Germany will hold the first renewable hydrogen auction in Europe

Isbel Lázaro.

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Inspenet, July 14, 2023.

This hydrogen auction could generate great benefits for the European country.

Recently, the European Energy Exchange (EEX) platform introduced a new product to the energy markets: green hydrogen . This resource was valued and began trading at €231/MWh in the German market.

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That was the first step and now a large renewable hydrogen auction is being planned for the end of next year .

Currently, the price of hydrogen remains stable at around €230/MWh, having previously reached a peak of €259/MWh. This stability is largely due to the limited supply of commercially available hydrogen.

However, in Germany they are considering going further and looking for ways to cover their industrial needs for hydrogen. The idea is to acquire this resource cheaply abroad and then resell it to its industrial clients.

In this sense, the EEX energy products trading platform has developed a platform that will allow the technical implementation of sales auctions and other commercial instruments for hydrogen and its derivatives. This will facilitate the trade and acquisition of hydrogen at competitive prices in the market.

EEX, HintCO and the German government allies for the first hydrogen auction

EEX and HintCO have collaborated to launch H2-Global , a tool that will enable the purchase and sale of renewable hydrogen and its derivatives through a competitive bidding process.

This initiative seeks to establish long-term purchase agreements, providing producers with greater investment security that did not exist before. The contract will be awarded to those producers who can offer their products at the lowest price during the bidding process.

In addition, separate tenders will be held to establish short-term sales contracts with buyers. In this case, the contract will be awarded to the bidder who presents the best offer. It is worth mentioning that any expected difference between the two prices offered will be offset by public financing.

In December 2022, the first global bidding processes for the procurement of renewable hydrogen derivatives, such as ammonia and green methanol, were held in regions outside of Europe. In this context, HintCO acts as a physical intermediary and merchant in this process.

To support these initiatives, the Federal Ministry for Economic Affairs and Climate Protection has allocated funding of €900 million with the objective of compensating the difference in costs between the higher purchase prices that are expected and the lower income from the sales made by HintCO.