Defining an Accelerated Go-To-Market Strategy for a Green Hydrogen Plant Developer
-
2024年7月16日
-
FTI Consulting was engaged by the developer of a green hydrogen production plant in southern Europe to assist in securing off-take agreements for its production, as having off-take contracts is one of the eligibility requirements for green hydrogen producers to receive subsidies from the European Hydrogen Bank (“EHB”).
Our Impact:
- The Client more directly and efficiently targeted the most-promising green hydrogen off-takers using a shortlist created by FTI Consulting. These targets were the most likely to (i) purchase green hydrogen in a reasonably short-timeframe, (ii) attach a significant green premium to green hydrogen, and (iii) be competitively supplied by the projected production plant (cost-efficient distance).
- The Client then deployed an innovative term sheet developed by FTI Consulting for green hydrogen off-take that comprehensively addressed all the new and often unprecedented risks linked to the immature and illiquid green hydrogen market. The term sheet not only maximised reference to existing commodity markets templates to facilitate and accelerate acceptance by off-takers, but also offered flexibility to develop two primary options for marketing of green hydrogen for the Client: a “more risk for producer and higher price” product versus a “less risk for producer and lower price” product.
Our Role:
- Off-taker analysis: We carried out a systematic mapping of potential current and future off-taker sites of hydrogen and its derivatives within a relevant area for competitive transport costs (200-400 km from the production site). As a next step, we assessed and ranked the identified individual off-takers based on three analytical dimensions: (1) Estimated Willingness-to-Pay, (B) Expected time to first consumption of green hydrogen, and (C) Distance from the production plant.
- Risk identification, allocation and benchmark analysis:
- Firstly, we systematically identified and characterised the risks inherent to the green hydrogen value chain.
- Secondly, we analysed possible risks allocations against a benchmark of seven publicly available off-take contracts of hydrogen, LNG and methanol to understand the practice of risk allocation in different industries, and possible off-takers’ recognised risks allocations.
- Thirdly, we allocated the risks across the supply chain based on a combination of (1) reliance on existing risk allocation standards, (2) an assessment of which party is best suited to manage the risk, and (3) the Client’s preferences.
- Term sheet definition: Taking into account the conclusion of the risk analysis, we drafted two versions of a term sheet for our Client by providing a choice between “more risk and higher price” vs. “less risk and lower price” options for the green hydrogen product to be offered.
出版
2024年7月16日
主な連絡先
シニア・マネージング・ディレクター