EU could miss hydrogen electrolyser target for 2024: ICIS and Hydrogen Europe

The EU could miss its target to reach 6GW in electrolysis capacity to produce green hydrogen by 2024, analyst Independent Commodity Intelligence Services (ICIS) and industry group Hydrogen Europe said after a joint review of plans submitted by the European Commission for its post-Covid recovery and resilience facility (RRF).

Most production capacity targets in national H2 strategies of EU members primarily target 2030, and only small projects of 5-20MW are expected to be online around 2024, making it difficult to reach the cumulative 6GW capacity target, Hydrogen Europe intelligence manager Alexandru Floristean reckoned.

One of the main reasons that the target was at risk is “mostly because of the additionality principle and how it is implemented,” Floristean said.

The additionality principle means that project developers also need to provide new renewable energy capacity when bringing new electrolyser capacity online. But that adds more expenditure and planning time to potential projects.

“Unless there is a change in allowing the market to ramp-up grid-connected small projects in a simple way using guarantees of origin (GOs) and power purchase agreements (PPAs), the 2024 target will not happen,” Floristean added.

ICIS and Hydrogen Europe as part of their review found that some €12bn ($13.9bn) of funding could be used for direct H2 projects. Hydrogen spending could rise to €54bn, if funding allocations were expanded to include joint projects such as H2 fuel cell and electric vehicle infrastructure.

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Floristean said the current project pipeline could easily meet the 2024 target but without a regulatory framework, those projects are at risk.

Another concern is that the maturity and capital expenditure of electrolysers by 2024 could also put the target into question, participants at a panel during the Greek renewable and storage forum earlier this month said, according to ICIS.

As electrolyser manufacturers ramp up production capacity, H2 experts said that learning rates will reduce the total cost per unit and support increased efficiency.

According to ICIS data, power prices make up about three quarters of the final cost of green hydrogen.

This post appeared first on Recharge News.

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