The consortium behind the H2EU+Store RAG project to produce "green" hydrogen in western Ukraine using solar and wind power for subsequent delivery to Europe, initiated by RAG Austria AG and Eco-Optima LLC, is expected to be ready in 2028, RAG Austria CEO Markus Mitteregger said.

 

"The first step of EUR 500 million must be resolved by 2028. Already in 2029, there should be a first flow of hydrogen mixed with the flow of natural gas," he said during the "Rebuilding Together with Ukraine: Turning Ambitions into Concrete Action" panel at the European Forum Alpbach, an Interfax-Ukraine correspondent reports.

 

Mitteregger recalled that RAG Austria is Europe's fourth-largest natural gas storage company and that, amid the reduction in gas supplies from Russia, it became interested in the idea of producing gas (hydrogen) from solar energy and subsequently transporting it through pipelines for delivery to combined-cycle power plants to produce heat and electricity. The availability of favorable conditions for building solar and wind power plants in western Ukraine, developed infrastructure there and a partner such as Eco-Optima, one of the largest operators in the region, led to the creation of a consortium to implement this idea, which has continued to develop the project.

 

"Now we are at the stage where we need to do detailed engineering. We have completed the feasibility study, we have done the basic engineering, and the next step will be to carry out all the detailed engineering for wind and solar power. We have already started the work," the Austrian company's CEO described the situation.

 

He added that the consortium had established business relations with Ukrainian gas storage operator NJSC Naftogaz Ukrainy and Ukrainian gas transmission system operator GTSOU, Slovak gas transmission system operator Eustream, Austrian gas transmission system operator Gas Connect Austria, as well as Bavaria-based bayernets.

 

"So everything is ready, and we also have three contracts with customers from the Bavarian chemical industry, as well as from Austrian industry, who need hydrogen instead of natural gas," Mitteregger said.

 

According to him, the project has received support from Ukraine, and another major market operator is ready to join it.

 

The RAG Austria CEO added that Raiffeisen Bank, the largest foreign bank in Ukraine, is ready to take "the next big steps" with the consortium.

 

"I hope that by 2028 we will be celebrating the final investment decision," Mitteregger stressed again, noting that a dedicated hydrogen pipeline is planned to be built by 2032.

 

Regarding the steps required to implement the project according to the plan, he highlighted risk-coverage instruments, mutual certification and guarantees that natural gas and hydrogen can be blended.

 

The RAG Austria CEO explained that when green energy is produced and converted into hydrogen, RFNBO certification is required to confirm that it is indeed "green" hydrogen that can be fed into the gas network, and that this certification must be recognized by all countries to which the hydrogen is supplied.

 

"It sounds simple, but it is not easy. We have already been negotiating with the German government for three years," Mitteregger said, citing an example. According to him, blending, in this case, 2-4% hydrogen in natural gas, is another issue being discussed in Brussels, and it should also be discussed between Austria and Ukraine.

 

He said that until these issues are resolved, there will be no final investment decision because it will not be possible to attract bank and other financing for the project.

 

At the same time, the RAG Austria CEO noted that the project also cannot be postponed until the war is over, because the consortium is not the only party looking for suitable sites for solar and wind power plants, and, as warned by Eco-Optima, which has already built many such plants, it will be too late later.

 

Rainer Schnabl, a member of the Management Board of Raiffeisen Bank International AG, confirmed that the implementation of the project had been discussed with the consortium at a bilateral meeting, as well as the conditions required for this.

 

In his opinion, H2EU+Store could also attract funds from the European Union's recently established flagship investment fund, amounting to EUR500 million in equity.

 

As reported, the project's participants also include Open Grid Europe (OGE) (Germany), Bayerngas (Germany), NAFTA (Slovakia) and MND (the Czech Republic).

 

The H2EU+Store website notes that the project is structured in three phases, with corresponding development of new photovoltaic, wind and electrolyzer capacities in Ukraine and conversion of transport infrastructure and storage facilities in Central Europe. Currently, the first project under Phase 1 is being prepared to produce approximately 9,000 tonnes of hydrogen per year, with production expected to reach 62,000 tonnes by 2032.

 

Source:  FCW Team