France will still need to build out renewable power to facilitate green hydrogen projects, despite the electricity grid’s heavy reliance on nuclear, says Matthieu Guesne, CEO of French hydrogen developer Lhyfe.

The European Commission recently published rules that would remove the ‘additionality’ requirements for green hydrogen in power bidding zones in countries with power grids emission intensity of electricity lower than 18g of CO₂e/MJ.

France’s nationwide bidding zone meets this criteria, thanks largely to a nuclear fleet that provides more than two-thirds of the country’s power, Guesne says.

But projects in France would still need to sign power-purchase agreements with renewable producers to be considered green. They would also need to prove geographical and temporal correlation—meaning the renewable production would need to be based in France and electrolysers would need to match the average generation profile of the renewable plants—first on a monthly basis and, from 2030, on an hourly basis.

“Renewable energy must be developed if we want to achieve our objectives” Guesne, Lhyfe

France will in any event need to build out renewables if it is to maintain a low-carbon grid—power demand could eventually double as the country decarbonises, Guesne says. And he notes that the timeframe for building new nuclear stations is long, meaning new nuclear plants being planned today are unlikely to come online before 2035. So, in the short term, “renewable energy must be developed if we want to achieve our objectives.”

Hydrogen from renewables should be favoured for economic reasons too, Guesne argues. “New nuclear already costs two to three times more than wind per MWh.”

Lhyfe operates in 12 countries in Europe, with a total pipeline of 9.8GW and a target of 3GW by 2030. Its preference is for a direct connection from renewables to electrolysers as it is “cheaper and cleaner”, Guesne says. Ultimately its goal is to produce hydrogen at sea, with electrolysers fed directly by offshore wind farms, he adds.

On the other hand, French state-owned utility EDF says the draft rules mean it “can produce low-carbon hydrogen by electrolysis using France’s grid and… can source renewable electricity from existing renewable sites, including sites benefitting from support schemes.” The utility says that it already uses France’s electricity grid for some of its current electrolyser projects, through its subsidiary Hynamics. “However, these pieces of legislation provide certainty and visibility to investors in hydrogen production and consumption.”

Sweden

Sweden benefits from the rules, as its power grid is 30pc nuclear and 67pc renewable, Guesne says.

Under the rules, no proof of additionality is required for hydrogen projects in bidding zones where renewables have a 90pc share of the mix. This applies to the two most northern of Sweden’s four bidding ones, SE1 and SE2, says state-owned utility Vattenfall. Additionally, “bidding zones SE3 and potentially SE4 have a carbon intensity below 18g CO₂e/MJ in a given calendar year,” freeing them from additionality requirements, Vattenfall says.

The utility adds that it is “carefully assessing the proposals and the potential implications for single business cases.” Vattenfall is involved in the Hybrit green steel project in Lulea, in bidding zone SE1. Another large green steel project—the H2 Green Steel project in Boden—is also in the SE1 power zone.

But rising power demand from electrolysis could begin to put some pressure on the power grid. Transmission system operator Svenska Kraftnat forecasts that the country could be a net importer of power by 2027 under particularly dry weather conditions. The country’s power demand is forecast to rise to 188TWh/yr by 2027, from 144TWh/yr in 2022, partially driven by new industries in the north of the country.

Scepticism

Vattenfall says that it generally “remains sceptical that a system of additionality, temporal and geographical correlation is required”.

Similarly, German utility Uniper is concerned about “overly restrictive and complicated criteria”. It says it is particularly troubled by the possibility of member states adopting stricter temporality and regionality requirements. This leeway “is problematic as it could create distortions between member states and hamper investor confidence. Member states need to express how they will deal with this flexibility as soon as possible to not further delay urgently-needed investment decisions,” Uniper says.

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Author: Killian Staines