May 17, 2022 - Fortescue Future Industries, a subsidiary of the Australian iron ore company Fortescue Metals Group, entered into a binding exclusivity agreement announced May 13 with the Industrial Park at TransAlta, a non-profit formed to promote redevelopment of 4,400-acres in Lewis County formerly used for coal mining. Coal removal ended in 2006.

The adjacent Centralia coal plant, owned by TransAlta, is slated to fully retire in 2025 after over 50 years of operation. In 2020 it retired its first power generation unit, bringing its capacity from over 1,300 MW to 670 MW.

Fortescue said in a statement that it plans to employ the existing coal workforce in the proposed green hydrogen project.

"FFI's goal is to turn North America into a leading global green energy heartland and create thousands of green jobs now and more in the future," said Chairman and Founder Andrew Forrest. "Repurposing existing fossil fuel infrastructure to create green hydrogen to power the world is part of the solution to saving the planet."

Fortescue also announced that the proposed green hydrogen plant would be part of a bid to develop the region into the Pacific Northwest Hydrogen Hub using grant dollars from the Infrastructure Investment and Jobs Act passed last year. The company said it plans to apply for hydrogen hub grant funding with other regional stakeholders, including Puget Sound Energy, Washington Maritime Blue, Twin Transit and the Lewis County Energy Innovation Coalition.

The infrastructure bill earmarked $8 billion for the Department of Energy to support the creation of at least four regional hydrogen hubs.

Through a competitive application process, the bill requires the DOE to select at least one hub that uses fossil fuel as a feedstock, one hub that uses renewable energy as a feedstock and one hub that uses nuclear energy as a feedstock. It also requires each hub to focus on a different category of end-users – electric power generators, industrial users, the residential and commercial heating sector, and transportation.

Fortescue CEO Paul Browning indicated in the company's announcement that green hydrogen produced out of the Pacific Northwest Hydrogen Hub would help decarbonize the region's transportation sector and heavy industries.

"The electric power grid of the Pacific Northwest is one of the lowest carbon power grids in the world and can be used to produce green hydrogen, and could extend the region's low carbon leadership to hard to electrify sectors like long-haul trucking, ports, aviation, and heavy industry," Browning said.

The Department of Energy closed its second request for information round for the hydrogen hub selection process March 21. It received over 300 responses, indicating a high level of interest. After a review of its 300-plus responses, the department will initiate a request for proposals, wherein regional groups will submit applications for the funding.

It's not yet known when the department will issue the RFP. Other regions – like the US Gulf Coast, Southern California, the Rocky Mountain region, New York, West Virginia and the Washington area – have also signaled strong interest in federal hub funding.

According to Platts price assessments, hydrogen produced using PEM electrolysis in Northwestern US fell to $4.20/kg (including capex) on May 13 since a high of $7.48/kg on May 3. Its $4.20/kg cost is the lowest price across the US as of May 13.