Securing Offtake Agreements: Addressing Power Price Risk and Long-Term Viability for Hydrogen Projects

Synopsis

The lack of long-term offtake agreements poses a risk to clean hydrogen production projects, this decreases their access to low-cost capital. As the hydrogen market lacks power purchase agreements (PPAs) or long-term fixed-price contracts, ensuring these agreements becomes crucial for project viability and longevity. What are the key strategies hydrogen producers can use to guarantee end-use for hydrogen?

• What are the main challenges faced by green hydrogen projects in securing offtake agreements and what commitments are required from prospective clean hydrogen buyers to secure multi-year offtake agreements?
• Should the focus be on securing an offtaker first or on developing the hydrogen project itself?
• How can financers and investors be encouraged to provide funding for hydrogen projects?
• How can industry collaboration help to develop standardized contracts and agreements for hydrogen offtake?
• What strategies can be employed to manage power price risk in green hydrogen projects, and which parties are best positioned to handle this risk?