Avangrid

Solution Statement

AVANGRID is committed to leading the clean energy transition and climate solution. As part of this mission, we submitted several responses to the U.S. Department of Energy (DOE)’s Hydrogen Energy Earthshot Request for Information (RFI), which we expect to lead to the deployment of large-scale hydrogen demonstration projects.

AVANGRID aims to become a leader in the green hydrogen economy, investing in our communities and building on our expertise as a leading renewables developer and operator. Our global partners at Iberdrola are already delivering green hydrogen projects in Spain – due to come online by the end of 2021 – and the UK. AVANGRID will leverage lessons learned from those efforts to streamline our development process and enhance our cost-competitiveness.

AVANGRID’s responses to the DOE RFI envision hydrogen stretching from coast to coast. In the US Northeast, AVANGRID is looking at applications ranging from transportation to industrial use to create a “Hydrogen Valley” across 

states like Connecticut, Maine, and New York, which have long histories as industrial hubs. In the Southeast, AVANGRID is pursuing concepts that would use our wind and solar assets to produce green hydrogen and green ammonia. In Oregon, AVANGRID has proposed co-locating hydrogen production at our Klamath cogeneration plant, creating a cleaner source of grid resiliency and flexibility as Klamath balances the intermittent generation from our Northwest wind fleet. These demonstrations will showcase hydrogen’s scalability and value, drive cost reductions by moving us along the technology learning curve, and open up a key avenue of future growth for AVANGRID.

Challenge Statement

The green hydrogen projects being developed by AVANGRID depend upon financial support from government agencies. As with many nascent technologies, there are barriers inhibiting widespread deployment of green hydrogen technology. Each of these barriers decrease green hydrogen’s cost competitiveness compared to fossil-based incumbents, and thus disincentivize the use and adoption of this low-carbon alternative. 

According to the US DOE, the current cost to produce green hydrogen is approximately $5 USD per kilogram, while grey hydrogen ranges between $1 to $2 USD per kilogram. President Biden’s Administration has announced plans to incentivize cost parity for green and grey hydrogen by 2030, and the US DOE has a stated goal of reducing the cost of green hydrogen by 80% to $1 USD per kilogram by 2030. Achieving the US DOE’s milestones will require investment by both the public and private sectors to reduce the cost of electrolyzers and the renewable energy powering them, as well as to increase the load factor of electrolyzers.

Energy Compact Description

AVANGRID aims to install at least 500 MW of green hydrogen electrolyzer capacity by 2030. To achieve this goal, we have proposed large-scale demonstration projects as part of a US DOE RFI that will deploy up to 350 MW of electrolyzer capacity across the United States which will 30M kg of green hydrogen per year. To achieve our 2030 goal, we estimate capital investments of over $500M USD.

Green hydrogen has the potential to decarbonize carbon-intensive sectors where there are few – if any – alternatives. Producing hydrogen with renewable power via electrolyzers can enable emissions reduction both in sectors that currently consume grey hydrogen (e.g., ammonia) and in sectors that are difficult to electrify (e.g., marine, air, or long-haul heavy-duty transportation). AVANGRID’s work to deploy green hydrogen and ultimately reduce its costs aligns with SDG 7 by increasing access to affordable, reliable, sustainable, and modern energy and SDG 13 by taking swift action to combat climate change, as well as supporting the goals of the Paris Agreement and achieving net-zero emissions by 2050. 

Our work on green hydrogen also involves building partnerships with electrolyzer manufacturers and hydrogen project developers, aligning with SDG 9 by promoting sustainable industrialization and fostering innovation.

Energy Compact Indicator 

  • Installment of 500 MW of green hydrogen electrolyzer capacity.

The most immediate obstacle AVANGRID faces in delivering on the green hydrogen energy transition is that green hydrogen production does not yet have an economic incentive framework for significant deployment of the technology. While the associated renewable power does have some public funding available that reduces the operational cost of the hydrogen production, the upfront capital cost – most importantly the electrolyzer, but also distribution infrastructure and bulk storage – requires additional investment support and a clear regulatory pathway