Hydrogen fiasco: Most of the capacity awarded in the second EU hydrogen auction has been withdrawn

Almost half of the successful projects in the second EU hydrogen auction, in which electrolyzers with a total capacity of 2.3 GW were awarded support, have been withdrawn. The European Commission has therefore offered funding to an additional 10 projects, whose combined capacity is less than half that of the withdrawn projects. The international outlet S&P Global reported.

According to published information, the second EU-wide hydrogen auction attracted 61 bids from 11 countries. That is roughly half the number of bids received in the first auction. Despite the drop in the total number of bids, however, the auction was oversubscribed by around four times.

A total of 15 projects with a combined capacity of 2.3 GW were ultimately awarded support in the auction. According to the published results, the successful projects in the auction requested a fixed premium of between 0.2 and 1.9 euros for each kilogram of renewable hydrogen produced. By comparison, only projects requesting a fixed premium of less than EUR 0.48/kg succeeded in the first hydrogen auction.

"Of the 15 successful projects, however, 7 decided not to proceed to signing a grant agreement or were unable to provide a signed completion guarantee," the European Commission said.

The 7 projects withdrawn from the auction had a combined capacity of 1.9 GW, around 80% of the capacity of all successful projects. The largest successful project, Zeevonk, with a capacity of 560 MW, was also withdrawn. Its developers announced that the project could not currently be completed under the conditions set, particularly the requirement to enter operation by 2030. According to the company, delays in building the necessary hydrogen infrastructure, which is not expected to be available until 2032—four years later than originally planned—would prevent the project from going ahead.

In response to the withdrawal of the 7 projects, the European Commission offered support to 10 projects from the reserve list, with a combined capacity of 774 MW. These projects requested a fixed premium of between EUR 0.64 and 1.22/kg, while the withdrawn projects had requested EUR 0.2 to 0.6/kg.

The Commission expects the final list of successful projects to be announced by the end of this year.