Texas Shines in US Clean Hydrogen Industry Amid Federal Policy Uncertainty
Key Ideas
- US clean hydrogen industry faces uncertainty due to federal policies, but industry leaders see potential in Texas.
- Companies like Plug Power Inc and Verdagy Inc are investing in Texas to tap cheap renewable energy for hydrogen production, creating jobs.
- Federal funding is crucial to make clean hydrogen competitive; despite uncertain support from the new administration, companies are optimistic.
- Cost of green hydrogen production in Texas is projected to decrease significantly, making it one of the cheapest sources in the US by 2030.
Despite federal policy uncertainty affecting the growth prospects of the US clean hydrogen industry, leaders in the sector are finding hope in Texas. Challenges like President Trump's tariffs, the fate of federal tax credits, and the US$7 billion hydrogen hub program are impacting the industry. The average cost to produce green hydrogen using renewable energy and water is currently around US$8 to US$9 per kilogram, significantly higher than using fossil fuels. The need for more federal funding to enhance competitiveness is emphasized by industry analysts. However, with limited support expected from the new administration, companies are seeking opportunities to reduce production costs by leveraging cheap renewable energy sources in Texas. Plug Power Inc is planning to build a liquid hydrogen production facility in Texas, which is expected to create hundreds of jobs. Verdagy Inc is also constructing a clean hydrogen plant in Texas near the Gulf Coast, with plans to produce 9,000 tonnes per year. By utilizing electrolysers powered by renewable energy and maximizing production, costs are projected to decrease. Verdagy aims to bring green hydrogen costs down to as low as US$2 per kilogram in the upcoming years. The overall outlook predicts that hydrogen production in Texas will become one of the most cost-effective options in the US by 2030, with a projected cost of US$4.82 per kilogram.
Topics
Green Hydrogen
Renewable Energy
Job Creation
Offtake Agreements
Federal Funding
Production Costs
Industry Leaders
Texas
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