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The European Hydrogen Bank subsidy is essentially a top-up and won’t close the cost gap fully which means subsidy winners are reliant on offtakers to pay the premium for green H2

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Link: climate.ec.europa.eu/system/files...

climate.ec.europa.eu

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"A price ceiling will apply to the Member State supply of projects bidding, expressed as a factor of three times the price of the last project awarded Innovation Fund support that is not from that same Member State. This approach will avoid strategic bidding..."

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If true thats a very stupid reason. The European Hydrogen Bank auction had a bid ceiling of €4.5/kg to qualify. Of course German projects will need more subsidy than projects in Iberia and the Nordics where subsidy bids were all <€0.50/kg.

Germany Scraps €350 Million in Subsidies for Hydrogen Projects

#Germany just cancelled funding for green hydrogen projects allocated as part of the first EU Hydrogen Bank auction. Apparently because the EU insisted the subsidy can’t be higher than €1.44/kg. www.bloomberg.com/news/article...

bloomberg.com

Germany abandoned plans to funnel €350 million ($368 million) into hydrogen projects, putting clean-fuel goals even further from reach.

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Adi Bhashyam @abhash.bsky.social · 10/12/2024

Summary of Denmark’s industrial decarb strategy lately

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Adi Bhashyam @abhash.bsky.social · 10/12/2024

Yeap where there is a clear alternative, H2 use won’t make much sense. But part of this is also accepting that industrial decarbonization where H2 is needed won’t be cheap. Investing in some high-cost domestic H2 production could still be justified from a resilience perspective imo.

Adi Bhashyam @abhash.bsky.social · 10/12/2024

Part of this is driven by the high green hydrogen production cost in Europe. Even with a 30% energy penalty, imported green ammonia cracked to hydrogen could be cheaper than local green H2 production in Germany.

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Adi Bhashyam @abhash.bsky.social · 07/12/2024

Agree. Layering subsidies does not necessarily mean its a bad project. IRA credits just seem to make some “interesting” business models work too.

Adi Bhashyam @abhash.bsky.social · 06/12/2024

We should expect to see more hydrogen project cancellations over the next years with a few remaining that actually make sense or that survive because they find ways to layer multiple subsidies (eg US tax credits and import incentives in Europe). #energysky

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Adi Bhashyam @abhash.bsky.social · 05/12/2024

Good chart! But numbers seem off. For example, Air Products does not have binding agreements for the supply of 0.66 Mtpa, its probably closer to 20% of that.

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Adi Bhashyam @abhash.bsky.social · 05/12/2024

If you are interested in spicy takes on the energy transition directly from the BloombergNEF analysts who write the research, give this starter pack (made by @solarchase.bsky.social ) a follow: go.bsky.app/SRQaZno #energysky 🔌💡

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Reposted by Adi Bhashyam

Jenny Chase @solarchase.bsky.social · 04/12/2024

Wait are we all denying being journalists? I can do that too, but I do think 'analyst' is a lot like 'journalist with some spreadsheets'.

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Reposted by Adi Bhashyam

Jenny Chase @solarchase.bsky.social · 03/12/2024

A starter pack of my colleagues who are analysts at BloombergNEF. Batteries, electric vehicles, modelling, policy, energy economics, solar! Get your BNEF analysts on Bluesky here. go.bsky.app/SRQaZno

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Reposted by Adi Bhashyam

Michael Liebreich @mliebreich.bsky.social · 02/12/2024

Today's #HydrogenSoufflé is brought to you by Norsk Hydro. It turns out that there are more promising ways to decarbonise aluminium production, even in a country with endless renewable electricity and a storied role in the history of electrolysis. www.gasworld.com/story/norsk-...

gasworld.com

Norsk Hydro drops green hydrogen investment

Norsk Hydro (Hydro) is to drop investment in green hydrogen and batteries after citing challenging market conditions.

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Adi Bhashyam @abhash.bsky.social · 28/11/2024

Will be interesting to see the network tariffs for the German hydrogen network. Also the slower market ramp up for H2 could mean much of the 9,000km+ pipelines would carry only small amounts of H2 when they become operational in 2032.

