In a significant development for the energy sector, France has released an updated draft of its National Hydrogen Strategy, outlining ambitious plans to bolster its low-carbon hydrogen production capacity and invest heavily in the decarbonization of hydrogen.
According to the updated draft, France aims to install 6.5 GW of low-carbon hydrogen production capacity by 2030, with a further increase to 10 GW by 2035. To support this endeavor, the French government plans to invest a substantial $9.87 billion by 2030 to facilitate the deployment of decarbonized hydrogen.
A key component of the strategy involves the allocation of €4 billion through contracts for difference auctions to subsidize 1 GW of electrolysis capacity. These subsidies will take the form of operating subsidies, partially calculated based on the cost difference between grey hydrogen (including carbon pricing) and low-carbon hydrogen. The government has already consulted on preliminary specifications and industries, with plans to initiate a competitive tendering process for the first project bids in 2024.
Furthermore, the draft strategy highlights that new subsidies will be available in 2024 for hydrogen equipment manufactured in France. In parallel, the government will launch an exploratory study on natural hydrogen to assess France’s extraction potential, economic benefits, and environmental impact by 2025.
The strategy also calls for the preparation of a report by French government agencies on the prospects of importing carbon-free hydrogen or its derivatives, including potential import infrastructure, by the end of the first quarter of 2024. It emphasizes that public financial support will continue to focus on local production.
One of the innovative initiatives in the updated strategy is the use of hydrogen to help balance the electricity grid. This involves reducing the power consumption of electrolyzers during peak demand periods while promoting their operation when electricity is abundant, cheap, and low-carbon. To facilitate this, sufficient hydrogen storage or the utilization of excess non-electrolysis capacity will be required to maintain the possibility of continuous hydrogen supply to industrial customers.
Overall, France’s updated National Hydrogen Strategy represents a significant step forward in the country’s commitment to transitioning towards a more sustainable and low-carbon energy future.
