Texas: A Hub for Green Hydrogen, A Key for Decarbonization

New Harvard-China Project Research Explores Texas’ Potential Role in Decarbonizing the United States

As the United States grapples with decarbonizing its energy systems, one potential solution may lie to the south. Texas, one of the country’s largest oil and natural gas producers, has the potential to become a domestic leader in green hydrogen production and supply. 

In a new paper published in the Proceedings of the National Academy of Sciences, researchers from the Harvard-China Project—based at the Harvard John A. Paulson School of Engineering and Applied Sciences—assessed the optimized grid-integrated supply paths for green hydrogen, ranging from local applications to potential export options. Texas has the capacity to generate over 300 million tons of green hydrogen from wind and solar power, far surpassing its current consumption and export of fossil fuels. By 2030, researchers found that green hydrogen production in Texas could be cost-competitive with fossil fuel-derived hydrogen, which would have significant implications for the state’s economy.  

“Texas is a titan in the fossil fuel industry, producing 1/3 of total national CO2 emissions,” explains first author Haiyang Lin, a postdoctoral fellow at the Harvard-China Project. “Yet, with its rich wind and solar resources, Texas also has the potential to be a significant source of green fuel—creating jobs, expanding the state’s economy, and charting a path towards global decarbonization efforts.” 

"Texas has the potential to be a significant source of green fuel—creating jobs, expanding the state’s economy, and charting a path towards global decarbonization efforts.” - Dr. Haiyang Lin
 

Figure 1. Renewable power capacity factors and off-grid green hydrogen production cost. Spatial distributions of mean annual capacity factors for (A) onshore wind and (B) solar PV. Violin plots illustrate the distribution of the levelized cost of hydrogen (LCOH) produced from wind power (C) and solar power (D). Supply curves indicate the weighted average LCOH for the cumulative quantity of hydrogen produced in 2022 (E) and 2030 (F). Hydrogen produced with US domestic manufactured alkaline electrolyzers (USECs) and China imported alkaline electrolyzers (CNECs) are compared. Note the different color bar limits in (A) and (B).
 

Green Hydrogen and Why it Matters

Green hydrogen, produced using renewable electricity and water, is a clean and sustainable source of energy and chemical feedstocks. Water molecules are split into hydrogen and oxygen through a process called electrolysis, and the electricity used to power the process comes from renewable sources like wind and solar. Hydrogen production itself is labeled by a “rainbow” of colors, ranging from blue and gray (produced from natural gas with/without carbon capture) to black and brown (produced from coal). 

Texas is well-positioned to lead the U.S. green hydrogen transition. The state’s hydrogen infrastructure is already robust, with some 900 miles of hydrogen pipelines and three of the world’s four salt caverns operational for storage. Likewise, the state’s abundant renewable resources include wind power and cost-effective turbines. Texas is also the largest domestic consumer of gray hydrogen; shifting to green hydrogen could eliminate emissions associated with gray hydrogen and reduce its carbon footprint. 

Implications of the Research

While previous studies have estimated Texas’ green hydrogen potential or the economics surrounding its production, this study presents a cross-sectoral framework to evaluate green hydrogen’s role in Texas’ economy and its role in decarbonizing the U.S. and beyond. The findings suggest that by 2030, green hydrogen could become cost-competitive with gray and blue hydrogen, providing flexibility for the power sector and serving as seasonal storage. 

The first step in assessing Texas’ potential role in green hydrogen was to calculate the hourly capacity factors for onshore wind and solar power. Overall, the potential capacity is estimated at 1,291 GW and 7,057 GW, respectively. This means that the potential annual power generation is 4,834 TWh for wind and 15,631 TWh for solar power – far higher than the current estimated demand for electricity (422 TWh in 2022) and projected demand (499 TWh in 2030). This massive surplus can be harnessed to produce green hydrogen, which researchers estimate to be over 50 million tons available by 2030 at $1.5/kg. Moreover, the 45V tax credit, aimed at incentivizing clean hydrogen production, could lower costs further to under $0.2/kg, making it even more competitive than blue hydrogen.

Researchers simulated the entire hydrogen supply chain—production, storage, delivery, compression, dispensing, and ammonia synthesis—on an hourly basis over a representative year, to model the scale and cost of green hydrogen supply. Their analysis also evaluated the grid-level impacts of hydrogen integration, highlighting its potential to lower system costs, enhance grid capacity, and improve power flow and reliability. By utilizing hydrogen production as a flexible load, curtailment of excess renewable energy could be significantly reduced, while hydrogen and ammonia-based power generation can bolster overall system resilience. Notably, hydrogen-based power capacity could reach 89% of the existing thermal plant capacity, even though its generation mix contribution is only 6%, emphasizing its role as a long-term backup resource.

Researchers further compared off-site hydrogen delivery via pipelines/trucks to on-site production through expanded electricity transmission. The analysis demonstrated that pipelines are more cost-effective for large-scale hydrogen distribution, reducing delivery costs by $0.41/kg by minimizing the need for extensive high-voltage transmission lines and additional local renewable installations. Moreover, pipelines offer greater operational flexibility, supporting hydrogen adoption across various sectors. By 2030, this strategy could bring the projected levelized cost of hydrogen (LCOH) at fueling stations down to $4-5/kg, making it a viable competitor to gasoline and diesel. Similarly, green ammonia—a critical derivative—could be produced at $350-550/ton, offering a stable and cost-effective alternative to volatile fossil-based ammonia.

Exporting green hydrogen and ammonia from Texas to domestic and international markets offers an attractive option for potential stakeholders. Through pipelines and shipping, Texas could emerge as a major supplier of green hydrogen and ammonia for domestic and international markets. Using pipelines to transport ammonia instead of gaseous hydrogen could reduce delivery costs by around two-thirds, though the high processing costs associated make delivery to states closer to Texas less cost-effective. Research indicates that maritime shipment of ammonia is considerably less costly, representing a potential case for green fuel export not only to other parts of the United States, but international buyers. Texas can ship either ammonia or liquid hydrogen to Japan, for example, by way of the Panama Canal for approximately $2.6/kg, lower than the country’s targeted cost for imports in 2030 of $3/kg. The affordable costs and prospects for large-scale production could support a vision for Texas to transition to the role of a major global supplier of green hydrogen. 

Research Cited:

Haiyang Lin, Andres Hernandez Gonzalez, Chris P Nielsen, and Michael B McElroy. 2024. “Texas: A Green Hydrogen Hub to Decarbonize the United States and Beyond.” Proceedings of the National Academy of Sciences, 121, 50, e2321347121. Publisher's Version and Abstract

By Kellie Nault, HCP Communications