The Los Angeles Department of Water and Power (LADWP) this week joined a coalition that aims to bring down the cost of green hydrogen.
LADWP, along with the Green Hydrogen Coalition and other partners, launched HyDeal LA, a collaboration of developers, green hydrogen off-takers, integrators, equipment manufacturers, investors, and advisors.
The group aims to work together to bring the cost of green hydrogen down to $1.50 per kilogram (kg) in the Los Angeles Basin by 2030 by creating a commercial green hydrogen cluster at scale.
Hydrogen created by electrolysis powered by generation sources such as wind, solar or hydro power is considered “green” from an environmental standpoint.
Green hydrogen can enable deep reductions in carbon dioxide emissions and can be used in a variety of applications, such as a fuel for a power plant or for a steel mill or for a hydrogen fuel cell vehicle. Green hydrogen also can provide long-duration seasonal energy storage.
In addition to LADWP, participants in HyDeal LA include 174 Power Global, Mitsubishi Power, and Southern California Gas. Implementation partners include Clifford Chance, Marathon Capital, and Strategen.
In its first phase, HyDeal LA participants will design the competitive supply chain necessary to achieve $1.50/kg delivered green hydrogen in the LA Basin. They also will work toward achieving in-principle agreement on the necessary terms and conditions to achieve production, storage, transport and delivery of green hydrogen at scale.
“Green hydrogen is the key to reliably achieving 100% renewable energy,” Martin Adams, LADWP’s general manager and chief engineer, said in a statement. “We are pleased to join the HyDeal LA effort, which includes an innovative and expanding vendor and development community, to support and help catalyze the supply chain needed to achieve large-scale, low-cost green hydrogen power supply for our local in basin plants.”
Separately, LADWP is leading the effort to turn the Intermountain Power Project in Delta, Utah, to the world’s first gas turbine designed and built to operate on entirely on green hydrogen by 2035.
HyDeal LA is part of HyDeal North America, a commercialization platform launched by the Green Hydrogen Coalition that is dedicated to deploying green hydrogen at scale for multi-sectoral decarbonization.
HyDeal LA is modeled after HyDeal Ambition, a similar project in Europe committed to producing and purchasing 3.6 million tons of green hydrogen annually for the energy, industry, and mobility sectors at about $1.83 per kilogram before 2030.
In a November report, S&P Global Ratings said the cost of producing hydrogen from renewable resources would need to fall by over 50 percent, to $2.00 or $2.50 per kilogram, by 2030 to make it a viable alternative to conventional fuels.
The levelized cost of renewable power accounts for about 60% of cost of green hydrogen, S&P said, adding that a $10 per megawatt hour decline in the power price reduces the cost of hydrogen by $0.4 to $0.5 per kilogram.
Other factors in the cost of green hydrogen are the capital costs of electrolyzers and capacity utilization factors. Increasing utilization to 50 percent from 40 percent would reduce the cost of hydrogen by $0.2 to $0.3 per kilogram.