Lhyfe, this French start-up that sees itself as a global giant in renewable hydrogen

A few hundred meters from the Bouin wind farm in Vendée, a new type of factory, which came out of the ground in 2020, is running at full speed. Powered by the wind and connected to the ocean, but not connected to the national grid, it has been producing around 300 kilos of renewable hydrogen per day for almost a year, thanks to an electrolyser that breaks down water. by an electric current. Compressed and then transported by truck, the precious molecule is thus supplied, a few dozen kilometers away, from forklift trucks at a Lidl logistics center, from Le Mans dump trucks, or even from buses in the nearby city of La Roche. -Yon. Enough to limit the environmental footprint of mobility in the region, argues its operator, who believes, hard as iron, in the future of carbon-free hydrogen.

But there are no industry giants on the horizon: it is a start-up from Nantes, Lhyfe, created just five years ago, which operates the site – its first. The latter offered it a turnover of 197,000 euros in 2021… which the company intends to multiply tenfold over the next five years. By 2030, it even points to an installed capacity of 3 gigawatts (GW) equal to that of the giant EDF, which now shows its desire to become ” leader in carbon-free hydrogen “.

In order to fulfill her ambitions, the young scion announced her listing on the Paris Stock Exchange at the beginning of the week, with the intention of increasing her capital from 110 to 145.5 million euros. Although it had already raised 76 million euros in the form of convertible bonds, ” of which approximately 47.8 million will be converted into shares on the day of the liquidation-delivery of the IPO “, he then specified, the total value of the operation could therefore reach 193.3 million euros.

Specifically, investors will have until May 19 to acquire the shares during an open price offer, even if Lhyfe estimates them between 8.75 and 11.75 euros.

Lhyfe weaves its web in Europe

With this future capitalization, Lhyfe hopes to conquer Europe. And it plants its seeds everywhere, with no less than 93 onshore projects in the pipes, which are expected to open 4.8GW of commercial pipes by 2028, the pure player guarantees. In particular, it is part of the EU-funded GreenHyScale consortium, which plans to install a 100 MW new generation electrolyser in Denmark by 2025, compared to just 1 MW for the one in Bouin.

Last month, the start-up also announced that it had signed a memorandum of understanding with the German energy company WPD for the establishment of a hydrogen production plant with a capacity of 600 MW (240 tonnes per day). , in connection with the Storgrundet offshore wind farm (1 GW) in Sweden.

And that’s not all: Lhyfe recently won a tender in Germany against Siemens to supply, by a production of 30 tons per year, the Deutsche Bahn hydrogen trains… built by the Siemens group itself. It also entered into a partnership with the renewable energy subsidiary of Portuguese giant EDP, which will become its preferred supplier “.

The tricolor company is even looking beyond the Old Continent and announced in April that it raised 10 million euros from the Japanese conglomerate Mitsui with the aim of ” expand internationally “. Thanks to this strong fabric, its portfolio is almost five times larger than that of EDF in hydrogen “, welcomes today its president, Matthieu Guesné.

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European subsidies

It must be said that the young shoot is sitting in a gigantic market. Because the whole world has high hopes for the massification of hydrogen, which will be invaluable for the decarbonization of mobility and industry, in addition to the electrification of processes. Especially since the war in Ukraine has further accelerated the process, especially for the European Union, which is trying by all means to limit its extreme dependence on hydrocarbons from Russia. Thus, in its emancipation plan called REPowerEU that will be presented next Wednesday, Brussels intends to double the goal of “green” hydrogen production defined by its 2020 strategy! That’s a production of 20 million tonnes a year by 2030, fueled by strong subsidies.

“I firmly believe in ‘green’ hydrogen as the engine of our energy system of the future”, even declared the Vice-President of the Commission, Frans Timmermans, during a meeting with the Committee on the Environment of the European Parliament. Thursday, April 28th.

And yet, the use of hydrogen is not new, particularly in industrial processes ranging from the development of synthetic and petrochemical fuels to the manufacture of semiconductors.

But today almost all of the 10 million tonnes of hydrogen produced each year in the EU are produced from fossil fuels, by methane steam reform…

With its future electrolysers directly connected to wind and solar farms, Lhyfe therefore aims to create a place of choice to replace “gray” hydrogen in the future mix, with just over 0.8% market share in the European Union in 2050 It is now that society must capture this share “, we slipped in their ranks.

Carbon-free hydrogen: another “climb to climb” for the tricolor sector

Offshore wind energy at the heart of the strategy

Still, the road will be long. While a kilo of “gray” hydrogen costs 1.90 euros to produce, the “green” equivalent, whose manufacturing process does not depend on fossil fuels, is now around 6 euros. But industrialization will greatly reduce the costs of the latter, assures Matthieu Guesné, while those of hydrogen produced from methane will increase as a result of the carbon price and the drop in demand. Until a convergence around 2030-2035, start-up is expected.

For the Bouin plant, we invested 10 million euros for 1 MW. But for the next projects, it will be something around 5 million euros, for five times more hydrogen produced. ! […] Especially as they will be profitable from the first year of operation “, emphasizes the entrepreneur.

Thus, while the company suffers large losses, with a negative Ebitda of more than 5 million in 2020, its CEO counts on a return to green from 2026, and a long-term Ebitda margin of over 30%.

Above all, it depends on a very strong deployment of offshore wind energy”, key to the massification of green hydrogen for industry “, according to Matthieu Guesné. And for good reason, offshore parks can offer more plentiful and slightly less intermittent electricity than their onshore equivalents, whose annual occupancy rate barely exceeds 25%.

“Tomorrow, hydrogen will be produced at sea. And we will be the first to master the technology of offshore electrolysers”, promises the founder of the company, which notably signed a partnership with Chantiers de l’Atlantique.

By the end of the year, Lhyfe intends to put into production the first 1 MW offshore pilot site at Le Croisic in Loire-Atlantique, which is expected to deliver a daily production of 400 kilograms of carbon-free hydrogen.

Le Croisic’s 1 MW Plug Power electrolyser.

consequent brakes

However, there will be many challenges before expanding. Because the implementation of new parks raises major problems of acceptability, from Oléron to Dunkirk, via Saint-Brieuc, so much so that France still doesn’t have any (although Saint-Nazaire’s has begun its final phase). In addition, the international situation can weigh heavily on the wind energy sector and frustrate cost savings forecasts. Because the steel used in offshore towers currently sells for over $2,000 a ton, or about three times as much as it did a few months ago!

The state of the supply chain is […] unhealthy now […] because we have an inflationary market that exceeds what anyone predicted even last year “, had warned last month the general manager of GE Renewable Energy (French subsidiary of the American General Electric), Sheri Hickok.

Especially since the electrons used to produce hydrogen, with the yield losses that this chemical process implies, will represent so much less current available to the electrical grid.

We will never have enough renewable energy to produce green hydrogen “, thus launched Emmanuel Macron at the end of 2021.

Given this finding, several strategies are already beginning to take shape. While the French government relies on an abundance of nuclear energy to develop its local hydrogen, other states, such as Germany or Belgium, aim to import it massively, sometimes from distant countries.

In this ecosystem under construction, Lhyfe hopes to open a third way: bringing consumption and production closer together, without depending on the atom.

Storage and transport: the two big challenges of hydrogen deployment