Democrats And Industry Are At War With Themselves Over A Controversial Energy Plan
OSWEGO, N.Y. — On the snowy eastern shore of Lake Ontario sits a beige metal shipping container roughly the size of a mobile home. Inside, a machine called an electrolyzer is zapping tanks of freshwater with enough volts to split the hydrogen out of H2O to harvest the gas, which the U.S. government is banking on replacing fossil fuels...
The trouble is that making hydrogen from electricity still generates far fewer molecules than using natural gas, making the clean stuff much more expensive. “Gray” hydrogen costs less than $3 per kilogram to produce today, and sometimes drops below $1. The price of “blue” hydrogen, which uses that same fossil method but captures the planet-heating carbon dioxide before it enters the atmosphere, maxes out below $5 and can be less than $2. The “green” hydrogen needed to make a difference on climate change can go for as much as $12, and costs more than gray in every market that analysts surveyed this year.
That’s why the Joe Biden administration is spending billions of dollars to build a whole new American hydrogen industry from the ground up, and bring the price of green hydrogen down to $1 by the end of the decade….Late last year, Constellation, the biggest U.S. nuclear plant operator, began… to generate clean hydrogen from its two reactors at Nine Mile Point Nuclear Station here in the rural lakeside college town in northwestern New York.
Hailed by the Energy Department as a historic “milestone,” it was to be the nation’s first-ever experiment in producing hydrogen from nuclear power — and, according to Constellation, the only major commercial effort in the world.
By March, the electrolyzer’s hum was vibrating the corrugated walls of its shipping container in a fenced-off area outside the nuclear plant’s main facility… Constellation said its homemade fuel was cheap enough for the power plant here to stop buying the hydrogen it uses in its own reactors from outside vendors, and made plans to keep the electrolyzer going permanently. Looking beyond its own facility, the company started working with the state energy agency in Albany to produce more hydrogen to help keep New York’s lights on.
Constellation now wants to go nationwide with its hydrogen. The Baltimore-based utility giant announced a $900 million investment to build thousands of times as much electrolyzer horsepower at its LaSalle nuclear station in Illinois. In October, the White House gave the company its blessing.
All those plans may go up in flames as early as this week.
That’s when the Treasury Department is expected to release its proposed rules for how companies can qualify for the clean-hydrogen tax credit, known as 45V.
It may turn out to be among the Biden administration’s most consequential — and controversial — climate policy decisions...
Such a rule would effectively bar the nuclear industry from getting in on the hydrogen bonanza. By the time any new reactors could be built — a process that may take more than a decade — the tax credit would expire. Eleven Democrats who also authored the bill — ranging from liberal Sens. John Fetterman (D-Pa.) and Sherrod Brown (D-Ohio) to conservative Sen. Joe Manchin (D-W.Va.) — say the legislation was written specifically to allow for the use of existing nuclear stations and other already-built clean-electricity sources.
