In November 2023, the Innovation Fund is set to inaugurate a green hydrogen pilot auction, known as the 'Hydrogen Bank.' We at Spinverse have been closely monitoring the development of this initiative, with the goal of providing comprehensive support to our clients, as we have consistently done in previous Innovation Fund calls.
Background
This initiative is part of the 'Fit for 55' package, proposed by the Commission to align EU policies with ambitious climate goals, including a 55% reduction in greenhouse gas emissions by 2030. Competitive bidding mechanisms play a vital role in supporting hydrogen production and reducing reliance on fossil fuels, as outlined in the REPowerEU Plan.
As a natural extension of this strategy, the initial auctions facilitated by the Innovation Fund will concentrate on the production of renewable hydrogen. This approach acknowledges hydrogen's versatile role as an energy carrier that can benefit various sectors and applications within the broader energy system. The Green Deal Industrial Plan has already unveiled plans for the inaugural auction dedicated to renewable hydrogen production, scheduled for autumn 2023. A substantial budget of 800M€ has been earmarked within the Innovation Fund for this purpose, intended to be disbursed as a fixed premium to support producers of green hydrogen.
Objectives
The Hydrogen Bank aims to support the development of a green hydrogen industry as follows:
- Efficient distribution of financial support
- Facilitating price discovery and market information
- Mitigating risks for renewable hydrogen projects and attracting private investment
- Streamlining administrative processes.
Call structure
The eligibility criteria for the Hydrogen Bank Auction Call are central to ensuring that the projects selected align with the program's objectives and standards. To qualify, project proposals must be located within the European Economic Area (EEA) and have electrolyser capacity installed at a single physical location, with no allowance for virtual pooling. Projects must also fall within specified budget limits, with a maximum grant of 266.7M€ and a minimum new installation capacity of 5 MW electric (MWe). Bid amounts for hydrogen production should not exceed 4.50€ per kilogram. Additionally, applicants are required to pass rigorous legal entity checks, including Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, ensuring they are not under sanctions or involved in bribery, with no history of default.
Consortium members can originate from anywhere globally, with the caveat that all beneficiaries must undergo validation. Proposals must also adhere to EU exclusion situation limitations, encompassing default, sanctions, prosecution, and compliance with the Deggendorf rule. Furthermore, self-declarations are required to confirm adherence to these vital eligibility criteria, ensuring the integrity and transparency of the selection process.
Timeline
The first competitive bidding mechanism under the Innovation Fund will be operationalised through a pilot auction to support renewable hydrogen production. The terms and conditions for the pilot auction were published on the 30th of August 2023 and the pilot auction is expected to open on the 23rd of November 2023. The estimated auction closure is on the 8th of February 2024.
Spinverse has a profound understanding of Innovation Fund calls and documentation, with a specific focus on the hydrogen sector. Our team of experts can help in both validating your project’s eligibility and skilfully crafting your project proposal. Contact us today!
More information on the EU website: Competitive bidding