Q&A - Lhyfe: Navigating the hydrogen landscape

Founded in 2017 by Matthieu Guesne, Lhyfe is a France-based producer and supplier of green and renewable hydrogen. 

inspiratia speaks to Taia Kronborg, the chief business officer at Lhyfe.  

Kronborg expresses optimism about the upward trajectory of the hydrogen sector after experiencing fluctuations over time. The discussion shed light on the opportunities and challenges within the hydrogen sector and Lhyfe's approach towards advancing green hydrogen production.  

Could you provide an overview of Lhyfe's role in the hydrogen and renewable sectors? 

Lhyfe was founded with a clear purpose, not solely for profit, but with a strong commitment to future generations. Our chief executive officer embodies this ethos, driving our focus on designing, building, and operating our own green hydrogen assets. Unlike technology suppliers or turnkey solution providers, we oversee the entire process from plant design to commercialisation of our green hydrogen projects.  

What strategies do you employ to secure financing for hydrogen projects? And what challenges do you encounter? 

We pursue project financing through traditional channels, working with banks and equity sponsors. Lhyfe typically looks for a mix of equity, debt and subsidies for its sites. However, the hydrogen sector faces unique challenges due to its evolving technology and market incentives. Convincing banks to invest requires demonstrating our experience and ability to mitigate risks associated with pioneering projects. 

The main challenge for this technology is that we are not yet at the same level of understanding and de-risking as in the renewable energy space or other infrastructure projects. We are in a growing technology field where incentives and technology are not fully ready. Many technology suppliers today have not built many large-scale plants, and for those who have, it has been a long time. So, it is completely new. Moreover, convincing banks to invest requires demonstrating our experience and ability to mitigate risks associated with pioneering projects. 

Is green hydrogen significantly more expensive compared to other renewable energy sources? 

Green hydrogen production may initially incur higher costs compared to natural gas. However, when considering factors like CO2 emissions and the declining costs of renewable energy, green hydrogen emerges as a crucial component of the energy transition, particularly in Europe. 

While the upfront costs for solar and wind projects primarily involve equipment and installation, hydrogen projects entail additional expenses such as civil works and operational complexities. The maturity of the respective sectors also influences financing terms and returns on investment. 

Could you elaborate on the permitting process for green hydrogen projects? 

The permitting process varies by country and project size, ranging from six months to two years. Local regulations and authorities play a significant role, with environmental impact assessments and public consultations often required. However, compared to renewable energy projects, we have encountered less resistance due to the smaller footprint of hydrogen facilities. 

What are Lhyfe's expansion plans? Are there any plans to diversify to other renewable technologies? And do you plan to expand outside of the continent globally?

We operate in 11 European countries, with a focus on markets like France, Germany, the Nordics, the UK, and Spain. Each country presents unique opportunities and challenges, guiding our strategic approach to project development and market penetration. 

We are working on the very large-scale production of renewable hydrogen throughout Europe. In 2022, we carried out the world's first pilot production plant, Sealhyfe, for offshore hydrogen, integrating Plug's technology and powered by a 1MW floating wind turbine.  

We are also working towards developing the 10MW Hydrogen Offshore Production for Europe (HOPE) project in Belgium, which is due to come on stream in mid-2026. This is being implemented by our partners across the continent.  

Through HOPE and Sealhyfe projects, Lhyfe aims to validate industrial solutions which it will submit in response to future calls for projects from various governments, to help achieve the target set by the European Commission as part of the REPowerEU plan of 10 million tonnes of clean hydrogen produced in the European Union by 2030. 

We have a team working on reoxygenation (BOxHy project), because our ultimate ambition is to use the oxygen co-produced at our offshore production sites to reoxygenate the oceans. That is already a lot of challenges that we want to focus on. 

We have an office in Canada, we have a partnership with Mitsui in Japan, we are looking to other countries, but our main focus is Europe.   

Is Lhyfe considering exploring hydrogen storage in salt caverns? 

Absolutely, salt caverns offer promising opportunities for hydrogen storage, particularly in regions like Germany and the Netherlands. As hydrogen infrastructure develops, storage solutions will become integral to the industry's growth and stability. 

Who are the end users of the hydrogen produced by Lhyfe? 

Our hydrogen serves various customers in mobility and industry. We deliver compressed hydrogen via trailers or pipelines to meet diverse market demands. 

In mobility, the end users include communities and local authorities to power buses, trucks, vehicle fleets, river shuttles, trains with renewable hydrogen. Lhyfe helps them to design and build this innovative fuel chain with the right partners. Hydrogen is also supplied to transport and logistics to decarbonise heavy vehicles. In addition, ammonia, methanol, chemicals, steel, glass, electronics, food manufacturing industries.  

What challenges and opportunities does Lhyfe face in green hydrogen production? 

The evolving nature of hydrogen technology presents challenges, such as supplier immaturity and operational complexities. However, our experienced team ensures reliable project delivery and ongoing optimisation efforts. 

Around the world, the race for hydrogen is on, and the development of offshore wind farms is booming. Lhyfe is convinced of the central role offshore has to play in the massification of renewable green hydrogen production.

Producing hydrogen using offshore wind turbines could allow all countries with a coastline to access renewable green hydrogen, produced locally, beyond the horizon line, and in industrial quantities, to decarbonise transportation and industry. However, until now, no one has ever produced hydrogen at sea. It is to prove that it is now possible that Lhyfe took on the great offshore challenge with the Sealhyfe pilot project.