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What is a hydrogen valley and how it can help to scale up the EU hydrogen economy

There is growing momentum for hydrogen technology developments worldwide, but Europe aims at ranking first, leading the hydrogen economy thanks to its ambitions included in the Green Deal and, more recently, in the REPowerEU.

In particular, Hydrogen Valleys have become a global phenomenon. As defined by the Clean Hydrogen Partnership, a Hydrogen Valley is a geographical area – a city, a region, an island or an industrial cluster – where several hydrogen applications are combined into an integrated hydrogen ecosystem that consumes a significant amount of hydrogen, improving the economics behind the project. It should ideally cover the entire hydrogen value chain: production, storage, distribution and final use.

Although Hydrogen Valley concepts are always adapted to specific regional circumstances, Uwe Weichenhain, Senior Partner at Roland Berger mentioned five main characteristics during the relaunch of the Hydrogen Valleys platform on 8 May. First of all, Hydrogen Valleys go beyond simple R&D projects as they are large in scale: indeed, the project scope entails at least a two-digit multi-million euros investment. Then, they all have a clearly defined geographic scope and a broad value chain coverage, covering multiple steps in the hydrogen value chain. They also supply various end sectors and they all have to be under real development and at least working on a feasibility study to be considered as such.

“There are 80 hydrogen valleys registered on the platform, from just 30 in 2021, which is an important signal,” Mr Weichenhain said. “Overall, the EU has the goal to create 100 hydrogen valleys by the end of 2030 and considering that out of those 80 Valleys, 60 are located in Europe, we are on track.”

However, they are not in an operational stage, being mainly just either only ideas or in the FID stage. In particular, Central and Eastern European countries are not home to many projects, especially large-scale ones. 

“We are very confident and will continue our support in that regard, that European Hydrogen Valleys will advance to post-FID/operational project development stage in the next years,” says Mirela Atanasiu, Head of Unit Operations and Communication at the Clean Hydrogen Partnership. “The target of 100 Hydrogen Valleys has been set by the Mission Innovation member states, not the EU alone and is aiming to reach that number by 2030. The key advantage of Hydrogen Valleys, independent of the region, is clear: a bottom-up concept that increases market momentum by pooling demand, scaling production and sharing infrastructure – thereby, ultimately bringing down costs.”

At the same time, Hydrogen Valleys not only share similar characteristics but also barriers and obstacles, ranging from regulatory hurdles to financing issues. 

Markus Kaufmann, Principal at Roland Berger said that two years ago it was more about regulations and legislation. Today, according to a recent survey, regulations are still among the top concerns but there is more clarity, thanks to enactments like the Delegated Act. However, on the top of the list of challenges, there are permitting and authorisation issues and project financing. 

“For example, in Germany, it takes between 3 to 18 months to get permits for an electrolyser and a filling station,” he mentioned. “It is too long. So policymakers can still do a lot to ease these bottlenecks.”

Among the best practices, cross-border projects were presented during the relaunch of the platform. Within CEE, a special notice went to the North Adriatic Hydrogen Valley, jointly developed in Slovenia, Croatia and the Italian region of Friuli Venezia Giulia and which covers the entire chain, from production to storage and distribution to the end use of hydrogen in various sectors such as industry and transport.

According to Stephen Taylor, deputy director-general of Trieste Area Science Park, the fact that the Valley is not led by a public operator but by three institutions was crucial: because different governments are involved, a non-profit organisation was created, with a structure that is driven by the community.

Asked about what advice he would give to those setting up a hydrogen valley now, Mr Taylor mentioned the importance of a strong political will, the involvement of key stakeholders and the private sector in addition to the public one.

“We have to convince the private sector that by investing in the hydrogen economy now, there will be a return of investment in the long term,” he said.

Indeed, this is one of the lessons learnt from the past years: cooperation is essential. For example, earlier in April, the first CEE Hydrogen Forum took place intending to map cooperation in hydrogen valley projects. However, there are still many barriers to cross-border cooperation.

“We enable and support cross-border cooperation between project developers, for example, through the matchmaking feature on the Hydrogen Valleys platform or the new members’ area, allowing for enhanced collaboration between all Hydrogen Valley stakeholders,” Ms Atanasiu tells CEENERGYNEWS. “In addition, a continuous exchange between project developers, policymakers, investors, and off-takers is needed to boost additional cross-border initiatives. We will continue to drive this exchange through our various initiatives this year, for example, new reports and analytics, information dossiers and dedicated topical and regional workshops.”

Other Valleys registered on the platform and present in the CEE region include the Hydrogen Valley Estonia, the development of a complete and nationwide system that will accelerate the energy transition and independency of the whole country under the motto from zero to green. Hungary’s Yellow Swallow, an MVM Group’s complex hydrogen value chain umbrella program mainly focuses on sector integration via hydrogen as an energy vector. Or the Amber Hydrogen Valley, which aims to activate the long-lasting hydrogen economy in the Pomerania Region in Poland, through the creation of a whole hydrogen value chain. There are also several projects in the V4 countries (Slovakia, the Czech Republic, Poland and Hungary) which include the deployment of hydrogen vehicles, the creation of hydrogen refuelling stations and the budding of electrolysers. Or, in Ukraine, the construction of a renewable hydrogen plant with a targeted electrolysis capacity starting at 100 megawatts (MW), with a future capacity increase of up to 3 gigawatts (GW).

“The CEE region, in general, offers great potential for hydrogen market uptake and Hydrogen Valleys in particular,” concludes Mirela Atanasiu. “There is a great regulatory push from recent national hydrogen strategies, for example, in Croatia, Czech Republic, Poland and Slovakia. We also see great initiatives developing in other countries, such as Romania, Hungary and Bulgaria. In addition, Ukraine has very promising natural conditions for clean hydrogen production and can hopefully soon be at the forefront of Hydrogen Valley development in CEE as well.”

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