Editor's note: To read a competing viewpoint on this topic, visit http://tinyurl.com/bdezs6dt.
For nearly 75 years, homes, businesses and factories in Lewis County have been largely powered by low-cost hydroelectric energy. In the early years, the PNW had so much excess hydropower that it could be used for energy inefficient industries like aluminum production. Those days are gone. The supply of hydroelectric energy is limited, and it is our responsibility to ensure energy generated by PNW hydro first benefits those in the PNW.
Fortescue Future Industries, an Australian company, supported by the Economic Alliance of Lewis County and many local government officials, claims hydrogen is a new way for hydropower to benefit the region through jobs, new tax revenue and economic development in Lewis County.
Is this reasoning justified?
The annual load to serve all Lewis County PUD is 125 average megawatts (MW) serving more than 35,000 meters for homes, businesses and industries. The proposed Fortescue plant will consume as much as $600 million taxpayer dollars and use up to 300 MW of power, nearly two and a half times as much energy as the entire Lewis County PUD for as few as 35 local full-time jobs. Is this a wise use of the PNW’s limited hydro resource?
Creating hydrogen from electricity is inefficient, requiring more energy than it captures in hydrogen. Today’s technology requires 44 to 50Kwh of electricity to produce 33Kwh equivalent (1 kg) of hydrogen (a loss of 25% to 35%). The United States Department of Energy states that “hydrogen production cost from electricity needs to be decreased significantly to be competitive with carbon-based processes to produce hydrogen.”
So, why hydrogen now? The goal is to reduce the cost of hydrogen production by 80% by 2030. This level of efficiency is currently unobtainable. So federal and state governments plan to subsidize the cost of production with tax dollars while consuming the PNW’s limited supply of low-cost hydroelectricity to make hydrogen economically competitive, all with the hope that technology will catch up to the subsidies. This is a significant gamble of taxpayer dollars.
Fortescue will use a significant amount of hydroelectric power to feed its hydrogen project at the same time we are facing removal of four lower Snake River hydroelectric dams supported by President Biden and Governor Inslee. That is roughly enough energy, 1,000 average MW, to serve a city the size of Seattle. Everyone knows that reduced supply and increased demand invariably leads to higher prices.
My predecessor, Gary Kalich, successfully guided Lewis County PUD through the WPPSS nuclear crisis while developing the Cowlitz Falls hydroelectric project. Following Gary as manager of Lewis PUD, I am familiar with the claims of replacement energy sources and politicians planning our electric energy supply. PUD customers are currently paying for high-cost government mandated wind and solar power. Now, hydrogen is being promoted as the “green” answer to a better environment, tax revenue, jobs and economic development by inefficiently using our tax dollars and the PNW’s increasingly scarce hydroelectric power. If Fortescue is serious about making green hydrogen, they should contract with a large wind or solar farm for the electric energy required by the hydrogen plant so that the plant does not impact the supply of low cost hydro used by Lewis PUD and other PNW utilities. Fortescue should adhere to the same rules the PUD must follow for renewable energy. Initiative 937 requires utilities meet a percentage of their energy needs with renewable green energy and hydro does not count as renewable.
Do our local leaders really understand the cost and inefficiency of hydrogen? Has the risk to electric ratepayers been taken into account? How much capital is Fortescue investing in the hydrogen plant? These are some of the many questions needing answers before hundreds of millions of tax dollars and a significant amount of our hydroelectric energy is committed to Fortescue’s plant. Fortescue is acting in its own best interest. The big question is whether the hydrogen plant is in the best interest of Lewis County and the PNW.
Dave Muller is a retired manager of the Lewis County Public Utility District.
