Dive Brief:
- The U.S. Department of Energy has awarded $750 million in clean hydrogen manufacturing and technology grants to 52 projects, the DOE said Wednesday.
- The DOE expects advances in electrolyzer manufacturing, fuel cell assembly and advanced materials and components could help U.S. manufacturers produce 14 GW of fuel cells and 10 GW of electrolyzers per year.
- Electric Hydrogen, an electrolyzer manufacturer and one of the grant recipients, said the funds should help the company accelerate its growth plans by up to five years and could help the clean hydrogen sector break through the current market stalemate.
Dive Insight:
The latest hydrogen investment from the DOE aims to bridge the gap between supply and demand for green hydrogen by cutting production costs — and it might just work, according to manufacturing experts from Electric Hydrogen, also known as EH2.
EH2 learned on Wednesday that it was one of eight electrolyzer manufacturers to win grants under the Clean Hydrogen Electrolysis Program created by the bipartisan infrastructure law. Other companies selected for awards — such as ACS Industries, 3M and Plug Power — will focus on electrolyzer components, fuel cell manufacturing, and on supply chain challenges related to both electrolyzers and fuel cells. The DOE also awarded a $50 million grant to the American Institute of Chemical Engineers to establish a research consortium dedicated to the recycling and reuse of clean hydrogen-related materials and components.
The grants are expected to play a key role in advancing the DOE's National Clean Hydrogen Strategy and Roadmap and its Hydrogen Shot, which aims to cut the cost of clean hydrogen to $1/kg by 2031, according to U.S. Secretary of Energy Jennifer Granholm.
“The projects announced today — funded by the President’s Investing in America agenda — will supercharge our progress and ensure our leadership in clean hydrogen will be felt across the nation for generations to come,” Granholm said in a statement.
They should also help the hydrogen industry break free of its chicken-or-egg challenge, said Jigish Trivedi, senior vice president of operations and supply chain for EH2.
“In order to reduce the cost [of producing clean hydrogen], it's imperative that the market is growing,” Trivedi said. “But until you bring the cost down, the market doesn't really kick off.”
EH2 plans to use the $46.3 million DOE award to streamline its manufacturing processes, said David Eaglesham, EH2 founder and chief technology officer. Normally it wouldn't make sense for the company to begin this streamlining process until its existing factories were nearing capacity — a milestone the company expects it could reach organically in two to five years, Eaglesham said. But with the DOE's grant, EH2 can begin to hire engineers to work out more efficient manufacturing processes even as it grows the customer base for its first factory in Devens, Massachusetts, he said. The factory is expected to begin production in the second quarter of this year.
Eaglesham said the DOE's grants represented a “big step” in getting green hydrogen over the first set of technical challenges that have prevented it from growing more rapidly. For green hydrogen to compete on the open market, it must achieve cost parity with conventional hydrogen derived from fossil fuels, Trivedi said. But that will require lower-cost electrolyzers, which will require manufacturing at scale, they said.
But even if the industry clears this first hurdle, it will still face a host of challenges related to financing and distribution, Eaglesham said.
“The DNA of our company is from solar companies that have brought solar panels to parity with fossil electricity on the grid, and that is very much the goal for Electric Hydrogen as a company, to drive to fossil parity,” Eaglesham said. “And the reason we think this kick start is so important is it moves us in that direction of driving toward lower cost.”
