Opportunities for Green Hydrogen Project Financing in Europe and the US Explored
Market barriers include high value chain complexity, an uncertain regulatory environment, and a limited track record of technology performance and lifetimes
A new report from Guidehouse Insights analyses opportunity for green hydrogen project financing in Europe and the US.
Attracting financing for green hydrogen facilities and moving them through the various stages of project development remains a major challenge. The proportion of projects that have taken a final investment decision (FID) or begun construction is currently a small fraction of the overall pipeline, representing less than 2% of planned capacity in Europe and the US. According to a new report from Guidehouse Insights, while this situation is expected to improve in 2023, progress will still favor projects with limited offtake risk and well capitalized backers.
“Potential financiers must be able to make an informed assessment of a project’s cashflows and risk profile to make a commitment,” says Jacques Moss, research analyst with Guidehouse Insights. “In most cases, this requires projects to have secured long-term offtake agreements with creditworthy counterparties.”
Green hydrogen projects also present added difficulties to stakeholders familiar with more conventional forms of energy infrastructure, including increased value chain complexity, an uncertain regulatory environment, and a limited track record of technology performance and lifetimes, according to the report.
The report, The State of Play for Green Hydrogen Project Financing in Europe and the US, provides an overview of the key variables likely to influence financing, with a focus on project design, risk mitigation and regulatory developments in Europe and the United States. An executive summary of the report is available for free download on the Guidehouse Insights website.
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*The information contained in this press release concerning the report, The State of Play for Green Hydrogen Project Financing in Europe and the US, summary and reflects the current expectations of Guidehouse Insights based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Guidehouse Insights nor Guidehouse undertakes any obligation to update any of the information contained in this press release or the report.