EU Hydrogen Bank's pilot EUR-800m auction to open on Nov 23
Photo by Business Wire.
The European Commission (EC) this week published the terms and conditions for its pilot green hydrogen auction, saying that it is intended to open on November 23, 2023, and award producers a total of up to EUR 800 million (USD 869m) in the form of a fixed premium.
As mentioned in the newly-released document, the purpose of the auction is “to cost-efficiently support the production of renewable fuel of non-biological origin (RFNBO) hydrogen” within the European Economic Area (EEA).
Plans for the auction were unveiled earlier this year when the EC gave more details about its intended establishment of a so-called European Hydrogen Bank. The competitive bidding process is being financed by the EU Innovation Fund.
By providing support in the form of a fixed premium of up to EUR 4.5 per kg of renewable hydrogen produced over ten years of operation, the Commission seeks to cover the gap between the production costs and the demand side’s willingness to pay. To be eligible for the subsidy, renewable hydrogen has to be sourced from newly installed electrolysers in a single location with a production capacity of at least 5 MWe. Virtual pooling of capacity is not permitted.
The maximum grant for each bid is set to be one-third of the total available budget, or EUR 266.7 million in the case of this first auction.