GO-Biz’ Tyson Eckerle on the Plan to Build Out California’s Hydrogen Market

Thank you very much, Mariana, and thank you, council general, for hosting this, and Senator Archuleta for all your ongoing leadership at the State. I think if anything, building out this hydrogen market will take all of us to succeed. I even have my Japan-California (US) pin on for the occasion. It’s pretty cool to see all the collaboration that's been going on.

I thought I would just give an overview of where we are, what ARCHES is, and where we are in the process of it. We were selected to negotiate for 1.2 billion dollars in federal funding to help launch and catalyze the renewable hydrogen market in California, which is exciting.

That license plate is a real license plate on a Toyota Mirai, which was made in Japan. Right here, the Chief Technology Officer drives it. That says, we're pretty excited about it.

[ARCHES] is organized around these five pillars if you will-- we have the state, which is a core founding partner by the GO-Biz, and we have higher education, so the University of California campuses pulled together, including the UC Office of the President and the national labs that they organized. We also have organized labor, which was a bedrock foundational partner right from the beginning. Then we have community partners. Then we have the industry, which is where a lot of the investment and competency needs to happen.

Overall, this public-private partnership was created with the intention of a sustainable, statewide, renewable, and clean hydrogen market with an ecosystem. We came together to go after the federal funding, but that federal funding is just a start. It's the pebble that launches the avalanche. There's a bigger rocket that launches the avalanche of the hydrogen market, and we're very excited about what it can do.

We want to use renewable resources to fully decarbonize a regional economy, with a focus on creating jobs, opportunities, air quality, environmental justice, equity, and all the other things.

What we submitted to the Department of Energy was a tiering of projects. There were 39 of what we called tier-one projects that we submitted for funding, but the tier-two projects were all very qualified and, you know, there's only so much money to go around. With the OEM type of suppliers, there are a lot of opportunities to feed into this ecosystem. Even if the company or provider was not part of the actual application, there are still purchases to be made and a lot of technology to get introduced to the market.

[This is what] the ecosystem looks like. We have our feedstock, renewable electricity, biogenic sources, electrolysis, and biohydrogen production. Going into distribution, we'll start with liquid hydrogen fuel cell trucks trucking liquid hydrogen around. For the pipelines, we have planned big segments to build about 165 miles with some limited above-ground storage. All of this drives towards what we're looking to get to by 2030, which is our three major first industry off-takers. There's hydrogen for power generation, which can sign offtake agreements right away and we can finance supply against that. The big behemoth is the transportation sector with fuel cell trucks and fuel cell buses. Then, the port with those offtake numbers of metric tons per day in 2030.

[Let me explain a] geographic picture of where we are.

It's a statewide network and … we have all the production sites in Central Valley, taking advantage of our solar resources. Offtake is there as big centers of offtake in the Bay Area, in Los Angeles, in particular the ports of Los Angeles, Long Beach, and Oakland. You can also see where some of the pipelines are. Those are the pipelines that we can build between now and 2030 as they help drive down costs.

As time goes on, we'll be able to connect those pipelines and drive costs down further. Looking at opportunities going forward, all our clean hydrogen was going to transportation in 2023, but by 2030, we're building out to those ports and power sectors.

2045 is when the giant scaling up happens. The Air Resources Board, which leads our climate policy work at the State, did a bunch of analysis for what we call the Scoping Plan. The 2022 update shows that we have to scale up hydrogen 1700 times from 2020 for renewable hydrogen to meet carbon neutrality by 2045. That opens up opportunities in sectors like the maritime industry or the manufacturing of ammonia and aviation, just as another example.

On how we selected projects, I won't go through this word for word, but we put out an open RFP just to see what was out there in the marketplace and what the excitement level was. What came back was 50 billion dollar’s worth of projects. We then had a scoring team of over 100 independent reviewers based on our pre-selected criteria. As we put these together, our intention was a robust and resilient ecosystem that everybody could benefit from, and that’s what we submitted to the DOE. We're pretty excited about everything we've been able to pull together.

[Next] is about our community engagement.

We’re proud of our community pathways plan created with the DOE for California. From day one, we've been working in engagement communities, and there's much more work to be done, but we want to make sure that the projects on the ground are developing or delivering benefits. One of the unique things we did was have community liaisons, both from ARCHES and the project partners. Our independent community benefits monitoring team will help make sure that we develop the right metrics and that we’re accountable.

