CPS Energy Partners with Modern Hydrogen to Launch Innovative Clean Hydrogen Pilot Project
In a bold move towards decarbonisation and cleaner energy solutions, CPS Energy, the largest municipally owned electric and gas utility in the United States, has announced a pioneering partnership with Seattle-based clean energy innovator Modern Hydrogen. The collaboration will pilot an advanced methane pyrolysis technology that transforms natural gas into clean hydrogen and solid carbon, significantly reducing carbon emissions at the point of use.
The pilot project will deploy Modern Hydrogen’s MH500 unit, a modular system capable of producing up to 500 kg of hydrogen per day directly onsite. Unlike traditional steam methane reforming (SMR), which produces CO₂ as a byproduct, the methane pyrolysis process separates methane into hydrogen and solid carbon, preventing CO₂ emissions entirely. A portion of the generated hydrogen fuels the heat needed to drive the pyrolysis, eliminating the need for an external electricity supply.
“This is about doing something more valuable with natural gas,” said Tony Pan, CEO of Modern Hydrogen. “By producing clean hydrogen locally, we can decarbonise energy generation and reuse the carbon in practical applications such as asphalt for infrastructure projects.”
The hydrogen produced in the trial is expected to be blended—at less than a 20% ratio—into the fuel mix at one of CPS Energy’s natural gas-fired power stations, contributing to lower emissions without requiring major infrastructure changes. The captured carbon will be repurposed into road materials, adding a circular economy dimension to the initiative.
Overcoming Infrastructure Barriers
One of the biggest challenges to scaling hydrogen use is the need for costly, large-scale hydrogen pipeline networks—currently limited to around 1,600 miles in the United States, mainly in Texas and Louisiana. Modern Hydrogen’s distributed generation model bypasses this barrier by enabling clean hydrogen production at the point of use, using existing natural gas infrastructure.
“It seems far more elegant to reuse existing infrastructure than to build a brand-new hydrogen grid,” Pan explained.
A Step Forward in low-Carbon Energy
CPS Energy joins a small but growing group of utilities exploring distributed methane pyrolysis and carbon capture as part of the global push for net-zero emissions.
“By exploring this innovative opportunity to produce clean hydrogen using our existing natural gas system, we are moving forward on our commitment to deliver reliable, affordable, and cleaner energy for our community,” said Rudy D. Garza, CEO of CPS Energy.
Modern Hydrogen, backed by high-profile investors including Bill Gates, NextEra Energy, National Grid, and NW Natural, is also running pilots in Florida and Oregon, targeting both clean power generation and hydrogen blending into gas distribution networks.
This project marks a significant step in accelerating the clean hydrogen economy and positions CPS Energy and Modern Hydrogen at the forefront of low-carbon innovation in the global energy sector.