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Reposted by Adi Bhashyam

Gniewomir Flis @gnievchenko.bsky.social · 27/11/2024

Heard one of the heads of a pure play hydrogen fund today admit that hydrogen cars “didn’t work out”.

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Adi Bhashyam @abhash.bsky.social · 27/11/2024

Important to note that very little money is actually being given out at the moment and there is no clarity on how the funds will actually be used yet.

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Reposted by Adi Bhashyam

adriawilson.bsky.social @adriawilson.bsky.social · 26/11/2024

DOE’s $2.2B investment in the Gulf Coast & Midwest H2Hubs isn’t just about infrastructure—it’s a bold experiment in using public funding to enable the deployment of key clean technologies. Getting these hubs started is a major step toward clean industrial solutions. www.energy.gov/articles/bid...

energy.gov

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Similar results under Japan’s upcoming CfD for clean ammonia import and co-firing in coal plants wouldn’t be too surprising

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If selected, KOSPO will generate just 11.5% of the 6.5 TWh hydrogen-based electricity target under this auction

The other four likely didn’t qualify because their bids were higher than the confidential bid ceiling.

South Korea chooses controversial coal plant as sole winner of first clean hydrogen power auction

Co-firing clean ammonia in coal and gas plants is costly and has limited environmental benefits. South Korea just learnt this the hard way: ❌ Only 1 of 5 bidders in its first ever clean hydrogen power auction qualified for final negotiations www.hydrogeninsight.com/power/south-... #energysky

hydrogeninsight.com

KOSPO will generate only a tenth of the power that had been tendered by co-firing ammonia

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Adi Bhashyam @abhash.bsky.social · 22/11/2024

Not surprising. The 20Mt goal never had a chance of realistically being met by 2030. This reality check is now having negative consequences too, with Germany trying to reopen discussions on what counts as renewable hydrogen.

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Absolutely and great to see you here too Michael.

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In Thyssenkrupp’s case the largest part of the subsidy is conditional on them actually switching to green hydrogen, so they won’t get most of it if they don’t switch.

Colin McKerracher @colinmckerracher.bsky.social · 21/11/2024

Reposted by Adi Bhashyam

I hereby declare the latest round of hype for hydrogen fuel cell passenger vehicles over. I'm sure this will come up again around ~2030. With similar results.

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Electricity is 60-80% of production cost, especially when connecting to the grid which most projects do today due to technical limitations on the electrolyzer or space constraints.

Costs are much higher than many (including us) initially predicted and they are likely to stay high for the foreseeable future. The market needs buyers willing to pay a premium and policies to incentivize that only make sense in sectors where there are no alternatives to hydrogen or derivatives.

7. With restrictions on China, electrolyzer manufacturing in India might stand to benefit from overseas demand. We are counting over 13 companies now looking to start manufacturing in India. Many through licensing deals with western and Chinese technology providers.

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6. While the hydrogen hype is dying down in Europe, it has been rising in India. Producers seem to have a capex advantage, with green hydrogen plants rumoured to be installed at less than half the cost of projects in Europe/US. This makes exports of molecules like green ammonia interesting.

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5. US and European manufacturers have the edge on electrolyzer efficiency - for now. This might mean the cost of H2 production is worse in some markets despite lower upfront capex using Chinese electrolyzers. In places with low electricity costs, the efficiency tradeoff might still be worth it.

4. Restricting Chinese suppliers from European auctions or slapping tariffs on them might only be a short-term fix until other ways are found to circumvent them. We have seen this in the solar industry.

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3. Driven by lower manufacturing costs and lack of local demand, Chinese manufacturers are starting to bid on European projects with bids 33-50% lower than US/European electrolyzer players. Expect to see more Chinese equipment use in western projects over the next year.

2. Consolidations and bankruptcies in the electrolyzer manufacturing sector are likely over the next few years. There are simply too many manufacturers with underutilized factories, particularly in China.

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1. The hydrogen hype is coming to an end with many project cancellations over the last year and many more to come. Incentives to increase demand and willingness to pay a premium for clean H2 are needed to help more projects to FID.

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