Interview: France Hydrogene's Christelle Werquin on Nuclear's Role in Hydrogen

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French industry group France Hydrogene advocates for the development of the clean hydrogen sector in France. For France, which relies on nuclear energy for about 70% of its electricity, "clean" hydrogen must include hydrogen produced from the electricity grid, and therefore from nuclear. France Hydrogene chief executive Christelle Werquin discussed her organization's push to include nuclear-produced hydrogen in EU-level incentives for clean hydrogen and the potential for clean hydrogen in France on the sidelines of the Nucleareurope conference in Lyon on Jun. 21. A shortened and edited version of their conversation is below.

Q: What do you think of the role of nuclear hydrogen in recent European legislation, particularly in the Renewable Energy Directive and hydrogen delegated acts?

A: What we support is the idea that we will need nuclear electricity to produce hydrogen by electrolysis, low-carbon hydrogen. Because if we only rely on renewables, and in particular new additional renewable capacities, we will never have the 10 million tons [of renewable hydrogen] in 2030 that the European Union has planned for in REPowerEU.

And so it is absolutely necessary to rely on other ways of producing hydrogen under the technology neutral approach. But if we are only interested in electrolysis, which is the most interesting way for the moment to produce hydrogen in large quantities, we have to look at renewable and nuclear. Here, the electricity produced must be below the threshold defined by the taxonomy, meaning 3.38 kilos CO2 equivalent per kilo of hydrogen. We have been supporting this for a very long time in European legislation. In the delegated acts, we obtained a derogation for France for the specificity of our French electricity grid, which is largely based on nuclear power and which is already very decarbonized and which allows us to qualify as RFNBOs [renewable fuels of non-biological origin], a large part of the hydrogen produced, because we do not need additionality criteria or projects that are not already supported by state aid.

That was a first step. After, there was ReFuelEU Aviation, and there we recognized that we could make fuel with any source of electricity for hydrogen. So it's a victory for nuclear. And just two days ago, we had a positive opening with the Renewable Energy Directive, where we effectively obtained the possibility of using our nuclear to achieve some of the non-fossil hydrogen targets for 2030.

Q: Is hydrogen produced by individual nuclear reactors with electrolysis possible, or is “nuclear hydrogen” for now only hydrogen produced with a decarbonized grid containing nuclear?

A: For now, we are talking about hydrogen produced with a decarbonized electricity grid. And in France, our electricity grid is decarbonized thanks to nuclear power. That's the link. Later, farther in the future, when we talk about new small modular reactors or advanced modular reactors, then we will be able to do cogeneration, meaning to use the heat produced by the plant to supply high-temperature electrolyzers. There is a factory that makes high-temperature electrolyzers that has just been funded by France, but it's brand new. We are not yet at the stage of industrial maturity.

So it will happen really in a few years. Today, there is no direct coupling between the nuclear power plant and electrolyzers. We looked at whether we could increase the plant's load factor to enable hydrogen to be produced by electrolysis by using the surplus in some way. But it doesn't work, right? Because when the plant drops its load factor, it's for reasons of maintenance, refueling, etc. We cannot use a surplus load factor to produce hydrogen. There is no direct connection, direct coupling of an electrolyzer to a nuclear power plant, as one can have on the other hand a direct coupling between an electrolyzer and renewable energy. And for nuclear, it doesn’t work.

Q: What are the biggest challenges the production of low-carbon hydrogen faces in the coming years?

A: First, we need a regulatory framework that is stable, that gives good signals, because we can clearly see that the dynamics of hydrogen are really at the global level. There is the United States with the Inflation Reduction Act (IRA). It gives a very readable framework for investors, for industrialists. In Europe the discussions are very long, they always take time. It's always endless subtleties, it's very technical and it takes time to arrive. And so that delays the real investment in the projects. What we see today is that there are enormous project plans, enormous potential and enormous declared projects. But the real investments are slow to arrive first because of the regulatory framework and then because we need public support. We are at that stage in plenty of countries. In France, we have €9 billion, all public, that's a lot.

