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19 Jan 2024

US DOE has announced the consortium which will be used to bridge the early demand for H2Hubs

Amy Power
US DOE has announced the consortium which will be used to bridge the early demand for H2Hubs

The consortium selection has been announced by the US Department of Energy (DOE) which means the launch of the Regional Clean Hydrogen Hubs (H2Hubs) will be supported.

This consortium has been made up of the EFI Foundation (EFIF), S&P Global, as well as the financial exchanger operator, Intercontinental Exchange (ICE). The purpose of this collaboration will be to design and implement demand-side support mechanisms, which are used for unlocking the potential of the H2Hub’s market. The consortium will be announced by the DOE’s Office of Clean Energy Demonstrations (OCED), as the organisation has been specifically designed to accelerate commercial lift-off of the clean hydrogen economy, along with the H2Hubs programme. This project will also receive funding from President Biden’s Investing in America agenda.

In October of 2023, seven H2Hubs were selected by the DOE to receive some of the $7bn funding. This funding was provided by the DOE’s $8bn Regional Clean Hydrogen Hubs programme. Now that the consortium and the hubs have been announced, the DOE and the consortium have agreed to collaborate during the next six to nine months. Their focus will be directed to designing measures which will enable purchases of the clean hydrogen, which will be produced by the H2Hub-affiliated projects. Along with this plan, the team will also start developing an operational plan, around the process of administering these mechanisms, once they are finalised.

The hubs which have been chosen for this project are ARCH2, ARCHES, HyVelocity, Heartland, MACH2, MachH2 and PNWH2. These hubs will be due to receive $400m and $1.25bn of federal funding.

The chosen groups within the consortium, EFIF, S&P and ICE will work together to gather expertise in clean hydrogen, project finance and commercial contracting. Alongside this, the consortium will also work on laying the foundation for broader private sector scale-up, as well as use of the clean hydrogen market. This will all be made possible through providing price transparency and standardised contracts for the projects it is supporting.

The work being applied to the creation of this hydrogen demand-side initiative, is extremely important to the development and commercial viability of the H2Hubs. This hydrogen demand-site, leading to the hubs, will bridge the gap between producers and buyers, whilst simultaneously providing medium to long-term offtake certainty for a significant portion of their projected output. This is necessary to the project, as it will help secure funding for the project. This will also help them secure and supply buyers who would prefer to buy on a short-term basis for energy inputs, that will also soon be produced at scale.

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