Bill Gates says path to low-cost hydrogen unclear, US must try many ideas

As debate over what constitutes clean hydrogen heats up, Microsoft Corp. founder, philanthropist and energy investor Bill Gates said the U.S. should not close the door to pathways that could lead to cost-competitive hydrogen.

"The goal of cutting the premium by 80% is a fantastic and ambitious goal," Gates said at the U.S. Energy Department's Hydrogen Shot Summit on Aug. 31. "We don't know which path will be followed to do this. There are many different ideas, and we'll have to innovate. We'll have to try out different things. We'll have to see how things work as we scale up."

The DOE launched the Hydrogen Shot program in June with a goal of reducing green hydrogen costs by roughly 80%, to $1 per kilogram, within a decade. On Aug. 12, Gates pledged $1.5 billion in funding for four decarbonization technologies — direct-air carbon capture, green hydrogen, long-duration energy storage and sustainable aviation fuel — through the Breakthrough Energy Ventures LLC fund. The plan is to partner with the DOE to enhance federal spending.

The investment, Breakthrough Energy Catalyst, is contingent on the U.S. passing the Senate's bipartisan infrastructure bill, which includes federal funding for public-private demonstration projects through the DOE and $9.5 billion for the agency's hydrogen program. Breakthrough will likely shift Catalyst funds to Europe and Asia if the U.S. fails to put forward a program to develop clean energy technology, Gates told The Wall Street Journal.

"Through blended finance, we'll find a way to decrease the costs of these products and make them available in the market, proving they can be financed and scaled up," Gates said at the summit. "Our collaboration with the Department of Energy is designed to accelerate these products into the market."

What qualifies as clean hydrogen

The partnership comes amid an escalating debate over hydrogen, recently underscored by a scientific report by well-known climate researchers, which found that burning blue hydrogen is worse for the environment than combusting methane. Blue hydrogen producers pair processes that use natural gas as a feedstock with carbon capture technology.

Similarly, some green groups have urged policymakers to pursue only green hydrogen, produced by splitting water in electrolyzers using renewable power. Yet other energy system experts have argued for pursuing a broader range of hydrogen technologies, including low-carbon blue hydrogen, high-temperature electrolysis from nuclear power and other emerging pathways.

Breakthrough itself has backed technology that splits methane into hydrogen and carbon through a process called pyrolysis. At the summit, Gates also expressed confidence in a proposition that green groups have disputed: that the U.S. can adapt much of its vast, existing gas pipeline infrastructure to transport hydrogen.

U.S. Energy Secretary Jennifer Granholm touched on the debate in opening comments at the Hydrogen Shot summit.

"There has been a lot of discussion lately about whether certain hydrogen production pathways are actually considered clean," Granholm said. "At the DOE, we're just all about science. We're all about zero-carbon emissions. And we also clearly need to reduce other pollutants like [nitrogen oxide]. So if there are solutions that claim to be clean but are not, those challenges have to be addressed."

Infrastructure bill backs blue and green hydrogen

The Senate's infrastructure bill, which has not passed in the House of Representatives, largely takes a color-blind approach to hydrogen. While it allocated $1 billion to electrolyzer development, it also dedicated $8 billion to establishing hydrogen hubs, including in natural gas-producing areas.

Sen. Joe Manchin, D-W.Va., the chair of the Senate Energy and Natural Resources Committee who developed the energy legislation incorporated into the infrastructure bill, said the U.S. must invest in the entire hydrogen value chain to reduce costs and overcome deployment barriers. That means tapping natural gas, nuclear energy and renewable resources to produce hydrogen, Manchin said in a summit address.

"I firmly believe that we have a shared responsibility to address climate change, and that we've got to do it through innovation, not elimination," Manchin said. "Through technological advancements, we can now use our abundant domestic energy sources to produce clean hydrogen, which can significantly decarbonize our economy across the power, transportation and industrial sectors."