Frequently asked questions OWE

In Section B of the appendix to the Environment and Planning Act, we set out what we mean by the Industrial Emissions Directive, i.e. Directive 2010/75/EU. After the revised directive has come into effect, the European Union Member States have 22 months in which to transpose the Directive into domestic legislation. The (old) Directive 2010/75/EU will continue to apply until it has been amended in the Environment and Planning Act.

• Is the SPV established and active at the time of your subsidy application submission? If that is the case, the SPV must apply for the subsidy. The investments are recognised as an asset on the SPV’s balance sheet.
• If the process of establishing the SPV has not been completed when the subsidy application is submitted, the parent company has to submit the application.
• If you are in the process of setting up an SPV, you must state in the project plan that you intend to place the installation in the SPV at a later stage.

You have to at least have applied for the environmental and planning permit for the project. Apart from that, the following must be clear:

• the availability of the site;
• the kind of hydrogen power generation facility that you are building;
• the renewable energy source from which you will draw current;
• the possibility of having a power connection;
• how and to whom you take off the hydrogen.

Finally, you need to submit a financial plan and the contribution of the investment capital.
In other words, you can only apply once you have decided on the electrolyser and the supplier. The approach underlying the OWE scheme is that, once you have received a letter with the subsidy decision, you can begin to implement your project straight away.

You share your experiences on the progress of your project if you are granted an OWE subsidy and build the installation under the terms of the scheme. This applies when the installation is being built and when it is producing hydrogen. We use this information for new projects, among other things.

To ensure that the subsidies have the greatest possible impact, it is important that as many project developers as possible benefit from the lessons learned from the first electrolysis projects. To achieve this, we will disseminate non-sensitive company information from the progress and final reports as widely as possible. This information may, for instance, serve as the basis for public reports or presentations.

We will submit specific information about your project to you before we publish it. You can then submit your opinion (view) on the text to be published. We will take your opinion into account and submit the amended text to you.

Renewable PPAs for the first five years (OWE application round in 2023) or three years (OWE application round in 2024) of production must be adequate in terms of scope for the hydrogen production you have indicated. A supplementary agreement for more hydrogen production is an option, for example if you first have a PPA for wind energy and later for solar power.

A replacement agreement is possible in case of unforeseen circumstances, such as when the energy company goes into bankruptcy.

No, only when production starts. For a grid-connected or dual-connected facility, you do have to send a written offer for the 2024 OWE application round. This offer must at least state:

1. the power generation facility or installations you use to produce the renewable electricity;
2. the period during which you will be supplying renewable electricity;
3. the amount of renewable electricity that you supply in a year;
4. the price of renewable electricity to be supplied or your method for determining that price;
5. the offer’s period of validity.

You must take into account the requirements stipulated in Commission Delegated Regulation EU 2023/1184.

No. The PPA must meet the regulations in Commission Delegated Regulation EU 2023/1184. Your subsidy application must include at least one PPA that is directly connected to a wind and/or solar farm. Commission Delegated Regulation EU 2023/1184 sets out that, in addition to required additionality, there has to be correlation in terms of time and the geographical situation. Certifications of origin are not relevant to this system.

No, because Renewable Fuels of Non-Biological Origin (RFNBOs) produced by the renewable part of electricity through the grid do not comply with the delegated regulations for hydrogen.

Read more about RFNBOs and the certification of green hydrogen (in Dutch).

No, for the purposes of this subsidy, the hydrogen power generation facility must operate independently.

You need an environmental permit to be able to receive the advances. No deadline has been set yet, only that you must obtain the permit in good time so that you can start building the facility in good time. The schedule and milestones that you have set are part of the subsidy decision and are therefore determining factors for the building of the facility.

For your application, you need to make the emission reduction plausible when combined with the yield calculation. In any event, the yield calculation has to be per calendar year.

The milestones must follow one another (sequentially), because we pay out investment subsidy advances based on the budget for the milestones.

The first milestone may be prior to the financial investment decision (FID).

The minimum values for ROI and DSCR are in any event the parameters within which the financiers are willing to finance the project.

