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Houston's hydrogen revolution gets up to $1.2B federal boost to power Gulf Coast’s clean energy future

HyVelocity funding

The U.S. Department of Energy funding is earmarked for the new HyVelocity Hub. Photo via Getty Images

The emerging low-carbon hydrogen ecosystem in Houston and along the Texas Gulf Coast is getting as much as a $1.2 billion lift from the federal government.

The U.S. Department of Energy funding, announced November 20, is earmarked for the new HyVelocity Hub. The hub — backed by energy companies, schools, nonprofits, and other organizations — will serve the country’s biggest hydrogen-producing area. The region earns that status thanks to more than 1,000 miles of dedicated hydrogen pipelines and almost 50 hydrogen production plants.

“The HyVelocity Hub demonstrates the power of collaboration in catalyzing economic growth and creating value for communities as we build a regional hydrogen economy that delivers benefits to Gulf Coast communities,” says Paula Gant, president and CEO of Des Plaines, Illinois-based GTI Energy, which is administering the hub.

HyVelocity, which aims to become the largest hydrogen hub in the country, has already received about $22 million of the $1.2 billion in federal funding to kickstart the project.

Organizers of the hydrogen project include:

  • Arlington, Virginia-based AES Corp.
  • Air Liquide, whose U.S. headquarters is in Houston
  • Chevron, which is moving its headquarters to Houston
  • Spring-based ExxonMobil
  • Lake Mary, Florida-based Mitsubishi Power Americas
  • Denmark-based Ørsted
  • Center for Houston’s Future
  • Houston Advanced Research Center
  • University of Texas at Austin

The hub’s primary contractor is HyVelocity LLC. The company says the hub could reduce carbon dioxide emissions by up to seven million metric tons per year and create as many as 45,000 over the life of the project.

HyVelocity is looking at several locations in the Houston area and along the Gulf Coast for large-scale production of hydrogen. The process will rely on water from electrolysis along with natural gas from carbon capture and storage. To improve distribution and lower storage costs, the hub envisions creating a hydrogen pipeline system.

Clean hydrogen generated by the hub will help power fuel-cell electric trucks, factories, ammonia plants, refineries, petrochemical facilities, and marine fuel operations.

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Houston's HyVelocity Hub has joined in on a joint letter with the other six H2Hubs asking for revised guidelines. Photo via Getty Images

Houston's clean hydrogen hub joins request to revise federal tax credit guidance

edits needed

The group of regional hubs tapped by the United States government to receive funding to develop clean hydrogen projects have banded together to request a revision of the U.S. Department of Treasury's proposed hydrogen production tax credit (45V) guidance.

Houston's HyVelocity Hub, which was selected to receive up to $1.2 billion from the government's initiative, has joined in on a joint letter with the other six H2Hubs asking for revised requirements. HyVelocity also submitted its own letter to the Treasury.

HyVelocity's letter asks for flexibility and certainty the implementation of the “three pillars” for electricity, which include temporality, incrementality, and deliverability.

"It is imperative that to enable the desired environmental, economic, and equity goals of the IRA, private investment in hydrogen production must advance at scale and at an accelerated pace. Hydrogen production project investments require stable market projections and assurance of regulatory stability to ensure the economics of the long-term projects. To support this investment environment, we recommend that projects be granted a 'grandfathered exemption' such that for the project's life, they can use the regulations in place at the time when construction begins," reads the letter from HyVelocity.

HyVelocity, representing the Gulf Coast region, plans to create up to 35,000 construction jobs and 10,000 permanent jobs across nine proposed core projects with a collective investment of more than $10 billion in private capital to bring low-carbon hydrogen to the market.

The Houston-area initiative is backed by industry partners AES Corporation, Air Liquide, Chevron, ExxonMobil, Mitsubishi Power Americas, Ørsted, and Sempra Infrastructure and The spearheaded by GTI Energy and other organizing participants, including the University of Texas at Austin, The Center for Houston’s Future, Houston Advanced Research Center, and around 90 other supporting partners from academia, industry, government, and beyond.

