The company looking to buy 7 acres in Stillwater Business Park hopes to leverage California’s growing hydrogen-powered vehicle market.
Robert Chew, CEO of H2 Renewables, said he’s wanted to build a steam-methane reformation plant to make renewable hydrogen in California for about eight months.
Chew picked Redding for its location and the city’s affordable energy.
“For our timeline, the access to the energy at a reasonable cost and a reasonable amount of time, that is why we are in Redding,” Chew told the Record Searchlight on Thursday.
More: City moving forward on potential Stillwater deal
Overhead costs in Redding will allow the plant to sell the hydrogen at a price that is competitive with gasoline, Chew said.
Earlier this week, the Redding City Council authorized City Manager Barry Tippin to start negotiating with H2 Renewables on a purchase agreement for Lot 10 in Stillwater Business Park. Tippin hopes to bring a deal back to council within a month.
Chew said he would like to have the plant operating by mid-2019.
H2 Renewables would invest about $22 million to build the plant and then hand the keys to a Pennsylvania energy company that Chew says has been in the hydrogen business 40 years.
“We will put their name on the plant,” Chew said of the company that at this time he declined to identify.
Chew expects the plant to employ seven people who would make $80,000 to $100,000 a year. But the operation also would need truck drivers to deliver hydrogen to the San Francisco Bay Area and Southern California. That would bring the workforce to about 20.
Most of the hydrogen in this country comes from steam-methane reformation plants, the U.S. Department of Energy says. The manufacturing process uses high-temperature steam to make the hydrogen from a methane source, such as natural gas.
Chew, based in Connecticut, originally wanted to build his plant in Texas, but logistics and costs brought him to California. He said the Golden State is four to five years ahead of any other state when it comes to the hydrogen-vehicle market.
Hydrogen fueling stations, the customer Chew’s company would ultimately supply, are being built in California via grants from the California Energy Commission.
“The market for fueling for individual fuel-cell electric vehicles is quite small at the moment,” David Clegern of the California Air Resources Board said via email.
There were about 1,600 hydrogen fuel cell vehicles in the state as of April. But the state expects 37,400 hydrogen fuel-cell vehicles on the road by 2023.
“The California Energy Commission is funding a network of 100 refueling stations across the state and about half of them are built or in some development or construction phase now,” Clegern said.
Hydrogen fuel stations in operation today stretch from Del Mar near San Diego north to Truckee.
The plant in Redding would produce 8.6 metric tons of hydrogen a day. Chew said it would be a small operation compared with some of the big oil refineries that can produce 300 metric tons of hydrogen a day.
Most of the hydrogen produced at the refineries is used by the plant itself, Clegern said.
“There are several other plants (not many) which produce hydrogen for commercial use and sales to individuals (at a pump),” Clegern said. “All of these facilities are steam-methane reformation plants.”
Chew said he developed energy projects in Brazil for nearly 20 years before he embarked on this endeavor. He was looking for an alternative energy niche market and didn’t want to pursue wind or solar.
“We wanted to do something else so we looked at hydrogen,” Chew said.