N. American subsidies help boost nuclear hydrogen plans
Nuclear operators in North America are looking to take advantage of generous clean hydrogen subsidies to diversify and help pay the bills.
Generation workhorses, such as Bruce Power’s Nuclear Generating Station in Ontario, Canada, and Constellation's Nine Mile Point Nuclear Station in New York, as well as fourth generation reactor developers, such as Terrestrial Energy, consider themselves as important elements of the net zero mix when it comes to clean hydrogen production.
Governments in the United States and Canada agree and are ploughing billions of dollars into the hydrogen industry through subsidies that do not discriminate against nuclear technology.
In late 2022, the U.S. government announced a $7 billion funding opportunity to create regional clean hydrogen hubs (H2Hubs), at least one of which would use nuclear as its feedstock.
The Inflation Reduction Act (IRA), meanwhile, offers subsidies on low-carbon hydrogen and is agnostic as to the source of the electricity to produce it.
The IRA includes support for clean hydrogen production via tax credits that will award up to $3/kilo for low carbon hydrogen whether it is from renewables (green) or nuclear (pink).
“The Production and Investment Tax Credits for hydrogen production in the 2022 stimulus bills reduce the subsidized cost of ‘pink’ hydrogen so it is strongly cost-competitive with hydrogen from natural gas. This aims to assist with establishing production of ‘pink’ hydrogen,” says CEO of Terrestrial Energy, which is looking into its own production nuclear-produced ‘pink’ hydrogen from its Integral Molten Salt Reactor (IMSR), Simon Irish.
The U.S. Department of Energy (DOE), which estimates a single 1GW reactor could produce up to 150,000 tons of hydrogen a year, have teamed up with utilities to support four hydrogen demonstration projects at nuclear power plants.
These include projects at Nine Mile Point Nuclear Power Station, in New York, with Constellation Energy, Davis-Besse Nuclear Power Station in Ohio with Energy Harbor, Prairie Island Nuclear Generating Plant, in Minnesota with Bloom Energy and Xcel Energy, and Palo Verde Generating Station in Arizona with Arizona Public Service and PNW Hydrogen.
The projects all work toward the DOE’s ‘Hydrogen Shot’ goal of reducing the cost of clean hydrogen to $1 per one kilogram in one decade.
In Canada, where around 15% of the country’s electricity is from nuclear power, the government introduced a new 15% refundable Investment Tax Credit (ITC) for clean electricity in its 2023 budget that can be applied to all sizes of nuclear power including SMRs, large builds, and new refurbishment projects.
Canada's Minister of Environment and Climate Change Steven Guilbeault, a former anti-nuclear environmental activist, recently reportedly did a U-turn on nuclear power and said that, despite his previous opposition, he now believed "we need this technology" in line with Prime Minister Justin Trudeau.
Some like it hot
Hydrogen production is most efficient at high temperatures and thermal energy from nuclear reactors means high-temperature steam electrolysis, which is 20%-40% more efficient than conventional electrolysis, can be deployed, according to Terrestrial Energy.
“Generation IV technologies operate and supply heat at higher temperatures than existing reactor technology and, in the case of IMSR, much higher. High-temperature operation is essential for low-cost clean hydrogen,” says Terrestrial’s Irish.
“The IMSR can deliver the efficiencies needed for producing zero-carbon hydrogen, close to the cost of hydrogen from natural gas without subsidy – this is a game changer.”
Lazard’s 2023 Levelized Cost of Energy report sees subsidized and unsubsidized ‘pink’ hydrogen at $0.48-$1.81/kilo and $2.75-$4.08/kilo respectively, one of the cheapest methods of producing the gas of all generative technologies.
Levelized Cost of Hydrogen Analysis
(Click to enlarge)
Source: Lazard's 2023 Levelized Cost Of Energy+
Irish believes Terrestrial’s IMSR plant, with its “best-in-class heat supply”, will produce the gas even cheaper.
The IMSR produces heat of 600 C, costs less than $6 per million British Thermal Unit (MMBTU) and can produce electric power at less than $50 per MWh, the company says.
“These two energy streams when coupled to high-temperature electrolysis produce clean hydrogen at about $1.70 to $2.20 per kilo of hydrogen from a 250-tons-a-day plant,” Terrestrial says.
The IMSR plant is designed to be sited close to its industrial end user, which could save on high costs associated with storing and transporting hydrogen from its production point to the offtaker.
“With the ability to locate near the end user, an IMSR plant addresses the storage and transport challenges of making hydrogen as it supports hydrogen production at the point of consumption,” says Irish.
All the tools in the box
Canada’s Bruce Power, meanwhile, runs the second largest nuclear power station in the world with an eight-reactor plant that produces, when in full operation, some 6,400 MW to the Ontario power grid which is likely to be increased to 7,000 MW after extensive reforms.
The plant is in the midst of a 13-year, multi-billion-dollar refurbishment and part of the reform is looking at other technologies that could complement its electricity production.
Bruce Power is collaborating on a feasibility study to determine opportunities for hydrogen production using excess electricity, or curtailed power.
Canada envisions hydrogen from non-carbon-emitting sources delivering up to 30% of end-use energy by 2050, according to the “Hydrogen Strategy for Canada”, a strategy the government says is a call to action.
“We need every clean energy tool in the toolbox. We look at pump storage, net zero technologies, we look at hydrogen, and we say those are all technologies that are complimentary with this foundation we’re building and growing,” Executive Vice President, Operational Services & Chief Development Officer at Bruce Power James Scongack told Reuters Events Nuclear.
By Paul Day