DISCLAIMER: The “Notice of Intent to Issue” is for informational purposes only; the Department of Energy is not accepting any applications at this time. Any information contained in this notice is subject to change.
This is a Notice of Intent to issue:
Broad Agency Announcement
Bipartisan Infrastructure Law: Additional Clean Hydrogen Programs (Section 40314): Regional Clean Hydrogen Hubs
The Department of Energy (DOE) Office of Clean Energy Demonstrations (OCED) is considering establishing a Demand-side Support Mechanism to support reliable demand for hydrogen at DOE-supported Regional Clean Hydrogen Hubs (H2Hubs).
As part of this process, DOE intends to issue a Broad Agency Announcement (BAA) entitled “Implementing Entity (or Entities) for Demand-side Support Mechanism for Clean Hydrogen Hub Projects”. OCED anticipates issuing the BAA in the summer or early fall timeframe.
The BAA will seek an independent Implementing Entity (or Entities) to implement a DOE-designed and DOE-funded demand-side support mechanism to support the development of the H2Hubs. DOE will commit up to $1 billion to the mechanism.
The demand-side support mechanism will provide multi-year support for clean hydrogen produced by competitively selected projects affiliated with H2Hubs. It will facilitate bankable clean hydrogen demand from a diverse set of offtakers. It will help diverse entities leverage the full potential of clean hydrogen, including non-profits, local government, and Tribes, and facilitate the use of clean hydrogen across various sectors of the economy, such as in industrial processes, manufacturing and heavy-duty transportation.
The mechanism could include one or more design factors such as pay-for-delivery contracts, offtake backstops, feasibility funding to support analysis by offtakers, or other measures that strengthen demand for clean hydrogen and increase revenue certainty for H2Hubs. The mechanism will enable private sector financing and expedite progress to Final Investment Decision for H2Hubs.
Based on demonstrated performance and experience gained with the H2Hubs Demand-Side Support Mechanism, DOE may consider similar mechanisms for other technologies and clean energy products in the future.
Tools that mitigate market risk for clean energy technologies during scale-up could meaningfully accelerate commercialization of these technologies, especially in clean hydrogen. DOE’s Pathways to Commercial Liftoff Report and National Clean Hydrogen Strategy and Roadmap for clean hydrogen both highlighted the lack of long-term offtake as a critical barrier to the near-term expansion of the clean hydrogen economy.
A recent DOE Request for Information on the use of demand-side support measures in supporting clean energy technologies emphasized these issues, with respondents highlighting the benefits of well-designed measures that can tackle revenue certainty issues that arise as a result of the natural imbalance between supply scale-up and demand formation in emergent clean energy markets. This initiative underscores DOE’s commitment to addressing barriers to commercialization identified in the Liftoff Reports.
DOE has determined a demand-side support mechanism can facilitate achievement of statutory goals to accelerate the commercialization of clean hydrogen and facilitate a clean hydrogen economy while fostering the development of robust private sector demand for clean hydrogen products. Public input is needed to ensure DOE is aware of and considering a broad set of program design factors consistent with statutory authority. DOE will also consider a broader set of potential options to deliver this support (e.g., funding to the H2Hubs for this work or potential blended capital options).
Questions for stakeholder feedback:
To help inform the design of a demand-side support mechanism for the Regional Clean Hydrogen Hubs Program, DOE is seeking public input on potential benefits and risks, operating models, governance structures, and equipped implementing partners. These questions build on DOE’s Request for Information of Use of Demand-Side Support for Clean Energy Technologies but are specifically focused on support for Hydrogen Hub projects.
Responses are due no later than 5:00 pm ET on July 24, 2023 and can be submitted to Demand-Side-RFI-NOI@hq.doe.gov. All responses must be sent either as a Microsoft Word (.doc / .docx) or Adobe Acrobat (.pdf) attachments.
Category A: Most effective demand-side support measure to support H2Hubs
1. What is the most effective way DOE could catalyze durable, bankable demand for clean hydrogen at DOE-funded H2 Hubs? Which of the following potential mechanisms would be most impactful?
- Pay-for-difference contracts that provide support to projects based on the price they can achieve in the market
- Fixed level of support for projects (e.g., fixed $/kg amount) that stacks on top of other sources of revenue
- Funding to support feasibility analysis from potential offtakers near H2Hubs
- “Market-maker” for clean hydrogen to provide a ready purchaser/seller for clean hydrogen
- Other (please specify)
2. For eligible projects, what competitive process should be used to select projects that will receive demand-side support?
