Spain’s Benbros Energy pulls out of EU green hydrogen auction grant agreement process – S&P Global
Spain’s Benbros Energy, one of the seven winners from the first round of the EU’s Hydrogen Bank auction, has withdrawn from the grant agreement process, according to a European Commission document outlining the winners that signed the agreements.
Spanish solar company Benbros bid and won subsidy support in the first auction at 38 euro cent/kg of hydrogen produced, but it did not sign the grant agreement that would have committed funding for the project.
The company did not respond to a request for comment.
Platts, part of S&P Global Commodity Insights, assessed the cost of green hydrogen production via alkaline electrolysis in Spain, backed by renewable power purchase agreements, at Eur6.48/kg ($7.11/kg) on Oct. 8. The assessment reflects one possible pathway for producing EU Renewable Energy Directive-compliant green hydrogen.
EU Hydrogen Bank subsidies will be disbursed over 10 years when projects start producing certified green hydrogen and developers now have five years to start production.
All successful bidders had stayed significantly under the allowed cap in the auction.
The other auction winners were a Finnish project set to receive 37 euro cent/kg, two projects in Portugal that will receive 39 euro cent/kg and 48 euro cent/kg, two Spanish projects at 48 euro cent/kg each, and one project in Norway that won a subsidy at 48 euro cent/kg.
Entities made bids in the form of a fixed premium per kilogram of renewable hydrogen produced, with a cap of Eur4.50/kg.
The EC said Oct. 7 that Eur694 million of the Eur800 million auction budget is now committed to the six projects, meaning Benbros Energy forfeited around Eur100 million. This is not enough to fund the project at the top of the reserve list for the auction and will be put toward the next contest, EC Policy Officer Johanna Schiele said on LinkedIn Oct. 8.
Funded through the EU’s Innovation Fund, the auction was set up to bridge the gap between the cost of producing green hydrogen and the price an offtaker is willing to pay for the cleaner fuel.
A total of 132 bids were received across 17 countries in the auction, representing 8.5 GW of electrolyzer capacity, the commission said at the time.
Lessons from round one of the auction will be implemented in subsequent contests, the commission said. One of the new rules incoming for the EC’s Eur1.2 billion second tender in December will be a restriction on the use of Chinese-made electrolyzer stack equipment.
