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Baltimore-based Constellation Energy pursues ‘hydrogen economy’ to meet global climate goals

It’s one of the most visible signs of a movement to reduce emissions: the increase in electric and hybrid vehicles sharing roads with gas-consuming cars.

But even if more drivers switch to electric, reaching aggressive carbon neutrality targets in the Paris Agreement to limit global warming by 2050 will be difficult. That’s especially true in manufacturing, agriculture and commercial transportation, where batteries would be challenged to propel trains, planes and oceangoing ships.

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That’s where carbon-free hydrogen comes in, says the head of Baltimore-based Constellation Energy. Joseph Dominguez, who became CEO of the public energy company earlier this year after it split from Baltimore Gas and Electric parent Exelon. He is among industry leaders who view hydrogen, the most common element in the universe, as a significant fuel of the future.

“If we are going to deal with the climate crisis effectively, hydrogen is going to have to be a part of the story,” Dominguez said in an interview. “And a big part of the story, frankly. This is our last best hope to achieve the goals by 2050.”

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Constellation Energy produces electricity at power plants, principally in Maryland, Illinois, New York and Pennsylvania, including the nation’s largest fleet of nuclear power plants. It also supplies natural gas.

Amid the shift from fossil fuels to renewable and clean energy options, Constellation believes the production of carbon-free hydrogen plays a critical role. The company has positioned itself among an emerging group of players aiming to fill demand at a time when newly passed federal tax credits are expected to boost a budding clean hydrogen industry.

Joseph Dominguez, the head of Baltimore-based Constellation Energy, views hydrogen as a significant fuel of the future. He's pictured here in April at Constellation's headquarters in Harbor Point.

The promise of hydrogen is that once it’s produced, it can be used to generate power in a fuel cell while releasing only water vapor and heat. The challenge is producing the hydrogen, as well as storing, transporting and using it safely. While it’s nontoxic, hydrogen can be highly explosive.

Some critics hope to temper what they see as hype over hydrogen. They include Paul Martin, a chemical engineer and consultant who is co-founder of the Hydrogen Science Coalition.

“There’s an awful lot of talk about what hydrogen might be one day,” he said, instead of what it is: a commodity chemical, not a fuel, made from fossil fuels without carbon capture. “We’re kind of talking about the ghost of hydrogen future and what it might be, what it could be one day — if all the dice roll the right way.”

The coalition, made up of independent academics, scientists and engineers, says an evidence-based viewpoint should be injected into what’s become a political discussion about hydrogen’s role in the energy transition. Hydrogen, the group says, is not the best solution if it’s more “risky, expensive or emissions intensive than already available alternatives,” such as electrification or other energy efficiency solutions.

Hydrogen is a common raw material in making other products. It’s most commonly and cheaply made by an emissions-intensive process in which methane from natural gas is heated with steam to make a mixture of carbon monoxide and hydrogen.

But varying degrees of low-carbon hydrogen can be produced from clean energy sources, including “green” hydrogen made from water via electrolysis, using renewable or nuclear energy. Hydrogen advocates are looking at that low-carbon hydrogen as fuel for cars, trucks, jets and diesel trains, for heating homes and businesses, and in making steel and ammonia.

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Constellation, encouraged by new hydrogen production tax credits, is looking at ways to produce low-carbon hydrogen, including testing new electrolysis technology in partnership with U.S. Department of Energy at its Nine Mile Nuclear Station in upstate New York. The demonstration project, now under construction, aims to show the technology’s efficiency in separating hydrogen and oxygen molecules in water. It expects to produce hydrogen before the end of the year.

Constellation's Nine Mile Point Nuclear Generating Station is expected to be home to the nation’s first nuclear-powered clean hydrogen production facility.

The company aims to convert clean hydrogen, produced using its nuclear, hydro, wind and solar fleet, into liquid ammonia. It could be used for steel-making, chemical manufacturing and agriculture, and e-methanol, a sustainable fuel for cars, jet planes and trains that now use diesel.

Constellation envisions forming “hydrogen hubs” around some of its plants, where the fuel could be produced, stored and transported by waterways or rail lines that typically already exist nearby. In Maryland, Constellation operates Calvert Cliffs Nuclear Power Plant on the Chesapeake Bay near Lusby and Conowingo Hydroelectric Generating Station on the Susquehanna River, which together produce 93% of Maryland’s carbon-free energy.

“We want to re-imagine our renewable and clean facilities as clean energy centers, as opposed to having one simple application, which is delivering energy to the grid,” Dominguez said.

Experts say a network of low-carbon hydrogen producers, transporters and end users is still developing, and the costs of producing clean hydrogen, while decreasing, remain high. Even proponents acknowledge the many barriers besides high costs, such as supply constraints on critical hydrogen production equipment, a lack of cost-effective transportation infrastructure, a lack of training and talent, and a hodgepodge of regulations.

Martin said it makes sense to decarbonize ammonia to make critically needed fertilizer and chemicals. But he believes other uses, such as heating homes or fueling vehicles, make no sense.

