News Release

Going green with hydrogen

Tax incentives within Inflation Reduction Act boost economics, but developers and investors waiting on eligibility guidance

byEnverus

CALGARY, Alberta (June 27, 2023) — Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released a report that explores green hydrogen production technology, incentives available in the U.S. and models resulting project-level economics.

“The Inflation Reduction Act provides a much-needed boost to green hydrogen production economics,” said Alex Nevokshonoff, senior associate with EIR. “Projects claiming the 45V clean hydrogen production tax credit (45V PTC) have the potential to yield favorable returns and even outpace gray hydrogen economics in certain situations. Nevertheless, developers and investors continue to wait on additional guidance surrounding the use of grid electricity paired with renewable energy credits to determine eligibility for the incentives.”

Key takeaways:

  • The Inflation Reduction Act’s 45V clean hydrogen production tax credit (45V PTC) meaningfully bolsters economics and drives positive returns among green hydrogen generation projects. Capex represents a small percentage of overall costs and therefore limits the relative impact of the clean energy investment tax credit (48 ITC) compared to the 45V PTC.
  • EIR finds that alkaline electrolyzers prove more economical than proton exchange membrane (PEM) electrolyzers based on current technology assumptions.
  • Project operators will likely need to renegotiate PPAs at lower prices, realize extensions to the 45V PTC or secure additional green hydrogen premiums to justify continued production after the tax incentives expire in year 10.
Enverus News Release Graph - Project NPVs and Profitability Indexes With and Without IRA Subsidies

Additional Resources:

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Enverus is the most trusted, energy-dedicated SaaS platform, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 98% of U.S. energy producers, and more than 35,000 suppliers. Our platform, with intelligent connections, drives more efficient production and distribution, capital allocation, renewable energy development, investment and sourcing, and our experienced industry experts support our customers through thought leadership, consulting and technology innovations. We provide intelligence across the energy ecosystem: renewables, oil and gas, financial institutions, and power and utilities, with more than 6,000 customers in 50 countries. Learn more at Enverus.com.

About Enverus Intelligence Research
Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.

Media Contact: Jon Haubert | 303.396.5996

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