HYDROGEN INDEX

Eex Launch World First Green Hydrogen Index

by Floyd March

With the launch of the first ‘HYDRIX’ green hydrogen index through EEX, could this be a game-changing aspect of scaling up price discovery in future markets for renewable energy?

Clear price signals are the basis for the market ramp-up and further investments in the hydrogen economy. Up until now this hasn’t been a possibility and it is expected that HYDRIX will go a long way in creating a more secure business case in the future.

Large swathes of the EU will have a balanced scale of production and importing of hydrogen, so a trusted hydrogen index will go a long way in committing to prices in the future.

With vast success with the implementation of indexes in other sectors of the renewable sector, EEX will provide the sector with the foundation for growth. Being the leading electricity and gas exchange has uniquely placed EEX with the helicopter view required to launch an ambitious exchange for hydrogen.

Other exchanges have enhanced confidence in the past

Many big producers and consumers are already part of other EEX exchanges and indexes, and HYDRIX will tie these companies to its platforms and clearing functions in the maturity of hydrogen until 2033 and beyond.

Updating each week, the publicly available transparency platform will be expressed in euros per megawatt-hour (MWh) as the standard metric to follow.

When building the hydrogen product design, over 100 companies working in the field were recruited to help establish the business case for using the model and building confidence in the accuracy.

Having private companies working in conjunction with each other highlights the important role of collaboration when innovating the hydrogen sector. All of this is expected to make the EEX index more successful and scale up the use of the design.

Protections in place against market manipulation

Naturally, indexes are somewhat susceptible to manipulation, but a spokesperson explained: “We have builtin security measures to prevent the index from being manipulated." This will build additional confidence in the product.

The MWh measurement is designed to be on par with other EEX offerings, aiming to establish a connection and intersection to EEX guarantee-of-origin products that validate the renewable attributes of electricity and hydrogen.

Speaking

to Hydrogen Industry

Leaders, Sebastian Himstedt explained: “With HYDRIX, EEX provides transparency to the market. HYDRIX closes a crucial pricing signal gap, building a foundation for a market ramp-up and further investment in the hydrogen economy.”

A market-based index relying on actual trade prices for hydrogen provides a benchmark that can be used for sustainable investment decisions. “We are thus paving the way for the energy industry’s zero-carbon future and demonstrate our leadership in enabling the energy transition” added, Sebastian.

Improving FIDs is a core priority for the global market

This is welcomed news for the hydrogen sector on a global scale as final investment decisions are a little under 10% in the most recent reports. Indexes such as this may build the global framework and evidence base needed to secure more private investment in the future.

Sebastian wrapped up by explaining: “On our mission to build markets together we give an impulse for investments and trading and will further develop our offerings.”

With regards to our power markets, we have a proven track record in supporting the green transition – as you can see for example in our growing volumes in the intraday spot markets, operated by EPEX SPOT in Paris, that has become a cornerstone for the integration of renewables.”