cCarbon recently spoke to Sirko Beidatsch about European Energy Exchange AG’s (EEX) newly launched first-of-its-kind market-based hydrogen index, HYDRIX, and its impact on investments in the renewables market. Sirko is the Gas Market Expert and Business Developer at EEX and focuses on EEX’s natural gas product portfolio as well as wider topics, such as hydrogen, derivatives of hydrogen, guarantees of origin, and associated products.

Key Takeaways

• HYDRIX is the first market-based index providing price transparency in the green hydrogen market, replacing uncertain cost-based or substitute-based assessments.
• Renowned partners from the industrial and energy sectors provide weekly price assessments to EEX, ensuring a fair and transparent process.
• The HYDRIX index also serves as a reference for new or existing investments in hydrogen and the wider hydrogen infrastructure.

cCarbon.info – What is the significance of launching the HYDRIX hydrogen index in the context of the growing market for green hydrogen?

Sirko Beidatsch – HYDRIX is the first market-based index that is determined from supply and demand prices of hydrogen, delivered from renowned partners from the industry and the energy sector, thus supporting the necessary price transparency in the market. Before HYDRIX, the industry relied on cost-based assessments or assessments based on substitutes (such as power or natural gas prices) to derive possible prices for hydrogen, with significant uncertainty.

cCarbon.info – How does HYDRIX contribute to closing the pricing signal gap in the hydrogen economy?

Sirko Beidatsch – Clear price signals are the basis for market ramp-up and further investments in the hydrogen economy. HYDRIX fills this gap. With a market-based index based on actual trading prices for hydrogen, we provide a benchmark that can be used for investment decisions. It paves the way for the carbon-free future of the energy industry and underpins our commitment as an enabler of the energy transition.

About HYDRIX index

cCarbon.info – Could you explain the methodology used to calculate the HYDRIX index? How are the supply and demand prices of hydrogen determined?

Sirko Beidatsch – HYDRIX is calculated on a weekly basis and available since 24 May 2023. The index is published in euros per MWh on the EEX Transparency Platform every Wednesday at 4 pm CEST, on this website: https://www.eex-transparency.com/hydrogen/germany. Please find more information on the methodology here (PDF document on page 13).

cCarbon.info – What role do renowned partners from the industrial and energy sectors play in ensuring price transparency for the HYDRIX index?

Sirko Beidatsch – Our partners have committed to supporting the ramp-up of the hydrogen market by facilitating transparency through price assessments, which they provide to EEX on a weekly basis for the calculation of the HYDRIX index. Our partners include utilities, trading houses, engineering companies, and industrial consumers, mostly from Germany, however, we don’t reveal the name and number of contributors in order to ensure a fair, transparent, and non-discriminatory process.

cCarbon.info – How will the HYDRIX index benefit market participants and support investment decisions in the hydrogen market?

Sirko Beidatsch – HYDRIX is the first and currently sole market-based hydrogen index, that considers commercially traded hydrogen prices from both the supplier and consumer side for the index calculation, also reflecting the price level customers are willing to pay for hydrogen. All other indices until now have only reflected supplier-side costs, which can vary significantly.

cCarbon.info – Can you elaborate on the benchmarking aspect of HYDRIX? How can it be utilized by investors and other stakeholders?

Sirko Beidatsch – The publication of a market-based index for hydrogen can bring a very strong price signal for the industry. HYDRIX can be used as an orientation for new or existing investments in hydrogen or the wider hydrogen infrastructure.

cCarbon.info – What measures are in place to ensure the security and anonymity of the data used for the calculation of HYDRIX?

Sirko Beidatsch – EEX has developed a bespoke online price assessment tool (“EEX Index Messenger”) and uses a standardized, approved, and certified process for price contributions.

EEX’s leadership in energy transition

cCarbon.info – How does the launch of HYDRIX demonstrate EEX’s leadership in enabling the energy transition toward a zero-carbon future?

Sirko Beidatsch – HYDRIX is the first and currently only market-based hydrogen index, that considers commercially offered hydrogen prices from both the supplier and consumer side for the index calculation and therefore the willingness from customers to pay for hydrogen. All other indices are cost-reflective and therefore only mirror costs on the supplier side, for which costs can typically vary significantly. We strongly believe that HYDRIX is a valuable addition to bring more transparency to this emerging and promising sector, which we believe will play a crucial role in the energy transition in multiple ways, including as a storage option for renewables integration.

Analyst Contact:

• Megha Jha (mjha@ckinetics.com)
• Craig Rocha (cmrocha@ckinetics.com)