Report: Washington can lead nation in advancing green hydrogen economy, but must move quickly, strategically – Washington State Department of Commerce

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Updated data shows roles of green hydrogen and hydrogen-derived fuels in net-zero economy; recommends most strategic uses and phases for state support

OLYMPIA, WA — Green electrolytic hydrogen and renewable fuels made with hydrogen are expected to play an important role in Washington’s economy as it transforms to eliminate fossil fuels from the energy system, according to a recent report from the Washington Department of Commerce. The report finds that Washington has one of the first opportunities in the country to advance a green hydrogen economy at scale.

The report also suggests Washington should move quickly to produce green hydrogen and renewable fuels. Importantly, it will be critical to quickly develop new renewable energy and transmission capacity to produce the green hydrogen and other types of renewable fuels derived from hydrogen. To deploy these fuels effectively and equitably, the state should prioritize the most strategic uses and focus on environmental justice and workforce considerations as part of growing a green hydrogen economy.

“Green hydrogen is a critical tool in Washington’s decarbonization toolkit and we must use it wisely,” said Governor Jay Inslee. “Since we need significant amounts of clean electricity to produce hydrogen, we know we must target the most critical sectors that are harder to decarbonize, such as industrial uses and heavy transportation. This report helps chart a path for us to deploy hydrogen in the most strategic ways for our economy while building a more just energy future for all Washingtonians.”

Read the full report: Green Electrolytic Hydrogen and Renewable Fuels: Recommendations for Deployment in Washington.

The report assesses opportunities and challenges to advancing green electrolytic hydrogen and hydrogen-derived fuels in Washington, and provides detailed modeling of anticipated demand for green hydrogen as part of Washington’s path to a net-zero economy. It also provides analysis about electricity system impacts of hydrogen and renewable fuels deployment, siting and permitting recommendations, and workforce and environmental justice considerations.

“This report makes clear that green hydrogen is an important part of Washington’s decarbonization journey, and that Washington has one of the strongest markets in the country for this clean fuel opportunity. Commerce stands ready to use all state and federal tools to support the production of hydrogen and ensure it can help our hard to decarbonize sectors like aviation and industry to decarbonize,” said Commerce Director Mike Fong.

The report reflects on recent announcements about the Pacific Northwest Hydrogen Hub being selected for up to $1 billion in funding from the U.S. Department of Energy to develop one of several regional hydrogen hubs across the country, and potential impacts of a new federal hydrogen production tax credit. Both of these opportunities will help Washington meet hydrogen deployment goals outlined in the report and support the growth of a green hydrogen and hydrogen-derived fuels market in Washington.

A near-term opportunity to produce and use green hydrogen is coming this year in Douglas County. Douglas PUD is in the final phase of constructing a green hydrogen project near East Wenatchee with a commissioning date in mid-2024. The 80- by 136-foot concrete facility will house a 5MW electrolyzer, which will create around two tons of hydrogen gas a day. The infrastructure was designed with the ability to expand to 80MW with 32 tons of production capacity. The public utility will use renewable energy from its Wells Hydroelectric Project on the Columbia River to produce the renewable gas.

“In addition to producing a valuable renewable gas, we anticipate the plant will increase our ability to integrate more renewables in a manner that is cost effective, will reduce maintenance costs and free up reserve capacity to benefit our customers,” said Gary Ivory, Douglas PUD general manager
Commerce’s report identifies many sectors of the state’s economy where green hydrogen and renewable fuels are likely to play the biggest role. This includes replacing fossil-derived hydrogen used in refining and chemical production; heavy-duty transportation sectors such as aviation, maritime and long-distance trucking (both directly in fuel cells and to produce cleaner “drop-in fuels” that can be used in existing engines); and industrial heat, among others.

Key findings from the report include:

  • Washington will have strong demand for green electrolytic hydrogen and renewable fuels as part of a net-zero economy. State demand will reach 0.224 exajoules (EJ) of hydrogen and derived fuels by 2030 and keep growing.
  • Washington will need to rapidly scale up production of green hydrogen through electrolysis. The current baseline for in-state green electrolytic hydrogen production via electrolysis in Washington is near zero. This report anticipates that Washington will install 0.8 gigawatts (GW) of electrolysis capacity and produce 200,000 metric tons (MT) per year of hydrogen by 2030, and 4.5 GW of electrolysis and 700,000 MT per year of hydrogen by 2035.
  • Hydrogen and renewable fuels production must be developed in coordination with expanded renewable electricity capacity. Washington cannot meet the levels of hydrogen and renewable fuel production envisioned in this report without new transmission and generation capacity.
  • Green hydrogen and renewable fuels should be used strategically for end uses where they are well-positioned to support efficient decarbonization, such as petroleum refining and chemical production, heavy-duty transportation sectors and industrial heat.
  • Importing hydrogen and renewable fuels from other states may develop as part of a cost-effective approach to accessing adequate levels of green hydrogen and renewable fuels. This will likely involve a regional approach, with Washington producing much of the hydrogen our economy needs, and importing part from other states and regions nearby. This is consistent with our participating in the regional Pacific Northwest Hydrogen Hub.
  • Advancing a green hydrogen economy provides a critical opportunity to create more equitable outcomes, if we focus on inclusive practices and equitable distribution of benefits. There are environmental justice concerns unique to hydrogen and renewable fuels across the supply chain, which are important for project developers, tribes and stakeholders to understand and address.

The Green Electrolytic Hydrogen and Renewable Fuels report and all accompanying appendices are posted on Commerce’s Office of Renewable Fuels webpage.

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(Photo caption/credit: Crane operators install storage vessels for a green hydrogen plant Douglas PUD will commission later this year.)

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