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Hydrogen to breathe new life into Dutch pipelines

The Netherlands has a gas grid that will become obsolete. Repurposing it could revive the infrastructure

The Netherlands has a problem. It has a unique pipeline network dedicated to carrying the specific lower-calorific value quality gas of its giant Groningen field. Having legislated to wind down Groningen production, the grid will no longer be needed. Its solution? Integrate these pipelines into one of Europe’s most ambitious hydrogen visions.

The country aims to become northwest Europe’s new hydrogen hub. Plans are afoot to build the continent’s largest green hydrogen factory and the government is targeting 3-4GW of hydrogen-making electrolysis, compared with just a handful of MW installed at the moment.

“The government will, together with network operators Gasunie [for gas] and Tennet [for electricity], assess under which requirements a part of the gas network can be used for the transport and distribution of hydrogen,” said Eric Wiebes, Dutch minister for economic affairs and energy, in a letter to parliament presenting the government’s vision on hydrogen in late March. But the so-called ‘lo-cal’ network, which also extends across the Netherlands’ borders into Belgium—and from there on into France—and Germany, is an obvious candidate given that, once Groningen ceases production in 2022, it will have no immediate purpose.

“The Netherlands has a leading position in the shift to a hydrogen economy” Fennema, Gasunie

The Dutch government is targeting an installed electrolysis capacity of 500MW by 2025 to make hydrogen that can be used in industrial processes, to fuel cars, to heat homes or to be stored for converting back into electricity. And its institutional support has helped throw momentum and innovation funding behind the country’s mushrooming green ­hydrogen projects.

But the Netherlands’ long-standing experience with hydrogen production, as well as its commitment to decarbonise its energy system as a signatory of the Paris Agreement, are also helping power ­hydrogen’s momentum.

The country is Europe’s second-largest hydrogen producer after Germany and its experience with producing hydrogen from coal dates back well into the twentieth century. Today, its industry uses around 10pc of Dutch gas production to make so-called ‘grey’ hydrogen for use as a feedstock in chemical processes.

The advent of cleaner types of hydrogen, produced either using renewable energy or with carbon abatement, provides an opportunity to help reduce Dutch carbon emissions. The country has set itself a target of reducing greenhouse gas emissions by 95pc below 1990 levels by 2050.

Largest factory

It is therefore no surprise that the Netherlands plans to build Europe’s largest proposed green hydrogen factory. Gasunie, Shell and port operator Groningen Seaports are currently assessing the feasibility of the first part of the project, constructing an offshore wind farm of around 1GW in capacity off the northern coast of the Netherlands that will power an electrolyser for producing hydrogen.

Taking the project, named NortH2, forward will then also require a network that connects multiple hydrogen industrial demand clusters and storage, as well as offtake agreements with green hydrogen customers, says Gasunie.

The companies expect the feasibility study to be finalised by the end of the year and, in an ideal scenario, first hydrogen production from the mega factory would begin by 2027. In further phases, the project could then be expanded to up to 4GW by 2030 and possibly even up to 10 GW by 2040.

“The Netherlands has a leading position in the shift to a hydrogen economy. We have the North Sea for the production of wind, the ports as logistical hubs, the industrial clusters that want to make the switch to green molecules and a suitable transport network,” says Gasunie chief executive Han Fennema.

The NortH2 consortium is also considering placing the electrolyser offshore to avoid the transmission of electricity back to the mainland, a process which requires a pricey underwater cable, as well as transmission losses. This possibility of installing and operating an electrolyser offshore is currently being tested at a separate oil and gas platform in the North Sea run by UK producer Neptune Energy, a project which Gasunie is also involved in (see p10).

Seeing value in combining offshore wind with hydrogen production, minister Wiebes says the government would announce before the summer whether it will start launching integrated tenders for offshore wind farms and green hydrogen production plants.

But, as with any pioneering technology, the costs of producing green hydrogen are still extremely high. Official costings are yet to be determined for the NortH2 project, but Gasunie predicts building an offshore wind farm in addition to a large-scale electrolyser and transport infrastructure will require an investment of “some billions”. The consortium has made a call for other partners to come on board to form a “broad coalition” that it says is needed to bring the project to life.

“If you compare the cost of green hydrogen produced from offshore wind or solar, the cost … is still excessively high compared to grey hydrogen from gas, even if you take into account the CO₂ emissions price,” says Rene Peters, business director for gas technology at TNO, the Dutch research organisation. “Green is still too expensive.” But he contends that these demonstration projects are important for triggering cost reductions for future plans.

500MW – Netherlands 2025 electrolysis target

The government is also willing to help cover some of the higher costs for pilot projects through subsidies because it is keen to defend its position as an energy hub for north-west Europe. Where once it reigned as the largest gas exporter in the area, it may soon re-emerge as a ­hydrogen supplier.

“If you look at the gas infrastructure, we have this hub, we have the connections to the neighbouring countries and we have access to the North Sea. I think it is a logical way forward,” says ­Albert van den Noort, principal ­consultant and hydrogen specialist at consultancy DNV GL.

In his hydrogen vision letter, minister Wiebes promises to pay “special attention” to the connection with Germany, saying it was important for the Netherlands’ opportunity to function as a hub for the energy market.

Risk factor

An unforeseen risk factor is the current global economic slowdown due to the Covid-19 pandemic and the ensuing dramatic drop in oil and gas prices. Will they have an impact on the progress of green hydrogen projects in the Netherlands?

“The corona crisis, and the related oil price crisis, is something that could set it back a little bit,” says van den Noort. “But I think you have to realise this is a multi-decade-long quest, it is not something for just this period.”

The NortH2 mega factory project has not yet been affected by the changing environment, says Gasunie. “The reason is that we are in the phase of a feasibility study, so we do not yet have supply chains or construction activities to be ­impacted.”

But, as energy companies have experienced a drastic contraction in their disposable income, the spending crunch could have an impact on decommissioning plans in the oil and gas sector, which would have a knock-on effect on repurposing for the hydrogen supply chain, warns TNO’s Peters. “With low cashflow there is limited appetite to start new decommissioning projects because it is cash-out with no returns at all. The companies expect, when the pandemic ends, demand will go up again, prices will return and [ageing infrastructure can be made] economic for [a few more] years.”

 A delay in decommissioning could have a knock-on effect on plans to recalibrate gas infrastructure, other than the already under-threat lo-cal gas network, to accommodate hydrogen. These would include depleted salt caverns for storage, the hi-cal gas network and the offshore gas fields and networks that could play a role in blue hydrogen CCS. 

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