ICIS launches Europe’s first market-linked renewable hydrogen assessments

Source: press release, 27 September 2022

Accurate pricing data and information are essential to navigating the way to a traded hydrogen market and will be critical for market participants to achieve long-term success (illustration: ICIS)
Accurate pricing data and information are essential to navigating the way to a traded hydrogen market and will be critical for market participants to achieve long-term success (illustration: ICIS)

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 EUR 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,” says 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.