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Texas Poised to Become Leader in Hydrogen Production, Energy and Policy Leaders Say

January 28, 2021

Hydrogen has a chance to become the next big alternative fuel source, with the ability to sustainably power everything from cars to data centers. And Texas, already the energy capital of the United States, is set to become the hub for hydrogen production.

Leaders across industry, government, academia and more came together in a virtual event on Jan. 12, hosted by the Cockrell School of Engineering and the Energy Institute at The University of Texas at Austin, to highlight Texas' challenges and opportunities to become a leader in the emerging hydrogen economy. The seeds of this new industry have already been planted, and, if its potential is realized, hydrogen could join wind and solar as major clean energy generators.

"Hydrogen provides a great opportunity in addressing our energy challenges, and it could be especially important for Texas," said Varun Rai, director of the Energy Institute. "But the path is not going to be simple or obvious, and we all need to be working together very closely."

As Rai notes, a hydrogen-powered future has several major hurdles to overcome. Solving these problems will take collaboration from major energy companies, government action to support hydrogen use and continued innovation from research universities like UT on the cutting-edge of developing new ways to create and deploy hydrogen.

The Hydrogen Roundtable event delved into the important questions facing the hydrogen economy. The community aiming to solve these problems is growing, with more than 200 people attending the virtual event and speakers that included representatives from Congress, the U.S. Department of Energy, Shell, Toyota, ExxonMobil, the Gas Technology Institute, Frontier Energy, Dow and more, as well as energy researchers from UT Austin.

State of the Hydrogen Market

Hydrogen's most common use today is in the industrial sector, for oil refining and in ammonia, methanol and steel production. It's also used heavily as feedstock to facilitate the production of chemicals from raw materials.

There are already signs that hydrogen is becoming a more common element in other industries around the globe. In 2019, Japan announced a goal of having 800,000 hydrogen-powered vehicles on the road by 2030. China is among the world leaders in hydrogen-powered trucks today and continues to invest heavily in the market.

By 2050, hydrogen could make up 17% of the global energy mix, Daryl Wilson, executive director of the Canada-based Hydrogen Council, said at the event. And the Hydrogen Council projects hydrogen could become a $2.5 trillion market by 2050, supporting 30 million jobs around the globe.

"Hydrogen will take its place as a major contributor in the energy economy over the next few decades," Wilson said.

Why Texas?

Texas is uniquely situated to be the U.S. hydrogen capital because of its long history of energy innovation, talented workforce and ample land availability.

Texas already produces more than 2 million tons of hydrogen annually, mostly as a byproduct of fossil fuels on the Gulf Coast. A huge network of hydrogen pipelines run through Texas.

The state has more land than other potential energy hotspots, which is important for carbon capture and storage that is needed to produce clean hydrogen. The overlap of skillsets for the production of fossil fuels and hydrogen also puts Texas in a position to lead.

"We already have people who know how to make, transmit and use hydrogen, so we don't have to start from scratch," said Bob Hebner, director of the Cockrell School’s Center for Electromechanics (CEM). "We have an experienced workforce."

UT Austin is a hub for energy innovation, with more than 350 research teams across the university engaged in energy projects. More than 25 teams are working on hydrogen projects. UT researchers were instrumental in creating the first hydrogen-powered bus.

One of the biggest hydrogen projects at UT is part of the U.S. Department of Energy's H2@Scale initiative, which aims to support research and development of new hydrogen applications. DOE has awarded more than $11 million over the last six years to projects in Texas.

At UT, researchers plan to use hydrogen to power one of the institution’s greatest research tools. As part of the H2@Scale project, CEM researchers will create their own hydrogen on campus, by separating it from methane gas. They then will use that to create a fuel cell that will help power the Texas Advanced Computing Center, which designs and operates some of the world’s most powerful supercomputers and computing resources.

"Data centers are popping up all over the world, and they need a lot of power to be kept cool," said Mike Lewis, senior engineering scientist at CEM, and one of the leaders on the UT H2@Scale project. "Data centers are quickly becoming a bigger player in emissions produced globally, and finding a new, clean way to power them is key to reducing our carbon footprint."

The Challenge

Hydrogen's potential as a significant power source was on full display at the Hydrogen Roundtable event. However, widespread adoption remains a challenge. The reason: quite simply, hydrogen costs too much.

"Hydrogen is too expensive for most of the applications today, so we need to drive down the cost," Hebner said.

Wilson, from the Hydrogen Council, thinks the cost of hydrogen will fall sharply over the next few years. By 2030, the council predicts that hydrogen will be a viable competitive low-carbon option across 22 major applications that make up 15% of annual global energy demand.

Bringing down the cost of hydrogen needs to be a collective effort, Hebner said, between academia, industry and government. Events like the roundtable are meant to bring all the players together to start the conversation that will help solve these problems.

Researchers can take hydrogen to the next level by developing advanced materials, enhancing vehicle drivetrain design and finding new ways to transport and store hydrogen that are more efficient and less costly.

Industry enthusiasm for hydrogen will lead to the development of new applications, Hebner said. The presence of major industry players at the Hydrogen Roundtable shows that the excitement is there, as do the continued development of projects like Toyota's Mirai hydrogen fuel cell vehicle.

Government can speed up the timeline of hydrogen adoption through direct subsidies, the speakers said. Because of major subsidies, countries in Europe and Asia have taken an early lead in hydrogen innovation, said Jack Broodo president of feedstocks, energy and climate change at Dow. For Texas and the U.S. in general to become a hydrogen leader will require a similar level of government commitment.

"It's going to take the wherewithal of the American public standing behind this, or we'll quit before we get started because it will be too expensive," Broodo said.