Effective pilot environment-friendly hydrogen projects key for market's future bankability

May 13, 2021 10:07 AM ET
  • Information from eco-friendly hydrogen demonstration projects must be offered to help enable the future bankability of larger setups, releasing the industry's decarbonisation capacity.
Effective pilot environment-friendly hydrogen projects key for market's future bankability
Image: Toshiba

That was one of the key points made by stakeholders and also professionals throughout a session at the Green Hydrogen Summit today that explored the current as well as future organization versions for green hydrogen and also just how federal government motivations can increase the inceptive field.

Lisa McDermott, executive director renewable project financing EMEA at Dutch bank ABN Amro, claimed that while the environment-friendly hydrogen field is "at the start of what will certainly be a long trip to business maturation", the section is expected to "scale up more quickly than wind or solar did", partly due to decarbonisation targets.

With the European Union promising to reduce carbon emissions by at the very least 55% by 2030, compared to 1990 degrees, the bloc is intending to have more than 6GW of sustainable hydrogen electrolysers mounted by 2024 and afterwards over 40GW by the end of the decade, by which factor hydrogen is anticipated to become an "intrinsic component" of Europe's energy system.

McDermott said that the very first environment-friendly hydrogen projects will need to be financed by equity as it is "still a bit early" to request elderly financial obligation, including: "We need to go via the demonstration stage, we need to get the data available because the financial institutions, you need to access that data, you need to bring it to the financial institutions because they're mosting likely to demand that as the first thing in order to begin the diligence for a project financing."

These comments were echoed by Hyung-Ja de Zeeuw, elderly strategist sustainability, executive director, at Rabobank, that stated that banks in the Netherlands are keen to be involved in pilot projects to discover, and after that potentially enter bigger projects in the future with more elderly financial debt.

She called for the regulative regimen and also subsidies to be upgraded in the Netherlands, as existing aids for eco-friendly hydrogen "can not make business situation". "I believe they need to be a bit more tailor-made per project and I think that's additionally the instructions that the Dutch federal government is really going nowadays."

Last month, the Dutch government promised to invest EUR338 million (US$ 410 million) to scale up making use of environment-friendly hydrogen, having actually previously signed a memorandum of comprehending with Portugal last year that will certainly explore the shipment of renewables-produced hydrogen between both countries.

Government assistance for the sector should additionally be provided via gives or feed-in tariffs, according to Pedro Pereira, managing supervisor, Southern Europe, at renewables developer Eurowind Energy. "It is clear for me that we need to have the assistance of the governments if we are to meet or achieve the roadmap that is planned for green hydrogen," he said.

Instead of technological problems, Pereira stated one of the principal obstacles the industry should overcome is protecting offtakers. Nonetheless, he included that if readily shown eco-friendly hydrogen projects are developed with a great load variable as well as offtakers in position, "I believe that one way or another banks will begin funding these projects."