CPS Energy on July 22 announced an agreement with Modern Hydrogen on a new project to explore the potential for increasing grid resiliency and enabling cleaner power generation from natural gas. This project aims to address the growing demand for power resulting from population growth and increasing electricity loads.
CPS Energy will pilot Modern Hydrogen’s technology to convert natural gas into clean hydrogen as an ongoing gas-decarbonization service.
The project represents the first step in a long-term strategic investment in producing reliable, cleaner power at scale, as set forth in CPS Energy’s Vision 2027, which includes a commitment to a diverse power portfolio that incorporates new technologies.
“We need more energy, including natural gas, to serve our customers’ growing needs,” said President and CEO of CPS Energy Rudy Garza. “We are committed to San Antonio’s Climate Action and Adaptation Plan (CAAP). By exploring this innovative opportunity to produce clean hydrogen using our existing natural gas system, we are moving forward on our commitment to deliver reliable, affordable, and cleaner energy for our community.”
CPS Energy will be one of a few utilities in the nation to pilot distributed natural gas pyrolysis technologies and carbon capture. Instead of combusting natural gas and releasing or capturing CO2, Modern Hydrogen uses a process to break down the hydrocarbons that are in natural gas, producing hydrogen and solid carbon. The solid carbon is captured and reused in products like asphalt for infrastructure projects.
“San Antonio is making a smart, Texas-led bet on natural gas and clean power generation,” said CEO of Modern Hydrogen Tony Pan. “San Antonio and CPS Energy are showing the promise of American natural gas, for both clean power generation, and for better materials to build our infrastructure. They’re showing the country what it looks like to lead on reliability, energy security, and affordability.”
“Creating new markets for Texas natural gas is both a good energy policy and a long-term investment in the regional economy,” said Chairman of the Railroad Commission of Texas Jim Wright. “Deployments like this show how innovative technologies can unlock new value from the Eagle Ford and other prolific basins. This is about keeping American energy competitive, reliable, and local—exactly the kind of leadership Texans expect.”
The pilot is intended to be scalable while maintaining reliability and affordability for CPS Energy customers. If successful, future deployments of this technology may benefit regional power hubs, fleet depots, or transit systems in reducing grid strain.
“I’ve modeled the limitations of electrification and centralized hydrogen,” said University of Houston Petroleum Engineering Professor Christine Ehlig-Economides. “By tapping methane in the existing US pipeline network, distributed pyrolysis is one of the few pathways that may allow ubiquitous local hydrogen generation without massive disruption.”
