MadoquaPower2X wins big EU subsidy for green hydrogen in Sines

13 May 2024 Consultancy.eu 3 min. read
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The European Commission has unveiled the first round of projects that will receive subsidies from its European Hydrogen Bank, with Dutch-Portuguese-Danish consortium MadoquaPower2X one of seven recipients.

The group is building a state-of-the-art green hydrogen plant in Sines, Portugal, for which they have already raised around €3 billion. The plant (dubbed MP2X) will be a major boost to Portugal’s and the EU’s efforts to lower harmful greenhouse gas emissions.

MadoquaPower2X is a consortium led by Madoqua Renewables and Power2X, a Dutch consulting firm for renewable energy and investors. As project developer, Power2X has a key role in the funding and development of the project.

MadoquaPower2X wins big EU subsidy for green hydrogen in Sines

“The winning bidders will produce renewable hydrogen in Europe and will receive a subsidy to bridge the price difference between their production costs and the market price for [grey] hydrogen [made with unabated fossil gas], which is currently driven by non-renewable producers,” said the European Commission in a press release.

“The European Hydrogen Bank is therefore contributing to the scale-up of cleaner fuels which will contribute to the decarbonization of European industry.”

In total, the seven projects have a combined electrolysis capacity of 1.5GW have been awarded a total of €720 million from the EU coffer. After their bids for price per kilogram of hydrogen were accepted, each of the recipients will get between €8 million and €245 million.

Hydrogen in Sines

The MP2X project is slated to reduce up to 600,000 tons of CO2 emissions per year and create more than 200 jobs. Beside green hydrogen, the plant will also produce a massive amount of green ammonia, a by-product in the hydrogen production process.

The next step in the European Hydrogen Bank funding process is for the successful applicants to prepare their individual grant agreements, scheduled to be signed by November 2024 at the latest, with a view to beginning hydrogen production within five years.

“We are proud to bring this strong consortium to Portugal and collaborate with partners across the green hydrogen and hydrogen derivatives value chain. Portugal is structurally well positioned to play a leading role in the emerging energy transition space in Europe,” said Rogaciano Rebelo, CEO of Madoqua.

Occo Roelofsen, CEO of Power2X, said: “Power2X is excited to develop this flagship project together with our partners in order to accelerate Europe’s energy transition and contribute significantly to the 2050 net-zero target. MadoquaPower2X will pave the way for decarbonization of critical industrial processes and reduced dependency on natural gas imports.”

Hydrogen

Green hydrogen is one of several types of hydrogen gas. It is produced through the complex process of electrolysis, which is powered by renewable energy sources like wind or solar power. This process produces hydrogen gas without emitting any greenhouse gases or pollutants, making it a clean and sustainable form of energy.

Further reading: Global green hydrogen market to reach $700 billion by 2050.

Other types of hydrogen – like grey or blue hydrogen – are produced in plants powered by natural gas or other sources. That means that, while the resulting hydrogen is a clean source of energy, the supply chain behind it is not totally clean.

Some other major green hydrogen projects are planned or already being built in countries like Azerbaijan and Morocco, among others. Portugal and North Africa are well placed to take advantage of an important natural resource: Year-long, searing sunshine, which is a major competitive advantage for creating solar energy that can then be used to power hydrogen plants.