Having visited Japan, it was interesting to see some of their project-based community engagement. I was impressed with it.

We'll be investing a considerable amount in workforce development, 229 million, and then 150 million in programs to find partnerships with the communities. If you look at community benefits, we have two sides of the same coin, like the creation of parks, libraries, workforce training programs, and creating opportunities. Each of our projects within the artists' ecosystem will have what's called the project labor agreement, so organized labor is there with directions for local hire. We're able to hire people in the communities who need access to those jobs.

Finally, 1 percent of every project will be invested in the communities directly, so we're excited about this program going forward.

Just a little bit about the benefits to California for Californians.

Our kind of Andy Warhol chart on the left here shows the hub site maps. This is all real data of disadvantaged low-income communities and air pollution, as you can see a strong correlation there. Everywhere we put these projects, we’re decreasing emissions. Those emission benefits add up and accrue considerably, especially when we talk about getting diesel off the road in trucks.

That table in the middle shows close to 3 billion dollars per year of avoided health costs from health savings per year. Each year those benefits are accruing and of course, the market will be growing. The hub then essentially pays for itself and its health benefits. The other big number to focus on is the 222,000 jobs created-- these are family-supporting careers that we're hoping to get out in the market.

The other thing I want to point out is that we have a robust tribal engagement strategy. We have a tribal chairperson, who represents all the tribes in California, who's on ARCHES’ board, so we’re very excited about that as well.

We're coordinating a working group to coordinate across several universities, community colleges, high schools, etc. Then, of course, our training centers and workforce development agencies throughout the state will be in alignment with Stanford. I see Jimmy Chin here as well.

I want to talk about our timing because a lot of people are asking where the 1.2 billion is going. Well, it turns out, you know, that's just the card to negotiate-- essentially it's our money to lose, so to speak. We have to get through a bunch of hurdles within the Department of Energy to get to the award. Right now, it's looking like probably June or July, we might be under agreement with the Department of Energy, which took a little bit longer than we hoped. That's what happens when they're building out a new program.

We were selected for negotiation while [the Department of Energy] were trying to get into the phases.

Phase one, we're not there yet because it’s under a cooperative agreement with the Department of Energy. Under that, we start phase one, which is $20 million to do detailed planning, and then we get into phase two, which is the detailed project development and environmental reviews, about 15% of the total. Phase three, which is another two to four years down the road, is when the real construction starts.

Steel under the ground is a few years out, but we're trying to pull forward as much as possible. The idea is to get everything built by 2030. We have a couple of years of operating data to share with DOE, to kickstart this market going forward. We aren't going to wait for the DOE project as the state of California. We already have 15,000 fuel cell vehicles on the road, we have hundreds of buses, and we're getting the truck market going. There's no waiting but the federal government piece of this is helpful.

I also want to talk about how the state is trying to organize itself.

Back in August, Governor Newsom directed Go-BIZ, my organization, to develop California's hydrogen market development strategy, employing an all-government approach to hydrogen. We're working closely with all partners going forward and it's modeled after a zero-emission vehicle market development strategy.

It's about getting everybody within all of the agencies pulling in the same direction, so there are clear market signals that enable private market investment to come in. Realistically, it’s going to take private capital to get where we need to go.

I [want] to stress that this hydrogen market development strategy is going to work hand in hand with ARCHES. It's trying to enable the entire market and ARCHES is the implementation of getting everything working together-- creating a hydrogen marketplace and hydrogen strategy. This includes making sure that we have the policies and the implementation tools in place to go forward as we work closely across the agencies with the legislature of the federal government.

Our North Star is about leveraging clean, renewable hydrogen to decarbonize the transportation, energy, and industrial sectors. We have a lot of hope for hydrogen, and we’re very excited about everything it can do. We will need partnership to make it all work. Especially with Japan, our lieutenant governor and our director of jobs led a delegation to Japan close to a year ago. Now, they're focused on that partnership.

We share the same North Stars in terms of clean energy and creating a hydrogen-based society, so there's a lot of excitement there.

We have a website up and we're working on developing the strategy if anybody wants to engage-- we're all ears. We have a framing document with a bunch of agencies who had signed on in the alignments, and we're always taking feedback, iterating, and we want to learn how we can set this market up for success.

I appreciate the opportunity to speak here and the partnerships. We're grateful for everything that Japan has done and will do going forward.