WASHINGTON, D.C. — The U.S. Department of Energy (DOE) Office of Clean Energy Demonstrations (OCED) today announced the selection of a consortium to help accelerate commercial liftoff of the clean hydrogen economy and support the launch of the Regional Clean Hydrogen Hubs (H2Hubs), funded through President Biden’s Investing in America Agenda. The consortium—which consists of the EFI Foundation (EFIF), a leader in clean hydrogen economy development, in partnership with the commodity markets information experts S&P Global (S&P) and the financial exchange operator Intercontinental Exchange (ICE)—will design and implement demand-side support mechanisms for unlocking the market potential of the H2Hubs.
Over the next six to nine months, DOE will work with the consortium and the H2Hubs to design robust demand-side support measures that will facilitate purchases of clean hydrogen produced by H2Hub-affiliated projects to reduce climate pollution, create good jobs, support clean air, and advance U.S. competitiveness in various end use sectors, including energy-intensive industry and heavy-duty transportation. The team will also develop an operational plan for how to administer these mechanisms once finalized.
Developing a hydrogen demand-side initiative is critical to enhancing the early commercial viability of the H2Hubs, as demand formation for new energy sources often lags the creation of new reliable supply. Demand-side support and other “demand pull” measures bridge the gap between producers, who need medium- to long-term offtake certainty for a significant portion of their projected output to secure financing to build a project, and buyers, who often prefer to buy on a short-term basis for energy inputs that are beginning to be produced at scale, like clean hydrogen. “Demand pull” measures have been a valuable tool in the scale-up of renewable energy technologies like wind and solar.
EFIF, S&P, and ICE will leverage their deep expertise in clean hydrogen, project finance, and commercial contracting to support design of measures to de-risk clean hydrogen projects and increase demand certainty. The consortium will help craft demand-side support agreements for clean hydrogen projects affiliated with the H2Hubs to unlock final investment decisions and catalyze the formation of a mature clean hydrogen market. Ultimately, the demand-side initiative will support the growth and sustainability of the H2Hubs program by providing improved offtake certainty to help hydrogen producers attract private sector investment and end-use buyers. It will also lay the foundation for broader private sector scale-up and use of the clean hydrogen market by providing price transparency and standardized contracts for the projects it supports.
Funded by President Biden’s Bipartisan Infrastructure Law and managed by OCED, the H2Hubs are a critical component of the Administration’s efforts to build a strong, American-led clean hydrogen industry that drives the global clean energy transition while also creating high quality jobs and delivering healthier communities in every pocket of the nation. The H2Hubs also reinforce the President’s deep commitment to invest in America’s workforce, jumpstart local economic growth, and establish the U.S. as a leader in the clean energy technologies of the future. Learn more about the H2Hubs program here.
Learn more about the near-term expansion and commercial scaling of clean hydrogen from DOE’s Pathways to Commercial Liftoff Report on clean hydrogen.
