DOE close to loaning $500 million for world’s largest green hydrogen plant

The U.S. Department of Energy’s Loan Programs Office issued a conditional commitment to provide $504.4 million in debt financing on what could be the world’s largest industrial green hydrogen production and storage facility.

The Advanced Clean Energy Storage hydrogen hub, located in Delta, Utah, was announced in May 2019, and within three years is in the final stages of debt and equity closing. Currently, the hub has secured all major contracts including offtake, engineer, procure and construct (EPC) contractors, major equipment suppliers and operations and maintenance (O&M) providers. Haddington Ventures, the financial advisor for the hub and equity sponsor of Magnum Development, is securing $650 million, and these critical financial investments go toward the future growth and scalability of the hub.

“We are unbelievably excited to reach this important milestone, not just for our hub, but for the hydrogen industry as a whole,” said Michael Ducker, senior VP of hydrogen infrastructure for Mitsubishi Power Americas and president of Advanced Clean Energy Storage I. “Equally rewarding is having spent the past year partnering and working with such a forward-thinking and incredibly talented team from the Intermountain Power Agency to trail blaze this market-leading facility. We are honored to be sharing this industry moment with them along with all of our world-class partners joining this effort.”

The hub will initially be designed to convert renewable energy through 220 MW of electrolyzers to produce up to 100 metric tons of green hydrogen per day, which will then be stored in two salt caverns each capable of storing 150 GWh of energy.

Financed with support from the DOE loan guarantee, this facility will supply hydrogen feedstock to the Intermountain Power Agency’s (IPA) IPP Renewed Project — an 840-MW hydrogen capable gas turbine combined cycle power plant — that will initially run on a blend of 30% green hydrogen and 70% natural gas by volume starting in 2025 and will increase to 100% green hydrogen by 2045.

“The IPP Renewed Project is committed to helping the region meet its carbon targets by utilizing green hydrogen as a tool to integrate affordably and reliably with the significant build-out of renewables. The scale, experience, and collaboration offered by the Advanced Clean Energy Storage hydrogen hub made their team the ideal partner for us to work with as we realize our vision towards 100% green hydrogen at the site,” said Greg Huynh, Operating Agent, IPA.

Black & Veatch will provide EPC services for the energy conversion facility and will construct the hydrogen production facilities. Mitsubishi Power will provide the hydrogen equipment integration, including the 220 MW of electrolyzers, gas separators, rectifiers, medium voltage transformers and distributed control system. NAES Corporation will initially provide the O&M services for the plant and will oversee the current projected team of 20 plant-related personnel. Utah School and Institutional Trust Lands Administration, a subdivision of the State of Utah, leases the site and uses revenue generated from the hydrogen hub to benefit Utah Schools. WSP will provide EPCM services for the development of two large salt cavern storage facilities. WSP has been developing underground storage facilities since the 1980s and has developed over 200 salt caverns for midstream companies.

“The Advanced Clean Energy Storage Project is well on its way to achieving its goal in the creation of a world-class green hydrogen hub,” said Craig Broussard, CEO of the joint venture. “Through our network of partners, we have the potential to provide low-cost green hydrogen to verticals in addition to power, including refineries, heavy industrials and the transportation sector.”

While this conditional commitment demonstrates the DOE’s intent to finance the project, several steps remain and certain conditions must be satisfied before it issues a loan guarantee.

News item from Mitsubishi Power

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Original Source: https://www.solarpowerworldonline.com/2022/04/doe-close-to-loaning-worlds-largest-green-hydrogen-plant/