CPS Energy pilots turning natural gas into clean hydrogen
Pamela Largue
Posted on: 23 July 2025
CPS Energy will pilot technology that will convert natural gas into clean hydrogen, enabling greater grid resiliency while decarbonising.
Texas utility CPS Energy has signed an agreement with Modern Hydrogen to pilot technology that will convert natural gas into clean hydrogen, enabling greater grid resiliency while decarbonising.
Under the agreement, CPS Energy will use Washington-based Modern Hydrogen's distributed natural gas pyrolysis technology together with carbon capture.
The system, which taps into existing pipelines and infrastructure, uses heat to crack natural gas into hydrogen and solid carbon. The carbon is captured and reused in products like asphalt.
Some of the hydrogen is recycled to provide ongoing system heat, with the rest being delivered for use in feedstocks, heating, heavy duty fueling, and power generation.
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The partnership is part of CPS Energy's strategic mission to diversify its power portfolio, incorporate new technologies and decarbonise, while at the same time satisfying the increasing power demand due to a growing population and electrification.
President and CEO of CPS Energy, Rudy Garza, commented in a statement: “We need more energy, including natural gas, to serve our customers’ growing needs.
“We are committed to San Antonio’s Climate Action and Adaptation Plan (CAAP). 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.”
If the pilot is successful, CPS Energy suggests this system could be deployed in regional power hubs, fleet depots, or transit systems to reduce grid strain.
CEO of Modern Hydrogen Tony Pan, added: “San Antonio is making a smart, Texas-led bet on natural gas and clean power generation.
“San Antonio and CPS Energy are showing the promise of American natural gas, for both clean power generation, and for better materials to build our infrastructure. They’re showing the country what it looks like to lead on reliability, energy security, and affordability.”
