PV HYBRID STORAGE SYSTEM DEMO PROJECT (EDP)

Financing of the construction of a 50 MWp photovoltaic (PV) plant with a hybrid storage system with batteries and hydrogen in French Guiana.

The project will demonstrate the application of an innovative hybrid system comprising of batteries and hydrogen for the supply of dispatchable renewable energy. This solution is targeting, as primary markets, islands and other non-interconnected regions where the energy supply is based on expensive fossil fuel generation. The project will contribute to the EIB's priority objectives for energy sector lending related to renewable energy sources and transversal objectives of climate action as well as social cohesion.

The present project concerns the implementation and operation of a PV with storage in French Guyane. It is a first commercial demonstration of a hybrid battery and hydrogen based energy storage system, which constitutes a technical solution for the generation of dispatchable renewable energy in isolated regions. Through this commercial demonstration of the concept, the project will enable the development of future such projects at larger scale. In future applications, such projects can be designed to provide also additional services such as renewable hydrogen for transport or industrial applications, in addition to the provision of dispatchable renewable energy (e.g. multipurpose renewable hydrogen hubs).

The project entails significant contribution to key EU policies such as (i) energy and climate due to the generation of dispatchable renewable energy, (ii) support on less developed regions due to its context and (iii) energy innovation due to the use of novel energy storage system.

The project has the potential to help address multiple market failures (reduction of negative externalities, public goods, incomplete markets) and leads to good economic profitability and benefits to society.

The EIB contributes to the project, both technically with targeted inputs on social, and environmental matters, and financially, effectively crowding in additional lenders, which would gain key expertise for other, future investments in technologies that are key for the decarbonisation of the economy and have great strategic and competitive value. in addition, the repayment of the financing is adapted to the cashflow generation of the borrower.

The project falls in annex II of the EIA directive. The project also falls under the provisions of the Industrial Emissions Directive and the Seveso Directive (lower-tier) due to the hydrogen component and the Water Framework Directive due to the rainwater discharge and the discharge of the water produced in the fuel cells as a by-product. The project was subject to an environmental impact assessment (EIA) process under the provisions of the French Environmental Code (Code de l'Environment), the Water Law (Loi de l'eau) and the Seveso and Industrial Emissions directives. The project was granted the environmental permit on November 2019. The EIA and the social impacts will be assessed during appraisal.

The Promoters have been assessed by the EIB as being private companies not subject to EU rules on public procurement or concessions. However, if after the project appraisal, the EIB were to conclude that the Promoters are after all subject to EU public procurement legislation, Directive 2014/25/EU, then the Bank would require the Promoters to ensure that contracts for the implementation of the project will be tendered in accordance with the relevant applicable EU procurement legislation Directive 2014/25/EU, as well as Directive 92/13/EEC or Directive 89/665/EEC, as interpreted by the Court of Justice of the EU, with publication of tender notices in the Official Journal of the EU, as and where required.

EIB loan proposal of up to EUR 40 million.