Electrolytic or “green” hydrogen has garnered significant interest for its potential to reduce emissions across industrial sectors such as steelmaking and fertilizer manufacturing. As the interest in green hydrogen grows, so does the need for robust renewable energy accounting methods to ensure it is produced responsibly.
RMI has emphasized the need for the Inflation Reduction Act’s hydrogen production 45V tax credit to maintain hourly matching over an annual matching to ensure climate-aligned emission profiles. Hourly matching requires hydrogen production to align its electricity consumption with clean electricity generation on a real-time, hourly basis. Annual matching instead aggregates the total electricity consumption on an annual basis, allowing consumers to claim “clean energy” for hours where there is limited clean generation on the grid. Designing projects that are economically viable while achieving consistent clean power is one of the foremost challenges of the energy transition. If hydrogen developers can find a pathway to competitive business models for hourly matched electrolytic hydrogen, they will establish themselves as an example for industrial decarbonization efforts more broadly.
So far, much of the discourse on this topic has focused on whether the hourly matching requirement in the 45V tax credit guidance should be upheld. The 2024 presidential election increased tax credit uncertainty, but there are still important reasons for developers to pursue hourly matched power procurement. Accessing international markets is still critical to sustaining green hydrogen business models at scale, for example, and even in domestic markets, relaxing emissions standards makes it harder for offtakers to verify the climate attributes of the product. As such, attention should be given to the inherent costs and risks of power procurement and how the market could transform to address them.
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