🇳🇴 Ocean Hyway Cluster: Key highlights from new funding scheme

Press release from Ocean Hyway Cluster

Enova held a webinar on the upcoming support program for hydrogen and ammonia powered vessels. We have summarized the key highlights of the new funding scheme.

Thursday 24th August, Enova invited all interested parties to join the webinar on the upcoming support program for hydrogen and ammonia powered vessels. The aim is to reduce network and cost barriers, contribute to cost reductions and further support the development of technology.

Contract for Difference is challenging
Many are talking about the need for contract for difference in development of hydrogen and ammonia value chains. Enova have evaluated contract for difference to be very challenging in the current immature market where we don’t have established cost estimates and are lacking a clear market price. By guaranteeing a difference we risk manipulation of market price which will make it harder to create functioning market mechanisms. However, they acknowledge that this can change quickly as ships start entering the market and comment that operational support is something that is continually evaluated. As for now, this support program is the greatest contribution to getting zero emission vessels into the market.

New for this support program is the use of competitive bidding, allowing Enova to support up to 80% of the additional costs of investing in a hydrogen/ammonia vessel compared to a conventional vessel. This requires the process to be based on competition where cost-efficiency is the most important criteria for awarding support. 75% will be based on cost-efficiency (Support (NOK)/DWT(tons)), and 25% will be based on grade of innovation. This type of process requires a strict competitive regulation which deviates from other Enova support schemes.

Enova has defined two sets of criteria for support, one for hydrogen and one for ammonia. However, the general terms are identical and there are only a few technical differences related to the use of pilot fuels in ammonia vessels.

Key highlights
We have summarized a few key highlights from the support schemes, but encourage all to watch the recording from the webinar and read the two programs for more details:

Additional costs directly related to the ship can include both the propulsion system (all technologies) and technologies related to energy efficiency. Costs related to infrastructure are not included.

Applicants need to be a registered in Norway and document sufficient execution abilities related to financial, technical, and organizational aspects. These are further described in the program and are additions defined by Enova.

The project can include up to three vessels, which can be new builds or retrofit of existing vessels.

Final investment decision within 12 months of received commitment letter and execution/operation within 36 months.

The project must include a credible plan for bunkering location and provider of hydrogen/ammonia and document a positive cash-flow in operation.

There is an upper limit of support set to 150 MNOK and the project cannot have received any support from Enova previously.

The vessel needs to be able to fully operate on zero-emission fuels (exception for ammonia engine requiring a pilot fuel). During normal operation, there is set a minimum of 50% of energy consumption which shall be possible to cover by hydrogen/ammonia.

There are no requirements from Enova that the vessel shall operate on zero-emission fuels. Please note there are no requirements stating that the hydrogen/ammonia should be either blue or green.

Compared to an equivalent fossil fuel vessel, the vessel shall reduce the total CO2-emission onboard by 25% during the first 5 years to qualify for support.

The vessel shall be commercially operated.

The vessel shall be registered in NIS/NOR or operate at least 1/3 of the time in Norway/Norwegian economic zones, or document 1/3 of arrivals in Norwegian ports.

A minimum of 50% of the bunkered ammonia/hydrogen in the first 5 years of operation shall be bunkered in Norway.

Share your opinion
To ensure the support scheme is targeted, easy to understand and lead to actual vessels running on zero emission fuels in Norway, Enova is asking for feedback on the support program. We highly encourage all our members to contribute with your insights. Enova is asking for one response per company which can be uploaded as a PDF file by 06.09.2023.

Originally published on 31 August.