A low return on the project indicates higher financial risks for your project, which means that raising financing may be more difficult. This is an assessment criterion for your project. We will turn your project down if we think that your financial and economic plan is not feasible. If the returns on the project will be low, state your reasons for wanting to build the power generation facility anyway.

For the financial assumptions, we compare your project details with the figures from the Netherlands Environmental Assessment Agency for the SDE++ scheme 2024 (the final recommendation and excess project costs model).

That depends on when the subsidy is returned. If an applicant withdraws the subsidy before we have finished assessing the applications, we will take the next project in line into consideration. Once the assessment process is completed, we no longer transfer the subsidy to a project that has been rejected based on the budget.

If we reject a project that is within the subsidy budget, or if the applicant withdraws it, the budget limit is moved and the next project(s) stand a chance of getting the subsidy.

You have to substantiate your assumptions regarding the grid tariff based on reliable data and publications from expert authorities. If there is a significant difference between the price quoted by the Netherlands Environmental Assessment Agency and the price offered to you, attach the documents you are using to substantiate the most recent price.

It is considered to be a grid-connected line.

No, the models are only available in Dutch.

Yes, you can share information in English.

No. The subsidy only covers the costs incurred to build the hydrogen power generation facility.

Equipment that you use to deliver the hydrogen you have produced to customers, such as filling points for tube trailers and the tube trailers themselves, are not part of the hydrogen power generation facility. Tube trailers are also not covered by the subsidy if they are used as 24-hour storage.

No, the compressor for storage capacity higher than 70 bar for a maximum of 24 hours of production is not covered by the subsidy.

You may include a compressor that compresses from atmospheric pressure to 70 bar (HNS feed pressure transport grid) in the investments. So, a compressor that compresses from 30 to 50 bar is covered by the subsidy because the final pressure of 50 bar is lower than the maximum final pressure of 70 bar for this subsidy.

For this subsidy, we assume that the hydrogen power generation facility must be able to supply the hydrogen via a hydrogen pipeline (the backbone). That is why the compression step is capped at 70 bar for this subsidy. Any further increase in pressure for supplying customers is outside the hydrogen power generation facility’s system limit. You cannot apply for a subsidy for the purchase, construction and operation of equipment to increase pressure to more than 70 bar. Section 2.5.2 of the explanatory notes to the scheme lists the costs you can submit for the investment subsidy part. These notes also include limited hydrogen storage (of up to 24 hours of production) as a cost covered by this subsidy.

We consider financing expenses for the construction of the power generation facility to be intangible assets if you recognise these financing expenses as an asset on the balance sheet. You may then claim the capitalised financing expenses as investment costs.

You can submit financing expenses that are not recognised as an asset as operating costs.

In principle, you can. You cannot apply for an energy investment allowance (EIA) for projects subsidised under the OWE with EIA code 270403 (hydrogen production using electrolysis) of the Energy List. You can, however, apply for the EIA for other asset codes.

For the environmental investment allowance (MIA) and arbitrary depreciation of environmental investment allowance (Vamil), only code 4111 (equipment for electrification of processes in the chemical industry) of the Environmental List is in line with the OWE subsidy scheme. As far as this code is concerned, if you received a subsidy for your investment under this scheme, you are unlikely to be able to take advantage of the MIA/Vamil. If you were awarded the subsidy, you have probably already received the maximum state aid you are allowed to receive for an investment under the General Block Exemption Regulation (GBER).

We consider a cap of 10% as reasonable for the contingency item. By the time you submit your project for the subsidy, your project must already be developed to the extent that a larger contingency item is not likely.

Yes, a detailed design of the hydrogen power generation facility falls under intangible assets. Hours spent by your own staff may also be posted to intangible assets, but only if you recognised these hours on the balance sheet. And only if the hours are directly related to the building of a hydrogen power generation facility.

Costs incurred prior to submitting the application are not eligible for subsidy.

Yes, the FEED may begin before submitting your application. All the costs incurred prior to submitting the application are not eligible for Part 2 of the OWE 2024 subsidy scheme.
So if the FEED began before the subsidy application was submitted, you:

1. do not apply for subsidy for the FEED phase;
2. or you have to divide the FEED phase into a part before and a part after the subsidy application. Then you only apply for a subsidy for the part that has not yet started.

