First call of the incentive programme for innovative and unique renewable hydrogen projects (“Programa H2 PIONEROS”)

by SynerHy | Feb 23, 2022 | General topic

H2 PIONEROS summary sheet

The PERTE ERHA establishes the guidelines on which the different Orders that will regulate calls for public funding for different sectors will be elaborated. Regarding the hydrogen sector itself, the PERTE has already published two orders so far.

On 24th December 2021, MITECO published the Orders approving the regulations for granting funding towards two renewable hydrogen lines in the BOE (Official State Bulletin). Order TED/1444/2021 and Order TED/1445/2021. These funds will be financed by the Recovery and Resilience Mechanism.

On 18th February, it is published the first call resolution of the Incentive Programme for innovative and unique renewable hydrogen projects (“Programa H2 PIONEROS”) within the framework of the Recovery, Transformation and Resilience Plan. This call is made on a competitive tender process as a non-refundable subsidy and is managed specifically by the IDAE.

Maintenance and operational activities must be guaranteed for at least 5 years and up to 80% of the grant activity may be subcontracted with third parties.

Eligible projects

Integrated projects combining production, distribution and use of hydrogen in the same local area will be boosted. In this call, incentives are only available for projects aimed at the deployment of commercial applications.

A Descriptive Memorandum must be submitted, as well as an economic plan according to the available forms and models found on the IDAE’s website.

The projects to be financed must be unique and innovative production/distribution/consumption platforms with electrolysis power of more than 0.5 MW and less than 20 MW and as much diversified local power consumption as possible. Furthermore, these projects must be local, competitive and potentially replicated throughout the country and must also be the first project of its kind.

Typologies of projects to be considered within the same area are:

a) Facilities for production and distribution of renewable hydrogen, including associated renewable electricity generation facility

All technologies already used on the market whose potential allows a fast, scalable and competitive development.

Evidence of a minimum commitment of at least 30 % of the renewable generated hydrogen to be consumed and more than 80 % of the renewable generated hydrogen to be used in industrial uses; new heavy-duty transport uses and innovative stationary applications. In case of new consumption installations, these must be operative within six months at the latest.

In order to prove the renewable source of the power, following options will be admitted:

  • Option 1 (on-site renewables): New dedicated renewable power generation facilities.
  • Option 2 (on-grid renewables): Power Purchase Agreements (PPAs) subscribed with newly built renewable installations for at least 10 years.
  • Both solutions combined.

The following activities will be eligible for incentives:

  • Installation of electrolysers and auxiliary systems.
  • Dedicated renewable installations.
  • Infrastructures for storing, processing and supplying renewable hydrogen (for example, hydrogen refuelling stations).
  • Facilities and equipment for compression, transport and storage as part of the logistical infrastructure required for supplying renewable hydrogen production from the electrolyser site to the consumers planned by the project.

b) Industrial use

New equipment and/or retrofits for using renewable hydrogen as a feedstock to replace fossil hydrogen for specific industrial sectors (welding, oil refinement, fertiliser production…) insofar as it replaces at least 30% of the fossil fuel.

c) New uses in heavy road, ship, air and/or rail transport

For professional fleets, public or private, for both passenger and cargo transport, including retrofit costs, hydrogen refuelling stations dedicated to and linked to supplying hydrogen to these professional fleets will be eligible for incentives.

d) Innovative stationary applications:

  • Harbours – Powering ships based on fuel cell or hydrogen combustion devices with other associated applications in the surrounding area.
  • Re-electrification systems – Providing grid flexibility, by means of fuel cells (limited to 1MW) and/or combustion devices) including storage (for example back-up systems) and combined with renewables. Relevant for islands or off-grid systems.
  • Airports, Logistics Platforms – Encourage alternative uses where electrification may not be the most efficient solution, such as airport equipment and cargo terminals for handling cargo and/or mobility of people.

Beneficiaries

  • Companies with their own legal entity

  • Consortiums or Associations, with at least one SME

  • The public sector of any Public Administration

Amount of funding

An applicant may submit more than one unique project, although the amount of funding may not exceed €15 million per applicant per project. The minimum investment for the project to be eligible is €1 million.

Eligible investment costs will be calculated by comparison to a similar, less environmentally friendly investment that could feasibly have been carried out without support. That difference of costs for both investments will be the eligible cost.

Such similar reference investments are:

1. Renewable hydrogen generation infrastructure:

  • Industrial uses: Methane steam refining facility of an equivalent power, estimated at €0.25 M/MWe.
  • Mobility uses and stationary applications: oil refinement, estimated at €0.091 M/MWe.

2. Industrial equipment that uses renewable hydrogen:

Equivalent conventional fuels installation.

