Get insights into an optimal bidding strategy with the Hydrogen Bank Intelligence Report
Based on an analysis of 400+ H2 projects eligible for the EHB auction
Estimation of the potential winning bid range for the upcoming auction round
Information on possible budget claims and most viable types of projects
Accelerate the hydrogen value chain in Europe
European Hydrogen Bank
The European Hydrogen Bank is an EU initiative to support Renewable Fuels of Non-Biological Origin (RFNBO) hydrogen production within the EU and internationally. It entails a new competitive bidding mechanism under the Innovation Fund, also known as IF Auction, aiming to create investment security and business opportunities for European renewable hydrogen production.
In short
European Hydrogen Bank Auction overview
For whom?
Legal entities (public or private bodies) established in any country in the world and planning to install new electrolyser capacities in the European Economic Area.
When to apply?
The IF24 Auction opens the 3rd December 2024 and is expected to close in February 2025.
How much?
The second auction round will have a total budget of 1.2 billion, of which 200 million will be dedicated to projects with maritime offtake.
The maximum requested grant per project is €250 million for the general topic and €200 million for the maritime topic.
The grant will be paid as output-based support in form of a fixed premium in €/Kg of RFNBO hydrogen produced over 10 years, upon verified and certified production of RFNBO volumes.
The auction’s ceiling price is 4 €/Kg (bids are ranked from lowest to highest price).
For what?
The auction good is RFNBO (renewable) hydrogen, requiring production from new water electrolyser capacity (i.e., capacity that has not yet commenced at the time of application).
Produced in EEA countries in a single location.
The grant can cover 10 years of production period.
The bid price per unit is expected to cover the difference between the expected revenues from the sale of one hydrogen unit and its levelised cost.
Project costs can include:
- Costs for the installation of new RFNBO hydrogen capacity and operation for a period up to 10 years
- Cost elements like production, sale, transport, and storage can be considered into the bid.
Meet the requirements
European Hydrogen Bank Auction conditions
To apply for the European Hydrogen Bank Auction, your project must meet the following criteria for the 2024 call:
Your project must have a minimum 5MW(e) of newly installed electrolyser capacity in a single location in an EEA country.
Your project has not taken any firm commitment (e.g. order of equipment or start of construction) prior to application.
Your project’s planned to reach financial close within 2.5 years and entry into operation in less than 5 years from grant signature.
Your project will be able to secure a completion guarantee of 8% of the maximum grant amount from a financial institution.
Your project will be able to certify 70% GHG savings on overall production at the end of the support period.
There is no restriction on sector of offtake under the general topic, while the maritime topic requires projects to focus mainly on maritime off-taker.
Your project has a bid price up to 4 €/Kg
Your project budget does not exceed €250 million for the general topic or €200 million for the maritime topic.
Your project need to comply with safety standard ISO 22734:2019 and have a cybersecurity plan in place.
Your project has to limit the sourcing of electrolyser stacks which include surface treatment, cell unit production and stack assembly from China to not more than 25% (in MWe).
Cumulation rules
Cumulation with other public supports
The European Hydrogen Bank has different rules for the cumulation of the support under the auction with other public support. A non-exhaustive list of the 2024 draft rules is highlighted below.
Cumulation is NOT allowed with:
- CAPEX or OPEX support for hydrogen producers, i.e. other EU funding (Innovation Fund, CEF, IPCEI, etc.)
- National State aid
- Compensation for indirect emission costs
Cumulation is allowed in the following cases:
- Aid for early project development phases (e.g. feasibility, FEED studies, research)
- Previous aid for electrolyser capacity development that is not part of the bid
- Support for transport and storage infrastructure to the project, provided that the infrastructure is not dedicated exclusively to the project
- Aid provided to electrolyser manufacturers
- Public support on CAPEX or non-dedicated infrastructure for direct consumer of the output
In case the applicant has received OPEX funding for a part of the electrolyser capacity, it is possible to apply for the EHB auction for the remaining part of the capacity.
Grant application process
Apply for the European Hydrogen Bank
Applying for the European Hydrogen Bank Auction involves a considerable amount of effort and specific expertise in call and bidding strategy. To have a real shot at success in this competitive program, you need to develop a high-quality proposal that includes the following items:
- Competitive bid price
- Application form A: administrative information and summarised budget
- Application form B: Technical description up to 50 pages
- Application form C: Project’s contribution to EU programme KPIs
- Detailed budget table/calculator (Financial Information File)
- Participant information
- Timetable/Gantt chart
- Feasibility study
- Renewable electricity sourcing strategy, including LoI/MoU/pre-contractual agreements
- Off-take and price hedging strategy, including LoI/MoU/pre-contractual agreements
- Electrolyser procurement strategy, including LoI/MoU/pre-contractual agreement
- Permits, licences and authorisations (e.g. evidence of initiated process with relevant national or regional authorities to receive an environmental permit, evidence of the strategy to receive a grid connection, etc.)
- Completion guarantee letter of intent (at proposal stage) and completion guarantee (for projects invited to grant preparation).
OPTIMISE YOUR CHANGES
Strategic insights for a successful and assumption-based bidding decision
The main difference of the EHB Auction scheme compared to other EU grant calls is the importance of defining the right bid price, the main criterion of evaluation. Defining a successful bid price requires a complex decision-making process. EGEN’s EHB Intelligence report will give you clear and easy-to-understand strategic insights on the specific auction round that will help you make an assumption-based bidding decision. The report covers various topics, such as:
The European Hydrogen Bank auction call
The estimated winning bid range
The eligible hydrogen project landscape
why this grant?
Purpose of the European Hydrogen Bank
The European Hydrogen Bank Auction call for RFNBO hydrogen is economically efficient for technologies moving from commercial demonstration to scale-up of technologies, by:
- Reducing the cost gap between renewable and fossil hydrogen in the EU
- Allowing for price discovery and renewable hydrogen market formation
- De-risking European hydrogen projects
- Contributing to faster deployment and simpler implementation of projects, while reducing administrative burdens and costs.
“At EGEN, we specialize in guiding our clients through the intricacies of the European Hydrogen Bank Auction. With a dedicated focus on advancing renewable hydrogen projects, we offer expertise to those planning and implementing sustainable solutions within the European Economic Area. Let us be your strategic partner in contributing to the acceleration of the hydrogen value chain in Europe“
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How can EGEN support you?
EGEN’s consultants can support you in performing the required calculations, structuring, and writing convincing documents, and managing the application process. Furthermore, they can assist you in strategically scoping and positioning your project in accordance with relevant market trends and EU policy objectives. Most importantly, EGEN can provide strategic market intelligence on the call to help you define a successful bid price.
EGEN is part of PNO Group and has experts in the domains of environment, energy and mobility who have the mission to accelerate sustainable innovation.
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