Romande Energie is planning to manufacture green hydrogen and will set out its wider power-to-X strategy by mid-2021, a top executive at the Swiss utility tells Hydrogen Economist.

The utility, based near Lausanne in the canton of Vaud, has been exploring the potential of hydrogen for a few years and hired Jeremie Brillet as its head of hydrogen and power-to-X in October to formalise and lead its strategy.

“I joined the company to consolidate this knowledge and deepen the understanding of the opportunity in hydrogen for Romande Energie, and what role we can play in the value chain,” says Brillet. “We are still at the brainstorming stage, but within six months we will define a clear strategy as to where to go with hydrogen and what our focus will be.”

“The models are still unclear as all the metrics are changing very quickly” Brillet, Romande Energie

The company, 38.6pc-owned by the third most populous Swiss canton, distributed 2.5TWh of electricity in 2019. Hydroelectric accounted for 83pc, solar 3pc, biomass 2pc, wind 0.2pc and nuclear 12pc. About 20pc was generated in-house.

“The biggest issue that must be solved for renewable energy is its penetration of any given grid,” says Brillet. “This is where we see hydrogen having large potential. Not only to allow for a bigger portion of intermittent renewable energy in the energy mix, but also to enable a region or country to become more energy independent. That is the long-term opportunity from hydrogen and power-to-X.”

Business case

Last year, Romande Energie produced 602GWh of electricity in Switzerland and 137GWh in France. Its power grid spans more than 10,500km, serving around 300,000 customers in the French-speaking western part of the country.

In Switzerland, solar PV farms generate excess electricity in summer and river-based hydroelectric power plants do likewise when the mountain snows melt in spring. Unfortunately, peak electricity consumption occurs during winter. 

Using hydrogen as a means to store surplus energy is therefore particularly useful. Excess electricity can power electrolysers to make hydrogen, which can then be consumed when renewable production ebbs.

Making hydrogen could consume “a significant part” of Romande Energie’s overall electricity output, Brillet predicts.

“The models are still unclear as all the metrics are changing very quickly,” he says. “[But] even if an asset is entirely dedicated to making hydrogen, we should go for it, because on a macro scale there is not only the intermittency but also the seasonal mismatch between production and use.”

Another opportunity stems from the high taxes Switzerland levies on heavy-duty diesel trucks. Taxes are calculated based on distance and weight, effectively doubling the operating cost of diesel lorries transporting goods.

“There seems to be a clear case for hydrogen-powered trucks, as their operators do not have to pay that tax,” says Brillet. “Mobility is an immediate business opportunity.”

The most “precious asset” is the ability to produce green energy, he says. “So oil distribution companies—at least in Switzerland—[are] also moving to become hydrogen distributors. Electricity companies that own the assets to produce green energy can have a key role to play.”

Regulatory hurdles

Brillet cites two main difficulties in building green hydrogen production capacity: regulation, and the cost of distribution and production.

If renewable electricity plants directly power electrolysers, grid usage taxes do not apply so producing hydrogen could be economically viable in the long term. But if an electrolyser uses grid power it would incur those taxes. “The price of electricity will almost double in some cases”, says Brillet.

2.5 TWh – Electricity distributed by Romande Energie in 2019

Waiving such taxes would be consistent with the duties imposed on pumped storage power plants. “In principle, it could make sense to extend this exemption to any electricity storage capacity,” says Brillet. “There are [initial] discussions to exempt hydrogen plants from these taxes.”

Under current regulations, Romande Energie would be unlikely to use its entire electricity production to make green hydrogen, says Brillet. “But the more you have renewable electricity production, the more you increase the opportunity to further substitute CO₂ emitting uses of oil and gas with nearly CO₂-neutral green hydrogen and participate in the decarbonisation of the energy business”, he adds.  

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Author: Matt Smith