France's National Hydrogen Strategy updated: €4 billion in subsidies over 3 years, support for 1GW of electrolysis capacity

2023-12-21 09:43 Source:HaechiFuelCell

France has published the first draft of an updated National Hydrogen Energy Strategy, which is currently out for public consultation.

France plans to build 6.5GW of low-carbon hydrogen capacity by 2030, rising to 10GW by 2035.The capacity will come from France's low-carbon electricity mix, nuclear energy, renewables, depending on the supply options for each plant, and is consistent with the principle of technological neutrality between renewable, low-carbon hydrogen.

The document confirms that France will invest €4 billion in subsidies over the next three years to support 1GW of electrolysis capacity deployment. The French government plans to invest nearly €9 billion by 2030 to support decarbonized hydrogen deployment. These subsidies will be provided in the form of operating subsidies, calculated in part on the cost differential between gray hydrogen (including the carbon price) and low-carbon hydrogen.

The French government has consulted on the preliminary specifications and the industry and plans to launch a competitive bidding process for the first project in 2024.

The French government has previously said that the first round of tenders will be for 150MW (with a possible expansion to 180MW), the second round of tenders will be for 250MW, which is scheduled to take place in 2025, and the final round of tenders will be for 600MW, which is scheduled to take place in 2026.

In addition, the new document provides for the extension of the TIREURT (TIREURT-Taxe Intérieure de Consommation sur les Produits Énergétiques Utilisés comme Carburant dans les Transports, which is the French system of taxation of energy products used in the field of transportation to support the development and use of renewable energy sources) tax credit scheme to all energy carriers and almost all modes of transportation.

From January 2023, renewable hydrogen is eligible for this program, the document says. From January 1, 2024, low-carbon hydrogen is also eligible, with a subsidy of up to 4.7 euros per kilogram.

New subsidies for hydrogen equipment

The document also indicates new subsidies for hydrogen equipment produced in 2024.2024 The French government will set up an investment subsidy to directly support the installation of French-produced equipment, which may be appropriate for foreign buyers as part of France's international hydrogen diplomacy.

France will also continue to strengthen its control over all hydrogen energy equipment and its technology through various existing support programs. Mastery of hydrogen production, technology and equipment offers a strong opportunity for the re-industrialization of France.

Natural hydrogen extraction

The document also states that the French government will launch an exploratory study on natural hydrogen to assess the potential for exploitation, economic benefits and environmental impacts in France by 2025.

With the recent licensing of natural hydrogen research in the Pyrénées-Atlantiques department in southwestern France, the French government will massively accelerate its research on natural hydrogen, using the most environmentally friendly technologies for its exploitation and making full use of the potential of natural hydrogen in France, the paper said. France is capable of becoming a leading country in this future energy source (natural hydrogen).

Imported hydrogen

The document also requires French government agencies to prepare a report on the prospects for importing carbon-free hydrocarbons or their derivatives by the end of the first quarter of 2024, including possible import infrastructure, while noting that public financial support will continue to focus on local production.

Balancing the Grid with Hydrogen Energy

Another new initiative in the updated version of the strategy is the use of hydrogen energy to help balance the grid. This means reducing the power consumption of electrolyzers during periods of peak demand while facilitating operation when power is cheap and low carbon (electricity) production is plentiful.

The paper notes that taking the electrolyzer off the grid requires building up enough hydrogen storage or utilizing excess non-electrolysis capacity to maintain the possibility of continuous hydrogen supply to industrial customers.