Chevron New Energies now owns a majority share of the Advanced Clean Energy Storage project in Delta, Utah. Photo via Getty Images

Houston-headquartered Chevron subsidiary acquires majority stake in ongoing hydrogen project

M&A move

The Houston-based clean energy subsidiary of Chevron is making a big splash in the clean hydrogen sector. It just acquired a majority stake in what’s being promoted as the world’s largest facility for clean hydrogen storage.

Chevron New Energies bought Salt Lake City-based Magnum Development from Houston-based private equity firm Haddington Ventures. As a result, the New Energies unit now owns a majority share of the Advanced Clean Energy Storage (ACES) project in Delta, Utah. A joint venture of Magnum Development and Mitsubishi Power Americas is developing ACES. Financial terms weren’t disclosed.

“Having been the primary financial sponsor behind this key energy hub since 2008, we believe this transaction will accelerate lower-carbon-intensity solutions that reduce emissions in the western United States,” says John Strom, managing director of Haddington Ventures.

ACES plans to use electrolysis to convert renewable energy into hydrogen and store the energy in salt caverns. The first phase, designed to convert and store up to 100 metric tons of hydrogen per day, is under construction and expected to begin commercial-scale operations in mid-2025.

“Using salt caverns for seasonal energy storage is a significant opportunity to empower hydrogen as an energy carrier and greatly expand energy storage resources throughout the U.S.,” says ACES contractor WSP, an engineering, environmental and professional services consulting firm.

The hydrogen facility will support Intermountain Power Plant, a Utah power plant operated by the municipal utility in Los Angeles. The stored hydrogen is expected to fuel a hybrid 840-megawatt combined-cycle gas turbine (CCGT) power plant that’ll replace an 1,800-megawatt, coal-fired power plant.

A CCGT plant harnesses exhaust heat from natural gas turbines to generate steam through a heat recovery steam generator, according to IPIECA, an oil and gas association that focuses on environmental and social issues. The steam is then fed to a steam turbine to supply additional power.

Michael Ducker, senior vice president of hydrogen infrastructure at Mitsubishi Power, says the ACES project “will serve as a blueprint for future hydrogen opportunities.”

“We seek to leverage the unique strengths of each partner to develop a large-scale, hydrogen platform that provides affordable, reliable, ever-cleaner energy and helps our customers achieve their lower carbon goals,” says Austin Knight, vice president of hydrogen at Chevron New Energies.

Chevron New Energies is marketing its low-carbon hydrogen offering to sectors like transportation, power, and industrial. These sectors face especially big hurdles in their efforts to reduce greenhouse gas emissions.

In June 2022, the U.S. Department of Energy (DOE) issued a $504.4 million loan guarantee to finance ACES. The facility will combine 220 megawatts of alkaline electrolysis with two 4.5 million-barrel salt caverns for storage of clean hydrogen.

ACES expects to create up to 400 construction jobs and 25 permanent jobs.

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Houston energy-focused AI platform raises $5M in Mercury-led seed round

fresh funding

Houston-based Collide, a provider of generative artificial intelligence for the energy sector, has raised $5 million in seed funding led by Houston’s Mercury Fund.

Other investors in the seed round include Bryan Sheffield, founder of Austin-based Parsley Energy, which was acquired by Dallas-based Pioneer Natural Resources in 2021; Billy Quinn, founder and managing partner of Dallas-based private equity firm Pearl Energy Investments; and David Albin, co-founder and former managing partner of Dallas-based private equity firm NGP Capital Partners.

“(Collide) co-founders Collin McLelland and Chuck Yates bring a unique understanding of the oil and gas industry,” Blair Garrou, managing partner at Mercury, said in a news release. “Their backgrounds, combined with Collide’s proprietary knowledge base, create a significant and strategic moat for the platform.”

Collide, founded in 2022, says the funding will enable the company to accelerate the development of its GenAI platform. GenAI creates digital content such as images, videos, text, and music.

Originally launched by Houston media organization Digital Wildcatters as “a professional network and digital community for technical discussions and knowledge sharing,” the company says it will now shift its focus to rolling out its enterprise-level, AI-enabled solution.

