Energy Land ho! Why Lancaster has become a magnet for hydrogen energy projects

Four clean energy companies are planting seeds in Lancaster, California for greener opportunities.

Four hydrogen facilities have already been developed in the city of northern Los Angeles County by Element Resources Heliogen SGH2 and Hitachi Zosen Inova.

According to the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, hydrogen energy produced from natural gas, nuclear, solar and winds power can be used for storing, moving and delivering energy to homes, cars and in some cases planes. It emits only water after being consumed in a cell fuel,

L.A. Business First reported that developers are building these projects in Lancaster because of two factors: the sprawling amount of land available for development and a city government with an open hand.

Element Resources is a new clean energy startup based in Houston, San Diego and Lancaster. The company will be one of Lancaster's East Side Overlay tenants, which includes 6,000 acres on the eastside of the city that was zoned for hydrogen production. Element Resources has acquired 1,400 acres to be developed into the first clean energy facility of the company.

In its first phase, the project will produce 20,000 tons renewable hydrogen per year for Greater Los Angeles users.

Element has begun the planning process for the project with the city. Avery Barnebey told L.A. Business First, Element's Chief Financial Officer, that the company anticipates having the facility up and running in mid-2025. Construction is expected to start next year.

Lancaster's proximity to Los Angeles and its large amount of developable land are two things that make it attractive. Barnebey stated that this was a major selling point when deciding where to locate Element's initial facility. He added that the land in Lancaster is in pristine condition and does not require any additional environmental work.

He said, 'For large projects such as this, you will need a lot of land.' Where can you find lots of land in Greater Los Angeles? This is no easy task. Lancaster is close, and we could add more land to our facility in the future.

Element's facility for hydrogen will be powered with solar panels and require acres of space. Barnebey stated that the company was looking to lease additional land in order to increase production. Lancaster also touts its availability and affordable space near prime markets.

Location, location,location

Alexus Merino is the assistant city manager of Lancaster. He agrees that the city's attractiveness to clean energy developers includes access to land.

She told L.A. Business First that when you think of hydrogen projects and production, the majority of the need and use will be in the Los Angeles Basin. In the Los Angeles Basin it will be difficult to find cheap land to produce this amount of hydrogen. Lancaster can play a major role in this. We know that. We're close enough to the Los Angeles Basin to serve as a manufacturing and supplier hub that can support L.A.

Heliogen, a renewable solar energy company based in Pasadena (California), operates a R&D facility in Lancaster, using the former Golf Center of the city, a converted golf course that was underutilized. The company plans to expand its presence in the area by building a green hydrogen production facility on East Side Overlay.

Lancaster has partnered with Heliogen to build the facility where Heliogen will concentrate sunlight in order to produce up to 1,500 tons of carbon-free green hydrogen per year as steam, heat and power. Heliogen and Lancaster will collaborate with other equity partners in order to finance the construction costs of the project.

Tom Doyle, Chief Commercial Officer at Heliogen, said that Lancaster was the ideal location for future Heliogen projects.

Doyle told L.A. Business First via email that Lancaster was the ideal location to build a green hydrogen facility. This will produce carbon-free fuels for regional use. We are thrilled to be able to bring this vision to life. Our collaboration aims at demonstrating that concentrated solar thermal power can be an affordable, efficient renewable energy solution for Lancaster.

The company received a proposal for acquisition from the recently ousted founder of the firm this month.

Lancaster will also be home to the largest green hydrogen-production facility in the future. SGH2, which is a division within Solena Group, based in Washington, D.C., will be developing the facility, converting paper waste into hydrogen on a 5-acre site. SGH2 and Lancaster aim to be able produce 11,000 kilograms green hydrogen each day, or 3.8 million kilograms annually, which is nearly three times as much as any other green hydrogen plant in the world.

SGH2 will receive recyclables from the city, which, according to the company, reduces carbon emissions up to three-times more than green hydrogen produced by electrolysis using renewable energy. The company also claims that the process is more than five-times cheaper than other forms of energy renewal. It saves between $50 and $75 per ton on landfilling costs and landfill space, and is 5 to 7 times cheaper.

Merino stated that SGH2 has recently been approved by the city planning commission and is now preparing to begin construction at the site.

The Japanese company Hitachi Zosen Inova will build a $100-million anaerobic digester at Lancaster's landfill. The plant, which will be announced in 2020, will convert organic waste, such as food or plant matter, into compost, renewable natural gas, electricity and hydrogen.

The Low-C plant will be developed in conjunction with a hydrogen facility nearby using Hitachi’s latest green technology for hydrogen generation.

Lancaster's long tradition in clean energy

Merino agreed that the city's leadership was crucial in creating an environment supportive of clean energy developers. Lancaster, led by Mayor R. Rex Parris has attracted over $2 billion in investment from green technologies and companies, including over $1 billion invested in solar power plants. It also launched its own utility, Lancaster Choice Energy. Residents can choose renewable energy for their homes.

Merino stated that Lancaster is known as a business-friendly city for all developments, but clean energy projects are a good example of a city with a rich history in clean energies. It's easier for companies and developers to approach the city knowing the history, and that hydrogen is strongly supported.

Lancaster is the nation's first zero-energy city. It has been generating more electricity than it consumes, since 2019. Lancaster was also the first city in California to join the Alliance for Renewable Clean Hydrogen Energy Systems, California's public-private consortium of hydrogen hubs, funded by Department of Energy Regional Hydrogen Center Program.

Merino stated that through clean initiatives like Lancaster Choice Energy the city has also received an additional $17million in its general fund for reinvestment into clean energy projects.

Barnebey stated that the planning department was very pro-business and helpful. They provided excellent guidance to help us through the entire process. They're helping understand the local community, and it's been a productive relationship with the City Planning Commission and the City.

Merino noted that the community's reaction to the new clean energy projects in Lancaster has been positive. This is especially true as the city places a high priority on the effects of the facilities on residents.

It may be too early to assess the economic impact of the hydrogen project, but the new facilities will boost employment in the city. Companies such as Element Resources are looking for talent to fill the hydrogen facilities. This could be technical work, construction, or any other on-site jobs.

Barnebey stated that he would like to utilize as much labor and resource as possible in Lancaster and the greater Lancaster area. We will use the existing skill base to the fullest extent possible. We already have some consultants and counterparties in Lancaster. We prefer to work with local teams.