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The first EU Hydrogen Bank auction awarded € 720mn in subsidies last week

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The first EU Hydrogen Bank auction awarded €720 million in subsidies last week to produce 1.58 million tons over the period of 10 years to produce 1.58 million tons of renewable hydrogen. Projected European renewable hydrogen hotspots such as Portugal (2 bids), Spain (3 bids), Norway (1 bid), and Finland (1 bid) clean up subsidies with the 7 winning bids (~1.5 GW) selected out of 132 (~8.3 GW).
With an average clearing bid of €0.46/kg, the bids have been way short of the ceiling price of €4.5/kg and well below the estimated Levelised Cost of Hydrogen (LCOH), therefore requiring off takers to pay a “green premium” to cover the cost gap. Despite the higher willingness to pay in the mobility sector, more bids were received for the industrial use of hydrogen, with a predominance of fixed-price offtake contracts.
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