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“The trouble with hydrogen as a fuel is that it’s not efficient, but it’s not effective, either ... it’s hard and expensive to move around,” he said. “It’s not green hydrogen being a bad thing. It’s green hydrogen being proposed for dumb uses that’s a bad thing.” Martin also said such uses could delay better solutions to decarbonization problems.

Kevin Baker, a maintenance technician, drives a hydrogen fuel cell bus out of a terminal in 2021 in Canton, Ohio.

He suggested people are earnestly “betting on the wrong horse.”

But many in government and private industry are forging ahead with a different view.

“Hydrogen is critical for decarbonizing hard-to-abate sectors, where electricity alone is ineffective or too expensive,” said Tom Hellstern, a Seattle-based associate partner of McKinsey & Co. who co-leads the global consulting firm’s hydrogen unit in North America.

Analysts at McKinsey, which is a partner of the Hydrogen Council, a group made up of companies interested in scaling low-carbon hydrogen, say 15% to 25% of global emissions could be decarbonized using clean hydrogen if greenhouse gases are reduced to as close to zero as possible.

In some early applications, Toyota makes the Mirai, a hydrogen fuel cell sedan that combines hydrogen in the fuel tank with oxygen in the air to produce electricity to power the vehicle. Similar hydrogen-powered forklifts are becoming widely used, Hellstern said.

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But, Hellstern added, “we’re far away still from a world where we have abundant low-carbon hydrogen.”

The Energy Department allocated $8 billion in a federal infrastructure bill passed last November to develop six to 10 hydrogen hubs around the country. Seeking bids in a first phase that began this summer and runs through April 7, the government is expected to fund projects as soon as next year, including at least one that uses nuclear power as an energy source. Hub participants would need to match government grants and demonstrate economic success.

Constellation is preparing bids in conjunction with technology vendors, potential customers and others, including Connected DMV, a nonprofit regional planning group that sees hydrogen as a way to solve climate challenges and plans to submit a request to create a mid-Atlantic hub.

“We believe our region is very well positioned and uniquely qualified,” said Stu Solomon, president and CEO of Connected DMV.

Besides Constellation, energy companies Exelon and Dominion Energy are participating in determining parameters of a mid-Atlantic market and hub. Connected DMV, proposing the National Capital Hydrogen Center, recently released a “greenprint” plan based on the region’s expected hydrogen supply and demand.

In the next decade alone, the report said, an economy that incorporates hydrogen technologies could bring the region $1.7 billion in economic activity, nearly $500 million in additional state and federal tax revenues, and more than 10,000 new jobs. The carbon abatement would equal taking 700,000 cars off the road.

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The region is ideal, Solomon said, with academic and research institutions, major airports and ports, rail lines, data centers, solar and wind farms, and nuclear power plants.

“It provides a tremendous well of assets that can both produce power and ... consume it, and those that can provide the infrastructure to store it and move it,” he said.

Scaling hydrogen is about building an ecosystem, McKinsey’s Hellstern said.

“It’s difficult for one player to produce, transport and use,” he said “You need to build a consortium of different players.”

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The aviation industry could lead the way in the hydrogen economy, using e-methanol, made with clean hydrogen and carbon dioxide, as a sustainable aviation fuel, Dominguez said. Major airports in the Baltimore-Washington region “would be enormous consumers,” he said.

Joe Dominguez, Constellation's CEO, sees big airports in the Baltimore-Washington region being major consumers in the hydrogen economy.

Airlines represented by the International Air Transport Association trade group have committed to reaching net-zero carbon by 2050, by switching to sustainable fuels and developing “zero emissions” planes that use electric or hydrogen propulsion designs.

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Dominguez also sees immediate benefits in blending hydrogen with natural gas that’s delivered through gas pipelines. About a third of Constellation’s 81 fossil fuel-fired generators could burn a blend of hydrogen and natural gas, without engineering modification, allowing plants to reduce emissions. Consumers would see no difference in gas ovens or furnaces with a low-level blend coming through pipelines, he said.

“You can envision this world where we transition to electric, but it’s going to take a long time for people to trade in their stoves, their ovens and other devices, and move to electric, and there’s also resistance,” Dominguez said. “Any CO2 we reduce right now will have an environmental benefit. It’s not just where we get to by 2050. It’s all the steps we take on the way.”

Ushering in a hydrogen economy would require federal subsidies to close funding gaps until production scales up and costs decrease, as is happening with wind energy, he said. Production tax credits for hydrogen, included in the Inflation Reduction Act that President Joe Biden signed into law in August, are expected to help accelerate Constellation’s hydrogen plans.

Citing the war in Ukraine, Dominguez said hydrogen not only addresses climate change, but also national security.

“We’re acutely aware now,” he said, “of the need to have an industrial base in America that’s big enough to cover some of our basic needs in the event that we have other geopolitical crises that prevent supply from different parts of the world.”


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