This week, listed electric vehicle (EV) and transportation infrastructure maker Nikola announced that it is paying $50 million in cash and stock for a 20 percent equity interest in a clean hydrogen project being developed by Wabash Valley Resources, the Indiana energy storage company that is partly funded by the U.S. Department of Energy and is majority-owned by commodities giant Phibro.
The project, currently under development in West Terre Haute, Indiana, will combine solid waste industrial byproducts like petroleum coke with biomass to produce clean hydrogen for transportation fuel and baseload electricity generation, while capturing CO2 emissions for permanent underground sequestration. Upon completion, the project is expected to be one of the largest carbon capture and clean hydrogen production projects in the United States.
Trucking transition
In a statement announcing the investment, Nikola and WVR said they are aiming to lead the transition to clean transportation fuels for trucking operations in the U.S. Midwest, one of the most intensive commercial transportation corridors in the country. Hydrogen is expected to play a key role in this transition, with data from the U.S. Department of Energy estimating that by 2050, the hydrogen economy could contribute $750 billion each year and add 3.4 million jobs to the U.S. economy.
This investment is anticipated to give Nikola a significant hydrogen hub with the ability to offtake approximately 50 tons a day to supply its future dispensing stations within an approximate 300-mile radius, covering a significant portion of the Midwest. Exercising its offtake right will likely require significant additional investment by Nikola to build liquefaction, storage, and transportation services.
“We intend this project to produce clean, low cost hydrogen in a critical geography for commercial transportation.” said Pablo Koziner, Nikola’s President of Energy and Commercial. “The Wabash solution can generate electricity as well as hydrogen transportation fuel, which should provide the flexibility to support future truck sales and hydrogen station rollout in the region. The expected efficiency of WVR’s clean hydrogen production should allow Nikola’s bundled truck lease, including fuel, service, and maintenance, to compete favorably with diesel.”
As part of this investment in the hydrogen economy in the Midwest, Nikola intends to build stations across Indiana and the broader Midwest to serve the region.
“WVR is developing a multi-product facility, where the hydrogen can be combusted in a turbine to produce clean baseload power. The recent spate of power outages serves as a reminder that the market has a pressing need for a non-intermittent source of clean energy. We also look forward to working with Nikola to bring zero-emission transportation solutions to the Midwest,” said Simon Greenshields, Chairman of the Board for Wabash Valley Resources.
The completed facility should have the capability to produce up to 336 tons per day of hydrogen, enough to generate approximately 285 megawatts of clean electricity. The project is expected to require 125 full-time employees and may support 750 construction jobs. Groundbreaking is expected in early 2022 and take approximately two years to complete.
