OIES Podcast – Subsidising hydrogen and creating bankable demand

In this latest OIES podcast, from the Energy Transition programme, James Henderson talks to Martin Lambert and Alex Barnes about their articles in the latest Oxford Energy Forum on the topic of the development of a hydrogen market. We start with an assessment of the key policy instruments being used by governments to encourage hydrogen develop before moving onto three different examples of subsidy schemes being used in Europe – the European Hydrogen Bank, the UK’s Contract for Difference auctions and the H2Global two-sided auction being used in Germany. Martin reviews the progress with each of these and assesses their strengths and weaknesses before Alex argues for a broader model under which governments support projects according to the actual emissions which they avoid, rather than just subsidising the cost of hydrogen supply. He argues that that would result in a more logical economic and environmental outcome and would protect customers from the risk of changes in government policy around carbon taxes. In this way demand for hydrogen would be more bankable for the long-term, and would create a more realistic foundation for the development of the entire hydrogen value chain.

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