White House expands support for hydrogen in clean energy announcements this week | Brownstein Hyatt Farber Schreck
This week, the Biden administration announced several actions to expand its support for the clean energy economy. While much of the focus has been on solar power, the White House also made important announcements for the hydrogen industry and reiterated its support for licensing production and transmission of clean energy on federal lands. This alert focuses on these latest announcements.
The Biden administration authorized the use of the Defense Production Act (DPA) to increase domestic manufacturing of electrolyzers, fuel cells, and platinum group metals to produce and use hydrogen. hydrogen. In a memorandum to Energy Secretary Jennifer Granholm, President Biden said increasing federal purchases and purchase commitments of these technologies and raw materials is the most “cost-effective, expeditious, and practical alternative.” to meet future U.S. supply needs. The Department of Energy (DOE) welcomed the clearance, saying the United States must significantly expand new manufacturing, processing and installation capabilities to reduce dependence on imported fuel. these essential parts and prevent significant price increases as demand grows. In encouraging domestic manufacturing of key components to expand hydrogen production through DPA, the DOE emphasized that it would encourage the use of strict labor standards and community benefit agreements to support domestic workers. It also builds on the administration’s previous commitments to responsible deployment and environmental justice in other sectors by saying that DPA tools should be used to “support low-income communities that have been hard hit by Pollution”.
The DPA was originally enacted in 1950 to mobilize domestic resources to support the United States during the Korean War. Subsequent amendments to the act expanded its scope to ensure that the United States maintains a strong domestic industrial base to supply materials and services for natural defense and to respond to disasters. “To further ensure the adequate maintenance of the national industrial base, to the extent practicable,” the DPA states that “domestic energy supply . . . be augmented by relying on renewable energy sources (including solar, geothermal, wind and biomass sources), more efficient energy storage and distribution technologies and energy conservation measures Although the DPA calls for the expansion of generation, storage, distribution and conservation of clean energy, invoking the DPA to catalyze the production of clean energy equipment is a new approach, however, it offers the Biden administration a way to advance its clean energy agenda. through the executive branch instead of trying to break up an increasingly stalled Congress.
In addition to the White House authorization of the DPA, the DOE has announced plans to distribute $8 billion in funding to develop regional clean hydrogen hubs through its H2Hubs program. Each hub will connect hydrogen producers and consumers to accelerate fuel adoption. The Energy Policy Act 2005, as amended by the Infrastructure Investment and Jobs Act 2021, defines “clean hydrogen” as “hydrogen produced with a carbon intensity equal to or less than 2 kilograms of carbon dioxide equivalent produced on the production site per kilogram of hydrogen produced. Although the focus is on direct production emissions, the DOE said it intends to assess the full lifecycle emissions of each hub proposal and will give preference to applications that reduce emissions. greenhouse gases throughout the life cycle. The DOE will accept proposals for hubs that can produce at least 50 to 100 metric tons of hydrogen per day and will consider the Biden administration’s commitment to environmental justice and underrepresented communities when reviewing proposals. . This week’s announcement is intended to provide guidance to funding applicants in developing their proposals prior to the official announcement of the DOE funding opportunity this fall. Previously announced regional projects, such as the Western Inter-State Clean Hydrogen Hub, will benefit from this additional guidance.
Clean energy on federal lands
In the same announcement, the White House reiterated its commitment to allow projects that generate and transmit clean energy on federal lands. Five key agencies – the Departments of the Interior, Agriculture, Defence, Energy and the Environmental Protection Agency – are working together to speed up and increase the efficiency of environmental reviews of energy project proposals clean on federal lands. The DOE also seeks to work effectively with states, tribes, industry, and other stakeholders to accelerate the construction of transmission infrastructure to transport clean energy for use throughout the country. Delays and obstacles to permitting conventional renewable energy generation and transmission projects on federal lands will similarly hamper hydrogen projects, including the DOE’s plan for regional hydrogen centers., unless the DOE firmly establishes itself as the leader and coordinator.
This week’s announcements indicate that the White House’s government approach to encouraging a clean energy transition and tackling climate change is gaining momentum. Hydrogen, including planned hubs, continues to play a key role in these efforts. Notably, the practical funding level of the DPA authorization will be limited by the DPA budget. Congress has allocated about $888 million for total DPA spending, but clean energy programs will compete for funding with other DPA priorities, including COVID-19 vaccine production, reducing shortage of infant formula and support for national mining and processing of strategic and critical minerals. Legislation is pending in both the House and Senate to increase the annual appropriation for clean energy programs under the DPA to $10 million per year through 2030, but has been stalled for many years. month. Therefore, the DOE’s announcement of its intention to pour $8 billion into regional hydrogen centers may be the best source of funding to accelerate this critical technology.