Global engineering and consulting company Black & Veatch will undertake front-end engineering and design (FEED) studies for Verdagy’s 9,000-tonne-per-year clean hydrogen project.
According to Verdagy’s online statement, Black & Veatch is set to complete FEED by May 2025 for the Texas-based initiative near the Gulf Coast, US. This will pave the way for an expected final investment decision (FID) in July 2025.
The project will use Verdagy’s eDynamic electrolysers to produce hydrogen compliant with Europe’s Renewable Fuels of Non-Biological Origin (RFNBO) standards and 45V US Treasury requirements.
Verdagy opened its electrolyser manufacturing facility in Silicon Valley, California, last October, and said production would begin this quarter. The plant manufactures the company’s 20MW electrolyser modules, which are based on single-cell architecture.
Verdagy’s President, Rahul Bammi, said the FEED contractor agreement will tap into Black & Veatch’s “deep domain expertise.”
The CEO added, “This project will bring over $150m of investment to Texas, increase US energy exports, create American jobs and be the precursor to over a gigawatt of upcoming projects in the state.”
Black & Veatch’s Vice President and Managing Director of Energy Majors, Anand Pattani, said the engineering firm has “broad experience” in project execution.
“We’ve worked on FEED, and complete engineering, procurement, and construction of hydrogen electrolysis projects across North America,” Pattani said.
Last April, Black & Veatch helped EverWind Fuels complete a FEED study for its 240,000 tonnes per year green hydrogen and ammonia plant in Canada.
However, Verdagy’s anticipated July FID could face hurdles due to market conditions, financing challenges, and ongoing regulatory uncertainty in the US.
Despite this, the Hydrogen Council’s Hydrogen Insights report highlights a positive trend, with FIDs on clean hydrogen projects surging by 90% since October 2023 – marking 434 projects reaching the investment stage.
What it takes to bank hydrogen projects
Despite a significant surge in final investment decisions (FIDs) worldwide in 2024, with industry giants like bp and Shell committing to major clean hydrogen projects, the industry remains a way off meeting expectations, with large-scale projects lagging.
The bankability of hydrogen projects hinges on a combination of financial support, robust risk mitigation strategies and alignment with market and policy trends.
The Hydrogen Council’s Hydrogen Insights report revealed that FIDs on clean hydrogen projects have increased by 90% since October 2023, with 434 projects crossing the threshold.
The report said that global project pipeline grew from 1,418 projects worth $570bn to 1,572 in May 2024, valued at $680bn. However, the report also noted a decrease in new projects announced and highlighted a $335bn financing gap which could have put 2030 energy ambitions out of reach.
Wood Mackenzie also reported that the global low-carbon hydrogen sector has now contracted volumes totalling 8.3 million tonnes per annum (mtpa), representing 6% of the total announced hydrogen capacity of 135 mtpa, but only a quarter has progressed to firm sales and purchase agreements1.
Overall, the Hydrogen Council has estimated that global investments of $540bn will be required by 2030 to remain on track to meet its 2050 global Net Zero goal.
So, what makes a project bankable?
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