DH2 Energy is launching an auction to secure offtake hydrogen from its European Hydrogen Bank- (EHB)-supported 35MW green hydrogen plant in Spain with the region’s gas futures market operator MIBGAS Derivatives.
Set to open on Friday (November 15), the auction is open to all companies interested in buying the 1,700 tonnes of green hydrogen produced by the plant per year, for any use case, both nationally and internationally.
Planned to be undertaken in three phases by MIBGAS, after pre-qualification, bidders will undergo qualification and competitive stages, where the companies that present the best offers will be selected.
Winners from the competitive round will enter negotiations with DH2 Energy in the hopes of leading to formal offtake contracts.
The DH2 project, named Hysencia, will use 35MW of electrolyser capacity, with 39MW of solar power and a 10MW grid connection to produce hydrogen. The plans were approved earlier this year, with operations expected to start in 2027.
Having bid under the pen name Angus, DH2 secured funding for the project from the pilot EHB auction, with the developer set to receive €0.39/kg (€8.1m in total).
Read more:EHB pilot auction awards €694m after Spanish project withdrawal
Marcos Lópex-Brea Baquero, DH2 Managing Director, said, “This auction marks a milestone for the development of renewable hydrogen, and we are confident that it will help stimulate demand and advance the establishment of a stable market for renewable hydrogen.”
Despite promises made by both policymakers and prospective green hydrogen producers for low costs in the near future, high prices for green hydrogen have continued to deter potential offtakers.
Research by Rystad Energy estimated that despite the EHB subsidy and Spain’s low-cost renewable power, green hydrogen will still be priced at over $5/kg.
Read more:High costs to persist for Spanish green hydrogen despite EU subsidies: Rystad Energy
The complex cost dynamics have seen producers have to innovate in the way they pursue offtake contracts, such as DH2’s auction.
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