Posted on 22 Feb 2024
The European Commission’s pilot European Hydrogen Bank auction has received 132 bids from 17 European countries, which “far exceeds” the auction’s budget of €800 million ($862m), the EC said Monday.
Launched in October 2022, the European Hydrogen Bank has a total budget of €3 billion to support renewable hydrogen production in Europe. Auction winners will receive a fixed premium of up to €4.5/kilogram of renewable hydrogen for up to 10 years. The premium payment attempts to bridge the gap between the cost of renewable hydrogen and fossil fuel-derived hydrogen.
The bids total a planned electrolyser capacity of 8.5 gigawatts, supporting the production of over 8.8 million tonnes of renewable hydrogen across 10 years. Annually, this would account for around 10% of the EU’s target of 10m t/y renewable hydrogen production by the end of this decade, Kallanish notes.
“The applications are in and the enthusiastic market response to the pilot auction shows the European hydrogen industry is ready to scale up,” says Kurt Vandenberghe, the EC’s director-general for climate action. “Renewable hydrogen is an important solution in Europe’s endeavour to reach climate neutrality by 2050.”
“The success of this pilot auction is the result of thorough engagement and consultation with relevant stakeholders and a solid regulatory framework which provides certainty to investors,” Vandenberghe adds. “We now have a scheme that provides efficient and targeted public support in full alignment with market needs.”
The European Executive Agency for Climate, Infrastructure and Environment (CINEA) is now checking the admissibility and eligibility of the bids, which will be ranked according to price. The results will be announced earliest by April this year, with the grant agreements slated to be signed by November.
However, it is yet unclear how the budget will be allocated.
Last November, EC President Ursula von der Leyen announced the second hydrogen auction under the program would be launched in spring 2024. However, the commission on Monday said it aims to launch the second round before the end of this year.
Source:Kallanish
