Contracts for difference key to hydrogen economy
If financial instruments are not established to support adoption, the hydrogen supply chain will stall
A collaborative effort between governments and industry will be vital if the hydrogen economy is to become a reality, according to the Hydrogen Council, a global CEO-led initiative. One central component of this is supporting the creation of financial instruments to support a market for green hydrogen. “The cost structure of green hydrogen is dominated by the cost of renewable power,” says CEO of UK-based ITM power, Graham Cooley. “Renewable power tends to be regional in its cost structure and the techniques that we use tend to be regional. But the EU has a strategy for developing a hydrogen business model, called a contract for difference (CFD) and that is unique in the world.” A CFD is a f
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