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The Cathedral and the Bazaar: Integration of plug-and-play PEM electrolysers in centralised heating systems
Written By Andrea Pusceddu
March 11, 2026
By contrasting centralised “cathedrals” of green-hydrogen hubs with a nimble “bazaar” of modular PEM electrolysers, local hydrogen (H₂) production can integrate with district heating, enhance flexibility, and reduce logistics.
IMI’s Electrolyser provides customisable plug-and-play units ready for integration into heating networks.
Green hydrogen: Opportunities and challenges
Green hydrogen has long been identified as a key enabler for decarbonisation. Produced from water and electricity via electrolysis, it can be used without emitting greenhouse gases. Despite its potential, the deployment of green hydrogen faces challenges: many large-scale projects are delayed or awaiting investment decisions. Political uncertainties, shifting public priorities, and supply-chain complexities add further obstacles. Yet the technology remains highly relevant. Rather than waiting for centralised “cathedral” projects, a distributed “bazaar” approach can accelerate adoption.
The cathedral and the bazaar paradigm
The “Cathedral and Bazaar” model, first described by software engineer Eric S. Raymond in 1999, contrasts two approaches to development. Applied to hydrogen production:
Cathedral: Centralised, large-scale electrolysis plants linked to renewable power sources. Advantages include lower production costs through scale.
Bazaar: Small, localised production units offering flexibility, rapid deployment, and integration with existing infrastructure.
Large-scale hydrogen production reduces energy cost per kilogram but faces logistical challenges. Hydrogen’s low volumetric energy density requires high pressures or cryogenic temperatures for transport and storage, adding cost and complexity. Distribution networks need sufficient demand to be economically viable—a barrier for widespread adoption.
Hydrogen refuelling pump supplying fuel for commercial heavy duty transport.
Modular PEM electrolysers enable local production
Water electrolysis splits H₂O into hydrogen and oxygen using electricity. When powered by renewable energy, this process produces green hydrogen. Proton Exchange Membrane (PEM) electrolysers offer additional benefits:
Smaller footprint compared with alkaline alternatives
No requirement for toxic or corrosive electrolytes such as potassium hydroxide
Plug-and-play design enabling rapid deployment
Localised PEM electrolysers reduce transportation and storage challenges, allowing hydrogen to be produced and consumed on-site. While production cost may be slightly higher than in large plants, regulatory simplicity, environmental benefits, and faster authorisation make this approach highly suitable for urban or industrial applications.
Electricity cost represents roughly 70% of green hydrogen production costs, with the remaining 30% due to hardware. Therefore, cost-efficient energy is more critical than scaling up plant size.
Typical PEM electrolyser scale
1MW unit: Up to 480 kg/day, fits in a standard 12 m (40-foot) container.
5MW unit: Up to 2,400 kg/day, requires slightly larger container.
Additional space is required for cooling and power supply. Locally produced hydrogen can directly fuel vehicles or heating systems.
Hydrogen in heavy mobility
Hydrogen is particularly suited for public transport and heavy-duty vehicles, where battery-electric solutions are limited by range and charging times. Hydrogen buses and trucks offer comparable range to diesel vehicles and refuel in minutes.
Example: A PEM fuel-cell bus consumes approximately 8 kg H₂ per 100 km.
A 1MW electrolyser operating eight hours per day can produce roughly 160 kg H₂, sufficient for around 2,000 km of fleet operation.
Post-pandemic recovery incentives in Europe are accelerating deployment of hydrogen refuelling stations and fleets, including containerised 1–5 MW PEM electrolysers supported by national recovery programs.
Integrating electrolysers with district heating
Electrolysers operate at around 60% electrical efficiency, releasing approximately 40% of input energy as heat. This waste heat can be recovered and used in district heating networks, providing a decarbonised heat source for buildings such as hospitals or schools.
Standalone electrolysers dissipate heat via fans and heat exchangers.
Containerised PEM units, like IMI’s VIVO Electrolyser, integrate cooling and power supply, minimising footprint and civil works.
No toxic chemicals are required, improving safety and regulatory compliance.
IMI has delivered a 250 kW VIVO PEM Electrolyser to the Fraunhofer Institute for Energy Infrastructures and Geothermal Systems (IEG) in Zittau, Germany. This supports the IntegrH2ate research initiative with Linde, under the H2 Giga flagship program funded by the German Federal Ministry of Education and Research. Waste heat is upgraded via a high-temperature heat pump and supplied to the Stadtwerke Zittau district-heating network.
IMI VIVO PEM electrolyser in operation at the IntegrH2ate site, enabling green hydrogen production with advanced heat recovery and local energy integration.
Conclusion
While centralised “cathedral” projects demonstrate ambition and scale, distributed “bazaar” approaches unlock flexibility, speed, and resilience. Modular PEM electrolysers can be integrated into local heating systems, powering mobility and buildings efficiently.
IMI supports this transition through its IMI VIVO Electrolyser range, offering fully customisable units, from flanges and cooling loops to control algorithms, ensuring seamless integration into any host system.
Learn more about IMI’s range of hydrogen production solutions.
A version of this article originally appeared in the November 2025 edition of Euro Heat + Power magazine.
