GFO-25-308 - Distributed Clean Hydrogen Production with Onsite End Use (H2ONSITE)

GRANT FUNDING OPPORTUNITY

Distributed Clean Hydrogen Production with Onsite
End Use (H2ONSITE)

Clean Hydrogen Program

GFO-25-308

https://www.energy.ca.gov/funding-opportunities/solicitations

State of California

California Energy Commission

June 2026

Table of Contents

I. Introduction 1

B. Purpose of Solicitation 1

C. Key Words/Terms 3

D. Project Focus 8

E. Funding 16

F. Key Activities Schedule 17

G. Key Project Activities 18

H. Notice of Pre-Application Workshop 19

I. Questions 20

J. Applicants’ Admonishment 21

K. Additional Requirements Regarding Environmental Review 21

L. Background 23

M. Match Funding 27

N. Funds Spent in California 28

II. Eligibility Requirements 29

A. Applicant Requirements 29

B. CEC’s Rights and Remedies 31

III. Application Submission Instructions 32

A. Application Format, Page Limits 32

B. Method For Delivery 32

C. Application Content 33

IV. Evaluation and Award Process 39

A. Application Evaluation 39

B. Ranking, Notice of Proposed Award, and Agreement Development 39

C. Grounds to Reject an Application or Cancel an Award 40

D. Miscellaneous 41

E. Stage One: Application Screening 44

F. Stage Two: Application Scoring 46

Attachments Attachment Number Title of Attachment 1 Application Form 2 Executive Summary Form 3 Project Narrative Form 4 Project Team Form 5 Scope of Work Template 6 Project Schedule 7 Budget Forms 8 CEQA Compliance Form 9 Past Projects Information Form 10 Commitment and Support Letters Form (requires signature) 11 Project Performance Metrics 12 Applicant Declarations (requires signature) 13 References for Calculating Energy Use and GHG Emissions 14 Community Engagement, Benefits, and Impacts Reference 15 Appendix G: Environmental Checklist Form 16 Special Terms and Conditions for Native American Tribes and California Tribal Organizations

I. Introduction

NOTE: This solicitation is for the Clean Hydrogen Program, and the solicitation documents are different and unique. Please do not use attachments from other Energy Commission grant solicitations (e.g., Electric Program Investment Charge and Gas Research and Development programs).

A. Purpose of Solicitation

The purpose of this solicitation is to fund the demonstration of distributed-scale (up to 5 metric tons per day) hydrogen production facilities that are co-located with storage and end use to reduce clean hydrogen production costs, reduce retail prices, and decarbonize hard-to-electrify sectors. Additionally, funded projects must prioritize direct benefits to surrounding communities. Hydrogen can serve as a zero-carbon energy carrier and act as a potential replacement for fossil fuels in hard-to-electrify applications, particularly for the transportation, industrial, and electricity generation sectors. For the purposes of this solicitation, clean hydrogen is defined as hydrogen produced from water using eligible renewable energy resources, as defined in Public Utilities Code 399.12, or produced from these eligible renewable energy resources.

To achieve sustainable wide-scale deployment, hydrogen must be produced cleanly at increased scale and reduced cost. This solicitation aims to fund distributed-scale hydrogen production facilities with onsite storage and end uses to match hydrogen supply with demand in proximity, avoiding the high costs of transporting hydrogen from large central production facilities to offtakers miles away. The onsite storage and end use will allow the hydrogen to be stored until needed, thereby reducing buildout of expensive and complex distribution infrastructure. Funded demonstrations will identify cost barriers and inefficiencies in hydrogen production that future research can address.

