Green hydrogen players looking for clarity on project opex subsidies

May 20, 2022 06:13 PM ET
  • Additional subsidies to support the manufacturing of green hydrogen are being requested by market players looking to establish bankable H2 projects.
Green hydrogen players looking for clarity on project opex subsidies
Image: Solar Media

Talking throughout a panel discussion at today's Green Hydrogen Summit 2022, Anise Ganbold, research leader for commodities and also hydrogen at working as a consultant Aurora Energy Research, claimed there are just 4 countries in Europe that have actually announced and offered guidelines for green hydrogen opex subsidies: the UK, the Netherlands, Germany and Denmark.

Ganbold stated that while there is "plenty of money to go around" for capex for projects throughout the hydrogen value chain, there is a lot of demand for opex financing.

" When we speak to our clients, they claim, 'Yes, we have this capex subsidy, but what we're waiting for and also what we're waiting for more clarity for is the opex subsidies, and that's what we truly require in order to go get funding in order to be bankable,'" she stated throughout the summit, hosted by PV Tech publisher Solar Media in Lisbon.

In the UK, the government released a public consultation last year on a preferred hydrogen company version, which would certainly be improved a similar property to the country's offshore wind contracts for distinction scheme. This design is designed to overcome the price gap between low carbon hydrogen and nonrenewable fuel sources.

Ganbold expects that a lot of companies are preparing to participate in the UK's subsidy scheme but said "it's really tricky for governments to establish a revenue support scheme for such a brand-new market".

She included that obtaining the market for offtakers "is probably among one of the most important points because right now there is no market for green hydrogen, it's extremely costly contrasted to a lot of the incumbents.

" You'll require to have a subsidy that will aid bridge the gap for the consumers in order to have the incentive to switch to clean hydrogen. So we require to have subsidies on the demand side too."

The scale of hydrogen financing needed in the coming years was exposed in research released last year by market group the Hydrogen Council, which discovered that all the hydrogen projects announced internationally since very early 2021 will require complete investments of more than US$ 300 billion by 2030.

Outlining the difficulties of financing green hydrogen projects, Hyung-Ja de Zeeuw, senior company credit strategist at Rabobank, said it is required to factor in the creditworthiness of both the electrical energy vendors that power green hydrogen plants as well as offtakers.

It may likewise be required to consider the credit reliability of system companies. "But previously, there haven't been so many systems that's operational that we are sure that it really works, to ensure that's another threat," de Zeeuw claimed.

" If you look, in all sincerity, at the moment, at where we are with green hydrogen projects, the risks are still very high."

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