The cost of producing renewable energy from both wind and sun continues to fall, prompting a boom in sustainable electricity production. But this has also led to an auspicious problem: what to do with the excess energy produced from sustainable sources? California confronts this issue each spring when demand for electricity ebbs just as solar panels near peak midday production. With no easy way to store the power, the state—which has some of the highest U.S. electricity prices—is forced to export its excess, often paying neighbors like Arizona to accept electricity that would otherwise overload California’s power lines. Across the Sunbelt, and along the nation’s windy coastlines, this problem has made large-scale energy storage the next big thing.
Against the backdrop of an International Energy Agency prediction that this year, the cost of solar-generated electricity paired with batteries will become cheaper in the United States than electricity generated by new natural gas-fired plants, utilities are developing a range of storage options. These include a mix of experimental (sodium-based) and proven (lithium-ion) battery technologies, as well as gravity-based systems (to pump water uphill, for example, when electricity is abundant and cheap, then generate hydroelectric power on the way down when demand for current exceeds capacity—whether at night or when the wind dies). Such solutions for short-term needs are relatively straightforward but are designed to smooth the power supply across timescales measured in hours.
But what about long-term storage? Solar panels produce far more energy in summer than in winter, and winds often blow in seasonal patterns. Butler professor of environmental studies Michael McElroy and postdoctoral fellow Haiyang Lin have proposed what may be a better solution. Texas, the archetypal fossil-fuel state, is in an ideal position to use cheap renewable electricity to produce green hydrogen, an odorless, tasteless, invisible, and nontoxic gas that, when consumed in a fuel cell (which converts chemical energy and oxygen into electricity), yields only water as a byproduct. (Green hydrogen is made by reversing that process, splitting water—H2O—into hydrogen and oxygen using electrolysis.)
Texas is especially well suited to produce green hydrogen. While the state famously accounts for more than 40 percent of oil and more than 25 percent of natural gas production in the United States, it has also become “the state with the largest investment in wind energy,” says McElroy. “And it’s number two in solar.” It also has the nation’s most robust hydrogen infrastructure, with more than 900 miles of existing pipeline, and more than three-quarters of the world’s best subterranean storage facilities: vast salt-mine caverns. Hydrogen is currently used in oil refining in Texas and the Gulf States and, he adds, is exported to Louisiana for use in fertilizer production. The gas now used in these applications is referred to as gray hydrogen, because it is produced using natural gas, in a process that emits the greenhouse gas carbon dioxide. Switching to green hydrogen would not only lower the state’s massive carbon footprint (680 million tons of CO2 emitted in 2019—more than Canada’s total), but also capture excess renewable energy in a form that could position the state as an exporter of clean energy products.
Texas runs an independent power grid in which renewables accounted for 31 percent of the state’s 2023 electricity sales—enough to power 14 million U.S. households for a year. But McElroy and Lin say the state’s potential from solar and wind dwarfs current production. Using NASA meteorological data, they estimate the wind-power generation potential is 11 times the state’s total 2022 electricity demand, and more than nine times the projected demand in 2030. Solar’s potential is at least three times greater than that for wind. Texas, in other words, already the largest market for wind turbine equipment in the United States, could become a green energy giant. And green hydrogen would help the state avoid the problem of oversupply that has plagued California.
Their analysis indicates that in Texas, production of green hydrogen will become cost-competitive with gray hydrogen by 2030, even without subsidies. (Green hydrogen is currently cheaper than gray hydrogen as a result of tax incentives in the Inflation Reduction Act.) Texas consumes 3,000,000 tons of gray hydrogen annually, more than any other state, and that market would be the first to use the clean variety of the gas. But there are many potential uses for hydrogen, which can be used as a clean fuel for factories, as well as ships, trains, and long-haul trucks, an application in which electrification via batteries would be too heavy and take too much space to be practicable. The study includes detailed recommendations for the optimal siting of hydrogen plants within the Texas power grid and for expansion of the hydrogen pipeline system, and estimates of market demand in states where production would be more costly than in Texas.
As McElroy and Lin point out, there are numerous industrial applications for green hydrogen in the United States and abroad, other than as a transportation fuel: it is widely used, for example, in treating metals and processing foods. They add that it can also be used to produce liquid ammonia, a form in which it can be more easily transported. Ammonia is the second-most manufactured substance globally, used in the production of paper, rubber, leather and throughout the food and beverage industry. Liquid ammonia, their analysis shows, could be cost-competitively exported to markets as far away as Asia, although they emphasized in an interview that domestic and international markets should be encouraged to develop further, probably through policy incentives, both to stimulate demand and ensure supply. But with the right investments, Texas can be well positioned for the energy transition and become “a major future global supplier of green hydrogen,” they write, offering “a blueprint for other energy giants to follow.”
