The role of grid-connected electrolysers fed with carbon free electricity
Frans Timmermans and Fatih Birol put it loud and clear in these very pages last week: electrolysers to produce clean hydrogen are on the verge of becoming one of the decade’s breakout technologies. How do we make this a reality with the upcoming Hydrogen Strategy?
Today 97% of Hydrogen is fossil and not decarbonized. So the EU needs to ramp up the volumes, while decarbonising existing H2. This is a huge challenge. And we cannot afford a potential blind spot in our common strategy. We obviously need lots of renewables to produce hydrogen, but dedicated solar and wind will not be enough.
The potential of grid-connected electrolysers running on a carbon free electricity mix must not be forgotten. For the EU to achieve its objectives, a clear C02 emission criteria is needed. This criteria must give clarity and transparency to both investors and consumers. If we want the EU to be on track to achieve 2030 and 2050 climate targets, the production and consumption of clean hydrogen must be supported.
Today, producing 1 kg of hydrogen emits 10 kg of CO2 through a process called Steam Methane Reforming, which basically separates methane (CH4) into carbon and hydrogen. It relies on a fossil resource, natural gas, and it emits 90 MtCO2 per year in the EU. It is urgent to replace this existing fossil hydrogen consumption (9 Mt) with low carbon processes.
Water electrolysis is one of the main ways to produce hydrogen in a low carbon way. The electrolysis process separates water (H2O), into Hydrogen (H2) and Oxygen (O). Both products, hydrogen and oxygen, are valuable. The CO2 content of hydrogen is directly linked to the CO2 content of the electricity used to run the electrolyser. Which means that zero-carbon or low carbon electricity translates into zero-carbon or low carbon hydrogen.
The power sector has been a front-runner in decarbonisation. The CO2 content of electricity has decreased by 43% since 1990 and during the same period, electricity consumption increased by 1.5% to 2% year-on-year across Europe. This shows that decarbonisation and growing demand can go hand in hand.
As soon as electricity emits less than 200 gCO2/kWh electrolysis reduces emissions compared to fossil hydrogen. This is already the case in 8 EU Member States and it will happen all over Europe by 2030 thanks to emission reduction targets, which are likely to be revised upwards. In addition, the EU power sector has pledged to become fully carbon-neutral well before 2050.
That is why electrolysers will steadily decrease emissions and the renewable content of hydrogen produced by electrolysis will continue to increase. Consumers deserve transparency on both the carbon content and on the renewable nature of the hydrogen they purchase.
The CERTIF’HY project, supported by the European Commission, successfully pilots a system of Guarantees of Origin for Hydrogen in several member states. This system is ready to be scaled-up.
Investments made today in hydrogen will still be there in 2050, that’s why we can’t get this wrong. Putting massive public funding today into SMR related technologies would put the Green Deal at risk. Devising an EU hydrogen strategy without anchoring it with clear CO2-emission criteria could lead to fossil lock-in for several decades.
Hydrogen is a promising industry, which must rely on future-oriented values and innovative assets, not the ones of the 20th century. Transitioning out of fossil fuels can be scary for some market players but it must happen.
Hydrogen produced through electrolysis is mainly driven by the cost of electricity. With today’s power prices, electrolysis production costs are 3 to 4 times higher than for steam methane reforming.
Public support mechanisms are needed and must primarily be driven towards CO2 emission reductions and also support innovation, learning and positive spill-over effects. Increasing the value of low carbon solutions through appropriate CO2 signals, quotas or incentives would greatly support the development of the clean hydrogen industry and favour the early deployment of low carbon solutions in industry and transport.
Hynamics, as a producer of low carbon hydrogen by electrolysis, targets today market segments which recognize the value of low-carbon hydrogen or for which a local production allows to reduce very high hydrogen transport costs.
This is mainly heavy-duty transport and specific industries which need to reduce their CO2 emissions and where direct electrification is not the obvious solution. At Hynamics we do believe in a model where hydrogen is produced close to consumption sites, avoiding expensive and inefficient long-distance transport. These markets are meant to grow.
In this endeavour, the connection of electrolysers to the electricity grid will be a key enabler of sector coupling and essential to kick start the nascent hydrogen market. Betting on energy system integration is a unique opportunity to find synergies and flexibility, using the fact that electrolysers are powered with electricity.
Compared to off-grid systems, the overall business case of an electrolysis facility connected to the grid is beneficial in terms of running hours, reduced storage needs and additional revenues from flexibility services for the power system.
The recent crisis is hitting the EU economy hard but it can be turned into an opportunity to engage on a clear carbon neutrality pathway. The Paris agreement will not be fulfilled with business as usual solutions. Innovation is needed, both in technologies and in business models.
Let us not put European citizen’s money into fossil baskets.
Christelle Rouille is the CEO of Hynamics. Hynamics was created a year ago as a 100% subsidiary of the EDF Group. Hynamics activity model is to invest in H2 production assets and develop projects, from design to the operation phase. Hynamics produces H2 through water electrolysis fed with renewable and low-carbon electricity.
EDF is also a major shareholder in McPhy, a manufacturer of electrolyser, having invested 17 M€ in this technology-driven company.