The German government-backed H2Global auctions for renewable ammonia supply have garnered considerably more interest than two similar tenders for supply of renewable hydrogen-based methanol and sustainable aviation fuel, according to H2Global's executive director Markus Exenberger.
Interest in the renewable ammonia auction has been "much, much bigger" than for the other two tenders, Exenberger said today at the Handelsblatt Wasserstoffgipfel conference in Salzgitter, Germany. Industry participants submitted a "huge number of bids" during the ammonia tender, he said. While interest in the e-methanol and e-SAF auctions has been more muted, the organisation has received a sufficient amount of bids for these ongoing processes.
The tender for ammonia supply was launched in December and closed in late February, with the deadline extended once from earlier in February. The deadlines for e-methanol and e-SAF auctions have been extended three times and are open until the end of May.
H2Global had said strong interest in the auctions had led to the initial delays, and it recently revised some specific provisions in the criteria based on which successful applicants in the e-methanol and e-SAF rounds are chosen.
H2Global is intended to bridge the gap between costs for producing renewable hydrogen and its derivatives and the price that buyers are willing to pay, in a bid to kick-start projects and increase price transparency. Supply contracted for 10 years through the auctions will be sold on by tenders for one-year contracts at a later stage, with government funds to cover the likely price differentials. The aim is to support production projects with an electrolyser capacity of around 100MW, Exenberger said today.
Each of the three supply auctions has been endowed with €300mn, and Berlin has earmarked €3.6bn for subsequent auctions. The Dutch government said recently that it plans to get involved in the initiative by conducting its own tender, funded with €300mn.
H2Global is a good starting point for production projects, but future iterations will need to iron out remaining deficiencies, the head of Germany's national hydrogen council, Katherina Reiche, said at today's conference. Most importantly, offtake contracts should be offered for more than one year, as for consumers such as steel producers bidding on supply for a single year is not feasible, she said.
According to Exenberger, such parameters could be adjusted for subsequent auctions, with the initial tenders primarily intended to create transparent price signals.
