Presentations - WindEurope Annual Event 2024

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Turning ambition into bankable projects - lessons learned from green hydrogen projects which are successfully approaching FID

Manon Derelle, Director, Baringa


Of the global pipeline of over $300bn hydrogen projects, less than 10% have reached a final investment decision (FID). It is common to see green hydrogen project developers grappling with ambitious development portfolios where only 5% of projects have a clear route to bankability at present. Across the hydrogen space equity raises have proliferated - particularly for original equipment manufacturers (OEMs) but very few financial closes on green hydrogen projects have taken place. The first wave of bankable subsidies is coming as small auctions are implemented (1.5-2.5GW planned in Europe) but a lack of policy clarity is holding back most projects. In this presentation, the key barriers and enablers to reaching FID on green hydrogen projects will be explored, with a focus on offshore and onshore wind. Approaches and lessons learned from real life projects which are successfully approaching FID will be shared, in order to provide insights to the audience. Topics covered include the offtaker willingness to pay, and ability to pass fuel switching costs onto the end customer; innovative structures and partnerships - such as the offtaker acting as a consortium partner, investor and/or EPC contractor; the role of enabling policy and also its limitations - for example now that the dust is settling on the US Inflation Reduction Act tax credit, it is clear that permitting and pipelines present major challenges; and the commercial levers that can be used to reduce levelized cost of hydrogen (LCOH), for example optimisation of storage, contracting power from multiple assets with a firmer combined profile. There is a lot of value to squeeze out of EU/UK taxonomy rules through smart configuration. The green hydrogen projects that have already reached FID have incorporated one or more of these levers successfully into their business plan, and lessons learned will be shared in this presentation.

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