Hydrogen Dominates Discussions at Annual CERAWeek Energy Conference

Hydrogen was the talk of the town in Houston this March at the annual CERAWeek (Cambridge Energy Research Associates) energy conference sponsored by information and insights company S&P Global.

During past conferences, oil and natural gas led the discussion, but this year hydrogen was front and center with more than a dozen presentations about hydrogen or ammonia fuel solutions on the first day alone.

According to the details of the session on hydrogen growth, “Hydrogen is believed to play a major role in a netzero world, contributing up to 25% of global consumption. Today, hydrogen represents 2% of global energy consumption.”

One reason hydrogen is being discussed is that the Biden Administration, in the form of last year’s Inflation Reduction

Act (IRA), has provided generous subsidies for companies who move toward a “net-zero world.”

The provisions in the IRA for hydrogen are complicated. But the most generous subsidy will provide a $3 per kilogram tax credit for hydrogen produced with virtually zero emissions, labeled green hydrogen. Different colored hydrogen, produced with higher pollution levels, will receive smaller credits.

“If we’re not successful this time, we’re never going to be successful. The level of support is astronomical,” said Andy Marsh, the president and CEO of Plug Power, a manufacturer of hydrogen fuel cells.

Currently the primary use of hydrogen is concentrated in electricity generation with hydrogen being blended with other fuels. The use of hydrogen in the trucking industry is still quite limited. One problem is that hydrogen prices tend to be variable and would need to stabilize below diesel prices to be viable.

During the panel on growth, Bill Newsom, president and CEO of Mitsubishi Power Americas, said that the power sector is poised to benefit the most from the IRA subsidies. He also believed hydrogen exports will flourish in coming years.

The hydrogen wouldn’t be exported in its raw state, Newsom indicated, although exporting hydrogen as a component in ammonia, which is liquid at room temperature and gets its energy from the hydrogen contained in its structure, is likely.

During that same session, Justin Bird, CEO of Sempra Infrastructure, said he thought the potential growth of hydrogen fuel would be comparable to what happened with liquid natural gas over the last several years. He even believes that hydrogen presents a “bigger opportunity.