The 2022 California Air Resources Board (CARB) Scoping Plan estimates that by 2045, demand for low-carbon hydrogen will have increased to nearly two-fold the current levels of fossil hydrogen supply – or a 1,700-fold increase in existing low-carbon hydrogen supply – especially to support emerging end uses such as heavy-duty vehicles, power generation, manufacturing, and synthetic fuels., Hydrogen produced from water using renewable energy resources, or produced directly from renewable energy resources, can provide low-carbon energy and act as an alternative to fossil gas, helping meet California’s greenhouse gas (GHG) reduction goals of 40 percent below 1990 levels by 2030 and economywide carbon neutrality by 2045. In 2023, Governor Newsom directed the Governor’s Office of Business and Economic Development (GO-Biz) to develop California’s Hydrogen Market Development Strategy (H2 Strategy)., The goal of this strategy is to use an all-of-government approach to building California’s clean, renewable hydrogen market to decrease carbon emissions in the state’s transportation, energy, and industrial sectors. California’s hydrogen market was expected to receive a major boost from the California’s Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES). Formally launched in October 2022, ARCHES is a private-public consortium created by GO-Biz, the University of California, State Building and Construction Trades, and Renewables 100, and was set to receive up to $1.2 billion from the U.S. Department of Energy’s (DOE) Regional Hydrogen Hub Funding Initiative. However, this funding award from the DOE has been cancelled, creating a greater need for other programs to step in and support the statewide push for developing the hydrogen market.

Though clean hydrogen produces low- or zero-carbon emissions and has the potential to substitute fossil fuels in hard-to-electrify sectors, it’s not yet deployed at scale in California due to the prevalence of incumbent technology (fossil-based or “grey” hydrogen) and high barriers to entry. Barriers to achieving clean hydrogen deployment and uptake include high production costs, inadequate demand for clean hydrogen, limited transportation and storage infrastructure, and competing demands for renewable energy resources. Cross-cutting solutions are required to address these challenges. These include investments in distribution and storage infrastructure, rapid scale-up of equipment and technologies, commercialization of domestic manufacturing capacity, and expansion of the hydrogen workforce.

The Clean Hydrogen Program aims to increase the scale and reduce the costs associated with clean hydrogen production, storage, and end use. This solicitation will support clean hydrogen projects that co-locate hydrogen storage and end use with a hydrogen production facility that produces up to 5 metric tons of hydrogen per day using renewable energy sources. Funded projects must advance the technology readiness of the onsite hydrogen production, storage, and end-use integrated system as a whole. Specifically, the entire system must start at TRL 6 or higher. Funded projects must target hydrogen produced from water using eligible renewable energy sources or derived from these eligible renewable energy resources. Expected outcomes include the development and demonstration of clean, cost-advantaged distributed hydrogen production from renewable energy sources co-located with storage and end use and reduced GHG emissions in hard-to-electrify sectors. These projects will support long-term, sustainable, and cost-effective deployment of clean hydrogen while bringing direct benefits to California communities.

The Clean Hydrogen Program is part of California Climate Investments, which uses billions of Cap-and-Invest dollars to fund projects that reduce harmful emissions, protect public health, strengthen local economies, and support natural environments. With a strong focus on communities most impacted by pollution and limited access to resources, California Climate Investments helps build a more equitable and sustainable future.

