Hydrogen blending in natural gas pipelines could soon be coming to a university campus or city near you. Southern California Gas Company (SoCalGas), San Diego Gas & Electric Company (SDG&E), and Southwest Gas Corporation (Southwest Gas) filed a Joint Application with the California Public Utilities Commission (CPUC) seeking to implement hydrogen blending demonstration projects. The $35 million projects will gather and analyze field-testing data over 18 months using increased concentrations (from 5% up to 20%) of blended hydrogen in steel and plastic natural gas distribution pipelines to help inform a future systemwide hydrogen injection standard. Advocates believe this is an important step toward gas sector decarbonization and ultimately realizing a clean gaseous fuel delivery system in California.
As we describe below, this is the second attempt by the applicants to obtain approval for hydrogen blending demonstration projects. Their hope is that this time by collaborating with the University of California, Irvine, the University of California, San Diego, and the Town of Truckee (next to Lake Tahoe), their application will fare better.
A number of intervenors, including the Sierra Club and the Environmental Defense Fund (EDF) have expressed disagreement about the scope, need, and cost of the applicants' proposal, so it remains to be seen how the CPUC will respond.
The Joint Application is not without its supporters: PG&E, Southern California Edison, the Coalition for Renewable Natural Gas, the Green Hydrogen Coalition, and the California Hydrogen Business Council filed supportive comments. Of particular interest, PG&E's comments revealed some of its own parallel hydrogen strategy.
This proceeding is likely to reveal the hydrogen strategy for all the California utilities, and is worth monitoring by anyone interested in what a hydrogen future in California may look like (not to mention the potential trend-setting effect on hydrogen use nationwide). A prehearing conference has been proposed for November 2022 and the CPUC is likely to indicate its next steps before the end of the year.
The Second Application May Be the Charm
In November 2020, SoCalGas, SDG&E, Southwest Gas, and PG&E filed an application requesting approval of a bookkeeping account to simply record the cost of implementing a hydrogen blending demonstration program. The CPUC ultimately dismissed that application as incomplete, premature, and duplicative. The CPUC determined that the application did not provide enough details to explain how it related to existing hydrogen studies, namely the Hydrogen Blending Impacts Study at the University of California, Riverside Study (UC Riverside Study) and the California Energy Commission's (CEC's) research into the use and effects of hydrogen blends on end-use appliances. The CPUC did, however, provide guidance as to what a future application would need to show:
- Improved collaboration with stakeholders, including UC Riverside, the CEC, and other parties;
- How the results would apply to all of the applicants' gas pipeline networks and a detailed timeline, a budget for Commission approval, and details about each component of the proposed research program;
- The extent of the research on either distribution or transmission pipelines to test the effect of hydrogen embrittlement and the durability and integrity of pipeline materials and components, such as meters and compressor station equipment;
- How interim reporting will be conducted for the benefit of stakeholders;
- Sufficient information on total application costs and cost recovery, including whether the applicants intend to recover the capital costs from ratepayers; and
- Reasonable attempts to utilize existing CPUC-authorized and federal government funds.
The applicants expressly tried to follow this guidance in the Joint Application.
The Environmental Community Has Concerns
Sierra Club and EDF each filed protests expressing concerns about the safety, need, and cost to ratepayers of the proposed hydrogen blending projects. Sierra Club asserts that the CPUC has never come to the conclusion that hydrogen blending in residential and commercial buildings is an appropriate or cost-effective strategy for meeting California's climate goals, especially relative to a focus on broad electrification strategies, and maintains that these projects pose health, climate, and safety risks. EDF maintains that the scale and scope of the demonstration projects will severely limit whatever lessons may be gained from them, as well as raise the distinct possibility that these projects will fail to address all the key problems that should be addressed.
In response to these concerns, the applicants maintain that the objective of the projects is to eventually enable the use of hydrogen blending as an additional tool to other decarbonization strategies, including electrification, to reduce GHG emissions, and to support the reliability and resiliency of the energy sector. Moreover, the applicants reiterate that they are committed to developing and implementing a robust set of safety-related actions during the planning and development phases of the projects.
PG&E Reveals Its Own Hydrogen Plans
In its response to the application, PG&E offers strong support for hydrogen demonstration projects. In parallel with the applicants' projects, PG&E explains that it plans to focus its efforts on blending hydrogen in the gas transmission system by developing a stand-alone gas transmission facility that does not feed into the existing gas transmission system (but no PG&E application yet!). Initial hydrogen blend levels for the system are planned at 5% followed by a stepwise increase of 5% increments up to 30% in the high-pressure gas transmission system. PG&E intends to provide long-term operational data on the impacts of hydrogen blending on operations and maintenance, pipeline integrity, gas quality and measurement, fluid hydraulics, and safety.
As usual, California is on the leading edge of energy innovations with potential national implications, so stay tuned!