AES Progresses Green Hydrogen, Enters Innovative Collaboration with Electric Hydrogen

About Green Hydrogen

In our journey to reach net zero, green hydrogen is a critical tool for decarbonizing some of the most difficult to abate sectors. While electrification and deployment of renewable energy can address most of our global emissions reduction goals, some sectors instead require energy-dense fuels. Renewably generated hydrogen and its derivative fuels can address emissions in these sectors, including steel production, agriculture, aviation, shipping, and heavy-duty mobility. Producing hydrogen with renewable energy will also create large, new flexible electricity loads that have the potential to help balance the power grid, enabling further renewable energy penetration. To meet decarbonization objectives and leaning into our innovation leadership, AES continues to build its green hydrogen business. We are advancing our flagship projects,

To meet decarbonization objectives and leaning into our innovation leadership, AES continues to build its green hydrogen business. We are advancing our flagship projects, including participation in two Hydrogen Hubs and a joint venture green hydrogen project in north Texas.

As we continue to build a robust offering tailored to our customers' needs, we are examining innovative solutions and taking steps to secure access to promising technology, while prioritizing supply chain resilience and optionality. Most recently, AES and Electric Hydrogen have signed an innovative supply reservation agreement for their advanced, low-cost PEM electrolyzer plants, providing AES the ability to deploy Electric Hydrogen’s 100MW electrolyzer plants in our growing project pipeline as they advance in their commercialization journey.


The challenge

Currently, green hydrogen is more costly than hydrogen derived from fossil fuels, driven by a combination of the high capital cost of electrolyzers, and high electricity input costs. Compounding this challenge, renewable energy and electrolyzers have not yet been deployed together at scale and in an optimized fashion. As a result, many projects face significant headwinds, with the risk of slowing the adoption of green hydrogen.

Low-cost electrolyzers improve project viability not only by bringing total project cost, but also by unlocking more intermittent operation, enabling projects to leverage the cheapest electricity; when wind and solar are producing.

Ultimately, the cascading benefit of reduced project capital costs, and the foundational requirement for a reliable value chain, means there is a need for electrolyzers, that are manufactured in the US, ensuring supply chain resilience and project viability.

At AES, we are exploring innovative ways of optimizing hydrogen production by integrating renewables and electrolysis and engaging with electrolyzer suppliers to shore up our access to high performing, domestic supply of electrolysis.


Electric Hydrogen and AES

One way we are doing this is through our collaboration with Electric Hydrogen. This U.S.-based supplier of a fully integrated 100MW electrolyzer plant manufactures powerful electrolyzer stacks to enable the production of materially more green hydrogen output for the same amount of equipment relative to others. The industrial scale of their 100MW blocks, and fully integrated and skid-modularized design dramatically reduces engineering and deployment costs, addressing many of the cost challenges that the industry faces.

This week, AES and Electric Hydrogen announced a comprehensive framework supply reservation agreement for AES to access up to 1 GW of low-cost, high-performance electrolysis plants. The agreement contains key commercial requirements for AES to procure and deploy the plants in its growing pipeline of projects as Electric Hydrogen commercializes their product.

Green hydrogen is an emerging and rapidly growing industry, which means electrolysis supply at economic prices is currently constrained. This agreement would provide AES access to domestically produced electrolysis, an important step in shoring up AES’ supply chain resilience.

Through this collaboration and supply reservation agreement AES will closely engage with Electric Hydrogen on everything from technical milestones to bankability, as the company progresses their commercialization roadmap.


What’s next

AES’ position as a renewables market leader and our focus on innovation provides the foundation to deploy low cost, optimized green hydrogen projects for our customers.

Our approach to green hydrogen encompasses partnerships, projects, and participation in hydrogen projects worldwide. Our active pipeline has 800 metric tons per day of green hydrogen production capacity under development, and multiple projects will begin construction in 2 to 3 years. In addition to our US projects, AES Chile is working on a novel large green hydrogen-based ammonia project, which will produce 800 MW of new renewable energy. In Brazil, AES is currently investigating the viability of producing and selling green hydrogen and green ammonia.

AES is a leading decarbonization partner for our customers as we partner to bring solutions that help to advance their transition journey.

Ashley Smith

Ashley Smith

Chief Technology and Innovation Officer