B. Key Words/Terms

Word/Term	Definition
Applicant	An entity that submits an application to this solicitation.
Application	An applicant’s written response to this solicitation.
Authorized Representative	The person submitting the application who has authority to enter into an agreement with the CEC.
CCI	California Climate Investments Program is a statewide initiative that puts billions of Cap-and-Invest dollars to work reducing GHG emissions; strengthening the economy; improving public health and the environment; and providing benefits to residents of disadvantaged communities, low-income communities, and low-income households, collectively referred to as “priority populations.” California Climate Investments comprise programs funded by appropriations from the Greenhouse Gas Reduction Fund. The California Air Resources Board developed Funding Guidelines to provide direction for agencies that administer California Climate Investments. The purpose of the Funding Guidelines is to provide guidance for administering agencies, so they design and implement their programs in a way that: • Facilitates GHG emission reductions; • Meets statutory requirements; • Maximizes benefits to disadvantaged communities; • Targets investments to disadvantaged communities, low-income communities, and low-income households to help ensure statutory investment minimums are met or exceeded; • Provides accountability and transparency; and • Supports consistency across programs.
California Native American Tribe	A Native American Tribe located in California that is on the contact list maintained by the Native American Heritage Commission for the purposes of Chapter 905 of the Statutes of 2004 (Pub. Resources Code, § 21073).
California Tribal Organization	A corporation, association, or group controlled, sanctioned, or chartered by a California Native American tribe that is subject to its laws, the laws of the State of California, or the laws of the United States.
CAM	Commission Agreement Manager, the person designated by the CEC to oversee the performance of an agreement resulting from this solicitation and to serve as the main point of contact for the grant recipient.
CAO	Commission Agreement Officer, the person designated by the CEC to oversee the internal administrative processes and to serves as the main point of contact for solicitation applicants.
Carbon Intensity	For the purposes of this solicitation, carbon intensity refers to the kilograms (kg) of carbon dioxide-equivalent (CO2e) emitted per kg of hydrogen produced. Projects funded under this solicitation may measure lifecycle greenhouse gas emissions of hydrogen production with a well-to-gate system boundary using the latest model of Argonne National Laboratory’s 45VH2-GREET available at https://www.energy.gov/eere/greet .
CBO	Community Based Organization, a public or private nonprofit organization of demonstrated effectiveness that: a) Have an office in the region (e.g., air basin or county) and meets the demographic profile of the communities they serve; b) Has deployed projects and/or outreach efforts within the region (e.g., air basin or county) of the proposed community; c) Has an official mission and vision statements that expressly identifies serving communities; and d) Currently employs staff member(s) who specialized in and are dedicated to – diversity, or equity, or inclusion, or is a 501(c)(3) non-profit.
CEC	State Energy Resources Conservation and Development Commission or, the California Energy Commission.
CEC funds	CEC funds are Clean Hydrogen Program grant funds awarded under this solicitation. Also referred to as grant funds.
CEQA	California Environmental Quality Act, California Public Resources Code Section 21000 et seq.
Clean Hydrogen	For the purposes of this solicitation, clean hydrogen is defined as hydrogen produced from water using eligible renewable energy resources, as defined in Section 399.12 of the Public Utilities Code, or produced from these renewable energy resources. For more information on eligible renewable energy resources, refer to Section II.B. Project Requirements.
Clean Hydrogen Program	The Hydrogen Program is established and administered by the CEC per AB 209 (2022) adding Chapter 7.6 (including Article 4. Hydrogen Program) to Division 15 of the Public Resources Code and provides financial incentives to eligible in-state projects that produce, process, deliver, store, or use clean hydrogen.
CO2e	Carbon dioxide-equivalent
Days	Days refers to calendar days.
Disadvantaged Community	Communities designated pursuant to Health and Safety Code Section 39711 as representing the top 25% scoring census tracts from CalEnviroScreen 4.0 along with other areas with high amounts of pollution and low populations as identified by the California Environmental Protection Agency. ( https://oehha.ca.gov/calenviroscreen/report/calenviroscreen-40 )
DOE	Department of Energy
ECAMS	Energy Commission Agreement Management System https://ecams.energy.ca.gov
Eligible renewable energy resource	For the purposes of this solicitation, energy renewable resource refers to an electrical generating facility that meets the definition of a “renewable electrical generation facility” in Section 25741 of the Public Resources Code , subject to the requirements of Public Utilities Code section 399.12(e)(1)(A)-(D).
End use	For the purposes of this solicitation, end use refers to the application and/or consumption of hydrogen produced for its ultimate intended use.
Energy Equity	The fair distribution of benefits and burdens from energy production and consumption.
Geographic Diversity	For the purposes of this solicitation, geographic diversity refers to the individual benefits, such as resources, industry sectors, environmental benefits, and economic impacts in regional economies, which projects contribute to diverse areas of the state.
