Barthold Schroot at EBN makes the case for blue hydrogen for the Netherlands now, to minimise emissions and make life easier for green hydrogen later. The country is a big consumer of natural gas that, realistically, cannot be quickly replaced with renewables. So what’s the best alternative to burning that gas and can be introduced the soonest? Green hydrogen production (emissions-free) will take time to reach scale as it needs to piggy-back off wind and solar generation which itself must prioritise direct power to the grid. Blue hydrogen (made from natural gas where most emissions are captured and stored, or reused) is 2-3 times cheaper than green and has proven technology that can be scaled up faster. Blue’s main problem is that using it still emits carbon, though much less than gas. That all makes an immediate commitment to blue the optimal pathway, says Schroot. In time, green hydrogen – produced domestically or imported – will enter the energy mix as the ideal solution. When it does, it will have benefitted from the hydrogen value chain already in place thanks to a commitment to blue hydrogen today. Schroot uses six Dutch energy system scenarios recently published to give 120 TWh as a conservative estimate of total hydrogen demand for 2050.
The Netherlands is well suited for an energy system in which hydrogen plays a significant role. An extensive gas grid, large industrial clusters, a location on the coast, nearby offshore wind farms, well developed international transport facilities – they are all there. However, the Dutch are dragging their feet when it comes to building a new hydrogen value chain. Now why is that?
Uncertainty about future demand for hydrogen and debating which form of hydrogen we prefer prove to be serious obstacles in developing a hydrogen value chain in the Netherlands. This article will gladly solve both issues and stress the need to take action on a large scale.
We will be estimating demand for hydrogen as an energy carrier in the Netherlands in 2050 based on six recently published scenarios used in energy system modelling. Adding an estimate of the demand for hydrogen as feedstock, we will arrive at a total estimated demand of about 430 PJ (120 TWh) per year. This is a conservative estimate: easily both safe and high enough to build a Dutch hydrogen value chain on.
Moreover, we will compare three ways to provide the supply to meet this demand: import, domestic production of green and of blue hydrogen. This comparison will show that the domestic production of blue hydrogen is the cheapest, easiest and fastest way to reduce CO2 emission. It’s time to take on our responsibility to prevent CO2 emission and get going.
Estimating domestic hydrogen demand for 2050
In 2020 two studies were published which together considered six different scenarios for the Netherlands’ energy system in 2050. The first study by Berenschot & Kalavasta (2020) (BK) was conducted at the request of the Dutch TSO’s and was embraced by the Dutch government in the context of the Dutch Climate Agreement. The study contains four scenarios and uses the publicly available Energy Transition Model (ETM). The second study by TNO (2020) contains two scenarios (named ‘Adapt’ and ‘Transform’) and uses their inhouse energy system model OPERA, which works with a cost optimisation approach.
Figure 1 (below) shows that the hydrogen demand in these scenarios ranges from some 250 to almost 600 PJ, representing about 12 – 30% of the Netherlands’ present day final energy demand of about 2,000 PJ, which is assumed by these authors and others to be at roughly the same level in 2050.
Out of the six estimates of hydrogen demand in 2050 the ones from the ‘International’ scenario and from the ‘European CO2-steering’ scenario by BK both assume an open international hydrogen market. In these two scenarios it is assumed that imported hydrogen will be relatively cheap and therefore will result in a higher domestic hydrogen demand. Because we are trying to establish a conservative, minimal estimate of demand we exclude these two scenarios. The four remaining more nationally oriented scenarios, even though coming from two different models, agree to about 250 PJ of domestic hydrogen demand per year.
Dutch Hydrogen demand 2050: 430 PJ/year (120 TWh)
We consider this estimate of 250 PJ of hydrogen as a new energy carrier to be a conservative estimate.
To arrive at a figure for total Dutch domestic demand, the demand for hydrogen as a feedstock for industry needs to be added. Estimating this, one may argue that the refining of crude oil is going to stop eventually. On the other hand, there will be an increasing demand for synthetic fuels (e.g., for aviation and shipping), for iron ore reduction in steel plants etc. We assume here that these two developments will roughly even out. Therefore, it makes sense to use the current annual production and consumption of (grey) hydrogen by industry as a reasonable estimate. This is about 180 PJ (1,500 kilotonnes).
So, we establish that 430 PJ (120 TWh) would be a realistic conservative estimate of total hydrogen demand for domestic consumption in 2050. This equals a volume of about 3.5 million tonnes per year.
Deciding on hydrogen supply
Now that we have established that the Netherlands would at least need some 3.5 Mt of hydrogen per year in 2050, where will that hydrogen come from?
