Seven projects across Finland, Norway, Portugal and Spain are set to receive a total of EUR 720 million ($771.6 million) in the inaugural award of the European Hydrogen Bank, a European Union funding program to scale up hydrogen production.
“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 hydrogen, which is currently driven by non-renewable producers”, the Commission said in a statement.
Three projects in Spain with a combined output of 595 megawatts electric (mWe) are among the seven provisional winners, which will now have to undergo individual grant agreements with the European Climate, Infrastructure and Environment Executive Agency. Renato Ptx Holdco will build the 500 mWe Catalina project, while the other two smaller projects are under Benbros Energy SL (the 60 mWe El Alamillo H2) and Angus (the 35 mWe Hysencia).
The two Portuguese projects in this cohort have a combined capacity of 700 mWe: Madoquapower 2x’s MP2X project (500 mWe) and Petrogal SA’s Grey2Green II project (200 mWe).
In Norway, the Skiga project by the namesake company has a 117 mWe capacity. Rounding up this round is the 90 mWe eNRG Lahti project of Nordic Ren-Gas Oy in Finland.
“Together, the winning bidders plan to produce 1.58 million tonnes of renewable hydrogen over ten years, avoiding more than 10 million tonnes of CO2 [carbon dioxide] emissions”, the Commission said.
“The renewable hydrogen they produce will be used in sectors such as steel, chemicals, maritime transport and fertilizers”, it said.
The seven projects will receive subsidies of EUR 8 million ($8.6 million) to EUR 245 million ($262.6 million).
The first auction, which opened for applications late last year, was “oversubscribed” with 132 bids, the Commission said.
“The high number of bids and the investments awarded today are a clear signal of confidence in the nascent renewable hydrogen market”, Maros Sefcovic, executive vice president of the European Green Deal for interinstitutional relations and foresight, said in a statement. “There is a strong project pipeline in Europe and a competitive industry. These are encouraging signs for the future of this important net-zero technology”.
In the inaugural rollout, the producers get a fixed premium per kilogram of output, capped at EUR 4.5 ($4.8) a kilogram.
Projects throughout the duration of the Hydrogen Bank will receive a subsidy on top of the market revenues that they generate from hydrogen sales, for up to 10 years. They will have to start producing renewable hydrogen within five years upon the signing of grant agreements.
For the awardees in the first auction, the Commission expects the grant agreements to be signed by November 2024.
Announcing the opening of the auction November 23, 2023, the Commission said, “The Commission will use lessons from the pilot scheme to inform future auctions that could be developed for other decarbonization technologies and products”.
“The Commission intends to launch a second round of auctions in 2024”, it added at the time.
Last month the Commission said it had approved a EUR 350 million ($375.1 million) German offer for projects that did not get selected in the auction. This “auctions-as-a-service” mechanism of the Hydrogen Bank allows countries to have a competitive selection of projects to fund using their own national budgets without having to hold a national auction.
“The approved scheme will support the construction of up to 90 MW of electrolysis capacity and is expected to incentivize the production of up to 75,000 tonnes of renewable hydrogen”, the Commission said in a statement April 5. “This will help Germany achieve its ambition to have at least 10 GW [gigawatts] of domestic electrolysis capacity by 2030 and contribute to the EU target of a minimum of 42.5 percent renewable energy production by 2030, with the aim of reaching 45 percent”.
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