EU to reveal winners of first green hydrogen subsidy auction at end of April
Senior European Commission official urges member states to use Hydrogen Bank scheme for 'auctions as a service' to avoid the UK's mistake of overpaying for H2
The European Commission will publish the results of its €800m ($869m) pilot auction for hydrogen subsidies on 30 April, policy officer Johanna Schiele announced today.
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This would suggest that EU would continue to offer fixed-payment subsidies of up to €4.50/kg at the next auction, which is due to take place near the end of this year.
The European Commission will “tweak the edges” of the second auction based on the results of the first as well as industry feedback, Schiele said, although a switch to a Contracts for Difference model is unlikely until a market develops.
Given that the 132 bidders had to provide information on where they planned to source electrolysers for their projects, Schiele hinted that there would be “lively debate” on whether the second auction should specifically support projects using equipment made in Europe.
She added that while the Net Zero Industry Act — a proposed EU measure that would incentivise the European manufacturing sector to supply 40% of clean-tech equipment deployed within the bloc — would not necessarily apply to the European Hydrogen Bank, “we will fall in line with the Commission’s policy trend”.
Auctions as a service
The European Commission is pushing for more member states to use the EHB for its “auctions as a service” model, in which countries can channel state aid through the process towards projects within their borders.
“We don’t want 27 member states to come out with 27 different hydrogen support schemes,” said Schiele, noting that Germany and Austria are injecting €350m and €400m, respectively, towards the pilot auction.
She pointed out that auction design can also massively influence how much governments end up paying green hydrogen producers, citing the example of the UK, which is set to spend £2bn ($2.54bn) on 125MW of electrolyser projects.
Schiele noted that part of the reason for this is that prices rose during the long period of negotiation between the UK government and hydrogen project developers.