Black Hills Energy and Babcock & Wilcox have won a $16 million grant from the Wyoming Energy Authority to plan a hydrogen plant at a coal-fired power station in Gillette. The hydrogen will be made from coal, not water. In a market where federal hydrogen money is counted in billions, a state has written a modest cheque for a very different kind of project.
Key takeaways
- Black Hills Energy and Babcock & Wilcox Enterprises (B&W) secured a $16 million grant from the Wyoming Energy Authority, announced on 24 January 2024, for a coal-to-hydrogen project with carbon capture and sequestration in Wyoming.
- The Neil Simpson Hydrogen Plant will be located at Black Hills' Neil Simpson Power Plant in Gillette, Wyoming, and aims to use B&W's BrightLoop technology to produce 15 tons of hydrogen per day.
- The Wyoming Energy Authority grant to Black Hills and B&W will fund the permitting, engineering and development activities of the Neil Simpson hydrogen facility.
- Hydrogen from the Neil Simpson plant will be used in combustion turbines and boilers, while its carbon dioxide emissions will be sequestered or put to beneficial use.
- Enerdatics records 13 government grants for hydrogen in the US announced from 2022 to 2025, and the $16 million Wyoming award to Black Hills and B&W is the second smallest of them.
What is the Neil Simpson hydrogen project?
A plan to turn coal into hydrogen at an existing power station and keep the carbon out of the air. The facility would sit at Black Hills' Neil Simpson Power Plant in Gillette, in Wyoming's coal country. It would use B&W's BrightLoop process to produce 15 tons of hydrogen a day.
The design closes its own loop. The hydrogen is meant to fuel combustion turbines and boilers. The carbon dioxide separated in the process would be stored underground or used in other products.
The record describes the facility as commercial-scale. The grant, though, is for the stage before construction: permitting, engineering and development. It pays to find out whether the plant can be built, not to build it.
How does chemical looping make hydrogen from coal?
By keeping the fuel and the air apart. Chemical looping is a process in which a solid material carries oxygen between two or more reactors, so the fuel reacts with that material rather than with air. Because no air enters the fuel reactor, the gas that comes out is not diluted with nitrogen. That makes the carbon dioxide much easier to isolate.
BrightLoop applies this to hydrogen. According to the record, the technology uses a chemical looping process to produce hydrogen and isolate carbon dioxide for storage and sequestration. The capture is built into the chemistry rather than bolted on afterwards, which is the case Black Hills and B&W are making for coal as a hydrogen feedstock.
Hydrogen made from fossil fuels with the carbon captured is usually grouped apart from hydrogen made by splitting water with renewable electricity. The comparison that matters for the Neil Simpson plant is not with electrolysers. It is with burning coal in the same location without capture.
Why is Wyoming paying for it?
Because the project fits what the state wants to do with its own resources. The record says the project aims to support Wyoming's efforts to utilize its energy resources. For a coal-producing state, a technology that turns coal into a low-carbon fuel offers a way to keep using the resource as power markets decarbonise.
The sponsors bring complementary pieces. Black Hills owns the power station and the site. B&W owns the technology. A grant from the Wyoming Energy Authority, the state's energy development body, lets them test the plan on paper before either commits construction capital.
Enerdatics' data shows how small the award is next to the rest of US hydrogen funding. Enerdatics records 13 government grants for hydrogen in the US announced from 2022 to 2025. Eleven of them involve the US Department of Energy, including $7 billion across seven regional clean hydrogen hubs in October 2023 and $2.2 billion for two hubs in November 2024. Of the 13, only Synhelion and the University of Florida's $2.7 million award in June 2023 is smaller than Wyoming's $16 million. Black Hills and B&W's grant is one of only two in the set that do not involve the Department of Energy.
What does the grant signal for US hydrogen?
It signals that state money is reaching hydrogen projects the federal hub programme was not built around. The federal awards in the Enerdatics set are dominated by hubs, electrolyser manufacturing and fuel cell supply chains. Wyoming's grant goes to a single coal-fed plant at a single power station, at the earliest stage of development.
It also places Neil Simpson alongside a wider set of US projects that pair hydrogen with carbon capture. On the Gulf Coast, ENEOS has backed MVCE Gulf Coast, which plans to make low-carbon hydrogen using carbon capture and storage, as covered in Enerdatics' analysis of the ENEOS investment. The difference in scale is large. MVCE Gulf Coast plans 220,000 tonnes of hydrogen a year. Neil Simpson's 15 tons a day comes to about 5,475 tons a year, a single plant at an existing power station rather than an export-scale bet. The storage side of that model has its own market, shown in the timeline of the Bayou Bend CCS project.
Closer to Wyoming, hydrogen for power is already under way by a different route. The ACES Delta project in neighbouring Utah makes hydrogen with electrolysers and stores it for a power plant, as set out in Enerdatics' analysis of Chevron's ACES stake. Neil Simpson aims at the same end use, fuel for turbines and boilers, from coal instead of electricity.
What the record leaves open is the next step. It gives no construction cost, no timetable and no named buyer for the hydrogen beyond its intended use in turbines and boilers. The $16 million pays for the work that will produce those answers.
Frequently asked questions
How much did Black Hills and B&W receive from Wyoming?Black Hills Energy and Babcock & Wilcox secured a $16 million grant from the Wyoming Energy Authority, announced on 24 January 2024.
Where will the Neil Simpson hydrogen plant be built?At Black Hills' Neil Simpson Power Plant in Gillette, Wyoming.
How much hydrogen will the plant produce?The project aims to produce 15 tons of hydrogen per day using B&W's BrightLoop chemical looping technology, with the carbon dioxide captured for sequestration or beneficial use.
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