- Reverse auction in which projects compete to bid the lowest level of support they need to make their project viable
- Request for proposal-like process in which projects apply and are selected based on a variety of factors
- Eligibility-based process in which all projects that meet certain threshold requirements receive some form of support
- Other (please specify)
3. How can DOE design demand-side support to account for other kinds of support that H2Hubs projects may receive (e.g., tax credits, state and local government incentives, DOE cooperative agreement funding)?
4. How can DOE stucture demand-side support for H2Hubs to best catalyze the formation of a mature commodity market for clean hdyrogen?
- How can DOE structure demand-side support for H2Hubs to best catalyze the development of standard contract terms for clean hydrogen?
- How can DOE structure demand-side support for H2Hubs to best catalyze the development of price transparency for clean hydrogen?
Category B: Implementation of demand-side support measures
1. If DOE were to establish a demand-side support mechanism for H2Hubs with an independent implementing entity or entities, what capabilities and qualifications should DOE prioritize when selecting an entity or entities? Should DOE seek a single entity with national scope or several entities with regional scopes?
2. For any or all of the program design factors selected in response Category A, what existing entities could administer and oversee the demand-side support mechanism? If no existing entity currently exists with the necessary capacity or expertise, how long would it take to establish such an entity or entities? What are the necessary areas of expertise for DOE to prioritize in selecting an independent entity?
3. What are the risks to DOE in partnering with an independent entity to administer a demand-side support mechanism? What governance structures and guardrails should DOE consider in designing a demand-side support mechanism to help maximize impact and minimize implementation risk? Are there any models DOE should look to in establishing a governance structure?
PROPRIETARY INFORMATION:
Because information received in response to this NOI may be used to structure future programs and/or otherwise be made available to the public, respondents are strongly advised NOT to include any information in their responses that might be considered business sensitive, proprietary, or otherwise confidential.
If, however, a respondent chooses to submit business sensitive, proprietary, or otherwise confidential information, it must be clearly and conspicuously marked as such in the response as described below. Failure to comply with these marking requirements may result in the disclosure of the unmarked information under the Freedom of Information Act or otherwise. The U.S. Government is not liable for the disclosure or use of unmarked information and may use or disclose such information for any purpose.
If your response contains confidential, proprietary, or privileged information, you must include a cover sheet marked as follows identifying the specific pages containing confidential, proprietary, or privileged information:
Notice of Restriction on Disclosure and Use of Data:
Pages [list applicable pages] of this response may contain confidential, proprietary, or privileged information that is exempt from public disclosure. Such information shall be used or disclosed only for the purposes described in this NOI OCED-NOI . The Government may use or disclose any information that is not appropriately marked or otherwise restricted, regardless of source.
In addition, (1) the header and footer of every page that contains confidential, proprietary, or privileged information must be marked as follows: “Contains Confidential, Proprietary, or Privileged Information Exempt from Public Disclosure” and (2) every line and paragraph containing proprietary, privileged, or trade secret information must be clearly marked with [[double brackets]] or highlighting.
EVALUATION AND ADMINISTRATION BY FEDERAL AND NON-FEDERAL PERSONNEL:
Federal employees are subject to the non-disclosure requirements of a criminal statute, the Trade Secrets Act, 18 USC 1905. The Government may seek the advice of qualified non-Federal personnel. The Government may also use non-Federal personnel to conduct routine, nondiscretionary administrative activities. The respondents, by submitting their response, consent to the Office providing their response to non-Federal parties. Non-Federal parties given access to responses must be subject to an appropriate obligation of confidentiality prior to being given the access. Submissions may be reviewed by support contractors and private consultants.
RESPONSE GUIDELINES:
Responses to this NOI must be submitted electronically to Demand-Side-RFI-NOI@hq.doe.gov with the subject line “OCED-NOI-23-1” no later than 5:00 p.m. (ET) on July 24, 2023. Responses must be provided as attachments to an email. It is recommended that attachments with file sizes exceeding 25 MB be compressed (i.e., zipped) to ensure message delivery. Responses must be provided as a Microsoft Word (*.docx) or Adobe Acrobat (*.pdf) attachment to the email, and no more than 10 pages in length, 12-point font, 1-inch margins. Only electronic responses will be accepted.
A response to this NOI will not be viewed as a binding commitment to develop or pursue the project or ideas discussed. OCED may engage in pre- and post- response conversations with interested parties.
DOE requests respondents provide the following information at the start of their response to this NOI:
• Company/institution name
• Company/institution contact
• Contact's address, phone number, and e-mail address.