Geographic Correlation

In plain terms

A wind farm in one country cannot supply an electrolyzer in another if the grid between them is congested. RFNBO geographic correlation makes sure contracted renewable power can physically reach the electrolyzer. Under Art. 7 of Delegated Regulation (EU) 2023/1184, at least one of three conditions must hold for grid-connected plants using PPAs:

1. The renewable plant is in the same bidding zone as the electrolyzer, or was when it came into operation.
2. It is in an interconnected bidding zone, possibly in another Member State, where day-ahead prices are equal to or higher than in the electrolyzer's zone.
3. It is in an interconnected offshore bidding zone.

Member States may add further location criteria linked to grid and hydrogen planning.

Non-EU projects such as Morocco. The rules apply wherever the fuel is produced, inside or outside the EU (Arts. 1 and 9). Art. 2 extends "bidding zone" to equivalent concepts in third countries. Compliance is certified through voluntary schemes recognised by the Commission. A directly connected off-grid plant can qualify under the Art. 3 direct-connection route instead, provided it meets its conditions, and then avoids grid correlation questions.

Typical range

There is no numerical range. The rule is binary: one of the three conditions is met, or the volume does not count.

Why it moves LCOH

Geographic correlation limits where PPA power can come from. It favours co-locating renewables and electrolysis, which in turn ties the plant to the local solar and wind profile and its temporal matching consequences.

Common mistake