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European Commission seeks green hydrogen electrolyzer projects for EU funding

The European Commission wants to fund multiple 100-MW electrolyzer projects for producing green hydrogen as part of the EU's efforts to become climate neutral by 2050, it said Sept. 18.

The electrolyzer call is one part of the €1 billion European Green Deal call to support the 2050 target under its Horizon 2020 research and innovation program. The aim is to set up a European industry able to build hundreds of megawatts of electrolyzers using a European value chain as the EU seeks to move away from natural gas and LNG to decarbonized and renewable gases.

The commission wants the EU to install at least 6 GW of electrolyzer capacity able to produce up to 1 million tonnes of renewable hydrogen made by using renewable electricity to electrolyze water by 2024, according to the EU's hydrogen strategy published July 8.

The Horizon 2020 call is for projects that will cut green hydrogen production costs significantly, in particular striving for below €3/kilogram based on a levelized cost of renewable electricity of up to €40/MWh.

The commission also wants projects to aim to cut costs even further, perhaps by generating income from providing power grid balancing or frequency services.

S&P Global Platts' hydrogen price assessments in August were €3/kg to €3.5/kg for proton exchange membrane electrolysis and €2.5/kg to €3/kg for alkaline electrolysis. These are cost of production price assessments for a typical electrolyzer facility, excluding storage and transportation.

The commission also wants projects that aim to cut electrolyzer capital expenditure costs to €700/kW for proton exchange membrane and €480/kW for alkaline, in line with the Fuel Cells and Hydrogen Joint Undertaking targets for 2024.

Real-life uses

The commission wants projects that can demonstrate real-life use cases in an industrial or port environment, such as supplying a refinery, biorefinery, mobility hub, fertilizer plant or synthetic fuel plant or injecting into a natural gas grid. It wants to see proof of a compelling business case for using green hydrogen in transport, energy storage, heat or power production or as a raw material, for example.

The commission estimated that €25 million to €30 million of Horizon 2020 funding per project would be enough to address the challenge, although it may also select projects requesting different amounts. The Horizon 2020 funding can be up to half the total project cost, and project developers can combine it with other EU or national funding options, the commission said.

Projects need to last five years, including at least two years in operation. The commission aims to support different electrolysis technologies. Developers can submit their projects from Sept. 22 to Jan. 26, 2021.

The commission has to announce the selected projects by June 26, 2021, and sign grant agreements by Sept. 26, 2021.

Siobhan Hall is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.