The European Hydrogen Bank (EHB) has awarded seven renewable hydrogen projects with almost €720m ($772m) in subsidies with projects set to gain less than €0.5/kg of hydrogen.
Coming as the first competitive bidding process under the EHB, over 132 bids were made in total, with the selected seven expected to produce some 1.58 million tonnes of renewable hydrogen over a decade from a combined 1.48GW of electrolysis.
The winning bids will gain access to between €0.37 ($0.40) and €0.48 ($0.51) per kilogramme of renewable hydrogen produced, receiving total subsidies between €8m ($8.6m) and €245m ($263m), funded by revenues from the EU’s emissions trading scheme (ETS).
However, the scheme was unveiled with a ceiling price of up to €4.5/kg ($4.82) of hydrogen in a bid to bridge the cost gap to unabated fossil fuel-based hydrogen.
Speaking at the World Economic Forum’s (WEF) Special Meeting on Monday (April 29), TotalEnergies Chairman and CEO, Patrick Pouyanné, said current green hydrogen prices were €8/kg ($8.58).
Read more: Carbon pricing, incentives fuel TotalEnergies’ green hydrogen refinery shift amid high costs
Wopke Hoekstra, Commissioner for Climate Action, said the selected projects, which will produce little over 1.5 million tonnes of hydrogen in a decade, would help deliver the EU’s 2030 energy and climate targets.
The EU’s REPowerEU plan targets the production of 10 million tonnes of renewable hydrogen by 2030.
MadoquaPower2x landed the largest award of €245.3m ($263m) for its 500MW MP2X which could produce 511,000 tonnes in a decade (€0.48/kg).
Located in the Sines industrial zone, the project will produce green hydrogen and ammonia using alkaline electrolyser technology. Hydrogen will be transported through a local hydrogen grid for use by local industry.
Green ammonia is planned to be transported to the Port of Sines via pipeline for export and/or use as maritime fuel.
Renato P2X’s 480MW Catalina project in Spain scored big with €230.4m ($247m) for its plans to produce 480,000 tonnes (€0.48/kg).
The electrolyser plant will be connected to a green ammonia conversion facility through a dedicated 221km hydrogen pipeline. The developers expect the €2.35bn ($2.5bn) project to be online by December 2027.
Petrogal’s 200MW Grey2Green-II project in Portugal secured €84.2m ($90.3m) to produce 216,000 tonnes in 10 years (€0.39/kg).
While details of the project are thin on the ground, H2 View understands this will be a follow-up project to Portuguese-based Galp’s 100MW green hydrogen project to replace around 20% of its grey hydrogen consumption at its Sines refinery, which passed FID in 2023.
Read more:Galp reaches FID on green hydrogen, HVO and SAF projects
Skiga’s 117MW project in Norway landed €81.2m ($87m) to produce 169,000 tonnes over a decade (€0.48/kg).
Nordic Ren-Gas has secured a total of €45.14m ($48.4m) for its 90MW eNRG Lahti project in Finland, which plans to produce 122,000 tonnes of renewable hydrogen over 10 years (€0.37/kg).
Set to be developed with Lahti Energia, the project will produce synthetic methane, green hydrogen and district heat.
Benbros Energy grabbed €24.7m ($26.5m) for its 60MW El Alamillo H2 project in Spain, aiming to produce a decade total of 65,000 tonnes (€0.38/kg).
Angus gained €8.16m ($8.7m) for the 35MW Spanish HYSENCIA project which is slated to generate 17,000 tonnes in the 10-year time frame (€0.48/kg).
Maroš Šefčovič, Executive Vice-President for European Green Deal, said the result of the auction were “very encouraging.”
“These innovative auctions, funded by the revenues from emissions trading, are a game-changer when it comes to producing renewable hydrogen in Europe. The high level of interest shows the strong potential for this market and the need for resources beyond the EU budget,” Šefčovič said.
With all the projects expected to sign grant agreements by November 2024, all will have to start producing renewable hydrogen within a maximum of five years after signing.
The US’ comparable Inflation Reduction Act (IRA) Section 45V clean hydrogen production tax credit (PTC) scheme’s lowest available tax credit is $0.60/kg (€0.56) for hydrogen produced with 2.5-4kg of CO2e/kg.
Projects awarded subsidies under the EHB auction will have to comply with the Renewable Energy Directive’s (RED) rules for renewable hydrogen production of hourly correlation, geographical correlation and additionality.
Read more: The impact of Europe’s renewable hydrogen complexity
With plans for a second EHB auction expected to open by the end of this year (2024), the Commission intends to “draw on lesson learned” from the first auction.
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