Wednesday, September 30, 2020
Home Voices Hydrogen, the energy source for the future

Hydrogen, the energy source for the future

Although in the last couple of weeks the Green Deal is not in focus, and this might be the case for the next months too, as soon as the COVID-19 situation will improve and we’ll come back to the normal modus operandi, the fast and cost-efficient transition to a decarbonised society will be more relevant than ever.

So far, decarbonisation policies mainly focused on power generation. Increasing the production of renewable electricity by replacing exposed emission sources with lower carbon alternatives was the obvious area to start decarbonisation affordably. However, this approach has its limits, as full electrification cannot be achieved and the electrification of high energy density sectors can be very expensive. Furthermore, increased electrification, as well as renewable electricity generation of end-use markets, will require a growing need for more back-up to ensure reliable power supply.

The low-carbon and renewable gases are the solutions for segments where electrification is not feasible or inefficient. Among these, hydrogen looks the best-suited solution: hydrogen can be produced from a relatively large variety of sources, it can be transported over long distances and stored in large quantities. Finally, with hydrogen, the current gas infrastructure after retrofitting can be used at large.

Using hydrogen often will be the most cost-efficient solution to supply process heat and to conduct high-temperature combustion processes. Currently, the heating sector is dominated by oil and gas. Massive electrification would lead to an inefficient expansion of the electricity grid, increasing subsequently the cost for end-users. This can be improved using gas as a complement to mitigate peak demand and to avoid unnecessary expansion of the electricity grid. A switch from oil and coal to natural gas helps to reduce CO2 emissions and hydrogen will be decisive to reach the EU’s climate targets by making full use of the existing gas infrastructure.

In the coming years, the electricity grid will need additional flexibility to cope with intermittent renewable electricity sources. Gas-fired power plants, due to the cost advantage they have, are the best solution to provide this back-up service, but to secure the availability of gas – in the future hydrogen – the gas infrastructure needs to be properly assessed to ensure that enough capacity will remain in the energy system. Due to its ability to transport and store a large amount of energy, the flexibility in the energy system is mainly provided by the gas infrastructure.

Gas storages are used to match the natural supply with seasonal demand. Currently, electricity storages cannot compete with the natural gas storages as these are limited on a scale and usually available only for a short-term duration. According to a recent study made by Frontier, the gas storages in Europe have 1,000 times larger capacity than electrical storages and volume can cover energy demand for several months. On the other hand, electricity storages can cover the average electricity demand for only four-to-five hours. Even if the most optimistic cost scenarios would become reality, energy storage volume in batteries is still a minimum 100 times more expensive than energy storage volume in gas storages. The high interconnectivity of the European gas transportation system and LNG terminals are also an important factor to bridge the growing distance between the places where energy is produced and the demand regions.

Decarbonising the energy supply by switching wherever possible to renewable energy will require a sharp increase of these energy sources, therefore, requiring substantial additional generation capacity that may partly come even from outside Europe. The decarbonisation of the gas system should happen gradually, the low carbon, decarbonised and renewable gases will replace step-by-step natural gas and other fuels.

Depending on the level of hydrogen injected, gas infrastructure could largely influence and facilitate the decarbonisation process. This will be partially driven by market demand including continuous dialogue with producers, industry players and customers but the development of the renewable, low carbon and decarbonised gases for the next years will depend mainly on political choices and decisions. The chosen paths as well as the speed are and will be influenced by the overall European climate and energy policies and will differ amongst the Member States.

In order to survive, the gas infrastructure operators will need to adapt. For the moment two possible scenarios are plausible. Continuing with the mixed source gas infrastructure – under this scenario gas infrastructure would transport blends of hydrogen with natural gas up to a certain threshold. Ongoing research projects throughout Europe show that hydrogen could be injected to a certain extent into the transmission pipelines and natural gas storages without significant changes of the existing equipment. In parallel with the development of the hydrogen market most likely a dedicated infrastructure for hydrogen will also progressively emerge. This could be achieved on a regional basis and local areas for industrial and transport use mainly in urban areas. Decentralised energy solutions will gain importance as gas infrastructure will be more and more ready to promote power-to-gas technologies in urban areas.

Although on the long term the development of the different hydrogen technologies should be based on market measures, currently the gas infrastructure operators need financial as well as regulatory support in terms of adaptation of gas infrastructures. This would imply not only measures on the European level but also specific country by country measures depending on the existing development level of the gas infrastructure and the penetration of the low carbon, decarbonised and renewable gases.

Setting up research and pilot projects about the injection of pure and blended hydrogen into gas infrastructure and end-user applications is important as well as supporting a regulatory-sandbox approach for pilot projects to assess the effect of the different possible regulatory measures. Electricity and gas networks should be more closely interlinked, the planning of the electricity and gas grid and other infrastructure should be made in an integrated way therefore a proactive and holistic regulatory approach is a must. One of the most needed next steps should be to recognise the contribution of the gas system to the electricity system.

We are only at the beginning of the way towards hydrogen, we know a lot about it but at this stage there are more questions than answers, making the whole process exciting. What we should do currently is to explore, research, try to find the right answers and to be prepared for the next questions to come.

You can find further information here.

Most Popular

PKN ORLEN launches tender to acquire all shares in Energa Group

PKN ORLEN announced a tender to buy a minority interest in Energa Group to facilitate further effective integration of the two companies’ assets. PKN ORLEN has offered 1.82 euros per share to acquire a 20 per cent stake.

OMV implements energy-efficiency measures to achieve net-zero operations in refineries

OMV will strive to reduce its carbon intensity in refining by at least 20% by 2025. One factor in achieving net-zero operations is energy-efficiency measures. One such measure is the audit program at the Schwechat Refinery.

Ukraine’s Energoatom and Naftogaz join forces to develop hydrogen capabilities

Energoatom signed a memorandum of understanding with Naftogaz on cooperation in the field of hydrogen technologies, which will only make sense if the hydrogen is produced environmentally friendly.

New emission reduction target makes CEE countries fear a not-so-just transition

The European Commission has decided to increase the 2030 emission reduction target from 40 to 55%. Mrs von der Leyen herself recognised that it would be too much for some and not enough for others and many countries from CEE are considering it unrealistic.