Xcel, partners win USD-925m grant for Upper Midwest green H2 plan

US utility Xcel Energy (NASDAQ:XEL) and its partners have secured up to USD 925 million in federal funding for its proposal to create a green hydrogen hub across three Upper Midwest states as part of a broader programme to develop the national green hydrogen economy.

The Heartland Hydrogen Hub (HH2H) will be created as a partnership between Xcel, Marathon Petroleum Corporation and TC Energy. The utility confirmed the grant funding for the initiative on Friday, saying the proposal will result in cutting more than one million tonnes of carbon dioxide (CO2) emissions per year.

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The next step is to finalise award negotiations for the grant financing. The partners expect development activities on the project to continue through 2035.

HH2H envisages the production of low-carbon hydrogen at a commercial scale across North Dakota, South Dakota and Minnesota and the potential use of the green fuel in the production of fertilisers for the agriculture industry and for natural gas blending. With plans to open 3,900 direct jobs, the scheme could be expanded to other neighbouring states in future.

HH2H is one of seven regional clean hydrogen hubs selected to receive USD 7 billion in federal funding under the Bipartisan Infrastructure Law. Collectively, they are expected to mobilise over USD 40 billion (EUR 38.03bn) in private investment and produce more than 3 million tonnes of hydrogen per year, meeting nearly one third of the US clean hydrogen production goal for 2030.

(USD 1.0 = EUR 0.951)