News | May 20, 2020

World's Largest Green Hydrogen Project To Launch In California

LANCASTER, CALIF.--(BUSINESS WIRE)--

The global energy company SGH2 is bringing the world’s biggest green hydrogen production facility to Lancaster. The plant will feature SGH2’s pioneering technology, which uses recycled mixed paper waste to produce “greener than green” hydrogen that reduces carbon emissions by two to three times more than green hydrogen produced using electrolysis and renewable energy, and is five to seven times cheaper. SGH2 green hydrogen is cost competitive with “gray” hydrogen produced from fossil fuels like natural gas, which comprises the majority of hydrogen used in the United States.

The City of Lancaster will host and co-own the green hydrogen production facility, according to a recent memorandum of understanding. The SGH2 Lancaster plant will be able to produce up to 11,000 kilograms of green hydrogen per day, and 3.8 million kilograms per year – nearly three times more than any other green hydrogen facility, built or under construction, anywhere in the world. The facility will process 42,000 tons of recycled waste annually. The City of Lancaster will supply guaranteed feedstock of recyclables, and will save between $50 to $75 per ton in landfilling and landfill space costs. California’s largest owners and operators of hydrogen refueling stations (HRS) are in negotiation to purchase the plant’s output to supply current and future HRS to be built in the state over the next ten years.

“As the world, and our city, cope with the coronavirus crisis, we are looking for ways to ensure a better future. We know a circular economy with renewable energy is the path, and we have positioned ourselves to be the alternative energy capital of the world. That’s why our partnership with SGH2 is so important,” said Lancaster Mayor R. Rex Parris. “This is game-changing technology. It not only solves our air quality and climate challenges by producing pollution-free hydrogen. It also solves our plastics and waste problems by turning them into green hydrogen, and does it cleaner and at costs far lower than any other green hydrogen producer.”

Developed by NASA scientist Dr. Salvador Camacho and SGH2 CEO Dr. Robert T. Do, a biophysicist and physician, SGH2’s proprietary technology gasifies any kind of waste – from plastic to paper and from tires to textiles – to make hydrogen. The technology has been vetted and validated, technically and financially, by leading global institutions including the US Export-Import Bank, Barclays and Deutsche Bank, and Shell New Energies’ gasification experts.

“The world needs some good news right now, and we have it. Affordable, mass-produced, reliable green hydrogen is the missing link needed to decarbonize the world,” said Dr. Do. “We provide that link. We are the only company in the world delivering green hydrogen that is cost competitive with the cheapest, dirtiest hydrogen made from coal and gas, and much less expensive than other green hydrogen. Our technology can scale quickly and produce fuel 24/7, year-round.”

Unlike other renewable energy sources, hydrogen can fuel hard-to-decarbonize heavy industrial sectors like steel, heavy transport, and cement. It can also provide lowest-cost long-term storage for electrical grids relying on renewable energy. Hydrogen can also reduce and potentially replace natural gas in all applications. Bloomberg New Energy Finance reports that clean hydrogen could cut up to 34% of global greenhouse gas emissions from fossil fuels and industry.

“Countries around the world are waking up to the critical role green hydrogen can play in increasing energy security and lowering greenhouse gas emissions. But, until now, it has been too expensive to adopt at scale,” said Hanna Breunig, PhD, of Lawrence Berkeley National Laboratory’s (Berkeley Lab) Sustainable Energy Systems Group.

A consortium of leading global companies and top institutions have joined with SGH2 and the City of Lancaster to develop and implement the Lancaster project, including: Fluor, Berkeley Lab, UC Berkeley, Thermosolv, Integrity Engineers, Millenium, HyetHydrogen, and Hexagon. Fluor, a global engineering, procurement, construction and maintenance company, which has best-in-class experience in building hydrogen-from-gasification plants, will provide front-end engineering and design for the Lancaster facility. SGH2 will provide a complete performance guarantee of the Lancaster plant by issuing a total output guarantee of hydrogen production per year, underwritten by the largest reinsurance company in the world.

“SGH2 is changing the clean energy game,” said Santiago De la Fuente, former managing director of Acciona SA. “Hydrogen produced from waste gasification using SGH2’s process is greener than green, and cost competitive with the cheapest hydrogen on the market.”

