ICIS, a global source of independent commodity intelligence services, has launched the first hydrogen price assessments to reflect the market value of renewable electricity.
To unlock investments of up to €500bn outlined by the European Commission’s hydrogen strategy, investors, policy makers and hydrogen industry participants do require accurate and trusted pricing instruments aligned to net zero objectives.
Covering market-adopted technologies and locations, ICIS’s European renewable hydrogen assessments have been produced through “deep consultation” with energy market participants.
The assessments combine ICIS’s cross-commodity energy analysis with price assessments of long-term PPAs provided by Pexapark.
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.
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 said.
“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”.