Xcel Energy expects a two-year period of negotiations with the Department of Energy over the $925m award for the Heartland Hydrogen Hub.
The Minnesota-based utility is a major proponent of the hub, which plans to produce ammonia for fertilizer production and includes North Dakota, South Dakota, Wisconsin, and Montana.
“We’re really excited about our clean fuels program, but it is fairly long dated,” CEO Bob Frenzel said on the company’s earnings call today.
Negotiations with the DOE and final engineering will likely take two years, with capital deployment starting near the end of the company’s five-year plan, Frenzel said.
“I would think that parts of the hub can be activated by 2028 – 2029,” he added.
About half of the $5bn Heartland Hub is attributable to projects proposed by Xcel, Frenzel noted, with about $2bn of company capital expected to fund the facilities alongside $500m of federal money for Xcel’s portion of the project.
Xcel was also part of the Colorado hub application – the Western Interstate Hydrogen Hub – that did not win a DOE award. The company is still seeking to work with federal and state partners to advance some of the “attractive” projects in that region.
Frenzel said the company will put the hydrogen-related assets at the hub into regulated rate cases.
“If you think about our proposals at the DOE, we’ve got green hydrogen off of wind and solar, we’ve got pink hydrogen off of nuclear plants, and the end uses are: we’re going to help partners create green fertilizer, as well as some amount of blending into our gas plants and into our LDCs with some of the output.”
He added, “So the expectation is they would go through a regular state process around that capital investment and those ultimate uses for the fuel.”
