HyXchange publishes HYCLICX price indicator for spot market Hydrogen
On June 2023, HyXchange published its first issue of the hourly HYCLICX spot market indicator for hydrogen based on lowest-priced electricity hours during its EU Green Week event in Brussels. The indicator is an instrument to estimate variable production cost for renewable hydrogen from electrolysis in the Netherlands. The method of HYCLICX (Hydrogen CLImate Certificate IndeX) is also applicable for other countries. The HYCLICX indicator was inspired by the HyXchange spot market simulation of the future hydrogen market, optimizing the spot market outcome on variable cost. A total of 25 market parties participated in these simulation meetings. HyXchange aims to rapidly expand certificate and hydrogen trading, aimed to also facilitate trade between European countries and hydrogen imports from countries outside the EU.
The renewable HYCLICX price indicator is linking the variable price component of hydrogen to the hourly electricity spot market, reflecting the electrolysis as a source for green hydrogen. By selecting the lowest set of volatile hourly power prices, mostly occurring in two varying blocks per day in the Netherlands, hydrogen can be produced in the cheapest way. The hours are largely coinciding with a high share of renewable electricity production from wind and solar, also providing alignment with certificate rules and the EC Delegated Act on hydrogen. As a general main indicator, the HYCLIX publishes the cost price for the lowest-priced 50% of hours of electricity each month. The 50% approach is linked to the average time synchronous availability of renewable electricity. The HYCLICX methodology, at the moment calculated for the Netherlands, can also be readily applied to other countries with a transparent hourly electricity price. Interested countries are invited to join.
Any market party can apply a different operational pattern in its own individual way by using the hourly HYCLICX data, available on demand. Please contact the HyXchange team directly.
Insight in the cost price of hydrogen makes it possible to start hydrogen trading more quickly. HyXchange is with its price indicator hence contributing to the growth of hydrogen produced through renewable energy as a main commodity in the energy transition and at the same time reducing overal natural gas dependence. Next to green hydrogen a cost price index of low-carbon hydrogen and grey hydrogen is also provided based on TTF gas reforming and CCS. The HYCLICX full report will be published on a monthly basis, showing both in detail the hydgrogen production price for the previous months as well as the development dating back 1 year. In addition a weekly update is available, starting from June 12th.
More detail about the HYCLICX
HYCLICX is using to a large extend the same calculation method as the HYDEX , the German hydrogen price index published by E-bridge consultancy (see Hydrogen Index – E-Bridge), who was also involved in developing the HYCLICX. Points of departure are largely the same and assumptions are harmonized:
- The indicator represents the variable cost price component of green hydrogen production. This includes the electricity consumption including losses and fees, the cost of Renewable electricity through Guarantees or Origin (European Wind and Solar), and a variable cost component reflecting operational fixed cost. Capital cost and other considerations are not included.
- The indicator is provided in €/MWh based on the HHV (higher heating value) of Hydrogen. This takes the full energy value of hydrogen into account, also compatible with TTF natural gas and other gas price indices; also compatible with rules of the Dutch hydrogen grid and current Dutch hydrogen Guarantees of Origen. Conversion factors to €/kg and €/MWh LHV are provided.
What is in INCLUDED: the marginal-price costs associated with producing additional MWh of hydrogen:
- Water cost
- Tax on electricity demand electrolyser not into stack (auxiliary power)
- Green guarantee of origin for renewable electricity (monthly)
- O&M costs
- Stack replacement cost (replacement after 10 years)
- Electricity spot price (hourly variable)
- [H2 output at 30 Bar at electrolyser]
For blue and grey hydrogen: Gas price (daily variable), CO2 price (daily variable) and/or CCS storage cost (35 eur/mtCO2)
What is NOT INCLUDED: costs that are independent of producing additional MWh of H2:
- Capital cost of investment and financing of electrolyser
- Upfront project preparation cost
- Fixed administration and overhead cost
- Electricity grid: one-time grid connection fee or cost – if any
- Electricity grid: Capacity related demand grid tariff (yearly fixed) – if any
- Hydrogen grid: all shipper tariffs, connection fees and cost
- Any cost for other means of transportation (by ship or trailer)
- Commercial margin
- Flushing of elektrolyser with nitrogen
For blue and grey hydrogen: purification cost (varying depending on requirements set by network operator)