Douglas County PUD is diving into the deep end of renewable hydrogen with the goal of owning a production system, providing power to it, and selling the hydrogen. But its push to launch the Northwest's first hydrogen electrolysis pilot project had its first hiccup this fall. After requesting bids for a 2-3 MW electrolysis system in August, only one vendor replied—and even that proposal was deemed nonresponsive by the PUD.
Rather than hold another formal bid process, Douglas will now negotiate directly with electrolyzer manufacturers and other key vendors. The utility still hopes to find one company that can bring together the various components required for a utility-scale hydrogen electrolysis system.
"We're used to having hiccups in finding partners" for projects, Douglas PUD General Manager Gary Ivory told Clearing Up. "We're still excited" about the project.
More important, "we still have a goal of being up and running by 2021. Our timeline has not changed," he said.
The end market for hydrogen could be as big as the demand for fossil fuels today, said Evan Ramsey, who leads the Bonneville Environmental Foundation's renewable energy group. "The sky is the limit for [renewable] hydrogen."
Getting to that future will require taking a lot of baby steps. In the U.S., renewable hydrogen has not made it much further than research labs. There are a handful of commercial electrolyzers in the U.S., compared to as many as 100 in Europe, Ramsey said.
An electrolyzer splits water into hydrogen and oxygen—a process called electrolysis—and can run on renewable resources, in this case hydroelectricity, when demand is low or when there is excess generation. The hydrogen produced can then be put to myriad uses, such as to run fuel cells for transportation and in ammonia production for fertilizer. Additionally, renewable hydrogen can be used for energy storage and has the potential to spur decarbonization.
Douglas PUD plans to use its electrolyzer to help smooth hydroelectric functions. It is easier to ramp electrolysis up or down than a hydro facility. That should reduce wear and tear on its hydro resources.
Regardless of where you are, there are far more questions than answers for getting to a commercially-viable renewable hydrogen industry.
Electric "utilities stepping up and demonstrating the technology is a key piece" for making progress, he said.
"Douglas PUD has a great approach. They want to procure equipment, test it out and see what the market is," Ramsey said.
Consumer-owned utilities that own hydroelectric resources are uniquely positioned to advance renewable hydrogen. "They can make decisions at local levels without having to get regulators to bless their decisions," including creating power supply agreements with a developer that owns the electrolysis facility, he said.
That flexibility exists thanks to Senate Bill 5588, which Washington lawmakers passed earlier this year (CU No. 1900 ). The measure allows PUDs to produce, distribute and sell renewable hydrogen. The hydrogen is considered renewable if both the water and the energy source used to produce the gas are renewable (CU No. 1889 ).
Another feature that makes the Northwest a promising area for developing renewable hydrogen is its trifecta of carbon-free resources: hydro, wind and solar.
"That is three renewable resources with low costs. That's three opportunities to leverage low-cost energy for hydrogen production," Ramsey said. "That's a lot better than having one opportunity in Kansas when the wind is howling."
As the Northwest leans more heavily on carbon-free generation and retires coal resources, there is growing concern of capacity shortfalls by as early as 2025.
Renewable hydrogen could play a part in solving that challenge, said Anna Chittum, director of NW Natural's renewable resources group.
Essentially, injecting renewable hydrogen into natural gas pipelines effectively turns that system into energy storage. The hydrogen is produced when load is low, and is put into the natural gas grid when demand is high.
Natural gas providers are still figuring out how best to put hydrogen into commercial gas pipelines. There are some real-world experiments being conducted in Europe. In the U.S., renewable hydrogen has not yet been blended into any commercial natural gas systems, Chittum said.
NW Natural is researching how to do that. "There's a lot work to be done to understand how that will impact our existing equipment," she said.
The company and Eugene Water and Electric Board are exploring collaborating on a renewable hydrogen pilot project, she said.
Policy incentives can help spur more development, just as production tax credits did for solar and wind, said Ken Dragoon, executive director of the Renewable Hydrogen Alliance.
There are obvious potential markets for renewable hydrogen, such as transportation and fertilizer for agriculture. Setting up the supply chains and distribution networks will be a bit trickier.
"We're making a new industry here. Some creativity and footwork are required," he said.