The US Department of Energy (DOE) has announced the much-anticipated selection of seven hydrogen hub projects across the country that are eligible for $7 billion in federal investment. The selectees will now undergo an award negotiation process to obtain a commitment from DOE. This funding aims to accelerate the commercial-scale deployment of low-cost, clean hydrogen as an alternative source of energy and the creation of networks of clean hydrogen producers, consumers, and infrastructure.
FERC, CFTC, and State Energy Law Developments
The US Department of Energy’s (DOE’s) Office of Energy Efficiency and Renewable Energy (EERE) issued a funding opportunity announcement (FOA) on January 27, 2023, on behalf of the Hydrogen and Fuel Cell Technologies Office that makes available $47 million to support the research, development, and demonstration of affordable hydrogen and fuel cell technologies. The FOA further advances the Biden administration’s goals to achieve carbon pollution-free electricity by 2035 and to achieve net-zero emissions by 2050. It also supports the goals of the H2@Scale Initiative, which aims to advance affordable hydrogen production, transport, storage, and utilization, and aligns with DOE’s Hydrogen Shot, which targets affordable clean hydrogen production at $1/kg within the decade.
While no one has a crystal ball for what 2023 will hold for the energy industry, the seemingly widespread support for green technology and clean energy is expected to carry through this year. In our industry outlook, “The Trends—and Traps—That Will Shape 2023,” we highlight some of the major green energy tax credit trends.
On January 1, 2023, newly constructed standalone energy storage facilities became eligible for an investment tax credit (ITC) under Section 48 of the Internal Code of 1986, as amended (Code), pursuant to provisions of the recently enacted Inflation Reduction Act (IRA). Storage facilities placed in service before 2023 generally were only eligible for an ITC when constructed as part of a combined renewable generation (typically solar) plus storage facility and the storage system was charged by the paired renewable generation system at least for the 5-year initial operating period. Storage developers and owners will now be able to take advantage of new and significant tax credit opportunities, whether or not the storage system is paired with a renewable generation energy facility.
Later this month, the US Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE) intends to issue, on behalf of the Hydrogen and Fuel Cell Technologies Office, a funding opportunity announcement (FOA) to support the research, development, and demonstration (RD&D) of affordable hydrogen and fuel cell technologies. EERE’s notice stated that the FOA will focus on key hydrogen delivery and storage technologies and durable fuel cell technologies, particularly for heavy-duty trucks to reduce carbon dioxide emissions and eliminate pollution from the tailpipe.
Hydrogen will play a key role in addressing the climate crisis, supporting a transition to net zero, and achieving a sustainable clean energy future. As a versatile energy carrier and chemical feedstock, hydrogen offers many advantages and an ability to leverage renewables, nuclear, and fossil fuels with carbon capture and storage. It can also be used as a fuel or feedstock for applications that do not have competitive and efficient clean alternatives.
On September 22, the US Department of Energy’s (DOE) Office of Clean Energy Demonstrations issued a Funding Opportunity Announcement (FOA) to solicit applications for funding to establish regional clean hydrogen hubs (H2Hub) across the United States to improve clean hydrogen production, processing, delivery, storage, and end use.
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In an article featured in our global energy industry newsletter, Empowered, lawyers Carl Valenstein and Jonathan Wilcon analyze the implications of the Jones Act on offshore wind development. While the authors acknowledge that many see Jones Act compliance as a “potential bottleneck” for the offshore wind industry’s progress, they discuss strategies that will permit Jones Act compliance and offshore wind development in the United States.
US congressional Democrats released the latest version of H.R. 5376—better known as the Build Back Better Act—late last week, hoping to advance a $1.85 trillion spending package after months of deadlock.