GFO	Grant Funding Opportunity
Hydrogen Safety Panel	The Hydrogen Safety Panel, developed by Pacific Northwest National Laboratory with support from the U.S. Department of Energy, provides services for safety planning for projects addressing production, storage, delivery, and use of hydrogen.
Hydrogen System	This solicitation will use "hydrogen systems" to characterize the proposed hydrogen production, storage, and end-use components. Project requirements and research goals will be assigned accordingly.
Low-Income Community	Communities within census tracts with median household incomes at or below 80 percent of the statewide median income or the applicable low-income threshold listed in the state income limits updated by the Department of Housing and Community Development. ( https://www.hcd.ca.gov/grants-and-funding/income-limits )
Major Subrecipient	A subrecipient that is budgeted to receive $100,000 or more of CEC funds, not including any equipment or match funds that may be provided by the subrecipient.
California Native American Tribe	California Native American tribes listed with the California Native American Heritage Commission (NAHC) for the purposes of Chapter 905 of the Statutes of 2004.9
NOPA	Notice of Proposed Award, a public notice by CEC staff that identifies proposed grant recipients.
Onsite	For this solicitation, “onsite” means to be located on the same or geographically contiguous property, which may be divided by public or private right-of-way, provided the entrance and exit between the properties is at a crossroads intersection, and access is by crossing as opposed to going along the right-of-way. Noncontiguous properties owned by the same person but connected by a right-of-way which that person controls and to which the public does not have access, is also considered on-site property.
Pilot Test	Small scale testing in a laboratory or testing on a small portion of the production line of the affected industry. Pilot tests help verify the design and validity of an approach, and adjustments can be made at this stage before full-scale demonstrations
PPA	Power purchase agreement
Pre-Commercial Technology	A technology that has not reached commercial maturity or been deployed at scales sufficiently large and in conditions sufficiently reflective of anticipated actual operating environments to enable the appraisal of operational and performance characteristics, or of financial risks.
Principal Investigator	The technical lead for the applicant’s project, who is responsible for overseeing the project; in some instances, the Principal Investigator and Project Manager may be the same person.
Project Manager	The person designated by the applicant to oversee the project and to serve as the main point of contact for the CEC.
Project Partner	A person or entity that contributes financially or otherwise to the project (e.g., match funding, provision of a test, demonstration or deployment site), and does not receive CEC funds.
REC	Renewable Energy Credit
Recipient	A person or entity receiving a grant award under this solicitation. “Recipient” may be used interchangeably with “grant recipient”.
Solicitation	This entire document, including all attachments, exhibits, addenda, written notices, and questions and answers (“solicitation” may be used interchangeably with “Grant Funding Opportunity” or “GFO”).
Subrecipient	A person or entity that receives grant funds directly from a grant Recipient and is entrusted to make decisions about how to conduct some of the grant’s activities. A subrecipient’s role involves discretion over grant activities and is not merely just selling goods or services.
Sub-Subrecipient	Has the same meaning as a subrecipient except that it receives grant funds from a subrecipient or any lower tier level of a sub-subrecipient.
State	State of California
Tribal Land	Tribal lands are defined as: a) Land which is located within the boundaries of an Indian reservation, pueblo, or rancheria. b) Land not located within the boundaries of an Indian reservation, pueblo or rancheria, the title to which is held: i. in trust by the United States for the benefit of an Indian tribe or an individual Indian ii. by an Indian tribe or an individual Indian, subject to restriction against alienation under laws of the United States iii. by a dependent Indian community c) Land held under a long-term land lease (as a minimum, for the useful life of the proposed project) by an Indian tribe. d) Lands held in fee simple (purchased or owned) by an Indian tribe.
TRL	Technology readiness levels are a method for estimating the maturity of technologies during the acquisition phase of a program. Source: U.S. Department of Energy, “Technology Readiness Assessment Guide”. https://www2.lbl.gov/dir/assets/docs/TRL%20guide.pdf
Vendor	A person or entity that sells goods or services to the grant Recipient, subrecipient, or any lower-tiered level of sub-subrecipient, in exchange for some of the grant funds, and does not make decisions about how to perform the grant’s activities. The Vendor’s role is ministerial and does not involve discretion over grant activities.
Well-to-gate	The well-to-gate system boundary refers to all upstream activities for fuel and feedstock procurement plus the processes used to produce hydrogen, as determined under the most recent Greenhouse gases, Regulated Emissions, and Energy use in Transportation model (commonly referred to as the “GREET model”) developed by Argonne National Laboratory. Argonne National Laboratory, “GREET Model” 2022 https://greet.es.anl.gov/ .
WREGIS	Western Renewable Energy Generation Information System

