‘It’s crazy’ | Billion-dollar US nuclear hydrogen programme grinds to a halt amid uncertain subsidy rules
Constellation Energy says proposed EU-style additionality requirements would rule out any pink hydrogen production in the US
US utility Constellation Energy has put its giant $900m nuclear-powered (pink) hydrogen programme on hold while it waits for the Department of Energy (DOE) to decide whether to impose EU-style “additionality” rules on the country’s flagship federal subsidy scheme — a proposal the company warns would permanently kill off any efforts to make pink H2 in the US.
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Constellation’s chief executive officer Joe Dominguez told Bloomberg News that the lack of clarity has paralysed the company’s efforts to introduce hydrogen production across its nuclear fleet in the Midwestern United States.
“The uncertainty around the regulations has brought us pretty much to a full stop,” Dominguez said, warning that the proposed additionality rules would effectively put a stop to all pink hydrogen production in the US.
“There’s no business case [for building a new reactor],” he told Bloomberg, pointing to the billions of dollars and many years required to build a new nuclear plant from scratch. “I’m frankly frustrated this issue has come up. It’s crazy.”
Under current rules, eligibility for the maximum $3/kg tax credit under the Inflation Reduction Act would be determined by a carbon intensity limit of 0.45kgCO2e/H2 produced, which both pink hydrogen and green hydrogen made with renewable energy would easily meet.
The department is expected to rule on the matter in the coming months.
Billion-dollar programme
Constellation, which owns six nuclear power plants in Illinois, has given few specifics of its $900m pink hydrogen programme beyond the fact that it plans to use 250MW of its Midwestern nuclear capacity to produce 33,450 tonnes of H2 per year, which the option to expand to 400MW later on.
In March the company began producing hydrogen from a 1MW proton exchange membrane (PEM) electrolyser powered by its existing Nine Mile Point plant in New York state. H2 from the demonstration project — funded with the help of a $5.8m grant from the DOE — is used in the operation of the nuclear power plant.
Dominguez’s comments may well resonate with officials at the DOE, who are keen to encourage hydrogen projects using renewable energy, nuclear power and fossil gas with carbon capture and storage (blue hydrogen) — in fact the department’s $8bn Hydrogen Hub programme will offer cash to at least one of each type.
Dominguez argued that additionality measures would jeopardise US climate targets, which envisage a need for at least 10 million tonnes of clean hydrogen (with a carbon intensity of less than 4kgCO2e/kgH2) to meet the country’s demand for H2 in industry — currently met by polluting grey hydrogen made with unabated natural gas.
“If this doesn’t get interpreted correctly, we’re not going to have the hydrogen to meet the goal,” Dominguez stressed.