National and local clean energy advocates are hailing Colorado as a leader in the quest to produce clean hydrogen fuel as another alternative to dirty fossil fuels. Their prime evidence is a law just signed by Gov. Polis that defines clean hydrogen and reserves public tax credits and PUC approval to truly green projects.
So what’s the issue? What hydrogen is “green,” what methods are “blue,” which are the dreaded “gray,” and when and where is hydrogen likely to be used in real, large-scale projects in Colorado? We talked to a few experts to help sort it out.
How does hydrogen work as an alternative fuel source?
Pure hydrogen can be burned as a high-heat source, much like natural gas or coal or gasoline. It can also be used as an alternative to natural gas as a “feedstock” for industries like fertilizer production.
The challenge is that while hydrogen is abundant — it’s the first entry on the periodic table — it’s usually tied to a partner like oxygen. It needs to be split out before it’s useful. Splitting water — H2O — is the cleanest way.
How does the hydrogen color system work?
If hydrogen isn’t produced cleanly, or used to replace “dirty” fuel sources in hard-to-decarbonize industries like cement production, it’s not doing much good from a global warming perspective. If you produce hydrogen with electricity produced from coal or natural gas, you’re playing for the tie.
Green hydrogen is produced by splitting water with clean electricity such as solar or wind power, or hydroelectric power from dams. A green hydrogen system also means one that has no leaks in the literal pipeline — leaked hydrogen extends the life of the intense greenhouse gas methane in the atmosphere. And it’s greenest when hydrogen is replacing fossil fuel in a place that needs intense, always available heat, like a steel forge or cement kiln.
“We definitely see huge opportunities around hydrogen if it’s done right. But there’s also huge risks around it” when done wrong, Pete Budden, hydrogen advocate for the Natural Resources Defense Council, said in an interview about Colorado’s legislation. “It just has to be really targeted, where you use it and how you make it.”
Gray hydrogen is produced from methane (natural gas), and is currently the dominant production method for hydrogen used to make ammonia fertilizer and other industrial chemicals. The process releases much carbon dioxide into the atmosphere, according to the NRDC and other nonprofit sources, such as RMI. Producing gray hydrogen emits 10 kilograms of carbon dioxide for every kilogram of hydrogen made.
Blue hydrogen is an in-between, relying on natural gas methane but then capturing the resulting carbon dioxide and sequestering it underground or by other methods.
There is also “pink” hydrogen, in theory produced by electricity from nuclear power plants, which have advantages in producing fewer greenhouse gases but terrible disadvantages in producing toxic waste and suffering enormous cost overruns. Since there are no realistic plans for new nuclear energy in the U.S, environmental groups say, pink will not come into play outside of Europe.
What did Colorado’s 2023 bill do for hydrogen?
With lucrative federal and state tax credits and research grants becoming available for hydrogen projects, Colorado clean energy advocates wanted to get the state on the right “color” scheme from the start. House Bill 1281 says a new state tax credit for each kilogram of hydrogen produced can only go to a clean hydrogen project. That includes what Sen. Lisa Cutter, D-Littleton, says are some of the basic requirements for clean hydrogen: Produced with clean electricity, with minimal leaks in transport, and favoring projects that use hydrogen where other clean fuels won’t work.
“I give a ton of credit to all the bill sponsors and the Colorado Energy Office for really working hard to be responsive to all the environmental groups, and still do what we needed to do to be able to draw down from” new federal funding, Cutter said. “We really did have to work hard to thread the needle with the environmental groups. I never would be on the opposite side.”
Other sponsors of the bill included Rep. Brianna Titone, D-Arvada, Rep. Stephanie Vigil, D-Colorado Springs, and Sen. Kevin Priola, D-Henderson.
The bill also instructs the Public Utilities Commission to set up a process to review hydrogen projects proposed by investor-owned utilities like Xcel Energy. The PUC will have to review how new projects are paid for, whether costs are charged to consumer ratepayers or to company shareholders.
Such utilities would also have to report to the PUC what a hydrogen project’s impact might be on disproportionately impacted communities, who have already suffered the consequences of utility and industrial pollution throughout Colorado history. And the utilities would have to keep reporting about greenhouse gas savings and other aspects of their projects.
The language in the bill is already seen as a national model for other state regulators to follow, the NRDC and other groups say.
