Today (April 19), the US Department of Energy (DOE) revealed the details for 35 projects across 20 states that shared they received a share of $1.93bn from the Qualifying Advanced Energy Project Credit (48C) under the IRA.
Among those projects, eight are new electrolyser and fuel cell factories that have been earmarked a total of $325.8m funding, with Ballard Power Systems, Cummins Inc., Electric Hydrogen Co., John Cockerill Hydrogen North America, Nel Hydrogen, Nuvera Fuel Cell, Twelve Benefit and Topsoe, all set to benefit.
48C offers an investment tax credit of up to 30% of qualified investments for the qualifying projects, providing they meet wage and apprenticeship requirements.
In March (2024), the Internal Revenue Service (IRS) allocated around $4bn of 48C credits to over 100 projects in 35 states. The programme can only release the names of the selected projects after they have been certified – which can take up to two years.
Topsoe’s 1GW SOEC factory
While many of the projects have previously been announced, Topsoe today revealed plans for its over 1GW solid oxide electrolyser (SOEC) factory in Chesterfield Virginia.
Having been awarded almost $136m from 48C, the $400m factory is still subject to final investment decision (FID) – marking the company’s largest investment decision to date.
With its 500MW SOEC factory in Herning, Denmark, expected to start producing its initial volumes this year (2024), Topsoe said if the US factory is built, it will be the “largest SOEC manufacturer in the world.”
Roeland Baan, CEO of Topsoe, said the company was “thrilled” to announce the plans, praising the IRA and support from Virginia and the US Government in helping it to “accelerate the energy transition.”
A CO2 electrolyser?
Twelve Benefit plans to build a PEM CO2 electrolyser factory in Alameda, California. The systems are described as being able to transform CO2 through electrolysis to make power-to-liquid (PtL) sustainable aviation fuel (SAF). The company has secured $28.5m from the 48C tax credit.
Known projects
Ballard earlier this month announced it had been awarded $54m from 48C for a 3GW fuel cell factory in Texas – following $40m of direct DOE funding.
EH2 also announced its funding success – grabbing an $18.3m tax credit for its 1.2GW PEM electrolyser factory in Devens, Massachusetts.
John Cockerill Hydrogen’s 1GW Baytown, Texas, pressurised alkaline electrolyser factory secured $34.1m. The company started work on the site last December (2023).
Nel’s 4GW alkaline and PEM factory in Plymouth, Michigan, added a further $40.9m to its ever-growing pot of funding with the 48C credit. In March (2023), it secured $50m of Bipartisan Infrastructure Law (BIL) funding with an additional $25m from the State of Michigan.
Nuvera grabbed $14m to expand and re-equip its fuel cell factory in Billerica, Massachusetts. It also received $30m from BIL.
Policy Pillar: Do 45V rules threaten to halt the IRA’s hydrogen momentum?
It’s been hard to catch a breath covering US hydrogen policy developments. Looking back to August 2022 and the unprecedented momentum caused by the Inflation Reduction Act (IRA), it’s hard to believe the position the US hydrogen industry now finds itself in.
The lure of up to $3/kg clean hydrogen production tax credit (PTC) offered by Section 45V within the act saw a groundswell of interest in the market. Electrolyser OEMs and project developers alike jumped on the apparent US opportunity.
New factories, large-scale projects and new US-focused business strategies were announced.
Now, less than 24 months on, hydrogen industry players find themselves rethinking strategies and investments following the US Treasury’s guidance on how 45V will be implemented. And policymakers must decide whether they deliver rules that will pragmatically support hydrogen’s scale up or firmly ensure its green credentials…
Click here to keep reading.