Slide 1: The Road to Clean Hydrogen: Getting the Rules Right
The Road to Clean Hydrogen: Getting the Rules Right July 2023
Slide 2: The three pillars could impact the rate at which PTC ramps up the green hydrogen economy
The “three pillars” being considered for implementation could potentially impact the rate at which PTC ramps-up the green hydrogen economy. PTC pillars Definition Implication (based on analysis by Plug) Additionality Green hydrogen to be • Makes renewable power a value chain control point and limits
Slide 3: Additionality impacts go beyond project-level economics
Impact of additionality Additionality impacts go beyond project-level economics 1 2 3 Other considerations New RES could be driven by market forces regardless With new demand and incentives at the Delays the green hydrogen Poses difficulties in tracking Makes renewable power a value state and federa
Slide 4: Delay in scale up would prevent ~250,000 jobs and reduce carbon abatement by ~50%
Impact of additionality Delay in scale up would result prevent ~250,000 jobs from being created and reduce carbon abatement by ~50%. An additionality requirement would directly impose Gross2 impact on investments, GHG abatement, and PM2.5 concentration the current interconnection delays (5+ years) t
Slide 5: Other analyses cite lower LCOH impacts; driven by 4 key differences in assumptions
Other analyses cite lower impacts of the three pillars on LCOH; this seems to be driven by 4 key differences in underlying assumptions. Other studies model low or no firmness requirements for the hydrogen system and its downstream application (e.g., No hydrogen liquefaction) – they assume a system t
Slide 6: Two critical aspects overlooked by other studies: all-in hydrogen costs and demand curves
Two critical aspects overlooked by other studies include realistic all-in hydrogen costs and the anticipated demand curves. Breakdown of additional costs comprising the total Interpolated baseline demand curves by end-use sector production-to-delivery cost, for plant in GA in 2025, $/kgH2 H2 engine
Slide 7: Impact of hourly time-matching and strict local geographic matching
Impact of hourly time-matching and strict local geographic matching Hourly time-matching and strict local geographic matching could potentially lead to reductions in gross investments, jobs, and emissions Gross1 impact on economic and environmental factors, taking an average of LCOH changes across d
Slide 8: The three pillars would severely impact the rate at which the PTC ramps up green hydrogen
The three pillars being considered for implementation would severely impact the rate at which the PTC ramps-up the green hydrogen economy PTC pillars Definition, Impact Implication (based on analysis by Plug) Additionality Green hydrogen to be produced using newly-built Additionality makes renewable
Slide 9: FAQs
FAQs Plug
Slide 10: FAQs (1/11)
FAQs (1/11) 1 How does the model calculate LCOH We use a linear optimization model at hourly resolution where the objective (levelized cost of hydrogen)? function is total levelized costs for investment and operations over the plant lifetime, with constraints on target production, firmness of out
Slide 11: FAQs (2/11)
FAQs (2/11) 4 What is assumed is done with excess It depends on the time-matching requirement: electricity? ‒ For annual time-matching, the excess electricity is either curtailed or sold back to the corresponding grid that the plant is interconnected with ‒ For hourly time-matching, the excess el
Slide 12: FAQs (3/11)
FAQs (3/11) 8 What is included in the green hydrogen Our green hydrogen plant cost assumptions include system capex plant cost assumptions? Why are the (electrolyzer, balance of plant, hydrogen tank storage), as well as EPC costs higher than those cited in other Most of the other public studies
Slide 13: FAQs (4/11)
FAQs (4/11) 11 For annual to hourly comparison, the key factors that increase the LCOH are: What are the specific impacts to the optimization and modeling from hourly ~30% average increase in electrolyzer capacity and hence costs, given time matching that then resulted in the electrolyzer will
Slide 14: Green hydrogen demand (5/11)
FAQs (5/11) 13 Where do the clean and green hydrogen The clean hydrogen demand numbers are from the base case scenario in the demand numbers come from? DOE’s “National Hydrogen Strategy & Roadmap” To isolate the green hydrogen demand specifically, the hydrogen demand split by color is used fro
Slide 15: FAQs (6/11) Green hydrogen
FAQs (6/11) 16 Why does the green hydrogen demand According to the clean hydrogen demand projections published publicly, the from oil refineries occur in earlier years economy is expected to move away from diesel as clean alternatives emerge, but disappear over time? and hence conventional refin
Slide 16: Jobs (7/11)
FAQs (7/11) 20 Where do the job multipliers come from? Common job multipliers are from the Economic Policy Institute (2019) Net multiplier calculation methodology comes from the University of Groningen’s “On the Dynamics of Net versus Gross Multipliers” (2002) Total requirements matrix (to e
Slide 17: Emissions (8/11)
FAQs (8/11) 24 How is emission abatement calculated? The net emission impact is calculated by assuming that the lost green hydrogen demand would then lead to conventional fuels to be used for a longer period of time; then the carbon intensity of this conventional fuel is multiplied by the additi
Slide 18: Emissions (9/11)
FAQs (9/11) 28 What is PM2.5? According to the US Environmental Protection Agency: PM stands for particulate matter; and PM2.5 are fine inhalable particles, with diameters that are generally 2.5 micrometers and smaller Most particles form in the atmosphere as a result of complex reactions of
Slide 19: Emissions (10/11)
FAQs (10/11) The studies claiming that the PTC will drive significant increases in grid emissions 30 What is your response to studies which are compounding several poor assumptions and limitations of their models. claim that the PTC will result in significant These studies assume the following:
Slide 20: Emissions (11/11)
FAQs (11/11) 31 If additionality is not imposed what would At present, 100% grid powered electrolysis (not what is being proposed by be the emissions associated with Plug) does have more emissions than SMR produced (grey) hydrogen by ~2x. production if electrolytic load is added to However, as t
Slide 21: Green Hydrogen at Work™
pl, Green Hydrogen at Work™