FiveT Hydrogen AG’s Post

Our CEO Jorgo Chatzimarkakis and our Chief Policy & Market Officer Daniel Fraile sat down for an enlightening conversation the other day. Together, they discuss the results of the pilot auction of the European #HydrogenBank, whose results came out last month and are still the talk of the town. 🏦 🏆What were the winning prices? ⁉Were there any surprises in the results? 🔜Are there certain hydrogen applications that should be prioritised in the future? 🎁What is possible to expect from the next auctions? In this exchange, you will find the answers you were looking for, and more: #cumulation, #additionality, #competition, #trade are just a few of the keywords coming up. Enjoy the watch! And have a look at the draft terms and conditions for the 2024 auction 🔗 https://lnkd.in/dqC4ryNz 📽 https://lnkd.in/eCCFpg-w #HydrogenNow #H2Bank

🔴 BREAKING 🔴 DG CLIMA announces it will halve the budget of the second auction of the Hydrogen Bank to EUR 1.2bn (instead of the announced 2.2 bn). EUR 1bn will go for the general auction (all sectors), EUR 200mil for the (newly added) maritime sector. In this early market phase, public funding will be crucial to de-risk and unlock private investments. While we much welcome the continued Commission's support towards renewable hydrogen and see the bank as a highly promising tool that embodies the ideal of speed and simplicity, if we want to reach the EU RFNBO targets, the bank's budget should be increased, not reduced, and visibility on the next auctions is needed. 👇 Read more in our recommendations 👇

BREAKING NEWS The European Commission just unveiled the budget for the second auction of the #hydrogen bank. 1.2 billion EUR will be available on the second call, an increase of 400 million, as compared to the budget available in the pilot auction. Of this, 200 million would be reserved for off takers in the maritime sector (excluding traders / intermediaries) according to the Commission. As a reminder. The Commission awarded 720 million EUR in April 2024 to 7 projects (on a total budget of 800 million), supporting RFNBO production in the EU, at a maximum clearing price of 0.48 EUR / Kg H2. The #Hydrogen Bank is funded from the Innovation Fund. The total budget available for all calls under the Innovation Fund in 2024 (including the H2 Bank) will be 4.8 Billion

🚨 Our latest BloombergNEF analysis: The winners of the first European #Hydrogen Bank auction will need to find deep-pocketed buyers willing to pay a premium for their output if their projects are to proceed. Refineries, driven by EU regulation, may currently be the only sector willing to pay enough to make these projects viable. For other sectors, the incentive to pay more isn't as clear. The November deadline for signing grant agreements will therefore be an interesting one to watch. The full analysis for clients can be found here: https://lnkd.in/dpFE5k3E

**** Austria, Lithuania and Spain act and choose the European Hydrogen Bank to launch their renewable hydrogen projects faster****   The European Commission announced yesterday that these 3️⃣ member states will participate in the ‘Auctions-as-a-Service' as part of the second European Hydrogen Bank (EHB) auction.   This move marks a significant step towards putting in place the necessary funding for #renewablehydrogen made in #Europe with #electrolyser technologies made in Europe. Other Member States should now do the same. Here is why: ✅ SPEED: EHB's prequalification and signature of grant agreements is quick. Member States save time and their industry can develop faster since countries do not design their own scheme, which may take a long time to design, adopt and implement. ✅SIMPLICITY: EHB is a simple scheme, designed in consultation with industry. Member States do not need to invest resources or personnel to design their own scheme. National #hydrogen projects only apply to one single scheme, EHB. ✅SCALE: As an all-in-one support scheme, EHB covers all project costs (capital + operational costs), brings suppliers and offtakers together and applies the same rules across the whole European single market (instead of a patchwork of different schemes). This helps maximise the impact at national level and at an EU level.   We urge Member States to follow this example and use the EHB Auction as a Service to scale renewable hydrogen production in Europe. Now is the time for action! Read the full Commission press release below ⬇ #CleanEnergy #EUH2Week2024 #HydrogenEconomy #Sustainability

It is great to see that #EU countries are coming together to develop #hydrogen projects. Using a common #EU-wide support scheme will make it easier for #renewable #hydrogen projects to apply, and it will enable Member States to quickly compare and evaluate project applications.

⚠️ The European Commission will assess the possible introduction of regional Virtual Trading Hubs (VTHs) for cross-zonal hedging, and the moving from zone-to-zone to zone-to-hub long-term transmission rights (LTTRs) to improve the market participants' ability to hedge price risks in the internal #electricity market - but are these measures feasible?    Together with Energy Traders Europe and Eurelectric, we advocated for a cautious approach and the need for a thorough data-driven evaluation before any changes are implemented.   Compass Lexecon's study provides a detailed quantitative analysis focusing on transaction costs and basis risks in the CORE region and its extension to Iberia and Italy. It shows that:   ▪️ The current system across the CORE region where market participants hedge using existing physical hubs like those in Germany and Hungary is generally more effective for hedging than a virtual hub setup.    ▪️ If implemented, VTHs could fragment forward market liquidity, leading to lower efficiency on the market and higher costs, which may eventually be passed on to consumers.   ▪️ The introduction of zone-to-hub LTTRs does not seem sufficient to counterbalance less efficient hedging on VTHs.    Download the study to learn more: https://lnkd.in/eqgSBBGM   #energy #electricity #MarketDesign #EMD #hedging  

Must read Compass Lexecon study finds that, for the European CORE region, existing physical hubs are generally more effective for hedging than a regional virtual trading hub set-up. https://lnkd.in/eqgSBBGM #power #forward #futures #trading #electricity #market #design

The European Commission is exploring the introduction of regional Virtual Trading Hubs (VTHs) and a shift from zone-to-zone to zone-to-hub long-term transmission rights (LTTRs). The idea is to enhance price risk hedging in the internal electricity market. However, I do copy the key findings from Compass Lexecon’s study, supported by Energy Traders Europe and Eurelectric, highlighting significant misjudgments in the proposal: • Current Physical Hubs Are More Effective: Existing physical hubs already provide efficient hedging mechanisms. Replacing them with VTHs would undermine this effectiveness. • Fragmentation of Market Liquidity: VTHs risk fragmenting forward market liquidity, reducing market efficiency and increasing costs—burdens that could ultimately fall on consumers. • Ineffectiveness of Zone-to-Hub LTTRs: The proposed LTTR adjustments are unlikely to offset the inefficiencies introduced by VTHs. EU Commission should in my opinion adopt a very cautious, data-driven approach before implementing measures that could disrupt existing market structures.

Have a look at this insightful study on Virtual Ttading Hubs by Europex - Association of European Energy Exchanges Energy Traders Europe & Eurelectric!