But if public money isn’t enough, enormous amounts of investment are needed, and private finance must also come to support the deployment of hydrogen. Those are the two main points. The third is that we need electricity at a competitive price. So that's going to be a question about the costs of future nuclear, for example, on which we will need to have prior visibility, perhaps through long-term purchase contracts. The price of electricity is 75% of the cost of producing hydrogen. If this price is too high, it will be difficult to make competitive models.

Q: The discussions now on the electricity market design reform in the European Union are focusing a lot on long-term purchase contracts for electricity. Will this be good for hydrogen production?

A: Of course. We depend on the idea that we must be able to develop long-term purchase contracts and have a system that allows electro-intensive industries to obtain electricity competitively.

Q: Are there specific sectors in France where hydrogen is gaining ground or struggling?

A: Hydrogen can be used in many sectors where it is difficult to do direct electrification. So in transport, the French automobile sector says that there is part of the fleet of light and heavy-duty vehicles which cannot be fueled using batteries, and which will have to operate on hydrogen if we’re talking about zero emissions. Maritime and aviation, we see clearly with ReFuelEU that they require hydrogen, or later on, direct hydrogen, but we can clearly see that direct electrification is complicated.

These are really very important subjects for us. Besides that, there are of course all the industrial uses including industrial uses that currently use hydrogen. The whole challenge is to produce low-carbon hydrogen by electrolysis to replace the current use of fossil fuel-derived hydrogen. Then there are industrial uses for which hydrogen can be very important. And there are ongoing investments, notably in steel production.

Q: Are there sectors being considered for decarbonization through hydrogen where that may prove to be too difficult or expensive?

A: For the moment, the construction sector is a subject that we are looking at — there is a lot of interest, but it is not easy. Industrial heating is a similar subject. Maybe in the future, there will be uses like that where hydrogen could play a role, but for now it's not yet obvious how.

Q: Do you think hydrogen needs EU-wide support similar to the IRA?

A: Yes. There is the Net-Zero Industry Act. There is an H2 bank. But both measures only support renewable hydrogen. And we support the idea of low-carbon hydrogen. For the French sector, it is really based on the connection of the electrolyzers to the electrical grid. If we cannot include low-carbon hydrogen in financing tools, we won't be able to produce hydrogen.

Q: The French government aims to produce 6.5 gigawatts of decarbonized hydrogen before 2030. Do you think this is an achievable objective, and is it enough?

A: France defined its strategy in 2020 which targets the production and consumption of 680 kilotons of renewable, low-carbon hydrogen. To produce those 680 kilotons requires 6.5 GW of electrolysis capacity. We looked at the French sector, we looked a bit at the trajectory of developments and we identified two scenarios, a scenario that meets the fixed objectives, and another scenario that takes European regulations into account. And the scenario which takes into account European regulations, it leads to more than one million tons of hydrogen. That means 7 to 10 GW of electrolysis.

Last year we did a second study where we cross-referenced our scenarios with the reality on the ground. We looked at all the projects, the plans, and we saw enough project plans to go to the most ambitious scenario, which has a demand for hydrogen greater than one million tons in France in 2030. So we are looking at 7 to 10 GW. What we are saying to the state is that you have launched the tools to achieve 6.5 GW, we must not stop now, we must continue to make at least 6.5 GW. And in fact we certainly see a need for more.

Q: The new French national hydrogen strategy revision is expected to be published soon. Are there specific things you're hoping for out of this strategy?

A: We are afraid that this revision will limit the use of hydrogen only to industrial site decarbonization projects since the president has announced that he wants to quickly decarbonize the fifty highest-emitting industrial sites. So we fear that hydrogen will be confined to this sector. What we are saying is that hydrogen can also be used for other uses that are not in large industrial sites, for example, transport is very important. It is a difficult sector to decarbonize. And if we don't do that, we lose the entire industrial value chain in France. We want to be very careful that the revision also takes into account the challenges of the industrial value chain. This is a part of the hydrogen project.

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