Developers in the U.S. plan to significantly expand hydrogen production using electrolysis, signaling a shift from hydrocarbon-based methods like steam methane reforming (SMR).

If planned U.S. electrolyzer projects proceed, U.S. capacity could grow from 116 MW to 4,524 MW, producing about 0.72 million metric tons (MMmt) of hydrogen annually via electrolysis, according to the U.S. Energy Information Administration. EIA is citing these numbers from information collected by the U.S. Department of Energy’s Hydrogen Program Record. Electrolyzers, which separate hydrogen from water using electricity, could qualify for tax credits if built by 2033.

Currently, 10 MMmt of hydrogen is mostly produced via steam methane reforming (SMR) from natural gas and coal, but this yields significant carbon emissions. SMR units can be fitted with carbon capture and storage (CCS) capabilities to reduce the carbon footprint of hydrogen production by storing CO2 underground. Some call this process “blue hydrogen.” The U.S. Department of Energy’s data shows 7.6 MMmt annual SMR capacity, mostly without CCS.

Source: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy.

Hydrogen is a critical input for petroleum refining and fertilizer production, and it can also be used as a fuel for electric power generation to be blended with natural gas for use in traditional gas turbines or engines. Operators of natural gas-fired power plants are conducting hydrogen-blending pilot projects, but challenges remain to readily accommodate 100% hydrogen combustion in large-scale power plant applications.

It’s important to note that hydrogen produced by electrolyzers is only considered carbon-neutral if the electricity consumed is generated from renewable or clean energy resources like nuclear.

According to the International Energy Agency (IEA), two types of electrolyzer technologies are currently commercially deployed, both of which require further improvements to stay competitive: Proton Exchange Membrane (PEM) and Alkaline. These technologies vary by construction cost, start-up times, and materials used to convert electricity to hydrogen. No matter the materials used, electrolyzers can leverage electricity generated from renewable resources.

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