A German developer that is pioneering a “franchise model” of green hydrogen project development has secured the cash for work to take it to final investment decision (FID) on the first 100MW phase of its planned gigawatt-scale green H2 scheme in Lubmin, Germany — a feat it has told Hydrogen Insight it can complete within three months.
HH2E has bagged an undisclosed sum from UK infrastructure fund Foresight for development work on its renewable H2 project in Lubmin, northern Germany, which is one of up to 15 identical projects the company is working on in the country.
The funding will enable HH2E to reach FID “as soon as the beginning of Q4 [October]” a spokesperson for the company told Hydrogen Insight, pointing out that the project is not dependent on subsidies to proceed.
Construction would begin later this year, with commercial operation beginning in mid-2025.
The company has some firm offtake agreements in the bag already and is “on the way” to pre-selling all output, a spokesperson told Hydrogen Insight, although he declined to give a firm percentage.
Much of the H2 is destined for hydrogen filling stations in Germany serving the country’s road freight market — and HH2E is expecting to fetch offtake sales prices of €8-12/kg ($8.8-13.1/kg).
“This is the level which we believe the market can absorb,” the spokesperson for HH2E said, noting that final price for individual customers will also depend on the cost of distribution.
Other customers include those in the chemicals industry and commercial aviation, HH2E said.
If realised, the FID would make it one of the largest green H2 developments in Europe with committed funds, after Shell’s 200MW Holland Hydrogen 1 project in the Netherlands, which reached FID last year.
This speed of development is possible because the company is applying identical parameters across its project portfolio, HH2E told Hydrogen Insight — a “cookie-cutter” approach that cuts back the regulatory, permitting and procurement work associated with each project.
The Lubmin scheme is also being developed on the site of a decommissioned nuclear power plant, meaning it already has a grid connection, while its proximity to the now-defunct Nord Stream 1 and 2 gas pipeline infrastructure means it is also gunning to deliver via pipe.
Many green hydrogen projects are waiting for the EU’s subsidy schemes to take shape — as well as the regulatory infrastructure on which they depend such as Guarantees of Origin and emissions verification standards — before taking FID.
HH2E is already carrying out pre-FID development on its first 100MW-to-1GW Thierbach project in Borna, eastern Germany, also scheduled for FID later this year.
Each project, developed under a model characterised by HH2E as a "franchise model", is developed by a different special purpose vehicle in which HH2E is a shareholder, with a project-specific equity investor — in the case of the Lubmin project, Foresight.
Swiss energy company MET Group, which was previously touted as a co-developer in the project, is now on board as a collaborator on the project, "focusing on facilitating the sale of green hydrogen produced by HH2E at both Lubmin and other plants in Germany", HH2E said.
The Thierbach project is backed by Foresight and specialist H2 investor HydrogenOne.
In addition to finalising offtake agreements for the 6,000 tonnes of green H2 production for the first phase of Lubmin, HH2E must also carry out project design and procurement before it can reach FID.
The project concept envisages a first phase of 100MW built for a total of €230m, with a view to scaling up to 1GW for a total project cost of €1bn. The scheme incorporates an alkaline electrolyser and battery storage, which will allow continuous H2 production even without a constant renewable power supply.
HH2E has already signed a €30m deal for 120MW of electrolyser capacity from Norwegian manufacturer Nel, but these units will be spread out across the company’s wider portfolio of projects, most of which are still unannounced.
As a result, HH2E is negotiating further deals for electrolyser capacity with Nel and other manufacturers.
The company ultimately hopes to have 15 of its 100MW-to-1GW “franchise” projects in place in Germany as part of its efforts to reach 4GW of capacity by 2030, and has bought or reserved land for most of these, Hydrogen Insight understands.
A further two project will be announced this year, possibly before FID on Lubmin or Thierbach, the spokesman said.
The Lubmin site is close to the landing point of the NordStream1 and 2 subsea fossil gas import pipelines, which were respectively sabotaged and mothballed following Russia’s invasion of Ukraine in February 2022. Three of Germany’s gas distributors are currently working on a proposal to convert some of the onshore gas pipelines originating from Lubmin, built to carry Russian gas imported on NordStream, over to H2.