C. Project Focus

The overall goal of this solicitation is to fund the demonstration of hydrogen production facilities that are co-located with storage and end use to reduce clean hydrogen production costs, reduce retail prices, and decarbonize hard-to-electrify sectors. Projects must demonstrate clean hydrogen production, storage, and end use on the same property, either at new facilities or at existing hydrogen production facilities that will be scaled up. Additionally, this solicitation will fund the development and demonstration of onsite hydrogen production, storage, and end-use systems that can bring direct benefits to their surrounding communities, such as increased energy resiliency, decreased exposure and health impacts from pollution, workforce development, and economic growth, with systems at Technology Readiness Level (TRL) 6 or higher. At TRL 6, proposed hydrogen systems must be capable of performing all functions and have their performance tested with prototypes in relevant environments.

Proposed hydrogen production, storage, and end-use systems and technologies must meet the minimum requirements, grant agreement objectives, and target metrics in this section. Co-located production facilities and end uses must focus on decarbonizing hard-to-electrify sectors, such as heavy-duty transportation and high-temperature industrial processes. Also, projects must have reliable access to a 100 percent renewable energy supply for their on-site hydrogen production, storage, and end-use facilities. Produced hydrogen must be used in-state (see also “onsite” definition). Funded hydrogen production facilities should bring benefits to local communities (e.g., reduce emissions, reduce waste, and increase economic development). Projects must avoid any benefit to facilities associated with fossil fuels, such as oil refineries. End uses must not be oil refineries.

All projects must adhere to the eligible and ineligible hydrogen end uses listed in Table 1, in addition to meeting the grant agreement objectives listed below.

Table 1: Eligible and Ineligible Hydrogen End Uses

Eligible	Ineligible
• Transportation sector, particularly medium-duty and heavy-duty refueling stations, ports, and logistics centers • Hard-to-electrify industrial applications • Power generation	• Hydrogen blending • Petroleum refining • Applications that can be easily electrified, including but not limited to residential and commercial building gas appliances • Applications within oil refineries

The following are three examples of possible projects, though not an inclusive list of all possible projects:

• Demonstration of an onsite hydrogen system near or on transportation and logistics facilities such as ports, with the aim of replacing fossil fuels and reducing emissions in hard-to-electrify sectors such as transportation. The proposed demonstration would have a hydrogen production facility producing up to 5 metric tons of hydrogen through proton exchange membrane (PEM) electrolysis powered by onsite solar for renewable energy. This hydrogen can then be used in an onsite hydrogen refueling station for long-haul heavy-duty trucking.

• Demonstration of an onsite hydrogen system that provides long-duration storage solutions for local communities, thereby significantly enhancing energy resiliency. The project aims to establish a hydrogen production facility that can produce up to 5 metric tons of hydrogen per day through electrolysis. The hydrogen produced would then either be used by an onsite fuel cell system to produce electricity that can power local communities or be stored in Type I pressurized tanks.

• Demonstration of an onsite hydrogen system that provides long-duration storage solutions for local rural communities, thereby significantly enhancing energy resiliency. The project aims to establish a hydrogen production facility that can produce up to 5 metric tons of hydrogen per day through biomass gasification. The hydrogen produced would then be used by an onsite fuel cell system to produce electricity that can either power local communities or be stored in Type I pressurized tanks. The facility will make use of locally-sourced excess agricultural or forest biomass.

The proposed demonstrations must meet eligibility requirements as listed in Section II. Eligibility Requirements and Section IV.E. Stage One Application Screening. The Project Narrative (Attachment 3), Scope of Work (Attachment 5), and Project Schedule (Attachment 6) must include Grant Agreement Objectives (Section I.C.) and all requirements in the Stage One Application Screening (Section IV.E.), Stage Two Application Scoring (Section IV.F.), and Key Project Activities (Section I.F.). Projects exceeding the minimum technical requirements will score higher in accordance with the evaluation criteria. Budget Forms (Attachment 7) must be completed considering Key Project Activities (Section I.F.) and are limited to the restrictions in Eligible Project Costs (Section I.C.) for both CEC reimbursable funds and applicant match share.

For more information on project eligibility, see Section II.B. Project Requirements.

1. Grant Agreement Objectives

Applicants must describe how they will achieve the following objectives during the project term in the Project Narrative (Attachment 3):

1) Produce an annualized average of up to 5 metric tons of clean hydrogen per day while meeting the minimum technical requirements in the Project Narrative (Attachment 3).

2) Demonstrate (at new facilities) or scale up (at existing facilities) onsite hydrogen systems that include hydrogen production, storage, and end use(s).

3) Emit less than 0.45 kg of CO2e per kg of hydrogen produced, using a well-to-gate boundary for the lifecycle emissions assessment. Ensure criteria pollutants meet significance criteria established by the applicable air quality management district or air pollution control district.

