollars in loans and other incentives for international investors to put money into the budding industry. Without buyers, however, such efforts could amount to little more than an expensive experiment. Earlier this year, a report led by former Energy Secretary Ernest Moniz threw cold water on the idea that hydrogen was ready to become a cheap fuel source for a range of polluting industries. While federal tax credits would slash costs, the report found it was not enough to persuade most power companies, oil refiners and steel producers to pick the fuel over other, carbon-intensive options. The risk has yet to thwart producer interest. The sprawling clean energy subsidies are even luring European producers to U.S. shores. As Gabriel Gavin and Ben Lefebvre reported Wednesday, a Norwegian manufacturer chose Michigan, not Europe, as the site of a nearly $500 million factory that will make the equipment needed to extract hydrogen from water. Other European-based companies are considering following suit. While pure hydrogen is by definition carbon-free, the production process sometimes uses fossil fuels, generating greenhouse gas emissions. Using solar, wind or other renewable power to produce the fuel could position hydrogen as a reliable, climate-friendly option to help power the nation’s grid. At least, the Biden administration hopes so. It has called hydrogen a “cornerstone” of its aim to slash power-sector emissions by 2035 and reach net-zero climate pollution economywide by midcentury.
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