What Europe's First Hydrogen Valleys PDA Wave Tells Latvia About Reaching FID
The Clean Hydrogen Partnership has published results from the first Project Development Assistance wave supporting 15 hydrogen valleys across Europe. The findings reveal what actually moves hydrogen projects from concept toward Final Investment Decision — and where Latvian developers stand to benefit most.
NEWS
HydrogenLatvia
5/7/20264 min read
What the First Hydrogen Valleys PDA Wave Reveals — and Why It Matters for Latvia
The Clean Hydrogen Partnership has just published the results of its first Project Development Assistance (PDA) wave, covering 15 hydrogen valleys across eight EU Member States and three associated countries. For anyone tracking how European hydrogen projects actually move from idea to Final Investment Decision, this report is the most grounded read of the year so far. It also lands at a useful moment: the second PDA call is open right now, and we've already flagged that opportunity to the Latvian community in our earlier post here:
EU Hydrogen Valley PDA Call 2026 is open now
Below is what stands out from the report, with a particular lens on what it means for hydrogen valley development prospects in Latvia.
A Real Measure of Where European Hydrogen Stands
The first wave supported 9 PDA light beneficiaries (early-stage projects) and 6 PDA plus beneficiaries (concept-stage projects), drawn from 36 applications spanning 18 countries. Together, these 15 valleys represent roughly 3.4 GW of planned electrolyser capacity and around EUR 10.3 billion in planned investment volume — a meaningful slice of Europe's near-term hydrogen pipeline.
What's notable is the geography. Spain, France, Germany, Portugal, Italy, Norway and the UK all secured PDA support. The Baltic region did not. The report explicitly acknowledges that participation from EU 13 countries was very limited and that this under-representation signals both untapped potential and barriers worth addressing — which is exactly why a dedicated PDA light track tailored to EU 13 applicants has been introduced for the second call.
Commercial Maturity Is the Decisive Factor
Across the cohort, commercial support dominated. Almost every valley received high or very high commercial assistance, far ahead of technical, regulatory or governance work. The reason is simple: without a credible business case, sound commercial structuring and firm offtake commitments, projects cannot advance to investment readiness regardless of how strong the engineering is.
The PDA support delivered concrete commercial outcomes. PDA plus beneficiaries reached business plans yielding net present values around EUR 20 million and project IRRs of 15%, generated pipelines of 10+ qualified offtake leads through structured market outreach, and advanced cost estimation methodology from Class IV to Class III. PDA light beneficiaries advanced from early-stage initiation to validated willingness-to-pay assessments and structured offtake pipelines of 30+ counterparties.
For Baltic developers, the message is direct: the bottleneck holding most regional hydrogen projects back is not technology or ambition. It's the structured commercial work — willingness-to-pay analysis, offtake structuring, financing strategy — that converts a concept into a fundable proposition.
Offtake Remains the Hardest Problem to Solve
The single most important market insight from the report: well-structured offtake agreements anchored by industrial projects are the central lever for unlocking financing. Investors and financiers require long-term demand visibility before committing capital, and valleys that build on strong industrial anchor projects — refineries, large energy-intensive sites, ports — are best positioned to conclude bankable offtake contracts.
This points to a specific opportunity for Latvia. The Liepāja and Ventspils industrial corridors, the chemical and fertiliser sectors, and the developing aviation and maritime fuel demand around Riga all represent the kind of anchor offtake conditions that the report identifies as critical. The work to translate that potential into structured, bankable offtake is what PDA-type support is designed to enable.
Regulation Is Driving Demand, Not Just Constraining Supply
Clear and binding hydrogen-specific regulation emerged as a primary driver of demand across the cohort. RED III, FuelEU Maritime, ReFuel Aviation Regulation and the recent Delegated Act on low-carbon hydrogen are creating concrete demand pull for specific hydrogen products in specific sectors — and projects that understood this regulatory architecture were able to reposition their commercial narrative as active contributors to binding policy goals.
For Latvian developers, the implication is that regulatory analysis isn't a compliance afterthought. It's a commercial input that determines which offtake conversations are worth having, and which sectoral demand pockets will materialise on what timeline.
The DEVEX Funding Gap Is Real — and Bridgeable
Perhaps the most honest finding in the report: current financing instruments predominantly focus on CAPEX, leaving a structural funding gap for development expenditure (DEVEX) needed to mature projects to an investable stage. PDA-type support has proven highly effective at closing this gap, advancing projects to the point where traditional project finance solutions can be mobilised.
This is the structural reason the second PDA call matters for Latvia. The local hydrogen project pipeline includes several initiatives at exactly the maturity stage where DEVEX support is most decisive — between initial concept and investable feasibility — and the cost of preparing a competitive PDA application is small relative to the potential acceleration toward FID.
What This Means for the Latvian Hydrogen Ecosystem
The 15 valleys supported in the first wave each progressed measurably along the development pathway. PDA light beneficiaries moved from early initiation toward concept stage. PDA plus beneficiaries advanced from concept to feasibility and beyond, in some cases identifying LCoH optimisation potential of up to 25% across more than ten technical levers.
For Latvian hydrogen ecosystem stakeholders, three takeaways are worth holding onto.
First, the projects that won PDA support shared one trait: they could articulate a credible business case anchored in real offtake potential. Technical sophistication alone did not carry applications through.
Second, the geographic distribution of the first cohort confirms what the data already suggested — Baltic and EU 13 representation in EU hydrogen support programmes is disproportionately low relative to the region's project pipeline. The dedicated EU 13 PDA light track in the second call is an explicit response to that imbalance.
Third, the second Call for Applications is open through 26 June 2026, and the application effort is meaningful but manageable — roughly 40 hours according to the first cohort's experience. For Latvian developers and consortium organisations weighing whether to apply, the case is straightforward: the PDA programme has now demonstrably moved 15 projects closer to FID, and the next wave of beneficiaries will set the tone for which European regions accelerate fastest through 2027 and 2028.
Source: New report highlights results of Project Development Assistance for Hydrogen Valleys