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Industry consortium pushing to commercialize green hydrogen in California by 2030

Highlights

Targeting $1.50/kg by 2030

Current prices more than twice that level

Hydrogen could supplement, replace gas

New York — A western US power industry consortium is creating a commercial green hydrogen cluster at scale with a goal of achieving green hydrogen procurement at $1.50/kg in the Los Angeles Basin by 2030, the group said May 17.

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The Green Hydrogen Coalition in partnership with the Los Angeles Department of Water and Power and other partners, launched HyDeal LA, a collaboration of developers, green hydrogen off-takers, integrators, equipment manufacturers, investors, and advisors teaming up to lower the costs of developing a green hydrogen economy by creating a commercial-scale green hydrogen cluster, according to a media release.

In the production of energy, green hydrogen offers the promise of cost-efficient energy storage.

Produced via PEM electrolysis fueled by renewable electricity sources, green hydrogen can be stored in underground salt caverns or depleted wells and later burned to produce zero-carbon power.

Hydrogen produced via PEM electrolysis in Southern California including capital expenditure costs was assessed by S&P Global Platts at $3.69/kg late last week. Platts daily hydrogen prices incorporate the cost of variable natural gas, electricity, and carbon inputs, where applicable. A second set of valuations include fixed assumptions for capital and operating expenses.

"Creating a partnership of green hydrogen stakeholders in the LA basin makes a lot of sense given the policy drivers as well as the solar resource in the region," Morris Greenberg, S&P Global Platts Analytics' managing director of North American power, said in an email.

"Green hydrogen production economics involve a trade-off between power cost and equipment capacity factors so it is difficult to say whether the cost target can be achieved by 2030," Morris said. "Beyond supply costs, storage and distribution infrastructure will have to be developed to deliver hydrogen to end-users so including representatives of different industry segments should be helpful."

Independent studies, including the recently completed Los Angeles 100% Renewable Energy Study, have identified a need for renewably fueled combustion turbines—available for limited periods—to achieve reliable 100% renewable electricity, according to the statement.

Joining HyDeal LA marks another initiative around green hydrogen for LADWP, which is leading the conversion of the Intermountain Power Project in Delta, Utah, to the world's first gas turbine intentionally designed and built to operate on 100% carbon-free green hydrogen by 2035, the statement said.

HyDeal details

Although Los Angeles is the second largest city in the US, only four power transmission lines exist to bring LADWP's out-of-basin generated electricity into the city. When energy demand spikes, it is important to have reliable, in-basin power generation from existing power plants, according to the Green Hydrogen Coalition website.

"We can affordably maintain in-basin generation and reach zero-carbon goals by converting existing natural gas-fueled power plants to green hydrogen-fueled power turbines," the coalition said.

The HyDeal LA members are simultaneously focusing on developing contracts, an industrial and economic plan, arranging funding and designing needed regulations and policy to meet the $1.50/kg by 2030 target.

HyDeal LA leaders include 174 Power Global, Mitsubishi Power, and SoCalGas, along with implementation partners Clifford Chance, Corporate Value Associates, Cranmore Partners, Energeia, Marathon Capital, Sheppard Mullin, and Strategen.

"We are pleased to join the HyDeal LA effort, which includes an innovative and expanding vendor and development community, to support and help catalyze the supply chain needed to achieve large-scale, low-cost green hydrogen power supply for our local in-basin plants," Martin Adams, general manager and chief engineer at LADWP, said in the statement.