Energy News – 83rd Issue-Hydrogen and Alternative fuels
- Funding of hydrogen and alternative fuels infrastructure projects in the EU
Hydrogen
On 23 November 2023, the European Commission launched the very first (pilot) auction
under the European Hydrogen Bank for the facilitation of the production of renewable
hydrogen throughout Europe via the deployment of innovative technologies (for a certain
volume of hydrogen production). The available budget for this action was set at €800
million, coming directly from the Innovation Fund, which capitalises on the revenues from
the auctioning of allowances under the EU Emissions Trading System. The mechanism for
the bidding was laid out as follows: producers of renewable hydrogen would be entitled to
bid for the support and funding of their projects in the form of a proposed fixed premium
per kilogram of hydrogen produced (up to €4,5 per kilo). The goal of the project is to boost
productivity of renewable hydrogen, taking into consideration that the production costs for
the latter are significantly higher than the price which the consumers are willing to pay,
given that non-renewable hydrogen is, to date, cheaper to produce.
Pursuant to the above, on 19 February 2024, after the successful completion of the auction,
the Commission released the results, according to which, the initiative attracted a total of
132 bids from projects located in 17 European countries, with the total requested support
far exceeding the currently available budget of €800 million, provided by the Innovation
Fund, whereas the result of the bids provides for a total planned electrolyser capacity of
8.5 gigawatts (GWe), which could in turn lead to a cumulative production of 8,8 million tons
of renewable hydrogen, over a 10-year span, i.e. the designated maximum time for the
provision of the subsidy under the auction. The eligible bids will be ranked by the end of
May 2024 and the selected applicants will have to sign the grant agreements by November
2024, after which time, they will have to initiate production within five years
- Change of the priority for connection in the agricultural and industrial sector
- Update on the offshore wind farms licensing development
- New law on the protection of European consumers from the market manipulation
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