3. Renewable hydrogen refuelling stations:

The similar reference investment shall be a conventional fuel equivalent refuelling station. The cost shall be estimated according to the number of nozzles.

4. Other logistics facilities for renewable hydrogen distribution:

The eligible cost will be estimated in terms of the dedicated, executed and segregated logistical investment to the project.

5. Hydrogen vehicles:

The maximum funding will range from €90,000 to €200,000 according to the table provided by the announcement.

6. Innovative stationary applications (storage and fuel cell):

The similar reference investment will be a diesel generator of an equivalent power.

Maximum funding rates:

For dedicated renewable facilities, fundings shall not be higher than 15% of the total requested funding for this activity.

For hydrogen uses: funding for renewable hydrogen refuelling stations, hydrogen vehicles, new or retrofitted industrial equipment and stationary applications shall not exceed 30% of the total funding requested.

Funding for specific logistic infrastructure shall not represent more than 5% of the total funding requested.

The rate may be increased by 5 percentage points on the eligible costs when projects are established on islands and/or in sparsely inhabited towns.

Eligible costs 

Own costs (staff, operating or overhead costs) are not eligible. Eligible costs:

  • The design of technical projects related to the activities,
  • Costs of project management,
  • Costs associated with the implementation of civil engineering work, up to a maximum of 20 % of the eligible for funding,
  • Costs of application and funding justification management (10k and 7%).

Budget, financing and compatibility of funding

This call has an approved initial maximum budget of 150 million euros and expenses must be paid before the justification deadline established under the call to be eligible for funding. These funds shall be compatible with other funding granted, unless the same cost of the project is being funded.

Any beneficiaries may request an advance of the amount of the granted funding, whenever they comply with the requirements.

Deadline for submitting applications and period of the announcement

Applications for funding under this call and their documentation may be submitted from 7 March 2022 to 6 May 2022, by using the website of the IDAE.

Rating and selection of applications

The minimum score for assessment is 50 points.

In the event of applications with the same score, preference will be given to the application with the highest score in the “Economic Feasibility” criteria.

Technical characteristics criteria 🡪 20 points

1. Uses of renewable hydrogen

Priority will be given to those projects where 100% of the renewable hydrogen generation is used for those uses specified in the call, those which involve diversified uses, those where generation and consumption are nearby and those which replace more than 30% (the minimum) of the fossil fuel consumption of thermal demands.

2. Matching of the project characteristics to the context and priorities of the energy transition.

Economic feasibility criteria 🡪 25 points

1. Effectiveness of public funding

Priority will be given to projects where the target price to be marketed to the end-user is less than or equal to 6 €/kg and to projects with a lower percentage of the total budget. Funding requested per unit of hydrogen distributed (€/kg) and funding requested per emission savings (€/tCO2) will be analysed.

Project feasibility criteria 🡪 20 points

1. Planning and development level of the project

Priority will be given to developed projects (availability of suitable site, availability of a permanent local water supply and strong commitments from end-users).

2. Quality of the team applying for funding, related to the consortium/business partnership

The inclusion of a local entity or association and more than one SME in the case of consortium will be positively evaluated.

Technological scalability and market potential criteria 🡪 15 points

1. Replicability/scalability 

2. Significance of the Business Model

It will be valued the improvements caused by the project within the economic activities surrounding it

3. Market potential of new technologies

A contribution to the Spanish industrial sector and to the national and European value chain will be awarded.

Externalities criteria 🡪 20 points

1. Job creation, social and gender policies

2. Fair transition and demographic challenge

3. Environmental improvements and circular economy

4. Training and skills development

Milestone tracking

The mid-term milestones to be checked by the competent entity will be:

a) Achievement of preliminary administrative authorisation: 15 months.

b) Integrated Environmental Authorisation for the renewable hydrogen generation activity: 18 months.

c) Registration in the National System of Guarantees of Origin of Renewable Gases Census or similar administrative authorisation or licence to operate the hydrogen production facility granted by the competent authority: 28 months.

Deadlines for execution and justification, notifications and advertisement

  • The deadline for the execution of the supported projects will be 36 months, whilst the maximum period for justifying the project will be 3 months.
  • Ten working days are available, from the day following receipt of the requirement, to rectify the fault.
  • Applicants may submit their objections to the proposed provisional resolution within ten working days starting on the first day following its publication on the IDAE’s website.
  • Beneficiary entities must notify their acceptance of the resolution within ten working days starting on the first day following its notification, understanding that they withdraw their application if there is no reply within this period.
  • IDAE’s final resolution, within a maximum period of 6 months after publishing the call for applications.