Federal Fuel Cell Incentives & California Clean Air Goals: US Rep. Levin & CEC’s McAllister on Hydrogen

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VX News presents this excerpt from VX Green Hydrogen Discussion Forum Webinar #1 from November 12, moderated by Adm (ret.) Dennis McGinn, US Congressman Mike Levin, California District 49, and California Energy Commissioner, Dr. Andrew McAllister set the federal and state policy context in this panel discussion on Green Hydrogen and California’s Future Fuel Mix.Congressman Levin shares his  priorities for fuel cell electric vehicle incentives and his work on the Select Committee on the Climate Crisis, and Commissioner McAllister speaks to SB 100 implementation and the role for hydrogen in power sector decarbonization. 

Denny McGinn: Let me set a context. When you think about our energy security, nationally and internationally, our economic security and our environmental security are all inextricably linked. If we think about making investments in future forms of energy or fuel, we need to think in those contexts: energy security, environmental security, and economic security. The good news is that hydrogen has positive effects on every one of those, nationally and internationally.

 So, as we move forward learning a little bit more about the generation, the storage, transport, and then use possibilities of hydrogen, keep that in mind. There's never any one silver bullet to address the challenges of global warming or climate change, however, hydrogen is going to provide what I would call, silver buckshot, and we're going to get plunging into that.

Congressman Mike Levin: As some of you know, I was involved in clean energy for quite some time, and specifically was involved in trying to roll out more stationary fuel cells, fuel cell electric vehicles, and the infrastructure to support fuel cell electric vehicles in the past few years. In fact, I remember not too long ago being in a room with some of you, as we were thinking through how we get to 100 hydrogen fueling stations throughout the state of California. I think we're getting there due to great leadership and innovation and support, both public and private. I think California will lead the way, and I've been very fortunate in my first term, and now my second term in Congress, to have been put in a position to really make clean energy and clean tech development and deployment really one of my top priorities.

Throughout the last Congress, we have had divided government, as you know, and that has meant pushing very hard for an extension to key renewable energy tax credits, clean transportation tax credits, and as we all know, tax credits are an essential way that the federal government supports California's goals to reduce emissions. Soon after I was sworn in, in 2019, I helped lead a letter that more than 125 of my colleagues signed supporting an extension to some of the key tax credits, like those for fuel cell electric vehicles and stationary fuel cell power plants. The letter was really a group effort. A lot of my freshman colleagues and other environmental leaders in Congress, like my friend Paul Tonko from New York, who chairs the subcommittee of jurisdiction. The letter initially did not include a reference to fuel cell vehicles, but we fought to ensure that it did. You'll see a recurring pattern throughout the these remarks.

We haven't been able to get that extension done yet, but we're going to keep fighting during the lame duck, which historically has been a pretty common time for tax extenders to come together, and I'm hopeful that it'll happen this time as well. I thought I would also mention our Zero Emission Vehicles Act that I'm doing along with our friend, Senator Jeff Merkley, from Oregon. This would set a federal zero emission vehicle standard for light-duty vehicles, which would, importantly to those of you on this Zoom, include fuel cell electric vehicles. Again, this was the space where we made sure that zero-emission vehicles were not defined narrowly, but rather included both battery electric and fuel cell electric vehicles.

The bill would require 50 percent of new light-duty vehicles sold to be zero-emission by 2025. And that standard would ramp up 5 percent every year until it reaches 100 percent in 2035. In fact, after Governor Newsom introduced his action here in California around zero-emission vehicles, we modified our legislation, Senator Merkley and I, to be five years more aggressive as far as the zero-emission vehicle standard goes.

One other thing that I'll mention is that in the 116th Congress Speaker Nancy Pelosi, reconstituted the Select Committee on the Climate Crisis, so titled because we need solutions that are commensurate with the challenges of the climate crisis, and I was very honored when the speaker put me on the committee. I'm one of the three Californians along with our good friends, Jared Huffman and Julia Brownley, and I was one of the three freshmen members on the committee. The leader is Kathy Castor, out of Florida, she’s a fantastic chair. There are nine Democrats and six Republicans on the committee. I would encourage everyone to take a look at the action plan that we released earlier this year. It is around 500 pages and is incredibly comprehensive.

