Seven projects drop out of EU H2 bank negotiations

Seven renewable hydrogen projects — representing more than 75pc of the capacity and funding allocated in the European Hydrogen Bank's second auction round — have withdrawn from the process, prompting the EU to invite 10 new plants to enter award negotiations.

Of the 15 projects initially selected, "seven chose not to proceed with the grant agreement procedure or were unable to provide the signed completion guarantee," the European Commission said on 18 September.

The withdrawals account for 1.88GW of the 2.33GW of electrolysis capacity that was selected for funding in the second round. Their expected hydrogen output was 165,400 t/yr, out of a total 219,300 t/yr. The seven were due to receive €755mn over the 10-year support period — more than three-quarters of the €993mn awarded.

Germany's Deutsche ReGas and the Dutch Zeevonk consortium — a joint venture between Sweden's Vattenfall and Denmark's Copenhagen Infrastructure Partners — had already confirmed they would not take up the funds.

Other withdrawals include four Spanish projects, among them two by developer Galena Renovables, which submitted the lowest bids at €0.20/kg and €0.25/kg. The German Kaskade project, planned by French firm Meridiam SAS, has also exited the process.

The commission has now invited 10 projects from the reserve list to prepare grant agreements — eight in Spain, one in Portugal and one in Germany. These projects bid between €0.64/kg and €1.22/kg. They have a combined planned electrolyser capacity of 774MW and could produce 93,800 t/yr of renewable hydrogen.

This means the total hydrogen output supported over the 10-year subsidy period would be more than 700,000t lower than anticipated after the initial awards.

Cumulative funding for the new additions would be €908.3mn, alongside €239.4mn for which grant negotiations are ongoing. This brings total support closer to the round's €1.2bn ceiling than after the initial awards.

The commission said it expects the final list of projects with signed grant agreements to be released before the end of the year.

The EU sees the hydrogen bank as a key mechanism to kickstart the sector. But industry participants have repeatedly questioned the scheme's effectiveness, particularly following recent withdrawals.

Two of the seven winners from the first hydrogen bank auction also dropped out.

Brussels recently closed the consultation for the third auction round, which is due to launch in the fourth quarter and may include electrolytic low-carbon hydrogen.

By Pamela Machado