Yes, I am familiar with the NortH2 project. I have a good idea of the ambitions of the project through my interest in this from an academic perspective, but also thanks to my administrative role in the Topsector Gas.
In general, my impression is that most people feel positive about the hydrogen developments that are now emerging. I think Europe’s role in this is also perceived as positive. Furthermore, I have been speaking to a lot of people who feel enthusiastic about the position the Netherlands can take in this development. And that is not surprising either: the Netherlands is a natural-gas country after all. In such a position, you simply cannot say no to an opportunity like hydrogen gas.
Absolutely. This also ties in with how the Netherlands is structured. We have different transmission systems here. There’s the electricity system, of course, but also an underground gas transmission and distribution system that represents a huge investment of public funds. And then we also have the more locally oriented heat grids. So when you think about our energy supply, those three structural elements play a part.
Exactly. Ideally, you want to be able to apply conversion at the nodes of those systems, which will enable you to introduce optimum flexibility in the system. TenneT warns that the existing electricity infrastructure cannot handle the electrification of everything. If we can partially take some of the load off the electrical infrastructure and place it instead on the existing natural gas networks, that would be a win. Given that the infrastructure is there already, that saves a fortune in investments.
Just like you see happening with blood vessels and lymphatic vessels in the human body, with conversion happening very intelligently at many nodes, in our energy system we want to be able to convert smoothly from electricity to gases and vice versa. So we need to bring the new market that hydrogen gas makes possible into balance with our electrical and energy infrastructure.
If you look at the load factor – that’s to say the ratio of the potential capacity that can actually be achieved – for offshore wind turbines this is about 50%. They operate for half the time and for the other half the blades stay still. For onshore wind energy this is even lower still: those blades remain motionless 75% of the time, simply due to a lack of wind. And solar panels are idle about 90% of the time; after all, half of the time it’s night, and we also have a lot of cloud cover here, so the load factor here is just 10%. This is very different to power stations, which can run 90% of the time. So you have to have alternatives to sources that fall back to zero at some point. You need flexibility in the system for that. And hydrogen will be an important component to ensure that we can still guarantee security of supply despite the low load factors. After all, security of supply is energy priority one, two and three.
That is being said, that’s true, but it’s not entirely correct. We need to shift up now across the entire system as discussed, although we will need to continue to determine the exact ratios. The current fossil hydrogen market is like a mammoth tanker, accounting for some 70 million tonnes of hydrogen worldwide, produced 99% from natural gas through classic Steam Methane Reforming, the SMR method. Obviously, this system emits a lot of CO2. After all, you are taking natural gas and stripping off the hydrogen, which leaves behind the CO2. Per kilogramme of hydrogen produced, about 9kg of CO2 are released. On a global scale, hydrogen production of this nature is the 6th largest emitter of CO2 in the world.
All the same, we cannot lead ourselves to believe that we have suddenly mastered new green hydrogen methods that make the current SMR method redundant. Compared to that fossil-fuel tanker, the few megawatts of green hydrogen we are generating via electrolysers would be at most an inflatable dinghy, though a dinghy that is stubbornly pushing up against that tanker.
Absolutely. But then you should not only emphasise making the energy market more flexible, but also having clean industrial hydrogen production methods. Only then will we transform the fossil-fuel tanker into a mammoth green tanker. But that spot on the horizon is still a long way away.
There is another part of the story though. Currently, hydrogen is produced for one of the mainstays of our society, ammonia, which is needed to make fertilizer. Fertilizer demand is not decreasing; on the contrary it’s increasing in step with the demand for agricultural products, for food. I hear remarkably little about that food part of the story from you people. Ammonia production is required for food production, and so we will have to make it greener. A project like NortH2 is not only about greening energy and industry: it’s also about greening our food production.
At any rate, generation will have to be scaled up sharply and the price will have to fall just as sharply. Fossil-based hydrogen now costs about 1 dollar per kilogramme, while if you assume a very optimistic load factor of 50% for the current electrolysers, for green hydrogen that kilogramme may be 5 to 10 times more expensive. Then it’s immediately apparent that you will need to use a much larger volume of green electricity for larger-scale production of green hydrogen.
No, though if society thinks that we should have the courage to use part of the green electricity to generate hydrogen on an ongoing basis, and a good part of the politicians appear to agree, that demands action on the part of the government. Then funding needs to be sent in that direction, for example, and the carbon price floor will have to be raised and certificates for green hydrogen introduced, just to name a few measures.
The amount of renewable energy in the electricity mix is approximately 25%, so that percentage still needs to be much higher. And then hydrogen comes along to claim a share in this, with a conversion efficiency of 75%, at best. Then it’s easy for someone to say, isn’t this a bit of a shame?
Then I say, some of this simply needs to go towards generating hydrogen. Do we not have a long-term goal in sight? If we do not start now, if we do not right now allocate serious volumes of green electricity to the generation of hydrogen, then that market will not develop. Hence the stimulation measures and the carbon pricing that we were talking about. And don’t forget public opinion, which will pressure companies to decarbonise. In that case, too, green hydrogen is the way to go. Companies that do not agree to this will, at some point, no longer be viable on the market, if only because there will soon be no pension fund willing to invest in it.
