29

2024

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02

Engie delays 4GW green hydrogen target by five years, due to slower-than-expected industry progress

Author:

Hydrogeninsight


 

French energy company admits market for H2 and its derivatives is emerging more slowly than it had forecast

 

French energy giant Engie has pushed back its 2030 target to build about 4GW of green hydrogen projects to 2035.

 

While CEO Catherine MacGregor continued to highlight on an analyst call last week that hydrogen and biomethane would be a core part of the energy firm’s green gas business, she noted that “setting up the right conditions for investment in green hydrogen is progressing more slowly than we would like”.

 

However, she did not provide further comment on the five-year delay, adding: “I am convinced that hydrogen remains a fundamental enabler of this energy transition. The will and the need are absolutely there.”

 

A spokesperson for Engie told Hydrogen Insight that “the market for renewable hydrogen and its derivatives is still emerging, and its development and structuring is slower than what was envisaged a year ago”.

 

“In this context, it appears that the number of projects that reached final investment decisions in 2022 and 2023 is much less than expected from the announcements made by several actors.”

 

It had widely been expected that the hydrogen production tax credits of up to $3/kg, which were included in the US Inflation Reduction Act from August 2022, would start being handed out by the end of 2023, but the rules are still being debated and may not be finalised until later this year.

 

In a similar vein, EU subsidies had also been widely expected last year, but the first €800m ($867m) tranche of funding from the European Hydrogen Bank is now not due to be disbursed until November.

 

Based on the projects listed on Engie’s website as of 28 February 2024, the French company has a development pipeline of at least 3.9GW. However, at least one of the listed developments, Power 2 Methanol in Belgium, has already been scrapped, with few updates on many of the other announcements.

 

The projects that have actually reached a final investment decision (FID) or started construction are relatively small, with the largest two — Yuri and Hydrogen Park Murray Valley, both in Australia — only 10MW.

 

The larger facilities in the hundred-megawatt- or gigawatt-scale are likely to hinge on subsidies.

 

However, even Engie projects that appeared to have secured subsidies seem to have been delayed.

 

For example, the 100MW Columbus project in Belgium, which Engie is developing with John Cockerill and Carmeuse, was notified for both the Innovation Fund and Important Project of Common European Interest (IPCEI) scheme.

 

However, when it came to signing grant agreements from the Innovation Fund, Columbus was mysteriously absent from the list of 15projects, while no further updates on state aid via its IPCEI status have come to light.

 

Source:Hydrogeninsight

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