Industry News

France has agreed to fund 1GW of green hydrogen produced through electrolysis

by | Sep 22, 2023

The French government is offering an investment aid of 4bn euros in order to support 1 GW of green and nuclear hydrogen production by 2026.

The offer states that operating grants will be provided to industries who are producing hydrogen through renewable resources and production processes, including nuclear power. This means that projects that produce blue hydrogen through carbon capture and storage will not be eligible, but all other industries will be. This means the government will support any industries where hydrogen will count as a renewable fuel of non-biological origin (RFNBO). The industries will be supported as long as they meet the other criteria set out in the rules for this funding opportunity.  

The Government has been developing a system which simultaneously uses ‘points’ and provides the opportunity for companies to show that their production of hydrogen will be used in the cleanest way possible, from the beginning of its life through to the end. The point system will work through 100 points being available and a maximum of 70 of these being awarded dependant on how much money per ton of carbon the company have paid to avoid using carbon. Each company’s offer will be compared to the lowest price submitted. The government are currently devising a measuring system to determine how this part of the point system should be calculated, with the aim of companies requesting lower bids. The other 30 points will be calculated over a variety of factors.

These factors include, optimisation of electricity use, whether the company has guarantees from third party companies that the supply chain that their hydrogen will go into will also be decarbonised, whether or not the company has multiple industrial users per project, and finally that the company can produce proof that at least 50% of their hydrogen is produced from additional upstream renewables, instead of existing assets.

 The government has agreed that whichever business wins the funding, will receive a financial award towards commissioning. This award will be worth up to 50,000 euros per MW of power installed and this will help 50% of project investment costs.

The next steps for this project will be to hold three auctions, one of which will be held next year and offer 150 MW of electrolysers, the second will be held in 2025 and will offer 250 MW and the third will be held in 2026 and will aim to support 600 MW.

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