California has received the first $30 million installment of federal funding from the U.S. Department of Energy (DOE) to develop its regional clean hydrogen hub (H2Hub). The Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) hub, selected for a total of $1.2 billion in H2Hub funding last October, has signed a $12.6 billion agreement with the DOE to build the hub.
ARCHES Hub to Create Jobs and Expand Clean Energy Infrastructure
The ARCHES hub, made up of $1.2 billion from the DOE and $11.4 billion in committed public and private funds, aims to build and expand clean energy infrastructure across California. The project is expected to create 220,000 direct jobs and leverage the state’s existing green and blue hydrogen projects, pipelines, and vehicle refuelling infrastructure.
Dee Dee Myers, Senior Advisor to Governor Gavin Newsom, called the signing of the DOE cooperative agreement a “pivotal milestone” for California’s drive to carbon neutrality. “We are eager to put Californians to work building the future – a future powered by clean, renewable hydrogen that benefits all California’s residents,” she said.
ARCHES Hub Goals: Fuelling Stations, Cargo Handling Equipment, and Power Stations
The ARCHES hub has set specific goals, including:
- Building over 60 hydrogen fuelling stations to serve 5,000 heavy-duty trucks and more than 1,000 buses
- Replacing diesel-powered cargo handling equipment with hydrogen equivalents in the ports of Long Beach, Los Angeles, and Oakland
- Transitioning key power stations of the Los Angeles Department of Water and Power and Northern California Power Agency to 100% green hydrogen
- Using distributed fuel cells to support grid operations and provide resilience in key regions of the state
ARCHES CEO Angelina Galiteva expressed gratitude to the DOE for its commitment to building a sustainable hydrogen ecosystem and marketplace. “We look forward to working with our project partners, stakeholders, and diverse communities throughout the state to make this project a success,” she said.
Concerns Over Green Hydrogen Rules and Production Tax Credits
Despite the funding support, ARCHES and the other six H2Hubs have criticized the U.S. government’s planned green hydrogen rules that govern production tax credits (PTC) offered by the Inflation Reduction Act (IRA). In a joint letter to the Treasury Secretary and senior White House advisors, hub leaders warned that the PTC’s proposed three pillar rules of additionality, hourly matching, and geographic correlation for power supplying electrolysers may have “far-reaching consequences” for the U.S. clean hydrogen industry.
Originally intended to catalyze $40 billion in private investments into hydrogen and create over 330,000 jobs, H2Hub leaders cautioned that these benefits will “not fully materialize” unless the Treasury’s guidance is “significantly revised.”
