NW Natural wants to produce hydrogen in Eugene and then blend it with existing natural gas in its pipelines, which the utility believes would modestly shrink emissions and offer insights into the viability of larger-scale hydrogen blending.
NW Natural made preliminary regulatory filings for the hydrogen project with the Public Utility Commission of Oregon in July. The utility plans to file an application for approval of its Eugene hydrogen project with regulators this month.
About 2,300 residential, 160 commercial and six industrial customers in west Eugene would get blended natural gas once the project is operational by early 2024, said NW Natural Business Development Segment Manager Chris Kroeker.
NW Natural is embattled in Eugene, where lengthy negotiations surrounding climate goals last year failed to achieve a new franchise agreement with the city. The City of Eugene is now exploring widespread electrification options, which may include a ban on natural gas hookups in new construction as well a campaign to electrify buildings across the city.
Eugene project a small-scale test
Hydrogen blending is an emerging alternative to pure natural gas energy that adds hydrogen, a non-carbon fuel, to existing pipelines. Though there’s potential to reduce system emissions while using existing infrastructure, skeptics argue there are challenges, risks and inefficiencies, and they worry projects may stall more effective electrification strategies.
Kroeker said the Eugene project is a small-scale test of what the utility hopes it can achieve systemwide in the future. NW Natural has existing hydrogen blending sites in Sherwood, but Eugene would be the first test for the wider market.
Chris Kroeker, NW Natural Business Development Segment Manager said:
It’s not being constructed to be a low-cost, large-scale source of low-carbon gas.
“This is going to help us learn so we can go after those larger projects in the future. After this project, we hope to confirm that our standard operating procedures and equipment and our distribution system and downstream appliances all work just fine with 5% blends and upwards of 10% blends.”
“Once we understand that for this area, we plan on blending throughout our system when we can get low-cost supplies of hydrogen available to us.”
Project estimated to cost up to $9.8 million
NW Natural intends to purchase Eugene Water & Electric Board power to run a 1 megawatt electrolyzer, which splits water’s hydrogen and oxygen molecules in a process called electrolysis. The oxygen is released after the process.
NW Natural expects the $7 to $9.8 million construction project would lead to an annual reduction from the system of 228 metric tons of carbon dioxide equivalents, which the U.S. Environmental Protection Agency estimates is about the same emissions 49 gas-powered cars would create in a year.
The project cost will be shared by all NW Natural customers, whose bills would increase an estimated 15 cents per month, Kroeker said. Getting the project through the Oregon regulatory review process is expected to take six months.
According to the San Francisco-based think tank Energy Innovation Policy and Technology LLC, natural gas and electric utilities have proposed at least 26 pilot projects across more than a dozen states involving hydrogen for various uses.
But the organization warned in a March report hydrogen blending should play a limited role in a carbon-free economy.
“The existing body of research suggests blending hydrogen with natural gas for use in buildings or for power generation is highly inefficient and does little to reduce GHG emissions,” the report reads. “It might thwart more viable decarbonization pathways while increasing consumer costs, exacerbating air pollution and imposing safety risks.”