Renewable power purchase agreements for green hydrogen

Power purchase agreements (PPAs) can include provisions specifying that the electricity being supplied to a purchaser will be generated from renewable sources. A grid-connected electrolyser, therefore, could use a renewable PPA to ensure that the hydrogen it produces is fully renewable. However, tackling the challenge of renewable power intermittency might require new and more complex forms of PPAs. To fulfil their need for more stable and predictable power than individual renewable power facilities could typically supply, green hydrogen projects could sign renewable PPAs that include supply from multiple generating resources across a wider geographic region (if grid connections are available). This would avoid additional costly capacity that may often go unused.

Renewable PPAs for electrolysers ensure that the hydrogen they produce will be “green”. Such PPAs also help resolve an existing issue. Under many current PPAs, hydrogen producers are most likely to use electricity during periods of low renewable power supply; this increases the need for fossil fuel– based generation and overall system emissions. Renewable PPAs, however, provide a powerful incentive for both increasing the renewable power supply and producing hydrogen only when there is sufficient renewable generation, thus eliminating emissions without affecting electricity prices (Parkes, 2022).