Treasury hearing told to incentivise nuclear for hydrogen under IRA rules

Existing nuclear resources should be incentivised to support clean hydrogen production, a US Treasury public hearing on the Inflation Reduction Act’s (IRA’s) 45V guidance has been told.

Clare Behar, Chief Commercial Officer (CCO) of Hy Stor Energy, told officials the company believes the guidance should be adapted to support the use of nuclear resources to produce clean hydrogen.

Under rules proposed by the Treasury in December (2023), US green hydrogen producers will have to source renewable electricity from the same regional grid, from assets that are no older than three years old at the time of hydrogen production start-up, to gain access to the 45V’s top tier $3/kg PTC.

It also mandates that producers must match renewable electricity and electrolyser operation within the same calendar year until 2027, before hourly matching from 2028.

The so-called three pillars have been met with a large degree of controversy. Despite many players suggesting they could limit green hydrogen’s scaling, Behar said without them, “significant additional emissions would occur when grid-connected electrolyser demand drives increases in fossil generation.”

Read more: US H2Hubs: Revise 45V guidance to ensure hydrogen investments and jobs

However, Behar told Treasury and IRS officials, existing nuclear resources, “which produce no greenhouse gas (GHG) emissions,” should be incentivised through 45V to support clean hydrogen production.

“We therefore support proposals from across-the-board exemption from the incrementally requirement that would be specific to nuclear generating resources, permitting them to generate energy attribute certificates that will qualify for the 45V credit,” she said.

According to the US Energy Information Administration (EIA), nuclear met 18.6% of the US’ electricity generation in 2023 – 894 billion kWh.

Behar stressed, “The time for debating the application of Section 45V needs to end now. Continued uncertainty around the definition of clean hydrogen qualifications for the various tiers of the Section 45V credit is an existential problem for the clean hydrogen sector.”

Read more: High stakes for 45V guidance to cut emissions effectively, Hy Stor Energy CCO says

She told the hearing a lack of definitive guidance has led to developers postponing final investment decisions (FID), the cancellation of some projects and relocation of others.

Last month, Norwegian-based HydrogenPro put its plans for a 500MW electrolyser factory in Texas on hold while it awaits regulatory clarification.

“Hy Stor Energy urges Treasury and the IRS to adopt the three pillars approach they put forward in the proposed rule making,” Behar said. “Taking this high road will position the US to be a world leader in the race to embrace clean hydrogen.”

Today (March 27) marks the final day of the Treasury hearing which will conclude the public feedback period on the 45V guidance.

While there is no timeline for the final text, US sources have suggested it could be released in late summer or early autumn, with Democrats keen to get the rules into statute before the November election.

At the forefront: The renewed role of nuclear power

84years on from the discovery of nuclear fission – splitting atoms to release energy – the nuclear industry in 2022 seemingly entered a new realm of energy production. December saw a group of US scientists perform a breakthrough in nuclear fusion – combining atoms to release energy – where hydrogen played a central role.

The experiment at the National Ignition Facility (NIF) at the Lawrence Livermore National Laboratory (LLNL) in California, US, saw a series of increasingly powerful laser systems create temperatures and pressures such as those in the core of stars to kickstart a fusion reaction, which forced hydrogen atoms together and released energy.

Despite only delivering 3.15MJ of energy output, it is hoped the experiment could pave the way for nuclear fusion to become a key part of our energy system. Elina Teplinsky, Partner and Nuclear Energy and Hydrogen Expert at Pillsbury Winthrop Shaw Pittman, as well as the co-leader in the Nuclear Hydrogen Initiative (NHI) told H2 View that the development came as a turning point in demonstrating the commercial viability of fusion.

Teplinsky added that although fusion is not yet commercially available today, it could play a role in future hydrogen production, saying, “Nuclear fusion could also be paired with hydrogen production in the future. We have had fusion companies participating in NHI meetings, and that’s an area that will be really interesting to explore as fusion moves closer to commercial scale demonstrations.”

Despite nuclear fusion looking set to remain an ‘energy of tomorrow’ for several more years, the breakthrough has brought nuclear energy back into the spotlight of our energy conversation. In a world where we need to move away from carbon-intensive fuels, it begs the question of whether nuclear energy could play a key, renewed role…

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