You then encounter the same arguments you hear in the division between hydrogen and electricity. Pull an electricity cable and connect it to the European electricity network, meaning you do not convert it into hydrogen. You can defend that stance too. The discussion basically remains the same. That said, it really makes sense for us to look seriously at the possibilities in that region. The load factor of a solar cell is higher there than here, even without the boost you can get by adding concentrated solar power to the mix, for example. And then there’s the increase in efficiency by using molten salt, which also stays warm at night. In short, a lot is possible there.
But that brings us to another argument, that of our ‘security of supply’ mantra. There, we are dealing with unstable political situations. That will not immediately entice investors. And what if the King of Morocco decides tomorrow that it just doesn’t interest him anymore? That does not mean that we should not pursue this in the longer term. Quite the contrary. But not without serious generation here at home – no total dependence.
Besides, transport is still a big challenge. I’m not sure whether the ‘Hydrogen Games’ will be going ahead in Japan, but I am very curious about how they plan to get all the hydrogen there. I have seen videos with those LNG-like ships, but carrying hydrogen instead. Yes, well, while you transport LNG at -162 degrees Celsius hydrogen needs to be transported at -252 degrees. That requires a lot of extra cooling. There’s still a lot to be devised, built and arranged.
But that does not mean that we can afford to wait until these issues become clearer, or until there is sufficient green electricity. If you wait until then to shift up to large-scale generation and use of hydrogen, you’re too late. The supply of green electrons will continue to grow, in the Netherlands and abroad. Perhaps our networks will become a bit more efficient so that we can make better use of green electricity coming from Norway, because that interconnectivity is not something to write home about right now. But those are all arguments for seriously innovating and scaling up both tracks, the green electrons and the green molecules.
And then you could also think of the use of nuclear energy for the production of hydrogen. That’s a discussion that is coming up here again. Nuclear is of course not very suitable for providing flexibility. In a sense, it’s like diesel: it has to keep going. So if it is needed for the production of green electricity, then you use it for that, but when there’s a lot of wind, you turn it into hydrogen. That is a bit of a sensitive area, but it is worth thinking about. You could say: buy a nuclear power plant, put it next to the other one in Borssele and we will have it running in 10 years, or sooner if we buy one off the shelf. Especially now, we should not develop new generations of nuclear power stations here ourselves: we have neither the time nor the knowledge for that now. That, too, needs to be built up again. And then look at the full range of energy sources in the mix and see how you can bring it all into optimum alignment.
That is actually quite different. In the Netherlands, we have accumulated knowledge in the field of natural gas over a long time and now have a fantastic distribution and storage system and concepts like the gas roundabout that are still applicable. That means we have not just the physical, but also the knowledge infrastructure to transport, store, treat, heat and cool gas. We have that knowledge, at all levels from secondary vocational schools to college and university. But also in the knowledge-based companies that operate in this area. Just look at your own project partners.
Add to that the fact that we have a wonderful, stretched out coastline, with a relatively low North Sea where offshore wind can be harvested. The ports, our location relative to other European countries, storage in caverns – then you have to wonder, how much better a starting position could there be? If we miss this boat, then we are really doing something wrong. So, thinking that we should seriously invest in the position, innovation, infrastructure and earning capacity of the Netherlands is not a crazy thought, I would say.
I believe the largest electrolyser we have today has a 20MW capacity. And all of that is produced manually, because it is not profitable to automate it on this scale: the demand is still too limited. If you placed an order tomorrow for an electrolyser of say 200MW, that would blast the market wide open. The path to the gigawatts is still a tough climb. So everything we do now in terms of upscaling will not by any definition be wasted money. If we don’t start now, we will have to pay the top price to acquire that technology later. Which is why it’s better to invest in your own knowledge infrastructure now and develop it in house. It should then be a core mission of the government to invest generously in the preliminary phase: the market will never be able to crack this on its own.
The fact is that you have to run things in parallel. If you are afraid that hydrogen will take too big a slice of the green-energy pie, you are thinking too much in terms of limitations. We want to make our entire energy system greener, right? Waiting until the volume of green energy that will ultimately be needed is in place and getting started only then is not an option. So take action now, and focus on the sectors where the footprint is the largest, such as industry. Look at Tata Steel. Quite apart from the sadly failed courtship between Tata and SSAB, where our government could have acted a bit more decisively, we have to make a fundamental choice in the light of our national vision of a green future. The first option is, we don’t see any opportunities to make this mega-emitter cleaner, so we send it packing. That would be typically Dutch, because our garden will be nice and green again, but then we will simply be exporting our CO2 emissions. Or we want to make the steel industry greener, starting with Tata Steel, which could possibly take the lead in producing green steel.
Green hydrogen is a drop-in technology that must eventually replace conventional steam reforming. And, at the same time, we see a new playing field, the flexibilisation of the energy system. If this flexibilisation is not achieved, we will not get the desired greening and affordability of the energy we consume.
For a more economic point of view, I would recommend that the discussion move further with my Groningen peer Machiel Mulder. Machiel has discussed the pricing of hydrogen in the past already. My questions to him would be: What system does the Netherlands have to promote hydrogen and advance along this hydrogen route, and what instruments should we use for this? Is that simply providing public funding for it, is that pricing? How does that tie in with European objectives, and what is the approach they take in Germany, for example?
We are part of a European system after all; we sometimes tend to forget that here.