A complete switch to renewables is currently impossible without a solution to match renewables’ intermittent electricity generation with demand. Because it can be stored and transported, hydrogen can fill the gap. The recently announced CEOG Renewstable® power plant in French Guyana will be the first in the world to combine hydrogen and solar technology to produce 100% renewable baseload electricity. A pioneering project that will establish a solid blueprint for the future of renewable energies.
We are providing long-term financing as we are keen to participate in the development of the Hydrogen economy. BNP Paribas has developed a transversal and global ‘hydrogen squad’ of 30 team members to support this promising technology within the bank.
Camille Lenormand, CIB Company Engagement / Energy, Resources and Infrastructure, BNP Paribas Corporate and Institutional Banking
Solving the renewables’ intermittency challenge
For the energy transition to succeed, a key hurdle needs to be overcome: the issue of intermittency. Renewable energy produced by wind and solar farms cannot consistently produce electricity at all hours of the day. Solar power can only be generated during day light, and wind power, when it blows. This creates various issues, from lack of predictability to blackouts and potential overloading if too much power is generated for the grid to handle. This caveat has also hampered the mass deployment of renewables. Hydrogen, thanks to its storage capabilities, can solve this challenge by filling the production gaps of renewables. Combined with wind or solar technology, it can provide a constant source of clean energy. This idea is at the heart of the CEOG project.
The solar plant will provide electricity and at the same time produce hydrogen using electrolysers. The hydrogen produced will then be stored and transformed into electricity during the night. The plant has the benefit of producing electricity on a continuous basis, 24 hours a day, 365 days a year.
Guillaume Venner, Relationship Manager, Energy, Resources and Infrastructure, BNP Paribas.
The power plant, whose construction started in September 2021, is the first in the world to store intermittent renewable energy using hydrogen on an industrial scale. “This is the first and biggest hydrogen project of this kind in the world to date,” notes Guillaume Venner, Relationship Manager, Energy, Resources and Infrastructure, at BNP Paribas. “The solar plant will provide electricity and at the same time produce hydrogen using electrolysers. The hydrogen produced will then be stored and transformed into electricity during the night. The plant has the benefit of producing electricity on a continuous basis, 24 hours a day, 365 days a year.”
Storing intermittent renewable energy using hydrogen
Installed in the commune of Mana, in French Guyana, in a part of the world where a significant portion of electricity is generated from fossil fuels, the power plant heralds the development of renewable energy in the region. With 128MWh of stored energy, the plant will supply year-round uninterrupted electricity to about 10,000 homes, sustaining the needs of a growing population, and at a competitive cost compared to the existing diesel plants. “The electricity produced in Guyana today relies for a large part on hydrocarbons, so it will also contribute to decarbonising the electricity mix,” notes Venner. Free from greenhouse gases, fine particles, noise or smoke, the plant will prevent the emission of 39,000 tons of CO2 per year compared to a thermal power plant.
The equity partners of the Guyana plant include the French infrastructure fund Meridiam, the recently listed on Euronext Paris Hydrogène de France (HDF Energy) and petroleum operator SARA (Rubis Group). The overall scheme involves the construction, but also the finance, operation and management of a 55 MWp photovoltaic park with co-located green hydrogen storage with capacity of up to 88 MWh in gaseous form, and a secondary, short-term 38 MWh battery energy storage system (“BESS”) and a fuel cell with capacity of 3 MW. It will be connected into the Guyanese electricity grid under a 25-year capacity contract with French utility EDF. Commissioning is scheduled for April 2024. The benefits for the local community are also economic: it is estimated that the plant will create about 14 permanent and qualified jobs locally, on top of the several dozen jobs created during its construction.
As the leading European bank for corporates and institutions, present in all global financial centres, BNP Paribas has developed a full range of expertise dedicated to energy transition – including the development of green hydrogen – and strategies to channel financial flows towards projects and companies that are building a low-carbon world.
Powering the Hydrogen economy with sustainable finance
BNP Paribas is the main provider of financing to the project, which represents a total investment of €170 million. “We are providing long-term financing as we are keen to participate in the development of the Hydrogen economy,” said Camille Lenormand, Energy Transition Business Development, Energy, Resources and Infrastructure, at BNP Paribas. “BNP Paribas has developed a transversal and global ‘hydrogen squad’ of 30 team members to support this promising technology within the bank. This project shows how committed we are. It is the first large hydrogen project attracting long term money.” BNP Paribas sees itself as the bank of energy transition and this transaction fits in completely with its strategy, she adds. “This project is the first of this type, in a new market. It can be challenging to finance hydrogen transactions. The project had to have specific ingredients for success – regulated revenues, specific localisation, etc. This project is also important because it is a way to show our clients that we are developing expertise in hydrogen, but also that we are ready to commit long term money.” CEOG may be a first, it certainly will not be the last: the power plant project is already being duplicated in about 20 countries by HDF Energy globally including Mexico, Caribbean island nations, Southern Africa, Indonesia and Australia.