4) Advance the TRL of the proposed onsite hydrogen production, storage, and end-use integrated system by at least one level by the end of the project. At of the time of application submission, projects must have a minimum TRL of 6 for the integrated system.

5) Monitor, minimize, and reduce water consumption, where possible.

6) Use water not otherwise intended for human consumption (e.g., project uses purified reclaimed, recycled, or repurposed wastewater for water consumption).

7) Use 100 percent renewable energy resources onsite, a power purchase agreement (PPA) with bundled renewable energy credits (RECs), grid power with bundled RECs, or a combination of these to source renewable energy in California. Use of onsite renewable energy resources is the focus of one of the scoring criteria, and projects that have a greater proportion of their energy needs met by onsite renewable generation will receive a higher score.

8) Ensure onsite hydrogen end uses align with Table 1 and California’s goal of reducing carbon and sector-wide emissions, particularly in hard-to-electrify sectors. Avoid any benefit to facilities that are associated with fossil fuels, such as oil refineries.

9) Demonstrate the system for a minimum of 10 cumulative months. The time starts accruing after the system has reached stable operation.

a. Note: while projects are required to report findings for 10 cumulative months, hydrogen production is expected to extend beyond the term of the Agreement, until the system reaches the end of its operational life.

10) Demonstrate scalability potential within California. Identify plans to ensure the project remains operational over the system lifetime.

11) Actively solicit, consider, and integrate community input and engagement and create tangible benefits to local communities.

12) Develop and implement a measurement and verification (M&V) plan that describes how project benefits and metrics will be measured and quantified, such as:

a. Production capacity (metric tons per day)

b. Hydrogen consumption (metric tons per day)

c. Direct water consumption for hydrogen production (kg of water consumed per kg hydrogen produced), which factors in water rejected during preproduction water treatment processes, water used as a feedstock for electrolysis, and water consumed for cooling processes.

d. Water consumption for plant operations (kilograms of water per day), which includes direct water consumption for hydrogen production and water consumption from equipment, energy generation, and other daily operation needs.

e. Estimates of available water supply for plant operation, such as in volumetric rates, from identified sources that are not competing against domestic uses.

f. Hydrogen purity (percent).

g. Well-to-gate life cycle assessment (LCA) of GHG emissions (kg of CO2e per kg of hydrogen) at pre-installation, post-installation, and end-of-project stages; other environmental impacts such as water consumption (kg of water per day), hydrogen leakage (percent), fugitive methane emissions, and avoided air pollutants such as, but not limited to, carbon monoxide (CO), particulate matter (PM), trace contaminants, nitrogen oxides (NOx), and hydrocarbons [µg/m3] from fuel and feedstock procurement and hydrogen production facility operations, storage, and end use using applicable assessment methods .

h. Hydrogen leakage (kg and percentage released to the atmosphere overall and separately during production, storage, use, and, if applicable, delivery).

i. Energy use for plant operations including, but not limited to, hydrogen production, onsite transport, compressing, dispensing, and storage (kilowatt hours (kWh)).

j. Electricity production if using onsite renewable energy generation (kilowatts (kW)).

k. Land use requirements for system operations (acres).

l. Hydrogen production costs (dollar per kg at point of production and cost of dispensed hydrogen).

m. Installed capital costs for storage (dollars).

n. Feedstock procurement estimates (type and quantity), if applicable.

o. Process design assumptions and cost analysis methodology.

p. System performance under normal operating conditions including downtime [percent], facility system availability such as the proportion of time that the system is usable, hydrogen production efficiency [kWh per kg of hydrogen].

13) Develop and implement:

a. A safety plan that incorporates, at a minimum, hydrogen leakage monitoring and quantification plans; establishes emergency plans and procedures; and complies with federal, state, and local codes and standards for hazardous materials, material embrittlement, and setback distances.

b. An operations and maintenance manual, including, but not limited to, key system operating parameters and limits, maintenance procedures and schedules, and necessary documentation methods.

c. A system end-of-life plan, including, but not limited to, a decommissioning strategy, remediation plan, and waste management procedures.

d. A technoeconomic assessment, including, but not limited to, cost analysis; break-even analysis; sensitivity analysis; return on investment; payback period; market trends; growth potential; competitive landscape; demand projections; replicability of the project and/or long-term scale-up plans; and contracts, plans, or agreements for deployment beyond the term of the proposed project.

