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

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 kind of factory, which came out of the ground in 2020, is running at full speed. Powered by the force of the wind and connected to the ocean, but not connected to the national grid, it has been producing for nearly a year about 300 kilograms of renewable hydrogen per day, thanks to an electrolyser which decomposes water via an electric current. Compressed and then transported by truck, the precious molecule thus obtained supplies, a few tens of kilometers away, the forklifts of a Lidl logistics site, the dump trucks of Le Mans, or even the buses of the neighboring town of La Roche. -sur-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 no behemoths of the sector on the horizon: it is a Nantes start-up, Lhyfe, created only five years ago, which operates the site – its very first. The latter offered him in 2021 a turnover of 197,000 euros … which the company intends to multiply by ten in the next five years. By 2030, it is even aiming for an installed capacity of 3 gigawatts (GW) equal to that of the giant EDF, which now shows its desire to become ” a leader in carbon-free hydrogen “.

To give itself the means of its ambitions, the young shoot thus announced at the beginning of the week its listing on the Paris Stock Exchange, with the intention of increasing its capital from 110 to 145.5 million euros. While 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 settlement-delivery day of the IPO “, she then specified, the total amount of the operation could therefore peak at 193.3 million euros.

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

Lhyfe weaves its web in Europe

With this future capitalization, Lhyfe hopes to conquer Europe. And plants its seeds everywhere, with no less than 93 on-shore projects in the pipes, which should open up 4.8 GW of commercial pipes to it by 2028, assures the pure player. In particular, it is part of the GreenHyScale consortium, funded by the EU, which plans to install a new generation 100 MW electrolyser in Denmark by 2025, compared to only 1 MW for that of 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 tons 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, via a production of 30 tons per year, the hydrogen trains of Deutsche Bahn… built by the Siemens group itself. It has also entered into a partnership with the renewable energy subsidiary of the 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 had 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 on hydrogen “, welcomes today its president, Matthieu Guesné.

EDF challenges Engie and Air Liquide in “green” hydrogen, TotalEnergies in ambush

European subsidies

It must be said that the young shoot is sitting on a gigantic market. Because the whole world places many hopes in the massification of hydrogen, which will prove invaluable for decarbonizing 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 which will be presented next Wednesday, Brussels aims to double the objective of “green” hydrogen production set by its 2020 strategy! That is a production of 20 million tons each year by 2030, encouraged 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 Environment Committee of the European Parliament. Thursday, April 28.

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

But today almost all of the 10 million tonnes of hydrogen produced each year in the EU is produced from fossil fuels, via steam methane reforming…

With its future electrolyzers directly connected to wind and solar farms, Lhyfe therefore intends to carve out a place of choice to replace “grey” hydrogen in the future mix, with a little over 0.8% market share in the European Union in 2050. It is now that society must capture this share “, we slip into its ranks.

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

Offshore wind power at the heart of the strategy

Still, the road will be long. While the kilo of “grey” 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 lower the costs of the latter, assures Matthieu Guesné, while those of hydrogen produced from methane will increase under the effect of the price of carbon and a drop in demand. Until a convergence around 2030-2035, hopes the start-up.

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

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

Above all, it relies on a very strong deployment of offshore wind power, ” key to the massification of green hydrogen for industry “, according to Matthieu Guesné. And for good reason, offshore parks can offer more abundant and slightly less intermittent electricity than their counterparts on land, whose annual load factor barely exceeds 25%.

“Tomorrow, hydrogen will be produced at sea. And we will be the first to master offshore electrolyser technology,” promises the founder of the company, who has notably entered into 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 off Le Croisic, in Loire-Atlantique, which will have to deliver a daily production of 400 kilos of carbon-free hydrogen.

The 1 MW Plug Power electrolyser off Le Croisic.

Consequent brakes

Nevertheless, there will be many challenges before scaling up. Because the establishment of new parks raises major problems of acceptability, from Oléron to Dunkirk, via Saint-Brieuc, so much so that France still does not have any (even if that of Saint-Nazaire has begun its final stage). Furthermore, the international situation could weigh heavily on the wind power industry, and thwart forecasts of lower costs. Because the steel used for offshore towers currently sells for more than 2,000 dollars per ton, or about three times more than a few months ago!

The state of the supply chain is […] unhealthy right now […] because we have an inflationary market that exceeds what anyone predicted even last year “, had alerted 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 losses in yield that this chemical process implies, will represent as much less current available to the electrical network.

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

Faced with this observation, several strategies are already beginning to take shape. While the French government is counting on the abundance of nuclear energy to develop its local hydrogen, other states, such as Germany or Belgium, intend to import it massively, sometimes from distant countries.

In this ecosystem in full construction, Lhyfe hopes to open a third way: to bring consumption and production closer, but without relying on the atom.

Storage and transport: the two major challenges of hydrogen deployment