Seven green hydrogen projects with total electrolysis capacity of 1.5GW have been awarded a total of €720m ($772m) in the EU’s maiden European Hydrogen Bank (EHB) subsidy auction, the bloc announced this morning (Tuesday).
But the bid prices achieved are staggeringly low, with the lowest at just €0.37/kg per hydrogen.
Three of the auction winners are located in Spain, with a further two in Portugal and one each in Finland and Norway (full list at the bottom of this article).
Each successful applicant will receive between €8m and €245m, depending on the bid volume and winning bid per kg of hydrogen produced.
For example, the 500MW Catalina project in Spain will receive €230m for producing 480,000 tonnes over ten years at €0.48/kg, while the 60MW El Alamillo scheme is in line for €24m for producing 65,000 tonnes over the same period at €0.38/kg.
The two largest projects are industrial scale, sized to 500MW of electrolyser capacity, with the smallest project sized to 35MW.
In total, the winning projects can be expected to produce 1.58 million tonnes of green hydrogen over ten years for use in the production of steel, fertiliser and chemicals and to meet demand from the maritime transport sector.
“The winning bidders will produce renewable hydrogen in Europe and will receive a subsidy to bridge the price difference between their production costs and the market price for [grey] hydrogen [made with unabated fossil gas], which is currently driven by non-renewable producers,” said the European Commission.
“The European Hydrogen Bank is therefore contributing to the scale-up of cleaner fuels which will contribute to the decarbonisation of European industry.”
However, with the successful bids topping out at €0.48/kg of hydrogen, the EHB is unlikely to be able to “bridge the gap” between green hydrogen made with renewable energy and grey H2 for more than a handful of projects.
Yesterday, the CEO of French energy major TotalEnergies said that green hydrogen costs around €8/kg to buy in Europe at present, around €7/kg more than grey H2.
The bids submitted ranged from the lowest €0.38/kg all the way to €4.50/kg bid ceiling, suggesting that producers were hopeful of achieving a much higher subsidy allocation.
The bloc did not award the full €800m originally allocated to the pilot auction, leaving around €80m unspent, as a result of the next lowest bidder’s application exceeding the total budget.
The successful applicants must now prepare their individual grant agreements, scheduled to be signed by November 2024 at the latest, with a view to beginning hydrogen production within five years.
Full list of winners in pilot EHB auction
| Project | Developer | Country | Bid volumes (kilotonne H2/10 years | Bid capacity (MW) | Expected GHG avoidance (kilotonne CO2/10 years) | Bid price (€/kg) |
| eNRG Lahti | Nordic RenGas | Finland | 122 | 90 | 836 | 0.37 |
| El Alamillo H2 | Benbros Energy | Spain | 65 | 60 | 443 | 0.38 |
| Grey2Green II | Petrogal | Portugal | 216 | 200 | 1477 | 0.39 |
| Hysencia | Angus | Spain | 17 | 35 | 115 | 0.39 |
| Skiga | Skiga | Norway | 169 | 117 | 1159 | 0.48 |
| Catalina | Renato PtX | Spain | 480 | 500 | 3284 | 0.48 |
| MP2X | Madoquapower 2x | Portugal | 511 | 500 | 3494 | 0.48 |
Source: EU
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