In this latest OIES podcast James Henderson talks to Aliaksei Patonia and Henry Rushton about their latest paper entitled “Bankability of Hydrogen Projects: Key Risks, Financing Challenges and Mitigation Solutions.” The discussion ranges from an initial analysis of why hydrogen projects have failed to reach the scale that was anticipated a few years ago to questions around what banks are looking for as they assess the lending opportunities in the sector. While technology does not appear to be the main constraint, it is clear that costs have not fallen far enough yet to avoid the need for policy support, which continues to be a significant risk. In addition, the need for long-term offtake contracts, in the absence of a liquid hydrogen market, is also critical, and the podcast assesses who the natural early buyers of hydrogen are and what is their willingness to sign up for 15 year contracts that are seen as the minimum requirement. Finally, the authors discuss the type of policy initiatives which they regard as the key to the success of the hydrogen industry over the next decade.

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