Air Products and AES Plan US Mega-Scale Hydrogen Plant

12.12.2022 - Industrial gases company Air Products and utility group AES have announced plans to invest $4 billion in a mega-scale hydrogen plant, powered by wind and solar energy. The companies said the facility, which will be capable of producing more than 200 t/d, will be the largest green hydrogen plant in the US when it starts up in 2027.

The companies will own equal shares in both the wind and solar power operations and the electrolyzer assets, with Air Products also being the exclusive off-taker and marketer of the green hydrogen under a 30-year contract.

“We have been working on the development of this project with AES for many years, and it will be competitive on a world-scale while bringing significant tax, job, and energy security benefits to Texas,” said Air Products chairman, president and CEO Seifi Ghasemi.

In August 2022, the US government passed legislation that offers tax incentives for clean-power projects, making the economics of producing green hydrogen much more viable at commercial scale.

There has been rising interest in hydrogen as a climate-friendly alternative to fossil fuels, and the partners said demand for green hydrogen for mobility and industrial applications is expected to grow exponentially across the US over the next decade. Andres Gluski, CEO of AES said the project “puts the US on the green-hydrogen map.”

Green hydrogen is currently expensive to produce, largely because of the use of renewable electricity, but the cost is forecast to decrease in the years ahead as this source of energy becomes cheaper and electrolyzer production scales up.

Air Products is investing in several other hydrogen projects, aiming to have all its facilities producing low-carbon hydrogen by 2035.

In October, the group said it planned to spend about $500 million to build, own and operate a 35 t/d green liquid hydrogen plant at a greenfield site in Massena, New York. Start-up is scheduled for 2026-2027.

A year earlier, in October 2021, Air Products announced its largest-ever investment in the US, spending $4.5 billion on a blue hydrogen plant in Ascension Parish, Louisiana. The facility, producing more than 750 million standard cubic feet per day, is expected to be operational in 2026.

The gases group is also involved in another mega green hydrogen project in Saudi Arabia. Together with Acwa Power and Neom, the three partners will invest $5 billion to build a world-scale green hydrogen-based ammonia plant, which is due to go on stream in 2025.

Author: Elaine Burridge, Freelance Journalist