The terms and conditions for the European Hydrogen Bank’s second renewable hydrogen auction have been published.
Scheduled for later this year, the auction comes with an increased budget of €1.2 billion for renewable fuels of non-Biological origin hydrogen production within the EU and European Economic Area.
While the auction design remains largely unchanged, there are notable updates, such as the introduction of a minimum local content requirement for electrolysers.
Here are key insights from Yamna :
- The bid ceiling saw only a slight reduction (from €4.5 to €4/kgH2), despite receiving very low bid prices in the previous auction. This may serve as a buffer against potential price increases due to stricter conditions.
- The timeline for commercial operation remains unchanged at five years, but a new deadline for financial close has been introduced, requiring projects to reach FC within 2.5 years of signing the grant agreement.
- The introduction of resilience criteria for electrolyser procurement could drive up bid prices compared to the last auction, especially given the cost-competitiveness of Chinese electrolysers. However, the full impact remains uncertain, as most projects in the previous round were already planning to source electrolysers from EU manufacturers (according to the European Hydrogen Bank).