As you all know, the climate crisis is such a broad topic with implications on every sector that it requires basically every committee in the House of Representatives to be involved in one way or another. The work of the committee was dedicated to being, again, up to the scientific challenges that we face, and really radically trying to think, in both a pro-environment and pro-economy manner, what does the future need to look like; how do we get from here to there; how do we reduce greenhouse gas emissions enough to be able to mitigate the worst of the climate crisis? And so, everything from how we move goods and people to how we build buildings, to the type of choices we make around sustainable agriculture and growing our food, to the type of electricity that we're going to need to power all of this are included in the report.

You can check it out at ClimateCrisis.House.Gov. I was honored that it was called by Vox—and they're pretty critical usually—but they said this was one of the most well thought out plans for addressing climate change that has ever been a part of US politics. I'll close by just mentioning a couple of the recommendations that the climate crisis action plan made specifically to fuel cells, whether they be stationary fuel cell electric vehicles. First extending the ITC the investment tax credit for fuel cell property and the tax credit for alternative fuel infrastructure. Second creating an energy storage ITC, which would include regenerative fuel cells. Third, establishing a process to standardize permitting for distributed energy systems, which would include fuel cell systems and hydrogen fuel cell refueling. Then fourth, creating a manufacturer's tax credit for electric and hydrogen fuel cell buses.

 I can tell you, as I think I am still the only member of Congress to have actually leased a fuel cell electric vehicle, I am a true believer in the future of zero emission transportation. I look forward to continuing that strong collaboration and strong partnership with everyone here.

Andrew McAllister: Hydrogen is emerging very, very quickly as we all know, and we're all very happy about as a solution, and there are state-level opportunities here beyond California. There's a great discussion—a budding discussion, I would say—but I think the foundation will be very solid for West-wide collaboration on hydrogen. We have this geographic diversity, and the build out we're expecting for solar and other renewable resources in the coming years is just tremendous. The volume and scale of renewable expansion across the West is really ripe for complementing hydrogen as an infrastructure in-parallel. So, the investment community has a lot to be excited about in this realm.

Teeing off of what Mayor Garcetti said, Los Angeles is ground zero for this, and in important ways, Intermountain Power and DWP’s leadership is really hard to overstate how foundational that is for driving this discussion. So, this conversation is incredibly timely.

So,  I like to talk about really counting the molecules. I go back to first principles, and if we are going to meet the challenge of climate change, we have to count the molecules. I think the way we've talked about the gaseous fuel system, in particular, has been a little bit reductive, and we need to be a little more pointed in how we talked about it.

Natural Gas is a term that's a little too vague, I think, for our current and future reality. I'm not sure what natural means in this context, we have lots of different flavors of gas—renewable gas, bio gas, hydrogen gas, synthetic gas, and we have fossil gas. So, I think we need to be more specific in our terminology, and the beautiful thing about hydrogen is that it can play in all of those realms.  It can substitute for some chunk of the current natural gas. It can also move entirely to green hydrogen and provide infrastructure that largely can substitute for our current system.

Now we have lots of issues about cost, how to scale, how to invest, and what infrastructure really is optimal for our path from point A to point B. But as Denny suggested, there is a continuous path; discontinuity is our foe here. So, from where we are today, the business models that we have and the access to large capital for large infrastructure that we need to tackle climate change, hydrogen can provide a pathway that's really apropos in a lot of important ways.

