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28 April 2022

US DoE goes ahead with 504m loan for Aces H2 hub in Utah

The US Department of Energy says it will lend $504.4 million to a massive Mitsubishi inspired project called the Advanced Clean Energy Storage Project – whereby hydrogen made from wind power is stored in Utah caverns ready to generate electricity.

The Advanced Clean Energy Storage project is pretty much attached at the hip to the Los Angeles Department of Water and Power (LADWP) project to do virtually the same thing – make hydrogen, store it in caverns under a Utah mountain and then drive it through a Mitsubishi natural gas turbine converted to run on hydrogen, and use it to power Los Angeles. In this instance it is powering a turbine owned by the Intermountain Power Agency for its customers, some of which are in California, some in Utah, but the hub is to be developed with pipelines, distribution and other uses for the hydrogen too.

Both projects are coordinated through the Intermountain Power Agency, who will run the gas turbine plant, and combined they will create what they call the world’s largest Green Hydrogen hub, with developer partner Magnum and Mitsubishi Power.

Both projects plan to run on 30% hydrogen until 2045 before switching over to pure hydrogen in time for 2050. Both will burn the hydrogen, which could make almost as much pollution in the form of Nitrous Oxide (Nox) when burned in a turbine. However Mitsubishi has pioneered Nox units within their gas turbine designs, so possibly this outcome can be avoided at some further expense.

At Rethink Energy we can’t really escape the idea that this is really just a sales process for gas turbines, which had stalled in the US – and now companies like Mitsubishi and GE are retrofitting hydrogen to their turbines (or promising to) in order to escape censure as yet another natural gas turbine (which they are). They then tie them up in inefficient turbine contracts, and sit and wait until hydrogen really is cheaper than natural gas – which in the US may well not happen to past 2035.

The Advanced Clean Energy Storage Project add 1 GW of energy storage capacity – through renewable hydrogen, compressed air energy storage, large-scale flow batteries and is driven by solid oxide fuel cells. In its initial phase, it envisages the installation of 220 MW of electrolyzers to produce up to 100 tons of green hydrogen daily.

The produced hydrogen will be stored in two massive salt caverns, each capable of storing 150 GWh of energy. It will then be supplied as feedstock to an 840-MW combined cycle power plant where it will be blended with natural gas to run the facility operational by 2025 and by 2045the plant will use only hydrogen.

Magnum’s equity sponsor Haddington Ventures is securing $650 million for the project through its equity syndication program, which gets total costs to $1.15 billion

Contracts are now ready to be placed with an EPC (Black and Veatch) while Mitsubishi Power says it will deliver the hydrogen equipment integration, including the 220 MW of electrolyzers, gas separators, rectifiers, medium-voltage transformers and distributed control system.

Additionally NAES Corporation, a large independent provider of operations, maintenance, and repair services, will provide O&M services, while engineering firm WSP, will provide EPC Management services to develop the two large salt cavern storage facilities. WSP has developed underground storage facilities since the 1980s and has developed over 200 salt caverns.