In a moment of uncertainty for the green hydrogen sector, one Mississippi project is betting on automation to fuel its huge production ambitions.
Hy Stor Energy and Schneider Electric today announced their partnership to support the development of Hy Stor’s Mississippi clean hydrogen project, a 110 million -kilogram production site which failed to nab a spot as a Department of Energy-funded regional hub after pitching itself as a “Strategic National Hydrogen Reserve” in 2023.
- The top line: Schneider will help Hy Stor build out automations to optimize the hub’s assets, which will include off-grid wind and solar production and on-site hydrogen electrolysis and salt cavern storage. In a moment when how to comply with the Treasury Department’s proposed 45V tax guidelines is top of mind for hydrogen developers, Hy Stor chief commercial officer Claire Behar said having this combination of infrastructure and automation is key to ensuring that the Mississippi hub will have no problems complying with the rules.
- The market grounding: Released in December, Treasury’s 45V guidance has left the green hydrogen industry clamoring for clarity, as many fear that the strict guidelines will hold back new hydrogen development. And these fears aren’t baseless; projects have already been indefinitely paused or canceled, as the math no longer pencils out under 45V.
- The current take: The access to automation, Behar said, will allow Hy Store to optimize its platform in a way that is unprecedented for the industry. “This collaboration with Schneider is extremely important to really optimize our storage asset so that it is constantly injecting and withdrawing to provide that 24/7 reliability,” she added. “We’re not at the mercy of a grid outage, and our electricity price is decoupled from fossil fuels. All of that is within our fence and under our control.”
Hy Stor’s hub aims to couple on-site electrolysis — which produces green hydrogen by splitting water into hydrogen and oxygen — with long-duration, underground salt cavern storage and new and existing distribution infrastructure. The site, which Behar said is slated to come online in late 2026 or early 2027, will be powered by multiple gigawatts of off-grid, onshore wind and solar, and construction is set to begin at the end of this year.
If it succeeds in reaching its goal scale of producing approximately 110 million kilograms of green hydrogen each year, with over 70 million kg stored, the hub will be up to 10 times larger than any other green hydrogen project under consideration in the United States — and will be one of the largest in the world.
The Schneider partnership
But operating such a complex and large-scale project requires substantial amounts of power — and the energy management services to reliably deliver it. And that’s where Schneider comes in. The energy management giant will be the main automation, electric, and digital energy management contractor for the hub, optimizing Hy Stor’s off-grid renewables and storage assets.
Schneider is a key partner in planning the digital layers of the hub, Behar explained. For the project to operate effectively, the stored hydrogen has to be able to operate as a battery, for when the sun isn’t shining or the wind isn’t blowing. Connecting and optimizing all of the project’s assets will not only allow Hy Stor to provide real-time feedback to equipment providers and customers, she added, but will ultimately also allow it to avoid any lull in production.
For example, the pair plan to use weather data coupled with customer demands to forecast how much hydrogen the hub will produce at a given time via renewables, and how much will need to be pulled out of storage to meet the mismatch in supply and demand.
Additionally, Behar said, Hy Stor is looking to run stress tests using Schneider’s digital twin technology, to better understand, for example, what ten days of no sun cover would mean for the project’s assets.
While the partnership is still new, Schneider’s technology has been integrated successfully into other renewable projects developed by Hydro-Québec and Storengy, another salt cavern hydrogen storage company based in France.
A report from the Brattle Group recently found that salt dome caverns like those used by the Hy Stor hub are currently the only viable bulk hydrogen storage option. The caverns — which are limited geographically to the Gulf Coast and central and northeastern United States — aren’t affected by seasonal fluctuations and are less likely to leak and have a lower capex than other potential options like depleted fields. They bump up hydrogen production costs by about 20 cents per kilogram.
Meeting the policy moment
The partnership comes at a tense moment for the domestic hydrogen sector, as developers — and the federal government — grapple with how exactly to define “green” hydrogen, and whether the grid can support green projects.
Hy Stor filed an application in 2023 for the hub to be considered for up to $1.25 billion in federal funding and a spot as one of the nation’s seven clean hydrogen hubs. The Mississippi project wasn’t ultimately chosen, and of those that were, just one — the Pacific Northwest hub — produces exclusively green hydrogen rather than blue or pink versions of the fuel.
That fact has drawn some skepticism in the wake of the Treasury Department’s December release of its 45V tax credit guidelines, which call for hourly matching, additionality, and geographic correlation. This means that the hubs themselves won’t qualify for the proposed credits — and indeed, the seven projects that were chosen submitted a joint filing last month opposing the credits for their potential dampening effect on the industry.
Hy Stor, though, is among those applauding the guidelines. In December, it was one of eight companies that sent their own letter to Treasury supporting the stringent 45V approach that the department ultimately landed on.
Behar confirmed that the Mississippi project’s combination of on-site, off-grid storage and renewables means that it hasn’t been derailed by any of 45V’s requirements. If all goes as planned, she said, it will be essentially self-sustaining when it goes online in the coming years.
