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German green hydrogen developer inks €200 million to supply fuel for maritime, aviation projects

17 February 2022 Amena Saiyid

Green hydrogen producer Hy2Gen has secured €200 million ($227.3 million) from a variety of investors to construct facilities to deliver fuel for use in a variety of aviation, maritime, ground transportation, and industrial applications in Europe and North America.

The Wiesbaden, Germany, company said it raised the private capital from a variety of investors, including Hy24, a green hydrogen investment platform launched in October with the purpose of raising €1.5 billion ($1.7 billion) to accelerate large-scale clean hydrogen projects and infrastructure.

"As early as 2021, we were looking for the best possible combination of financial and strategic investors to build e-fuel production facilities," Hy2Gen CEO Cyril Dufau-Sansot said in the 17 February announcement. "These have the potential to decarbonize entire industries and transport sectors. We are now very pleased that all parties have sealed the largest investment in this segment."

With growing demand from regulators and investors to decarbonize transportation and manufacturing sectors, hydrogen, especially the "green" variety produced from renewable power sources, is increasingly being viewed as an alternative to carbon-intensive fossil fuels. In liquid form, hydrogen can be transported in existing pipelines or shipped in specially designed seaborne carriers, while in solid form it can be used in fuel cells for automobiles, and can be used to produce steel and cement, two traditionally carbon-intensive industrial processes.

The International Renewable Energy Agency in January said green hydrogen could be economical in locations that have "the optimal combination of abundant renewable resources, space for solar or wind farms, and access to water, along with the capability to export to large demand centers."

First investment foray

The Hy2Gen project is Hy24's first investment foray. It is funding the Hy2Gen from its clean hydrogen infrastructure fund for which it has raised €1 billion ($1.13 billion) to date, Hy24 CEO Pierre-Etienne Franc said in a statement accompanying the 17 February announcement.

This investment will enable Hy24 to "step into its role as a catalyst for hydrogen-based projects at scale to foster the energy transition," Franc added.

Other investors in the Hy2Gen project include French investment firm Mirova, Canada-based pension fund Caisse de dépôt et placement du Québec (CDQP), and French engineering and construction firm Technip Energies.

Founded in 2017, Hy2Gen said it currently has 800 MW of hydrogen production in planning and construction and an additional 12 GW of projects in development.

In April 2021, IHS Markit Hydrogen and Renewable Gas Forum Director Alex Klaessig and Senior Research Analyst Julia Wainwright estimated capital spending totaling $265 billion would be directed to production of low-carbon hydrogen by 2030, with the majority of the funds directed towards electrolyzers for producing green hydrogen. Given the demand for green hydrogen, they said this figure might be higher now.

They also noted that Europe is expected to "outinvest" other regions of the world, with forecast capital expenditure of about $196 billion by 2030.

Leveraging financing to build electrolyzers

Hy2Gen is seeking to leverage the backing it received towards designing, building, and operating electrolyzer plants in France, Germany, Norway, Canada, and the US to produce green hydrogen and its derivatives—green ammonia, green methanol, and sustainable aviation fuel.

Earlier in February, Hy2Gen announced it was joining commodity trading group Trafigura and Danish investor group Copenhagen Infrastructure Fund in building a green ammonia production facility on the southwestern coast of Norway to produce fuel for the maritime sector.

Known as Iverson eFuels, the facility will be located in the municipality of Sauda, which has an ample supply of hydropower that will feed an initial electrolyzer capacity of 240 MW to produce 600 metric tons (mt) of green ammonia per day.

The project owners have started work on the engineering phase, and following a final investment decision, expect to begin construction of Iverson eFuels in the first quarter of 2024 and be fully operational by 2027.

In the south of France, near Aix-en-Provence, Hy2Gen is the 100% owner and operator, as well as a leading investor to the tune of €460 million, in a facility that will include a biomass unit that will have the capacity to gasify 250 mt each day of woody waste and a 100-MW electrolyzer to split water. Together, these two units will produce green hydrogen and a blend of syngas (carbon monoxide and hydrogen) to produce a sustainable aviation fuel, E-Kerosene, on an industrial scale.

Posted 17 February 2022 by Amena Saiyid, Senior Climate and Energy Research Analyst

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