Yes, you can apply for a subsidy for a connection specifically for connecting the hydrogen power generation facility to the hydrogen grid.

In principle, you only apply for a subsidy for the parts specifically for the building of the hydrogen power generation facility. For items that do not entirely form part of the hydrogen power generation facility, such as land or a multi-purpose building, you may apply for a subsidy for the part intended for the power generation facility.

If the actual costs are lower than the costs you stated in your application, we will reduce the CAPEX subsidy. We will reduce the subsidy by the same percentage as the difference between the estimated and actual investment costs.

It is not possible to ‘pass on’ the CAPEX subsidy to the operating subsidy.

There are no obligations as far as the cost calculation method is concerned. You do, however, have to use realistic amounts and substantiate them whenever possible. We test whether these amounts are correct during the assessment.

Yes, you may include in your application the cost of the direct line from the wind turbine to the electrolyser.

The subsidy scheme does not set any requirements for this. You may also sell the renewable hydrogen to foreign countries.

In that case, you are both the customer and the operator. You have to use an internal settlement price in your feasibility study.

Yes, you have to substantiate the purchase of hydrogen. This means you have to be in contact with a potential buyer or buyers who are willing to provide a written statement of their intent to buy. We need evidence that you have spoken to one or more potential buyers and that they have shown serious interest in buying the hydrogen at a certain price or according to a pricing policy.

You have to provide a substantiation of the entire expected sales and expected selling price for the fully renewable hydrogen you intend to produce during the operating period.

It is not known when the Delta Rhine Corridor will be put into use. Therefore, you cannot use the transport of hydrogen over this corridor as a substantiation of your hydrogen take off in your OWE-application.

We do not require a guarantee. We require a written intention for the purchase of the hydrogen produced.

There are several aspects to consider:

1. You can combine subsidies received previously with this subsidy unless we explicitly exclude them, such as subsidy from the SDE++ scheme or subsidy from a previous OWE application round. The option to combine subsidies applies to European subsidies received (for instance, the CEF and the Innovation Fund) as well as to national subsidies (for instance, IPCEI wave 2). The rules of the first subsidy decision still apply, obviously. This may affect the combined support.
2. We coordinate the paying out of the subsidy or subsidy advances, where possible. To facilitate this, we ask you to use the same milestones in both project proposals (the old one for which you have already received funding and the new one for which you are seeking funding under the OWE scheme).
3. When ranking the projects submitted we take previously received subsidies into account. This concerns the total amount in the subsidy decision, not only the part that has actually been paid out.

If your project has already been granted an IPCEI subsidy, you can still apply for an OWE subsidy. Your project must, however, meet the conditions for this subsidy. This means, for instance, that you may not start the project operations covered by that subsidy before the date of your application. Also, before that date, you may not make irreversible investment commitments for the operations covered by that subsidy. You will have entered into an irreversible investment commitment if you have already concluded a contract for those operations or have issued a commission in that regard, or if you have commenced work at the site.

This means that for the same costs covered by both subsidies, you may also apply for an OWE subsidy, which is capped at the subsidy amount for the OWE subsidy scheme and the CEEAG European state aid framework.

Based on an adjustment that the European Commission made this year, the maximum amount of support from the European IPCEI approval decision no longer applies when combined with other subsidies.

We take previously received subsidies into account in the ranking of OWE projects. They are counted in the application of the 80% rule for the CAPEX subsidy.

The procedure is as follows:

• We know which OWE projects are within budget once we have ranked them.
• We will inform you if your application for an OWE subsidy has been approved. We then ask you which subsidy you would prefer: an OWE subsidy or an SDE subsidy.
• We take this preference into account when approving the OWE or SDE application, and when withdrawing or rejecting the other application.

Using the electrolyser for balance maintenance does not automatically count as proof that the electricity complies with the delegated acts. You will still need to demonstrate that you meet the conditions in Commission Delegated Regulation (EU) 2023/1184.