SGH2’s hydrogen is greener than green because in addition to producing carbon-free hydrogen, SGH2’s patented Solena Plasma Enhanced Gasification (SPEG) technology gasifies biogenic waste materials, and uses no externally sourced energy. Berkeley Lab performed a preliminary lifecycle carbon analysis, which found that for every ton of hydrogen produced, SPEG technology reduces emissions by 23 to 31 tons of carbon dioxide equivalent, which is 13 to 19 tons more carbon dioxide avoided per ton than any other green hydrogen process. And SGH2 hydrogen is five to seven times cheaper than other green hydrogen.

Producers of so-called blue, gray and brown hydrogen use either fossil fuels (natural gas or coal) or low-temperature gasification (<2000° C), which produces dirty syngas with toxic tars and low volume of hydrogen. Other green hydrogen producers use electrolysis dependent on large amounts of intermittent renewable energy and deionized water, which is green if it comes from 100% renewable power, but comes at a high cost (US $10-$15 per kilogram) and lacks reliability.

“Stork, a Fluor company, is a global leader in providing clients with operations and maintenance solutions throughout the entire plant lifecycle,” said Taco de Haan, President of Stork. “As part of the design team we look forward to assisting in the optimization of plant design with reliability- based maintenance principles followed by delivering the actual plant operations and maintenance services. We are proud to be a part of this partnership as its objectives are so well aligned with Stork’s sustainability agenda and our commitment to the global energy transition.”

Waste is a global problem, clogging waterways, contaminating oceans, packing landfills and polluting skies. The market for all recyclables, from mixed plastics to cardboard and paper, collapsed in 2018, when China banned the import of recycled waste materials. Now, most of these materials are stored or sent back to landfills. In certain cases, they end up in the ocean, where millions of tons of plastic are found annually. Methane released from landfills is a heat-trapping gas 25 times more potent than carbon dioxide.

SGH2 is in negotiations to launch similar projects in France, Saudi Arabia, Ukraine, Greece, Japan, South Korea, Poland, Turkey, Russia, China, Brazil, Malaysia and Australia. SGH2’s stacked modular design is built for rapid scale and linear distributed expansion and lower capital costs. It does not depend on particular weather conditions, and does not require as much land as solar- and wind-based projects.

“Malaysia has a tremendous supply of biomass waste, which, if not used, would be burned,” said Tan Sri Halim Mohammad, executive chairman of the Halim Mazmin Group, owner of one of Malaysia’s largest shipping companies. “Using SGH2's technology, we can convert this biomass waste to green hydrogen economically for use in land transport and shipping, which will help reduce dependency on oil and gas.”

Unlike any other technology, SGH2’s SPEG process provides a solution to the growing global plastics crisis. SGH2’s unique gasification technology uses a very high temperature (3500° to 4000° C) plasma- enhanced thermal catalytic conversion process optimized with oxygen-enriched gas, which results in the complete molecular dissociation of all hydrocarbons and the production of a very high quality, hydrogen-rich bio-syngas free of tar, soot and heavy metals. No other hydrogen-production technology can eliminate plastic as cleanly and as efficiently, if plastics are used or mixed in the feedstocks.

BNEF’s analysis predicts dramatic greenhouse gas reductions when green hydrogen becomes cost competitive, and forecasts green hydrogen costs dropping to U.S. $2 per kilogram by 2030 in India and Western Europe. SGH2 is already producing greener than green hydrogen at that cost today.

“Hydrogen is the emerging solution for hard-to-decarbonize sectors like the cement industry,” said Lawrie Evans, a technical expert in the cement industry, and former director of the world’s largest cement company, LafargeHolcim. “SGH2’s solution — to produce green hydrogen and bio-syngas from the gasification of biomass and biogenic waste using its SPEG process — can be a cost competitive solution to provide the high quality heat required in our industry, and replace or reduce the usage of coal and coke.”

The Lancaster plant will be built on a 5-acre site, which is zoned heavy industrial, at the intersection of Ave M and 6th Street East (northwest corner - Parcel No 3126 017 028). It will employ 35 people full-time once it’s operational, and will provide over 600 jobs during 18 months of construction. SGH2 anticipates breaking ground in Q1 2021, start-up and commissioning in Q4 2022, and full operations in Q1 2023. The Lancaster plant output will be used at hydrogen refueling stations across California for both light- and heavy-duty fuel cell vehicles. Unlike other green hydrogen production methods that depend on variable solar or wind energy, the SPEG process relies on a constant, year-round stream of recycled waste feedstocks, and therefore can produce hydrogen at scale more reliably.

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