The careful parameters will “encourage a robust, renewable long term hydrogen industry, that is climate aligned, and not something that’s going to be a flash in the pan or that wouldn’t have the credibility of true emissions reductions that these guardrails can actually deliver,” Budden said.
Where is hydrogen most likely to be used on a big scale in Colorado?
Colorado is currently teaming with other southwestern states to be an officially sanctioned “hydrogen hub” with the federal government. Winning that status would open doors for more research, development and capital grants to get big hydrogen projects off the ground here. Passage of thoughtful state legislation can help Colorado’s chances, advocates say.
Hard to decarbonize: Industries that rely on always-available heat in the thousands of degrees are not easily switched to renewable sources like wind turbines or solar farms. Researchers are working on lower-temperature production methods, but they remain experimental. Steel and cement plants are known as “stubborn” or hard-to-decarbonize industries. EVRAZ Steel in Pueblo, and cement kilns in Pueblo, Florence and Lyons are among largest producers of greenhouse gases in Colorado.
Hydrogen could be ideal in such places, since locating hydrogen production next to a massive industrial plant removes some of the danger of leaking during pipeline transportation. Hydrogen can burn at the high heats necessary for kilns and forges, and those factories are already accustomed to working with regulators on controlling emissions other than carbon.
Colorado utilities have plans to get to 80% carbon emission reductions by 2030, noted NRDC’s Alana Miller. To get the next 20% out by 2040, as planned, hydrogen will likely have to be in the mix, she said.
Chemicals: Production of fertilizer for U.S. farming is a chemically intensive process. Currently, the ammonia needed to create fertilizer is usually made with hydrogen refined from natural gas. Employing hydrogen made cleanly from water and renewable electricity would sharply cut carbon emissions from agriculture.
Utilities, as peak or backup power: When solar and wind renewable energy are producing an excess for the grid, that clean electricity can be used to split water into hydrogen, which can then be stored for far longer periods than power in electric batteries.
At peak energy demand, or when the sun is not shining, the hydrogen can be burned more cleanly than natural gas to produce peak or backup electricity for the grid. Utilities could store hydrogen for months or longer to help smooth out the seasonal cost spikes of natural gas of the kind that burned Colorado consumers in the winter of 2022-23.
Burning hydrogen does not create excess carbon, but it can increase emissions of nitrogen oxide, which is controlled by the EPA and contributes to Colorado’s Front Range ozone problem. Any utility-scale burning of hydrogen would have to include NOx safeguards, advocates say.
Heavy trucks and other long-distance transportation: The costs and storage needs of hydrogen make more sense for fueling heavy-duty trucks, trains or long-distance seagoing ships. Some truck builders are working on hydrogen-fueled models. Hydrogen can be refilled as fast as gasoline and diesel, creating some advantages over current electric recharging rates.
Environmental advocates are mixed about transport possibilities: “Electrification is coming on, it’s improving so fast that we kind of don’t want to call a winner yet in that,” Budden said. “And there is risk to putting all your eggs in the hydrogen basket when it comes to those trucks.”
Will I be able to fuel my car with hydrogen?
Not anytime soon. California has some hydrogen fueling stations, but most car manufacturers are treating hydrogen models as experimental, far different from the ramped-up production of consumer electric vehicles.
AAA Colorado was working with hydrogen power developers to locate a station that would fuel AAA rescue vehicles as well as potential public access. The state has now helped fund that project by New Day Hydrogen, and the company is working on a Globeville-Elyria-Swansea location. Those neighborhoods would be better suited to developing hydrogen for the trucking and warehouse industry, heavily concentrated along Interstates 70, 25 and 270. New Day Hydrogen says it has six large fleet operators showing interest in addition to AAA, and their goal is to open a fueling station in 2025.
Consumer hydrogen uses, such as cars, may not be the best application of the material for a long time, experts say. Federal, state and local officials are busy pouring money into the public recharging infrastructure for electric vehicles, which are ready, attractive and price competitive right now.
“We don’t want to see building out huge hydrogen refueling networks to double the amount of investment we have to make,” Budden said. “If we don’t want to waste loads of money.”
Update: This story was updated on June 5, 2023, with more information about a potential public hydrogen vehicle fueling station in north Denver.