As of 1 January 2030, the following applies for hours during which you use the electrolyser for balance maintenance and cannot demonstrate compliance with delegated acts:

1. the hydrogen produced during those hours does not qualify as RFNBO;
2. the electricity used during those hours cannot be included in the zero emissions in the greenhouse gas calculation.

Prior to 1 January 2030, the same applies within a period of one month.

In addition, there is a provision in Commission Delegated Regulation (EU) 2023/1184 that electricity consumption that prevents curtailment (switching off renewable generation) must meet additionality requirements. See Article 4.3 of Commission Delegated Regulation (EU) 2023/1184. As far as is currently known, Tennet is not (yet) able to provide the information required by this article. In addition, curtailment occurs during the hours when wind and solar farms produce a lot of electricity. We expect this to generate little or no additional annual full-load hours for a grid-connected electrolyser for which PPAs have been concluded with a wind as well as a solar farm.

Compression and transport are subject to the 70% GHG emission reduction requirement.

See also the formula in Point 1 in Annex A to Commission Delegated Regulation (EU) 2023/1185. It refers explicitly to ‘emissions from transport and distribution’, and states that electricity is an ‘elastic input’ (in the words of this delegated act).

Points 5 and 6 of the same annex make it clear that you can include electricity that complies with Commission Delegated Regulation (EU) 2023/1184 with zero emissions but not other electricity. This therefore also applies to electricity that does not comply with Commission Delegated Regulation (EU) 2023/1184 and for which guarantees of origin (GOs) are included. You must include all electricity directly or indirectly required to produce, transport and use the hydrogen. In other words, including (at the electrolyser site) electricity lost in transformers and electricity used for compression, gas scrubbing, cooling, peripherals, and so on.

No, this is a separate aspect.

No, maintaining the balance is separate from GOs.

Balance maintenance is also possible if you use electricity from fossil sources for which no GO is provided.

Then also write off GOs of sustainable electricity.

This is part of the certification measurement system.

No. Only electricity that demonstrably complies with Commission Delegated Regulation (EU) 2023/1184 can be included with zero emissions in the GHG calculation. Electricity that does not comply with Commission Delegated Regulation (EU) 2023/1184 has to be taken into account with the GHG intensity of the net. It makes no difference whether a GO has been obtained and written off for this electricity.

For a direct line, the green electricity produced with the support of a subsidy (SDE++ scheme) cannot be used.

For a grid-connected line, the green electricity produced with the support of a subsidy (SDE++ scheme) can be used as long as the electrolysers were put into operation prior to 1 January 2028 (the transitional phase of the delegated acts). If you put your electrolyser into operation after 1 January 2028, the green electricity (solar/wind energy) produced with the support of a subsidy (SDE++ scheme) cannot be used directly.

This subsidy scheme also applies to delegated acts. The transitional phase for delegated acts therefore also applies to projects under the subsidy scheme.

Electrolysers put into operation after 1 January 2028 cannot take advantage of the transitional provisions.

Electrolysers directly connected to a wind and/or solar farm are not subject to a transitional phase. In this case, the wind and/or solar farm must not have been commissioned more than 36 months before the electrolyser was commissioned.

Yes, as long as the power generation facility is commissioned within the five-year implementation period after receiving the subsidy decision. The subsidy period for the investment part and the operational part may overlap. It is not the case that different operating periods apply to parts of the installation delivered at different times. There is one operating period for your facility.

You have to produce a minimum volume of hydrogen to be under the €9 per kg. If you fail to reach this minimum volume, we will ask for a refund of some of the subsidy.

There are no other deadlines apart from the ones you stated in your milestone schedule, and that the implementation can take place according to this FID date.

We assess the situation. Depending on the circumstances and whether the plant is already under construction, we will immediately withdraw or suspend the application. If you do not build the facility, we will ask for a refund of the advances already paid out.

Yes. This 70% reduction of greenhouse gas emissions is a requirement of the renewable energy directive. The calculation method for greenhouse gas emissions is given in Commission Delegated Regulation (EU) 2023/1185. If you do not meet this 70% reduction in greenhouse gas emissions, you are not producing renewable hydrogen, and therefore your project does not qualify for the subsidy. We will also request a refund of the CAPEX subsidy.