US $5bn H2 hub in doubt as another firm revises plans
Doubts over the realisation of the $5bn Hydrogen Heartland Hub (H2HH) in the US' Upper Midwest region are growing as another key project developer looks to revise its original investment plans.
Minnesota-based utility Xcel Energy told Argus it is looking to adjust its original plans because of changes to costs and regulation over the last two years. Xcel is working with the US Department of Energy (DOE) to evaluate alternatives, it said.
Delays appear likely and it is not certain what form the projects may eventually take.
"Much has changed since we shared our hydrogen vision two years ago, and recent federal rules, market developments and stakeholder preferences have shifted," Xcel Energy said.
"Our proposed projects in the Heartland Hub are still in early-stage development, but the cost forecasts, policy developments and the regulatory uncertainty make aggressive development unlikely," it added.
Xcel had planned to invest $1.5bn-2.5bn in two of three plants in the Heartlands Hub (HH2H) that was already set back by the cancellation of its other project — a $2.2bn joint venture — earlier this month. That departure had left Xcel as the hub's main private-sector developer.
Questions over the hub's future come despite the DOE offering $925mn towards HH2H as part of the US' $7bn hydrogen hub funding programme (see map).
As part of the hub, Xcel had announced a project in South Dakota to make hydrogen from wind power for supply to Minnesota's One Earth Renewables that would use the supply to produce "carbon neutral" fertilisers. The firm had also announced a separate project in Minnesota slated to use a mix of nuclear, solar, and wind to make hydrogen for blending into natural gas distribution systems and power generation. But plans for the projects appear to have been far from concrete. "Detailed project design will begin until after HH2H and DOE finish award negotiations ," Xcel said last year.
The DOE was to contribute $565mn to Xcel's projects, the company had said last year. It is unclear what may happen to these funds and the full $925mn awarded to HH2H if Xcel changes its plans. DOE was not immediately available to comment on how project changes may affect hub funding.
The Heartland Hub — led by the University of North Dakota's Energy and Environment Research Center — is "collaborating with the DOE to finalize the HH2H contract and anticipates Phase 1 work commencing in late summer 2024," the Center told Argus.
It maintains an "optimistic outlook on the broad opportunities" of hydrogen technology and "maintains solid relationships with a diverse spectrum of stakeholders" that extends "well beyond the initial cornerstone partners" of HH2H, it said.
The US has awarded around $30mn each to three hubs so far this summer — in California, in the Pacific Northwest, and in Appalachia — to start ‘phase 1' planning activities.
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Clean H2 to hit 12mn-18mn t/yr by 2030, goals in doubt
Clean H2 to hit 12mn-18mn t/yr by 2030, goals in doubt
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India mulls government support for green steel
India mulls government support for green steel
Mumbai, 12 September (Argus) — The Indian government is considering ways to generate demand for pricier low-carbon steel from state-owned and private-sector consumers, in a move to accelerate the decarbonisation of the sector. Policy recommendations — including raising the use of low-carbon steel in government projects and centralising bulk procurement — were outlined in a new green steel "roadmap" issued by the Indian steel ministry on 10 September. Low-carbon steel is relatively priced at a premium to steel produced using traditional methods, making it challenging to generate its demand. The use of capital-intensive techniques to lower emissions would ultimately push up steel production costs by 10-15pc and subsequently raise input costs for consumers, according to a ministry's report. It will take time for Indian consumers to become active buyers of costlier green steel, industry participants said at the Indian Steel Association (ISA) Steel Conclave in Delhi earlier in September. Instead, they said India is likely to find its first buyers for green steel in overseas markets such as Europe where measures such as the upcoming carbon border adjustment mechanism (CBAM) will put a carbon levy on some imports. The ministry's report recommends developing a "green public procurement" policy aimed at increasing the uptake of low-carbon steel in domestic infrastructure and defence projects, many of which are funded by the government. The Indian government will now launch a green steel "mission," steel ministry secretary Sandeep Poundrik said following the report's release. "It was suggested the government can have a procurement push for green steel at least in government projects. That we will consider when we make the mission," he said. The report also suggested setting up a central agency for bulk purchases of green steel. Tax incentives and higher environmental, social, and corporate governance ratings could encourage private-sector consumers such as auto manufacturers to buy green steel, according to the action plan charted out in the report. One of the top goals outlined for the first phase of the action plan is for the government to draft a green steel procurement policy, something which could reduce the steel industry's carbon emissions intensity to 2.2t of CO2 per tonne of crude steel produced (tCO2/tcs) by 2030, according to the report. The Indian iron and steel sector's CO2 emissions intensity was 2.55 tCO2/tcs as of 2022. The Indian steel industry accounts for 12pc of the country's carbon emissions. Hydrogen, CCUS long-term goals On the supply side, the initial focus will be to lower energy consumption through methods such as scrap-based production and the elevated use of renewable energy sources. The ministry's action plan aims for renewable energy penetration of 45pc in the steel sector by 2030. The government and steel industry should invest in developing green hydrogen, carbon capture, utilisation and storage (CCUS) and biochar after 2030, according to the roadmap. These measures are currently at a nascent stage, with experiments underway to see if they could partially replace the use of coal in traditional blast furnaces. The roadmap is based on the findings of 14 task forces appointed by the ministry to explore ways to decarbonise the hard-to-abate steel industry. By Amruta Khandekar Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Methanex to acquire OCI’s methanol business for $2bn
Methanex to acquire OCI’s methanol business for $2bn
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EU commits €50mn to Namibian, South African H2 funds
EU commits €50mn to Namibian, South African H2 funds
Hamburg, 5 September (Argus) — The EU will contribute €50mn ($55mn) to renewable hydrogen investment funds in Namibia and South Africa. The funds will come from the bloc's Global Gateway international investment scheme, EU energy commissioner Kadri Simson said at the Global African Hydrogen Summit in Windhoek. "Investment will especially target private sector projects across the hydrogen value chain, such as the production, transportation and storage, as well as downstream industries," Simson said. Namibia's SDG Namibia Fund will receive €25mn, one of its managers, the Netherlands-headquartered Climate Fund Managers, said. This suggests the €50mn could be split equally between funds in Namibia and South Africa. The SDG Namibia Fund was launched in late 2022 with a target of raising $1bn in blended financing for renewable hydrogen projects and related infrastructure. It has received backing from Dutch state-owned Invest International and USAID Southern Africa Mobilizing Investment, and made a first investment late in 2023, supporting the Hyphen renewable hydrogen and ammonia project with an initial €23mn. South Africa's SA-H2 Fund is also targeting $1bn and is similarly backed by Invest International and other Dutch institutions. Simson announced two smaller support programmes in Windhoek. The EU together with the German government will provide €2.7mn for Namibia's planning efforts for expanding renewable hydrogen generation capacity and increasing access to this. It will grant €1.2mn to the Namibia Green Hydrogen Programme, a government-led initiative for drawing up regulations and support mechanisms for the sector. The EU plans to invest €1bn in Namibian renewable hydrogen and sustainable raw material value chains . The European Commission said last year that the bloc, its member states and European financial institutions would provide these funds as part of the Global Gateway initiative. By Stefan Krumpelmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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