14) Consult with recognized hydrogen safety experts or organizations, preferably with the Hydrogen Safety Panel if available and possible, during application development, prior to application submission. These preliminary discussions should involve, at the minimum, anticipated safety-related considerations. Applicants will describe preliminary hydrogen safety discussions in accordance with Scoring Criterion 2 in the Project Narrative (Attachment 3). Applicants must also include a support letter verifying preliminary engagement with a recognized hydrogen safety expert or organization using the Commitment and Support Letters Form (Attachment 10).

15) Share findings with a variety of stakeholders including, but not limited to, government agencies, national labs, industry groups, and hydrogen safety experts.

16) Obtain the necessary permits, waivers, and approvals to conduct the demonstration or scale-up legally and safely in a timely manner. See Section I.J. Additional Requirements regarding Environmental Review.

17) Identify and explain target metrics, including those in Table 2, in the Project Performance Metrics (Attachment 11). Note that these metrics are desired goals that projects should be aiming for but are not strict requirements. Each application should identify the minimum technical performance baseline and explain how the proposed projects can or cannot meet the target metrics listed in Table 2.

Table 2. Solicitation Target Metrics

Metric	Target
Hydrogen Production Costs	<$2 per kg of hydrogen by 2031 at point of production
Production System Efficiency	Maximize system efficiency, actual efficiencies to be included in project reports
Carbon Intensity	0 kg CO2e per kg H2 well-to-gate lifecycle emissions
Direct Water Consumption	9 - 13.5 kg water per kg of hydrogen produced
Hydrogen Purity	>99.00% (for all projects) >99.99% (fuel cell end use)
Hydrogen Leakage	Meet baseline and minimized leakage throughout hydrogen system: for example, less than or equal to 0.03% loss during production, 1% loss during compression and gaseous delivery, 2% loss during liquification and liquid delivery, 0.7% loss during pipeline delivery, and 2% loss during subsequent storage

2. Eligible Project Costs

To be eligible for funding, Budget Forms (Attachment 7) must be completed in accordance with the restrictions below for both CEC reimbursable funds and applicant match share.

Eligible reimbursable costs include:

• Equipment, including installation and materials, specifically associated with hydrogen production, processing, storage, and end-use technologies;

• Site construction and preparation;

• Engineering and design, including a system end-of-life plan;

• Knowledge transfer activities; and

• Products related to:

o Hydrogen Safety plan;

o Operations and maintenance manual;

o Measurement and verification plan;*

o System analyses, including life cycle and technoeconomic assessments (recipients must perform ongoing system analyses throughout the project term); and

o Administration (e.g., progress reporting, project meetings, final report).

*Measurement and verification will be reimbursed by the grant only when outside parties are used. Use of in-house staff is not reimbursable.

The Budget Form (Attachment 7) for the prime applicant must heed the following allocations for CEC reimbursable funds:

• Costs for the following products must, in total, not exceed 10 percent of total CEC reimbursable funds:

o Development of:

i. Hydrogen Safety plan

ii. Operations and maintenance manual

iii. Measurement and verification plan*

iv. System analyses, including life cycle and technoeconomic assessments (recipients must perform ongoing system analyses throughout the project term)

o Administration (e.g., progress reporting, project meetings, and final report)

• Knowledge transfer activities must be allocated a minimum of 3 percent of total CEC reimbursable funds

• Projects are recommended to allocate funding to directly benefit local communities

• At least 55 percent of total CEC reimbursable funds must be allocated towards equipment, including installation, and materials

• The remaining CEC reimbursable funds must be allocated to site construction, site preparation, and engineering and design

Other project costs are NOT eligible reimbursable costs under agreements resulting from this solicitation. However, eligible match share for other project costs may include, but not be limited to:

• Power acquisition of onsite renewable energy resources and other costs for installing or operating eligible renewable energy resources, as defined in California Public Resources Code Section 25741 and subject to the requirements of Public Utilities Code 399.12(e)(1)(A)-(D) and 399.12(e)(2));

• Existing onsite eligible electricity resource equipment (current value must be reflected with appropriate documentation);

• Permit costs and expenses associated with obtaining permits (with the exception of costs incurred by University of California recipients); and

• Feedstocks, such as water.

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