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A $3 billion green hydrogen storage hub planned for Mississippi would be 10 times larger than any other project of its kind in the U.S., and one of the largest in the world, according to the startup behind the project.

Hy Stor Energy announced a partnership with Connor, Clark & Lunn Infrastructure to develop, commercialize, and operate the Mississippi Clean Hydrogen Hub, which is expected to produce an estimated 110 million kilograms of green hydrogen annually its first phase and store more than 70 million kg of green hydrogen in underground salt caverns.

If approved, the project would begin commercial service by 2025, the company said.

“The biggest challenge the energy transition faces today is how to bridge the gap to allow renewables to replace fossil fuel electric power generation safely and reliably,” Hy Stor Energy CEO Laura L. Luce said. “We believe the approach we’re taking in Mississippi will become the blueprint for future green hydrogen projects that not only address the energy transition challenges we face but also bring new jobs, economic revitalization, and low-cost energy to communities in the region. We see this as an important way of advancing U.S. climate leadership.”

The companies selected Mississippi for the green hydrogen hub because of its business environment, naturally occurring underground salt formations, and access to existing infrastructure, like interstate gas pipelines and electric transmission lines.

“We’re excited to welcome Hy Stor Energy and hydrogen innovators to Mississippi,” said Speaker of the Mississippi House of Representatives Philip Gunn. “Their investment and eventual success here will improve workforce development, bring high-paying jobs to our state, and encourage other businesses to invest in the talent and infrastructure we’ve built together.”

Read more: Europe’s offshore wind to green hydrogen plan won’t work for the US, report finds

In the U.S., 95% of hydrogen is produced using natural gas, according to the Dept. of Energy. So-called “blue hydrogen” incorporates carbon capture and storage, though recent studies suggest the practice could produce even more carbon emissions in heat generation than using natural gas alone.

Long term, hydrogen produced using clean-powered electrolyzers can serve as a backbone fuel for grid stability, but the volume of green hydrogen produced worldwide is still very small due to a lack of infrastructure and clean power needed for production.

The Biden administration, to its part, is prioritizing research of carbon capture and green hydrogen production to fuel industrial facilities, heavy-duty trucks, and cargo ships — areas recognized as difficult to decarbonize.

The International Energy Agency released its Global Hydrogen Review 2021 on Monday, calling on world leaders to rapidly invest in hydrogen projects to support the clean energy transition.

study by the Center on Global Energy Policy at Columbia University advocated for investments in the U.S. natural gas pipeline system to support the eventual shift from natural gas to cleaner, low-to-no carbon fuels. Not for several more decades will zero-carbon fuels be ready to replace natural gas as the backbone of the energy mix, the authors wrote, and pipeline upgrades can support the transportation of hydrogen and biogas.

While some renewable energy and environmental advocates fear investments in fossil fuel infrastructure will delay the clean energy transition, and enable some of the world’s largest polluters, pipeline upgrades could provide the best chance of swapping out natural gas as the backbone of the energy system.

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Record-high natural gas prices are fueling an energy crunch ahead of winter in the Northern Hemisphere, leading to power shortages in parts of the world.

Anne-Sophie Corbeau, an energy policy researcher at the University of Columbia, believes the ongoing energy crisis could affect renewables and the broader energy transition in a couple of ways.

On one hand, developing countries eyeing a switch from coal to natural gas to support higher penetration of renewables may be dissuaded by higher gas prices. On the other, the energy crunch could be proving once-and-for-all that natural gas is losing its role as a transition fuel, and that it’s time to rapidly scale renewables and battery storage for resiliency and reliability.

“Ensuring that energy, including natural gas, remains affordable and available during the energy transition is likely to be a key concern for policymakers (at the COP26 United Nations climate summit),” Corbeau wrote in a commentary on the energy crisis. “As nations move to decarbonize their energy system and demand for each fossil fuel eventually peaks, the issue for policymakers across the world is how to avoid significant mismatches between supply and demand, develop a regulatory toolbox to reduce the exposure to price spikes, and ensure there is no power shortage, and plan ahead to make future energy systems climate-resilient.”

Corbeau added that governments must anticipate more frequent extreme weather risks and the impact on variable renewable energy systems.

The U.S. Energy Information Administration expects U.S. natural gas prices to remain elevated between October and March — the highest winter price since 2007-2008.

EIA forecasts LNG prices will begin decreasing in the first quarter of 2022.

Generally speaking, higher gas prices are an accelerant to renewables, according to Michael Webber, Josey Centennial Professor in Energy Resources at the University of Texas at Austin.

“But it’s also a boost for coal, which is tricky,” Webber said in an interview on Wednesday. “High gas prices generally help accelerate the adoption of renewables and I think the wind and solar people are happy about what’s happening right now, frankly.”

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