Hydrogen is presented as a real alternative to fossil fuels. But this is only the case when this hydrogen is renewable. It is the method used to produce hydrogen that will distinguish renewable hydrogen from carbon hydrogen.
To produce renewable hydrogen, water electrolysis and a supply of renewable electricity are required. The ecological benefit of the hydrogen produced is therefore based on two pillars:
The production method must exclude the use of fossil fuels. This is the case with the water electrolysis method
The quality of the electricity that powers the industrial process
However, getting renewable electricity is not so easy! Here is a brief update on the mechanisms of the green electricity market.
How can we ensure that the electricity we buy is renewable?
Electricity market mechanisms
Since 2007, the European electricity market has been open to competition. Electricity is traded:
- Via the European electricity market (for France, for example, this is the Epex Spot market). In this market, supply and demand make prices vary. Different markets allow the purchase on an hourly basis or via forwarding contracts covering the supply of electricity for days, weeks, months, or years to come.
- Intermediated over-the-counter, that is, via an aggregator or supplier. As its name suggests, it aggregates different sources of production and provides a buyer.
- Finally, by direct agreement, a contract between a buyer and a producer, according to the terms of a common agreement. This PPA (Power Purchase Agreement) offers guarantees of stability, long-term visibility, and transparency that are comfortable for both parties.
How can you buy renewable electricity?
When the producer produces renewable electricity, he issues a guarantee of origin, certified by a state-appointed body. This guarantee certifies that a certain volume of green electricity has been injected into the grid. Today the following energy sources are deemed renewable and therefore qualify for Guarantees of Origin:
- electricity produced using solar, wind, and geothermal energy, hydroelectric power, biomass energy, and wave and tidal energy…
- natural gas produced by methanization
The renewable electricity producer may apply for a Guarantee of Origin up to 5 months after the relevant production period. It is valid for 1 year in Europe and 1 month on the French market. In order to buy renewable electricity, it is therefore sufficient to buy a Guarantee of Origin, available on a European market (Power Next for France).
Buying renewable electricity therefore does not mean consuming renewable electricity
According to the AIB (Association of Issuing Bodies, the body set up by the European Union to promote the system), the largest issuer of Guarantees of Origin is Norway. This Scandinavian country issues more than 1/4 of the guarantees of origins of the European market. This is done thanks to massive hydraulic production.
Despite the interconnection of electricity networks, it is easy to imagine that there is very little chance that a green electron produced in Norway could actually be used to supply a customer in France. Another example: Iceland is a very large issuer of Guarantees of Origin … It has no physical interconnection with the European electricity transmission network.
It is therefore quite possible to power through a local polluting power plant that injects its electricity into the grid and then to buy a Guarantee of Origin on the European market to «green» this purchase.
At Lhyfe, we offer an alternative to producing environmentally friendly hydrogen
To overcome this disconnection between the certificates market and actual production, we have sought alternative solutions:
Connecting our hydrogen production facility directly to a renewable electricity generation
In our opinion, this is the safest solution. By installing our electrolyzer at the base of the wind turbines, we are sure to use the green electrons produced by the wind turbines to make the Lhyfe hydrogen. This process also works with other sources of renewable energy such as photovoltaic panels.
For wind farms, hydrogen is an additional storage solution to injecting electricity into the grid and an additional commercial outlet.
By going a step further than simply connecting to the grid and purchasing Guarantees of Origin, we can say that the hydrogen we produce is not only renewable but truly and intrinsically ecological.
Developing a local renewable sector
This industrial process also makes it possible to develop local knowledge and economic activities in this emerging sector. Our first plant in Vendée is a good example of the creation of this ecosystem:
- the producer of renewable energy is Vendée Energie, with wind turbines located a few meters from our factory
- we work with local service providers for site construction, maintenance, delivery, etc.
- we deliver to customers located near the factory: La Roche sur Yon, Les Sables d’Olonne or Saint-Gilles Croix de Vie
A model that adapts to the constraints of our customers
Nevertheless, our ambition to develop on a European scale and to serve large industries can sometimes call into question this direct connection that is dear to us. Today, many areas of activity in Europe do not have a renewable electricity generation park nearby. On the other hand, some industrial activities require a massive production of hydrogen on their own site.
To address these constraints, we have come up with a solution. We propose to contract directly with the renewable electricity producers closest to our production site. We work with them to synchronize their production and our electricity consumption over time.
Our commitment is complete and we want to propose coherent and truly ecological alternatives.