Working Groups
Accelerating hydrogen deployment requires action on multiple fronts. For now, most of the focus has been on “supply-side/push incentives” through financial tools like tax credits or funding programs to support developers. However, on-the-ground experience suggests that “demand-pull” measures are also needed to help mitigate the risk of market failure. Investment in hydrogen-related infrastructure must be accelerated, not least considering infrastructure projects’ often long lead times. The nascent hydrogen trade also requires targeted support.
The H2Global Foundation has thus formed the following working groups for 2024:
Bridging the global hydrogen infrastructure investment gap
Infrastructure is critical in developing a robust and reliable hydrogen supply chain. Well-developed hydrogen infrastructure, comprizing production, transport, storage, and distribution facilities, will promote efficiency and reduce end-user costs, helping to increase adoption. Developing hydrogen infrastructure, however, involves several significant challenges, including extensive permitting, uncertainty about regulation and the development of volumes, as well as significant upfront investments.
WG1 compares financial support instruments that can be used to address these barriers regarding mid-stream infrastructure for clean hydrogen and its derivatives. The assessed instruments are evaluated with a particular interest in their effectiveness to enable final investment.
The main conclusions of WG1 will be summarized in a peer-reviewed report on bridging the global hydrogen infrastructure investment gap to be published in 2024.
Unlocking demand—Hydrogen hubs, leveraging valleys, and the H2Global mechanism
Demand for clean hydrogen is currently small and uncertain—only 1.3% of hydrogen production has secured guaranteed offtake. The reluctance of potential offtakers is rooted in the cost of difference compared to conventional production as well as uncertainties regarding market and regulation developments. Governments are seeking to mitigate these barriers through various instruments, including incentives like carbon pricing, quotas, as well as capital or even operative expenditure support instruments. They are also considering leveraging hydrogen hubs.
WG2 discusses in detail barriers to clean hydrogen demand creation, currently available support mechanisms for the demand side, and the potential role of hubs. Particular attention is paid to matching the energy transition needs of different industries, clean hydrogen use cases, and different models of hubs.
The main conclusions of WG2 will be summarized in a peer-reviewed report on unlocking demand for clean hydrogen to be published in 2024.
Aligning hydrogen auction designs
In the absence of a liquid clean hydrogen market, some governments have employed auctions to accelerate a match between clean hydrogen supply and demand curves, including single and double-sided auctions. Among these are the H2Global auctions, the European Hydrogen Bank Pilot Auction in 2023, the Danish Power-to-X Tender, and the first and second Hydrogen Allocation Round in the United Kingdom. These auctions pursued different objectives and consequently implemented different designs.
WG3 assesses the trade-offs and synergies of the auctions' objectives and their effects on the outcomes. A particular focus is placed on the contexts and purpose for which different auction designs are most suitable to achieve maximum impact.
The main conclusions of WG3 will be summarized in a peer reviewed report on alignment and impact of different hydrogen auction designs to be published in 2024.
