Guidehouse Insights explore opportunities for green hydrogen project financing in Europe and the US in new report

According to a new report from Guidehouse Insights, attracting financing for green hydrogen facilities and moving them the various stages of project development is expected to improve in 2023, although progress will still favour projects with limited offtake risk and well capitalised backers.
Guidehouse Insights explore opportunities for green hydrogen project financing in Europe and the US in new report
Courtesy of NREL.

Attracting financing for green hydrogen facilities currently 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 percent of planned capacity in Europe and the US.

“Potential financiers must be able to make an informed assessment of a project’s cashflows and risk profile to make a commitment” said 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.

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Guidehouse Insights

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