Nine cleaner hydrogen production projects have secured a total of EUR 1.09 billion ($1.28 billion) in grants under the third auction of the European Hydrogen Bank.
“Across seven countries in the European Economic Area, the projects are expected to provide almost 1.1 gigawatts of electrolyzer capacity and produce over 1.3 million tonnes of hydrogen over their first 10 years of operation, with an estimated greenhouse gas emissions avoidance of 9 million tonnes of CO2 equivalent”, the European Commission said in a press release Thursday.
The grant amount is a fraction of the EUR 8.4 billion requested by project proposals in the bidding round. The 58 submitted bids represented about 4.3 gigawatts (GW) of electrolyzer capacity, according to a Commission statement March 20.
The European Hydrogen Bank, an EU Innovation Fund financing platform to scale up the renewable hydrogen value chain in the 27-nation bloc and partner countries, helps close the price difference between production costs and the price buyers are currently willing to pay.
“Upon signature of their grant agreements, the nine selected projects will receive a fixed premium of between EUR 0.44 and EUR 3.49 per kilogram of certified and verified hydrogen produced, for a maximum period of 10 years”, the Commission said.
Austria, Denmark, Finland, Germany and Greece each have 1 selected project under the third auction. Norway and Spain each have 2.
For the first time, a Hydrogen Bank auction covered projects with maritime or aviation offtakers. Eligibility had also been expanded to include electrolytic hydrogen produced through nuclear power.
The biggest of the selected projects by bid volume (10 years of subsidized production) is Finland’s Cloudberry project. The project by Vetyalfa Oy won a grant for a total of 508,915 kilotons of hydrogen. It is one of 2 winning bids in the renewable hydrogen fuels of non-biological origin (RFNBO) “low carbon” category, the other being the Lotse project in Germany with a bid volume of 140,554 kilotons.
In the RFNBO “general” category, the largest project by bid volume is Denmark’s NJK. The project by MorGen offered a bid for 445,000 kilotons. The other projects in the category are Hy2gen Nordic AS’ ALBA project in Denmark with a bid volume of 144,118 kilotons, Hellenic Hydrogen AE’s AN-1-B project in Greece (38,654 kilotons), Turn2X Asset Co II Extremadura SL’s T2X project in Spain (6,390 kilotons) and Wiener Wasserstoff GmbH’s Hy4IND project in Austria (3,036 kilotons).
Two projects have been picked under the RFNBO “maritime-aviation” category, both in Norway: Gen2 Energy AS’ Gen2-LH2 (17,886 kilotons) and Green H AS’ RogalandH (17,700 kilotons).
Additionally Germany and Spain are using results from the third auction, through the Innovation Fund’s “auction as a service” mechanism, to offer a combined EUR 1.7 billion from their national funds. The mechanism allows EU27, Iceland, Liechtenstein and Norway to pick projects that participated in the auction but were not selected for the Innovation Fund. Auctions as a service allows participating nations to have a competitive selection of projects to fund using their internal budgets without holding their own auction.
The European Climate, Infrastructure and Environment Executive Agency expects to sign grant agreements with the winning bidders by yearend.
“The selected projects will have to reach financial close within two and a half years of grant signature and enter into operation within five years”, the Commission said.
To contact the author, email jov.onsat@rigzone.com
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