ICIS launches Europe’s first market-linked renewable hydrogen assessments
LONDON, Sept. 27, 2022 /PRNewswire/ — ICIS, a global source of Independent Commodity Intelligence Services, has launched the first hydrogen price assessments to reflect the market value of renewable electricity. This product will support participants with the intelligence needed to develop a liberalised clean hydrogen market and optimise energy transition resources.
European policymakers have earmarked the development of a traded hydrogen market as a key enabler to meet decarbonisation and supply security objectives. The European Commission’s REPowerEU plan has quadrupled hydrogen supply targets by 2030 and established criteria to ensure hydrogen production is sourced from renewable energy.
To unlock investments of up to €500 billion outlined by the Commission’s hydrogen strategy, investors, policy makers and hydrogen industry participants thus require accurate and trusted pricing instruments aligned to Net Zero objectives.
Covering market-adopted technologies and locations, the ICIS European renewable hydrogen assessments have been produced through deep consultation with energy market participants. Critically, the ICIS European renewable hydrogen assessments are the first market-based assessments that are structured to be compliant with European Union and UK government standards for producing renewable hydrogen (Renewable Fuels of Non-Biological Origin).
These hydrogen price assessments accurately reflect the business conditions facing renewable hydrogen projects, providing participants with the confidence to make strategic investment plans, conduct bilateral negotiations and navigate volatility.
“ICIS views the provision of pricing for truly renewable hydrogen as a key enabler of the energy transition,” Simon Ellis, Head of Hydrogen Analytics at ICIS says. “These assessments are an important step in ICIS’s commitment to providing price transparency to the renewable hydrogen market. They are the first true, independent reflection on the cost of producing renewable hydrogen and will give investors the confidence they need to bring capacity online”.
“Building on our track record of establishing commodity benchmarks like the ICIS TTF and ICIS NBP, as well as providing price transparency to global ammonia markets, the assessments will provide the clarity required to develop the European hydrogen economy,” said Stuart Wood, Head of Energy Strategy at ICIS.
The assessments combine ICIS’s cross-commodity energy analysis with price assessments of long-term Power Purchase Agreements (PPAs) provided by Pexapark, trusted provider of pricing data, software and services for renewable energy. These PPAs are expected to be the primary means of supplying renewable power for the production of electrolytic hydrogen. PPA-based hydrogen pricing is therefore the closest representation of fair value for renewable hydrogen during the formative stage of market development.
Based on the ICIS European renewable hydrogen assessments:
- ICIS renewable hydrogen assessments have shown renewable hydrogen based on PPAs has avoided equivalent power market volatility over the past 20 months.
- Northwest European offshore wind production based on a 10-year PPA starting in 2025 has increased from €4-4.5/kg H2 at the start of 2021 to €6.10-8.15/kg H2 in September 2022.
- Comparatively, wholesale power market electrolytic (yellow) hydrogen based on power for delivery in 2025 has moved from around €3.8/kg H2 at the beginning of 2021 to around €15/kg H2 in September 2022, peaking at €28.1/kg H2.
- Spanish renewable hydrogen production costs are among the lowest in Europe, averaging €5.28/kg H2 (solar) and €4.85/kg H2 (onshore wind) over the course of 2022.
ICIS renewable hydrogen assessments.
ICIS is a trusted source of global commodity intelligence for the energy, chemical and fertilizer industry. We are a division of RELX, a FTSE 15 company with a market cap of £42.3 billion and an employee base of over 30,000 experts across 40 countries.
At ICIS, we help businesses make strategic decisions, mitigate risk, improve productivity, and capitalise on new opportunities. We make some of the world’s most important markets more trusted and predictable by providing data services, thought leadership and decision tools. As a result of our unmatched global presence, we can deliver targeted connected intelligence to influence thousands of decisions across supply chains every single day. We shape the world by connecting markets to optimise the world’s valuable resources. With a global team of more than 600 experts, ICIS has employees based in London, New York, Houston, Karlsruhe, Milan, Mumbai, Singapore, Guangzhou, Beijing, Shanghai, Dubai, Sao Paulo, Seoul, Tokyo and Perth.
RELX is a global provider of information and analytics for professional and business customers across industries. The Group serves customers in more than 180 countries and has offices in about 40 countries. It employs approximately 30,000 people of whom almost half are in North America. RELX PLC is a London listed holding company which owns 52.9% of RELX Group. RELX NV is an Amsterdam listed holding company which owns 47.1% of RELX Group. The shares are traded on the London, Amsterdam and New York Stock Exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX and RENX. Total market capitalisation is approximately £42.3bn | €47.4bn | $45.7bn.
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