Auctions, hydrogen power, and ammonia

The array of tenders, auctions and other mechanisms to drive forward demand for hydrogen continues to grow.

India, for example, is now on its second hydrogen auction - one which looks to be “oversubscribed at 626,500 tonnes per year… despite being capped at 450,000”. That’s by way of “14 bids to receive government funding”.

This demand for subsidy is despite what could seem like relatively small amounts of support to green hydrogen producers: “a three-year incentive with caps set at $0.61/kg in the first year, $0.49/kg in the second and $0.37/kg in the third”.

Wading its way through the received bids will be the Solar Energy Corporation of India (SECI), which will rank them “on the average incentive cost over three years” (with lowest cost bid capacity allocated first). Superimposed on this cost ranking will be a split between two pots of funding: “technology-agnostic pathways for 410,000 tonnes per year, and biomass-based pathways for 40,000 tonnes per year”.

Hoping for similar levels of interest will be Hydrom, “an entity orchestrating Oman’s national interest in green hydrogen”. That’s because it has “unveiled plans to launch the third round of public bidding on lands for green hydrogen projects, in the first quarter of 2025”.

The first such auction, in 2023, led to “the selection of five large-scale green hydrogen projects, representing a total investment of more than $30 billion and a total production of 750 ktpa”. The next one brought “the total hydrogen production in Oman to 1.38 million tonnes per year (mtpa) by 2030”.

Unlike previous rounds, this third one will “introduce innovative mechanisms like double-sided auctions, refined block strategies, and streamlined processes to align hydrogen production with industries such as green steel and fertilizers”.

The lucky winners of the auction “are expected to be announced between the last quarter of 2025 and the first quarter of 2026”.

Less seasonal auction goodwill is evident in Germany, which has “scrapped its €350m ($368m) plans for an EU-style renewable hydrogen auction 12 months after announcing the scheme”.

This was supposed to be Germany’s use of the European Commission’s ‘Auction-as-a-Service’ scheme, whereby member states can fund projects which bid into, but fail to qualify, in the continent-wide European Hydrogen Bank auction.

The reason for this failure to proceed is reported as that “Germany’s Economy Ministry could not agree on the auction’s terms and conditions with the European Commission due to ‘very tight specifications’”, whatever that means. It remains to be seen whether the money will be diverted towards other green projects or not.