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DOE releases NOI with RFI to invest up to $1B for demand-side support of H2Hubs

The US Department of Energy (DOE) released a Notice of Intent (NOI), which includes a Request for Information (RFI) (DE-NOI-0202301), to invest up to $1 billion in a demand-side initiative to support the Regional Clean Hydrogen Hubs (H2Hubs) (earlier post). The H2Hubs program will help form the foundation of a national clean hydrogen network.

Later this year, the DOE will announce the selection of 6 to 10 H2Hubs for a combined total funding of up to $7 billion in federal funding. The proposed mechanism outlined in the NOI will help connect the H2Hubs to prospective purchasers.

The announcement will help ensure both producers and end users in the H2Hubs have the market certainty they need during the early years of production to unlock private investment and realize the full potential of clean hydrogen.

DOE says that developing a hydrogen demand-side initiative is critical to ensuring the early commercial viability of a H2Hub given that demand formation for a new energy source typically lags creation of reliable supply. This new initiative will support the growth and sustainability of the H2Hubs program by providing the revenue certainty that hydrogen producers require to attract private sector investment. It will also help meet the needs of end users who often prefer the flexibility to purchase hydrogen on shorter-term contracts and require confidence in the long-term availability of clean hydrogen before making critical, long-term investments.

The NOI, which includes a Request for Information on the program’s design, will help DOE refine and validate its approach to provide demand-side support for the hubs to enter the clean hydrogen market and will identify the best approach to engaging and potentially involving private sector institutions in the organization, capitalization, and execution of the implementing entity’s mandate.

To help inform the design of a demand-side support mechanism for the H2Hubs program, the NOI seeks public input on potential benefits and risks, operating models, governance structures, and equipped implementing partners. The NOI is also informed by DOE’s dialogue with the energy industry, clean energy investment firms, nonprofit entities, non-governmental organizations, and public response from the demand-side request for information issued in spring 2022 and from DOE’s Pathways to Commercial Liftoff Report on clean hydrogen. Based on demonstrated performance and experience gained with the H2Hubs demand-side support mechanism, DOE may consider similar mechanisms for other technologies and clean energy products in the future.

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