To understand the opportunity for hydrogen produced from nuclear energy, we should first understand the opportunity for hydrogen more broadly.
Steel and concrete manufacturing, chemical processing, shipping and transportation, and agriculture — these industries drive our economy but also contribute to more than half of our greenhouse gas emissions. This is where hydrogen comes in. While some of these activities can be electrified, many hard-to-abate sectors will require alternative fuels to drive their decarbonization. The Department of Energy recently estimated that the opportunity for clean hydrogen production in the U.S. is 50 million metric tons annually by 2050.
However, producing hydrogen takes energy of its own. For example, the most common technology for producing clean hydrogen, electrolysis, uses around 50 megawatt hours of electricity to produce 1 metric ton of hydrogen. Even with advancements in electrolysis efficiency and the emerging potential of alternative production pathways, such as thermochemical water splitting, the reality remains that we will need massive amounts of clean energy to power hydrogen production. This is where nuclear energy can play a crucial role.
DOE officials estimate that a single nuclear reactor could produce up to 150,000 tons of hydrogen annually. In addition to nuclear energy’s large capacity for hydrogen production, a big driver for using nuclear-produced hydrogen is consistency. The industries looking to hydrogen for decarbonization require a steady, reliable supply, and nuclear energy is our most reliable source of clean energy. The combination of these features uniquely positions nuclear energy to lead the buildout of a clean hydrogen economy.
This opportunity doesn’t just look good on paper. Last year, Constellation began demonstrating the important role nuclear energy can play in hydrogen production at the Nine Mile Point Nuclear Power Plant in Oswego, New York. As part of the same DOE program, two additional pilots are being developed at Energy Harbor’s Davis-Besse Nuclear Power Station in Oak Harbor, Michigan, and Xcel Energy’s Prairie Island Nuclear Generating Plant in Red Wing, Minnesota. The reality of nuclear energy’s value in hydrogen was front and center during DOE’s Hydrogen Hubs selection, with three of the seven hub awards including nuclear energy in their project plans.
So, what’s next? All attention is now on the Department of the Treasury and its rulemaking on the Clean Hydrogen Production Tax Credit. Created by the Inflation Reduction Act, the hydrogen tax credit provides clean hydrogen producers with up to $3 per kilogram of hydrogen produced. The credit has the potential to be the bedrock on which a hydrogen economy is formed, but only if the Treasury allows that potential to be fully realized.
The recent draft rulemaking from the Treasury includes a number of burdensome restrictions that threaten the viability of the tax credit. Of particular concern is the exclusion of existing nuclear reactors from claiming it.
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Removing an asset as valuable as nuclear energy from qualifying for the tax credit is equivalent to asking a football team to play the Super Bowl without its best players. But the problem with this analogy is that this isn’t a game. This is a critical moment for the future of the hydrogen economy, and the Treasury should treat it with the seriousness and urgency it deserves.
Nuclear energy is ready to help today if the Treasury Department will let us.
Benton Arnett is the senior director of Markets & Policy for the Nuclear Energy Institute.
