Home Green Technology Hydrogen Advocates Together with ICCT Do not Perceive PPAs, RECs, Wholesale & Retail Electrical energy

Hydrogen Advocates Together with ICCT Do not Perceive PPAs, RECs, Wholesale & Retail Electrical energy

Hydrogen Advocates Together with ICCT Do not Perceive PPAs, RECs, Wholesale & Retail Electrical energy


Up to now week I’ve been concerned in an odd battle with researchers on the Worldwide Council on Clear Transportation (ICCT). I’ve been attempting to elucidate to them why their costing of electrical energy for hydrogen manufacturing makes completely no sense, and I haven’t been capable of get via to them. It seems I used to be giving them an excessive amount of credit score for understanding something in any respect about electrical energy era and distribution.

What’s been occurring? Nicely, the ICCT launched a significant complete price of possession report just lately for heavy items autos in Europe. These are the large vans that carry 35 tons of products alongside the highways. It had three extraordinary claims that had been clearly and clearly in error. The primary declare was that manufacturing hydrogen at a refueling station from electrical energy and water could be price aggressive with diesel in 2030. The second declare was that the vitality prices per kilometer could be solely 50% greater than utilizing electrical energy in battery electrical autos in 2030. The third declare was that hydrogen could be solely 10% dearer than utilizing electrical energy in battery electrical vans in 2050 on a per kilometer vitality foundation.

These are extraordinary claims and as such require extraordinary proof, however there was no extraordinary proof introduced.

Why are the claims extraordinary? As a result of manufacturing hydrogen with electrical energy and utilizing it in gasoline cells is at finest a 3rd of the vitality effectivity of utilizing it in battery electrical autos. Thrice the electrical energy will price 3 times as a lot. The primary is physics. The second is economics.

Was there any recognition within the report or ICCT touchdown web page that the claims had been extraordinary? No. Was there deep proof within the report that justified the extraordinary claims? No. There was simply the idea of worth of a kilogram of manufactured hydrogen could be based mostly on dust low-cost electrical energy and that this was fully cheap.

There are potential methods round this which have their very own deep flaws, however if you’re on the finish of the distribution grid shopping for electrical energy from a utility and both placing it into batteries or placing it into manufacturing hydrogen, you’re paying the identical worth for the electrical energy at any given time of time. That is extremely fundamental stuff about shopping for electrical energy from utilities.

I printed a chunk stating the clear failure and tracing it to an earlier ICCT research by totally different authors which had very naive assumptions about electrical energy charges being dust low-cost for grid-delivered electrons to refueling stations whereas the identical wires bringing the identical electrons for battery electrical autos had been priced at full business charges.

I assumed, in good religion, that the ICCT would acknowledge that the identical electrons on the identical place via the identical wires wouldn’t price totally different costs, and that the brand new research’s authors would notice the error and so they and the ICCT would retract and repair the report with the extraordinary claims. No such luck.

What occurred subsequent was that one of many lead authors doubled down on the assertion, defending their methodology as deliberate and acceptable.

So I attempted once more, explaining that on the station firmed electrical energy required a bunch of stuff and that inexperienced electrons underneath PPAs wanted to not solely have additionality however temporality and locality. Good subtle stuff for a dialogue with individuals who perceive electrical energy. Any luck? No.

At this level the lead creator was getting irritated, attempting to defend what was clearly indefensible, vastly decrease charges for electrical energy for manufacturing hydrogen on the identical place the place electrons would alternatively be put into batteries. They had been arguing about how a lot roughly they had been pricing electrical energy at, claiming my numbers had been fallacious, once they didn’t perceive that your complete foundation of their argument was flawed.

Sadly, I misunderstood their stage of sophistication associated to wholesale vs business electrical energy charges, PPAs and RECs. So right here’s a little bit of a primer, going again to stuff I assumed that they’d understood however clearly didn’t. I had been asserting naivety on the a part of the primary research’s authors, however hadn’t realized how naive the research was or that the authors of the brand new research didn’t know the fundamentals both.

To be clear, I’m not attempting to choose on the ICCT or the authors of the trucking TCO paper. They don’t perceive some issues and as such the edifice of their evaluation is just fallacious. They’ve to repair that. And if the ICCT will get one thing this fundamental fallacious, so do plenty of different organizations. And meaning plenty of the discussions round hydrogen for vitality are fatally flawed.

So listed here are the fundamentals.

Diagram showing separate transactions for PPAs, RECs and commercial electricity by Michael Barnard, Chief Strategist, TFIE Strategy Inc., icons by ChatGPT & DALL-E
Diagram exhibiting separate transactions for PPAs, RECs and business electrical energy by Michael Barnard, Chief Strategist, TFIE Technique Inc., icons by ChatGPT & DALL-E

An influence buy settlement (PPA) for renewable vitality and the related renewable vitality certificates (REC) are fully decoupled from the business worth of electrical energy an organization pays a utility.

PPAs pay for building of a wind or photo voltaic farm that’s connected to the grid. The group paying for the PPA receives RECs. They promote RECs on a marketplace for these devices. The sale of RECs pays for the PPA, roughly. A bunch throughout the monetary aspect of the corporate does this on their behalf. The corporate does this to make sure that someplace on the grid there are inexperienced electrons whatever the electrons that they’re buying at their services.

In the meantime, fully individually from the PPA and REC group, an operations group indicators contracts with utilities native to their services for provision of electrical energy at business charges. The native electrical utility is never a celebration to the PPA and even whether it is, it’s a unique a part of the utility and a unique contract. It doesn’t change its business charges for electrical energy as a result of the corporate has a separate contractual settlement with different entities to purchase inexperienced electrical energy and promote RECs. They’re fully decoupled processes.

Separate teams. Separate financial flows. Separate transactions. Separate authorized agreements. Totally different events. Not coupled however decoupled.

For a refueling station on a freeway the place vans will refuel, the PPAs and RECs are fully irrelevant to the worth of electrical energy delivered to the station. The one related issue is the native utility and their business charges. Shopping for electrical energy from the utility for batteries or hydrogen has no bearing on the worth of electrical energy. The worth of electrical energy at any hour or stage of demand will probably be equivalent in each instances.

There are complexities round peak energy calls for, managing peak energy and arbitraging time of use billing which I additionally alluded to in my earlier articles, assuming I used to be coping with researchers who grasped the fundamentals above. In consequence, a lot confusion, not a lot mild on their aspect. There’s a minor exception case the place wind and photo voltaic farms are inbuilt shut proximity to the ability which is buying the electrical energy and the utility offering the electrical energy is an integral a part of the PPA and REC contractual agreements. This received’t apply to refueling stations on highways for essentially the most half, would apply equally to battery electrical and hydrogen gasoline cell vans and shouldn’t be the bottom case.

And so, this piece, going again to what I assume is the basic lack of expertise on their half about how electrical energy is definitely purchased and offered. That is, once more, actually fundamental stuff about pricing electrical energy. My assuming that individuals who clearly favored molecules for vitality would perceive this regardless of just a few years of frequently operating up in opposition to the identical lack of comprehension is my unhealthy. I ought to have began with the fundamentals.




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