The potential of green hydrogen in the energy transition: the Octopus case
The impact that hydrogen will have on decarbonization and its role in the energy transition will depend on how it is produced. One of the most important challenges for decarbonization will be in fact the transition from the production of grey hydrogen to green hydrogen, in order to meet the targets set by the Paris Treaty for 2050.
Green Hydrogen is produced from Renewable Energy sources such as wind and solar, using the process of electrolysis, through which, thanks to electricity, water molecules are split into molecules of oxygen and hydrogen. Although it now accounts for only 5% of total production, green hydrogen is considered a key element in the energy transition of our economy, because it does not generate CO₂ emissions.
According to the report published by IRENA, green hydrogen could be key to decarbonizing sectors of the economy such as energy-intensive industries, the chemical and commercial transportation sectors, as well as aviation and shipping, which are still highly polluting. In addition, electrolysers that harness electricity generated from renewable sources, and stored hydrogen, could add flexibility on the supply and demand side of energy, facilitating the penetration of more wind and solar into the grid.
Hydrogenics 2 megawatt Power to Gas project in Falkenhagen, Germany - Green Energy Futures
Hydrogen and renewables: the Octopus case
Moroni&Partners, a Kiwa Group company, has recently performed Vendor Technical Advisor activities for Octopus Renewables, an operator specializing in the management of investments in the renewable energy sector and part of the group headed by Octopus Investments Ltd.
These Technical Due Diligence activities were functional to the signing of the agreement with A2A, one of the largest Italian multi-utilities, which subsequently won the tender for the purchase of an important portfolio consisting of 17 photovoltaic plants with a total nominal capacity of 173 MW.
A technical, authorization, performance and production forecast analysis was carried out, as well as feasibility studies on electrical storage and production of green hydrogen. Nine plants are located in Lazio and eight in Sardinia, and they were sold for a consideration of 205 M€, corresponding to an equity IRR of about 6%. The acquisition is subject to the approval of the Italian Presidency of the Council of Ministers pursuant to the Golden Power Decree. IMI-Intesa Sanpaolo, KPMG and KB Development acted, respectively, as financial, tax and technical advisors to the seller. Rothschild & Co and EY acted, respectively, as financial and tax advisor to the seller while Moroni & Partners analysed the technical profiles of the transaction.
The photovoltaic plants covered by the deal produce about 420 GWh per year of green energy, equal to the annual consumption of about 200,000 residential customers, avoiding the emission of 2.5 million tons of CO2 over their entire life cycle. Speaking of green hydrogen. The study took into account the location of the plants, the available space, and the maximum yield obtainable on the retail market of hydrogen and oxygen, in the absence of incentives, and current impossibility of inserting hydrogen in the existing methane gas networks. The study hypothesized the creation of modular hydrogen and oxygen production solutions for sub-clusters, exploring the issue of scalability, starting from a basic alkaline electrolysis module with a nominal capacity of 2.5MW.
The Octopus Tale project, one of the first of this dimension in the Italian and international energy scenario, has had such a resonancethat Moroni&Partners have now been engaged in energy engineering and technical advisory activities, related to green hydrogen, linked to the wind and photovoltaic sectors, for over 500MW.
Kiwa Services for Hydrogen Production
As Kiwa, we support the market in meeting the challenges proposed by the energy transition. Our industry expertise and the extensive knowledge gained in recent years at national and international level, mean we are now able to support the entire hydrogen production chain with the following services:
- Wide range of Testing, Inspection and Certification services in the solar, wind and hydrogen fields, including activities on Electrolysers
- Green Hydrogen Production Systems Energy Engineering - technical and financial due diligence for hydrogen production processes from renewable sources, with independent project assessments
- Pressure Equipment Directive Certification (PED)
- Non-destructive testing
- Carbon Footprint Certification according to GHG Protocol
- Conformity verification according to CSense scheme.
- Pre-assessment and evaluation of projects under development according to international standards and proprietary technical documents