Energy Transition

'High impact' EDF and TotalEnergies-backed hydrogen fund plans $2bn global spree

Hy24 hopes to unleash €20bn of private investment for mature H2 technologies globally on back of US Inflation Reduction Act

Hy24 chief investment officer Amir Sharifi.
Hy24 chief investment officer Amir Sharifi.Hy24
  • Rachel Parkes
A pure-play hydrogen investment vehicle is planning to splash €2bn ($1.9bn) over six years on H2 projects across the entire value chain, with the aim of unlocking €20bn of private money in the sector.

The Hy24 fund, a joint venture between Swiss cleantech investor FiveT Hydrogen and French private equity house Ardian, intends to plough the cash into areas of “high impact” within the hydrogen sector, including the US, Europe, South America and Asia.

Investments will be made across the hydrogen value chain: from the upstream, including green hydrogen made from renewables and low-carbon blue hydrogen made with fossil gas and carbon capture and storage, to downstream infrastructure projects such as refuelling stations.

“The fund will look to create the biggest impact in areas in which it invests which, of course, all have different strengths and weaknesses when it comes to the hydrogen economy,” a spokesman for Hy24 told Recharge. “Spain, for example, with its abundance of wind and solar potential, offers an attractive renewable-to-green hydrogen market.”
Hy24 has already begun committing capital, buying a 30% stake in the renewables arm of Spanish energy infrastructure owner Enagás, with the aim of developing the company’s green H2 business. Enagás is already producing small volumes of renewable hydrogen from its 330-tonnes-per-year Mallorca project, on the Mediterranean Balearic island.

And it has also invested in Germany’s H2 Mobility Deutschland, which operates a large network of hydrogen refuelling stations, and Hy2Gen, a project developer for green hydrogen production facilities.

First launched in October 2021 and backed with capital from its six founding investors, AirLiquide, TotalEnergies, Plug Power, Baker Hughes, construction giant Vinci, and cryogenic tank manufacturer Chart Industries, Hy24 claims to be the world’s first and largest hydrogen-only investment fund. It now has a total of 50 investors from 13 countries, including energy players Snam, GRTGaz and EDF, aviation firm Airbus, as well as a selection of institutional funds and commercial banks.

The fund is now closed to further investors after hitting €2bn in capital, exceeding its initial target of €1.5bn.

Grid-powered electrolysis

When it launched last year, the company’s founders told Recharge that they planned to focus initial investment on electrolysis powered by electricity from the grid.
That strategy has not changed, even for Hy24’s European investments, the company told Recharge, despite the uncertainty caused by the European Parliament’s decision to scrap the proposed delegated acts, which would have imposed strict rules on how green hydrogen producers sourced their supply.

In fact, Hy24, which has made no secret of the fact that grid-powered electrolysis might not be strictly “green”, appeared relieved that the rules have been relaxed for the moment.

“The additionality principle, in the long term, is sound in that it ensures clean energy is used to produce green H2,” the Hy24 spokesman said. “However, it is extremely difficult to put in place in practice so rapidly, so it is wise to have this pass through some bridging periods where the additionality and temporality principles are relaxed, up to the moment the renewable dynamic will be strong enough to generate the required capacity dedicated to hydrogen.”

He added: “Before the end of the decade, we should see a mix of projects connected to the grid with PPA but also dedicated integrated schemes, and the regulation should enable this.”

Moreover, it seems the fund’s global outlook is a result of pull factors for hydrogen investment across the world rather than push factors relating to European regulations.

“The main reasoning behind the global investment outlook is the IRA [Inflation Reduction Act] in the US and the export markets of Asia, as well as the abundant of renewable-to-x projects in areas like South America and western Europe,” the spokesman added.

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Published 11 October 2022, 12:13Updated 11 October 2022, 12:17
Hy24EnagasTotalEnergiesEurelectricEurope