European Hydrogen Bank’s pilot auction attracts 132 bids from 17 countries

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The pilot auction under the European Hydrogen Bank, for renewable hydrogen production in Europe, has attracted 132 bids from projects located in 17 European countries. The total support requested far exceeds the currently available budget of 800 million euros, provided by the Innovation Fund.

“The applications are in and the enthusiastic market response to the pilot auction shows the European hydrogen industry is ready to scale up,” commented Kurt Vandenberghe, 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. We now have a scheme that provides efficient and targeted public support in full alignment with market needs.”

All bids taken together provide for a total planned electrolyser capacity of 8.5 gigawatts (GWe). Over the span of ten years, this would lead to a total production volume of 8.8 million tonnes of renewable hydrogen. On a yearly basis, this would cover close to 10 per cent of the EU’s REPowerEU ambition for domestic renewable hydrogen production in 2030.

Producers of renewable hydrogen, as defined in the Renewable Energy Directive and its Delegated Acts, have made their bids to receive support in the form of a fixed premium per kilogram of renewable hydrogen produced. This premium bridges the gap between the cost of production and the price buyers are currently willing to pay for renewable hydrogen rather than fossil hydrogen. The Commission is also offering a new “Auctions-as-a-service” mechanism to enable Member States to benefit from the EU-level platform and award national funding to additional projects, in full respect of State aid rules.

Germany is the first EU country to make use of the “Auctions-as-a-service” feature, putting up 350 million euros from its national budget for renewable hydrogen production projects located in Germany in case eligible bids for German projects cannot receive Innovation Fund support due to budget limitations.

The European Executive Agency for Climate, Infrastructure and Environment (CINEA) is currently checking the admissibility and eligibility of the bids and will then evaluate them. The bids will be ranked according to their price. Applicants will be informed about the evaluation results in April/May 2024 and successful applicants will be invited to prepare and sign the Grant Agreements by November 2024 at the latest.

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