So, if we envision what 2045-2050 is going to look like, hydrogen can play a part of this vision. Most of the state is out of compliance with federal air quality standards, particularly ground-level ozone. So, if we can imagine a place where our kids are growing up and we're completely in compliance, that's amazing and that's about combustion and ground-level ozone precursors like NOx and the hydrocarbons. I think there's a broad, society-wide vision for improving our quality of life, and it's becoming clear that hydrogen can play an important role in that

To get more in California specific, we have an existing hydrogen economy. It's largely, balkanized, but there is a lot of know-how and a lot of players that are highly competent that we can build on. And internationally, we're engaging more on this as well. As California, we have MOU’s with Denmark, Germany, and Norway, and we're talking with Scotland, and Japan, obviously, is a huge ally in this. There's just a lot of synergy across the world, and California can really be a platform in the US to build this conversation and start to build real infrastructure in this evolution and this transition.

I think it's important to integrate the various conversations. Congressman Levin mentioned the transportation side, which I think is very exciting. We have a goal in the state for 200 hydrogen fueling stations by 2025, and we're well on the way to that. But the power sector side of things really can provide, and I think it's really necessary to integrate those two so that we get the kinds of scale and synergies from transportation, electric power sector, and storage that are really going to underpin the clean energy economy, both on the gaseous side and, increasingly, on the electric side.

So, I lead the some of the technical work behind SB 100—the de Leon bill from 2018 that establishes a target of renewable energy and zero carbon resources to get to 100 percent zero carbon by 2045. We're doing a pathway work on how we’re going to get there.  Power-sector hydrogen right now is in kind-of a tier two bucket; we need to get that technology trajectory so that we can actually include it in the mix. start hitting milestones for cost reduction, and really map that on to what that needs to look like in terms of our investment.

Our buildout to meet any scenario of SB 100 is in the gigawatts per year for the next 20-years of solar, wind, and other renewables—a massive build out— that is going to provide a really great platform for complementing, as we must, with storage technologies and bringing new technologies into the power sector. Particularly as we get past 70-80 percent renewables, we're going to need these solutions. Hydrogen, I think, can provide that. Intermountain, again, is really important there—the industry transition and that continuity to 2045.

The other thing I wanted to mention is that we are going to have a conversation about these long-term planning issues in the Integrated Energy Policy Report discussion next year. It’s a little bit wonky, but basically every two years the Energy Commission does a directional effort to project forward what are planning and the big issues of the day going to be going for the next 10 years and beyond. It's certainly time, in the context of SB 100 implementation, to really have a convening and begin to build the record on the natural gas transition itself, but what different technologies, including hydrogen, are going to have to play in that transition. There's a great opportunity to become a leader in California in this in this realm, and we're in a position to take some leadership, really carry that flag, and figure out what the optimal path forward is going to be. So, building out that Western integration discussion and also, pragmatically, how we can drive this piece of the carbon transition—of the climate transition—in California with real investment in real innovation, real technology, and real infrastructure shifts. These are generational shifts we're talking about in terms of building new technology to support the power sector.

The last thing I’ll say before wrapping up: Reliability in the power sector is number one. We've seen that we have challenges with actually adapting to climate change; it's here with us. These heat waves from the summer were a tremendous challenge, which just clarified that reliability is something that cannot be taken for granted. It’s put the big infrastructure conversation a little bit more front and center and really favored an acceleration of this hydrogen conversation. So, I'm excited to lead that conversation at the Energy Commission and certainly to work with all of the stakeholders in this. There's some really great work. We have a growing legislative foundation and statutory foundation to help us plan and do analytical work and studies to underpin this conversation. We also have some great actors, both in the private sector and the UC system and the existing entities in the industry here. I'll just call out also the Green Hydrogen Coalition, and the California hydrogen Business Council as two entities that are really helping to marshal this discussion.

 

“It's certainly time, in the context of SB 100 implementation, to really have a convening and begin to build the record on the natural gas transition itself, but what different technologies, including hydrogen, are going to have to play in that transition.”—Andrew McAllister
“I think there's a broad, society-wide vision for improving our quality of life, and it's becoming clear that hydrogen can play an important role in that” —Andrew McAllister

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