UC Irvine has been supplementing its campus power generation using green hydrogen for about 6 years now. They got approval to expand that throughout the campus gas infrastructure and are implementing it now.

Now, there's a few ways this can be used. The campus has something over 4MW of solar installed, and has on-site electrolysis facilities to convert excess into hydrogen. That can simply be pushed into the gas pipeline and burned as part of existing boiler operations. The hydrogen burns more cleanly than natural gas and increases the overall efficiency of the system, though there is still some carbon emissions this way. The pipeline also serves as a form of storage. Ideally you put the hydrogen into on-site fuel cells for power generation, and that too is happening, with only surplus from that operation (and from the on-campus hydrogen fueling station) being added to the natural gas feed. The campus also has things like large scale thermal storage so boiler operations that benefit from solar peak energy can be averaged into non-solar generation hours, etc.

There's a fair bit of industrial scale fuel cell out there, so there is demand. Companies like Apple and Google power their data centers off of solar + fuel cell, often using biofuel. Those fuel cells are largely identical to those that can operate off of hydrogen. So there is production capacity out there and I can see many of the manufacturing or distribution in that area being converted to that.

The question is how will that hydrogen be transported. Are they injecting into the large gas pipelines in the state, is it going into yet to be built dedicated hydrogen pipelines (we have some in CA, but none near Lancaster to my knowledge) or in some other way - such as solid state hydrogen storage from any of the companies working on that?

Agreed, hydrogen actually fills a really sketchy gap (industrial feedstock) in a fossil fuel free modern society. However, as long as we continue to not price carbon release in the atmosphere, the economics will require heavy subsidies. This plant is really only useful for proof of concept.

Its really kinda stupid for energy production though.

I think it may be easier/cheaper /ecologically more beneficial to store hydrogen than electricity long term.

You'ld be better off making methane of a number of other fuels. People are pumping hydrogen to create an infrastructure and a market that will be fulfilled by dirty hydrogen surplus from gas extraction.