Europe’s first renewable hydrogen auction under the European Hydrogen Bank will award nearly €720 million ($768.4m) to seven projects, Kallanish reports.

The selected renewable hydrogen projects are located in Finland, Norway, Spain and Portugal. Together, they will produce 1.58 million tonnes over 10 years. That’s around 1.5 gigawatts electric (GWe) of capacity.

According to the European Commission, the winning bids were between €0.37 and €0.48 per kilogram of renewable hydrogen produced. The cheapest bid came from the 90-megawatt-electric eNRG Lahti project in Finland led by Nordic Ren-Gas Oy. The highest bid of €0.48/kg came from four projects, including the Catalina project in Spain and the MP2X project in Portugal – with each bidding for 500 MWe of production capacity. The grants will vary between €8m and €245m.

Project Coordinator Country Bid volume (10 years) Bid capacity (MWe) Bid price (€/kg)
eNRG Lahti Nordic Ren-Gas Oy Finland 122,000 t 90 0.37
El Alamillo H2 Benbros Energy Spain 65,000 t 60 0.38
Grey2Green - II Petrogal Portugal 216,000 t 200 0.39
HYSENCIA Angus Spain 17,000 t 35 0.48
SKIGA Skiga Norway 169,000 t 117 0.48
Catalina Renato Ptx  Spain 480,000 t 500 0.48
MP2X Madoquapo wer 2x Portugal 511,000 t 500 0.48

Source: EC

This “oversubscribed” first bidding process attracted 132 bids in total in 17 European countries. Though only 119 of these were deemed eligible, the auction was highly competitive. The renewable hydrogen production locked in the auction will meet demand from the steel, chemicals, maritime transport and fertiliser sectors.

Production must begin within a maximum of five years from the grant agreement signing. This is expected to be done by November 2024 “at the latest,” the EC says. The selected projects will receive the awarded fixed premium subsidy for up to 10 years for their certified and verified renewable hydrogen production.

“The Commission plans to launch a second European Hydrogen Bank auction by the end of this year,” a spokesperson says. “It will draw on the lessons learned from this pilot auction and also further consult stakeholders before launching the next auction.”

For the new planned auction, the EC is proposing to reduce the auction ceiling price from €4.50 to €3.50/kg; cut the maximum operation start time to three years, from the current five; increase the requested amount of the completion guarantee from 4% to 10% of the requested grant amount; and include a dedicated budget basked for projects with offtakers in the maritime sector.

Additionally, officials want to request further detailed information from bidders, particularly on the origin and value chain of electrolysers, as part of an equipment procurement strategy.  

The so-called IF23 Auction was launched in November 2023 and closed in February 2024. Its €800m budget comes from the revenues of the EU Emissions Trading System.

Separately, Germany is awarding €350m in national funding for green hydrogen projects under the new EU Auctions-as-a-service mechanism. The support to non-EU member countries will help Germany to secure clean hydrogen supply. The EC says other countries should “take advantage of this service for future auctions.”