“There seems to be a huge amount of hype in the finance community around hydrogen. This is clearly perceived as one of the key factors for net zero,” he told delegates in the Investment session this morning.

But how do we get from the enthusiasm to a closing on large-scale financing?

Baker explained there are points of focus that need to be explored when looking at the bankability of hydrogen projects. From clean hydrogen, government criteria, the all-important technology and more, it is more than just dishing out the cash.

Whilst investment in the hydrogen market is clearly necessary right now, especially as the European Commission looks to cut ties with Russia, it takes time for ambitious projects to turn from PowerPoint to reality.

“I think one of the challenges we have is sorting out the real projects and what I term the PowerPoint projects,” Baker explained. “There are a huge number of projects being put forward in the market around the world. Some will take many years to develop, others may never make it.

“The key is to try to find the right projects to develop the structures, to develop the templates and the precedent we need to ensure that there’s long term liquidity available for the market as it develops.

“We’ve clearly seen that support flowing into the industry now, and we’ve started to look at a number of large-scale projects and how we might finance those.”

As outlined in multiple hydrogen strategies across the globe, clean hydrogen is a key focus – and this also goes when it comes to investment. “There’s a lot of talk around blue, pink, turquoise, any number of different colours of hydrogen, but what we’re really focused on is the emissions intensity of the products that’s being produced from our side in the finance community,” Baker explained.

“We obviously want to finance projects, which are going to meet the criteria set down by different governments around the world for clean hydrogen qualification. The EU are working on hydrogen standards at the moment, and so is the UK.”

Baker continued, “We’ve been following the evolution of these standards very carefully to make sure the projects we are supporting, the projects that we’re getting involved in at the early stage, will in all likelihood meet the standards that are going to be prevalent in the market.”

Speaking from an engineer’s background, however, Baker enthused that technology is the key focal point for him. What is meant by this, is whether the technology will make its revenues. Will the technology work and, if so, will it perform at rate that will efficiently give back to the hydrogen economy?

This is an interesting point here, as Baker highlighted the importance of assessing the whole value chain. Explaining the why this is necessary, he stated, “Demand for electrolysers, when you look at various ambitions and you look at the size of some of the projects of coming forward now in the market, they’re actually dwarfing the availability of electrolysers, or the current production of electrolysers.

“We’re somewhat concerned about the ability of the market and the supply side of the market to meet the demand, especially if all these projects start to move ahead relatively quickly as it all plans to.

“So, we spend quite a lot of time, very similar to the beginning of the solar boom, in looking at different electrolyser suppliers, looking at who we think would be the winners and losers, and we’re also involved in financing some of the electrolyser manufacturing facilities that we now see being built to support supply.”

“We see this as absolutely critical to making sure the supply chain can keep up with demand.”

“Which technologies win or lose? We don’t know yet. Which suppliers will win and loose? I think we’ll see consolidation in the market. We just want to be sure that we’re aligned with suppliers who can actually meet their obligations.”