Collide explains that its platform gathers and synthesizes data from trusted sources to deliver industry insights for oil and gas professionals. Unlike platforms such as OpenAI, Perplexity, and Microsoft Copilot, Collide’s platform “uniquely accesses a comprehensive, industry-specific knowledge base, including technical papers, internal processes, and a curated Q&A database tailored to energy professionals,” the company said.

Collide says its approximately 6,000 platform users span 122 countries.

CenterPoint reports progress on grid improvements ahead of 2025 hurricane season

grid resilience

As part of an ongoing process to make Houston better prepared for climate disasters, CenterPoint Energy announced its latest progress update on the second phase of the Greater Houston Resiliency Initiative (GHRI).

CenterPoint reported that it has completed 70 percent of its resiliency work and all GHRI-related actions are expected to be complete before the official start of the 2025 hurricane season.

"Our entire CenterPoint Houston Electric team is focused on completing this historic suite of grid resiliency actions before the start of hurricane season,” Darin Carroll, Senior Vice President of CenterPoint's Electric Business, said in a news release. “That is our goal, and we will achieve it. To date, we have made significant progress as part of this historic effort.”

CenterPoint’s resiliency solutions include clearing higher-risk vegetation across thousands of miles of power lines, adding thousands more automation devices capable of self-healing, installing thousands of storm-resistant poles, and undergrounding hundreds of miles of power lines.

CenterPoint's GHRI efforts, which entered a second phase in September 2024, aim to improve overall grid resiliency and reliability and are estimated to reduce outages for customers by more than 125 million minutes annually, according to the company. It has undergrounded nearly 350 miles of power lines, about 85 percent of the way toward its target of 400 miles, which will help improve resiliency and reduce the risk of outages. CenterPoint also aims to install the first of 100 new local weather monitoring stations by June 1.

In March, CenterPoint cleared 655 miles of high-risk vegetation near power lines, installed 1,215 automated reliability devices capable of self-healing, and added an additional 3,300 storm-resilient poles.

In April, CenterPoint will begin building a network of 100 new weather monitoring stations, which will provide 24/7 weather monitoring and storm response preparation.

“We will continue to work every day to complete these critical improvements as part of our company's goal of building the most resilient coastal grid in the country,” Carroll added in the release.

ExxonMobil, Rice launch sustainability initiative with first project underway

power partners

Houston-based ExxonMobil and Rice University announced a master research agreement this week to collaborate on research initiatives on sustainable energy efforts and solutions. The agreement includes one project that’s underway and more that are expected to launch this year.

“Our commitment to science and engineering, combined with Rice’s exceptional resources for research and innovation, will drive solutions to help meet growing energy demand,” Mike Zamora, president of ExxonMobil Technology and Engineering Co., said in a news release. “We’re thrilled to work together with Rice.”

Rice and Exxon will aim to develop “systematic and comprehensive solutions” to support the global energy transition, according to Rice. The university will pull from the university’s prowess in materials science, polymers and catalysts, high-performance computing and applied mathematics.

“Our agreement with ExxonMobil highlights Rice’s ability to bring together diverse expertise to create lasting solutions,” Ramamoorthy Ramesh, executive vice president for research at Rice, said in the release. “This collaboration allows us to tackle key challenges in energy, water and resource sustainability by harnessing the power of an interdisciplinary systems approach.”

The first research project under the agreement focuses on developing advanced technologies to treat desalinated produced water from oil and gas operations for potential reuse. It's being led by Qilin Li, professor of civil and environmental engineering at Rice and co-director of the Nanosystems Engineering Research Center for Nanotechnology-Enabled Water Treatment (NEWT) Center.

Li’s research employs electrochemical advanced oxidation processes to remove harmful organic compounds and ammonia-nitrogen, aiming to make the water safe for applications such as agriculture, wildlife and industrial processes. Additionally, the project explores recovering ammonia and producing hydrogen, contributing to sustainable resource management.

Additional projects under the agreement with Exxon are set to launch in the coming months and years, according to Rice.

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