There are basically three options:
- Import of hydrogen
- Domestic production of green (or zero carbon) hydrogen: by water electrolysis and using renewable power
- Domestic production of blue (or low carbon) hydrogen: from natural gas and steam by reforming processes in combination with carbon capture and storage or utilisation (CCUS)
Import of hydrogen
Some argue that eventually the production of renewable power and therefore also of hydrogen from renewable sources like solar PV, wind or even hydropower will be much cheaper in distant areas, e.g., closer to the equator, where there is more space and sun than in North-western Europe. Production costs as low as 1 to 2 euro/kg are foreseen. But the costs of transport to the Netherlands need to be added. The IEA in a recent report estimated those costs at some 5 euro/kg for distances of more than 4,000 kilometres. Long distance transport, by shipping and pipelines, will add significantly to the cost of imported hydrogen. At some point imported hydrogen will be able to compete, but it is unlikely that this will happen very soon.
In addition, one should not be naïve about the likelihood of geopolitical (and terroristic and criminal) turmoil. To be dependent on hydrogen production abroad and having long supply routes makes us unnecessarily vulnerable.
Domestic production of green hydrogen
The Netherlands intends to generate its renewable power, which is needed for the production of green hydrogen, primarily from offshore windfarms. Using a load factor of 5,000 hours per year we arrive at some 40 GW of installed capacity needed to produce 3.5 Mt of hydrogen per year. Note that this capacity should be exclusively dedicated to the production of hydrogen. The idea that electrolysers could run on excess power only during periods when there is more wind than needed is not realistic. The volume of hydrogen produced would be too small and the costs per unit too high because of the under-utilisation of electrolyser capacity.
Given the currently installed capacity of 2.3 GW of offshore wind in the Netherlands and the ambitions for building more (see Figure 2 below) there will not be enough renewable power to produce 3.5 Mt of hydrogen. Most of this power from offshore wind will be needed for direct electrification.
Green hydrogen produced in North-western Europe is at the moment two to three times more expensive than blue hydrogen. This price difference may decrease. However, whether and when this will happen is rather uncertain. On top of that, a large hydrogen storage issue should be solved. Finally, the Dutch part of the North Sea already is a very busy place and space for additional wind farms is becoming scarce.
Even if we could solve these problems, developing the renewable energy sources needed for the production of domestic green hydrogen is simply going to take too long. Let us take a look at a depiction of Dutch domestic energy production from 2000 to 2020 and optimistic forecasts for the period 2020-2050 (Figure 2 below).
Gas consumption is not going away soon
Obviously, Dutch gas production is plummeting, resulting in growing gas imports. The Netherlands became a net-importer in 2018 and is no longer able to meet its own domestic demand for natural gas of about 40 bcm/a (1,400 PJ).
Based on even the most favourable assumptions, renewable sources will by no means be able to fill the Dutch need for energy before 2050. Substantial natural gas imports are therefore inevitable until at least the 2040s. The combustion of this gas de facto results in the continuation of large amounts of CO2 emission.
Figure 2 shows clearly that we will have to be using gas for at least the next 20 years. In order to prevent the CO2 emission that result from combusting this gas, we seriously need to consider the conversion of gas into blue hydrogen as an alternative.
Domestic production of blue hydrogen
At this moment the production of blue hydrogen including the capture and storage of 90% of the produced CO2 in depleted Dutch offshore gas fields is about 2 to 3 times cheaper than the production of green hydrogen. Of course, this difference will decrease as the costs of power from wind farms and of electrolysers come down. But this will take time.
The most important advantage of blue over green hydrogen, however, is the fact that blue can provide the large hydrogen volumes that are needed already very soon. The decision to build a CO2 transport and storage infrastructure has been taken and plants for steam methane reforming can be built within a few years from now. The technology is proven.
Opposition against blue hydrogen
Now, if it seems such a good idea, why are the Dutch dragging their feet? One of the reasons is the fact that natural gas has gotten a negative image. This is due to the earthquakes in the Groningen field (which led to the decision to stop producing gas there) and to the CO2 emissions resulting from the combustion of natural gas. When it comes to blue hydrogen the fact that its production is not completely emission-free adds to the overall anti-gas sentiment amongst some parts of Dutch society.
Taking responsibility and action
Admittedly, blue hydrogen is not completely CO2 free and therefore not perfect. However, blocking blue hydrogen for this reason will not bring the production of green hydrogen any closer. Worse still, blocking blue hydrogen is in fact prolonging the period in which we keep emitting CO2, which is a highly unwanted effect.
Advocating the import of hydrogen basically means we hand over the initiative to produce hydrogen to parties abroad, while reducing CO2 emissions really is our very own responsibility.
We need to kick start a Dutch hydrogen value chain, based on domestically produced blue hydrogen, on a large scale. And we need to do that now.
At least 430 PJ (120 TWh) of clean or low carbon hydrogen will be needed in the Dutch energy system. The earlier we succeed in developing a hydrogen value chain, the less CO2 will be emitted into the atmosphere. Right now, the domestic production of blue hydrogen turns out to be by far the best option for the Netherlands for now.
It is the cheapest option to reduce CO2 emissions that are now the result of the combustion of gas, it is practically possible to produce large quantities in the short term and it will not present us with extra vulnerability on the energy front.
In time, when imported hydrogen and domestic green hydrogen have become feasible alternatives, these forms of hydrogen can be added into the mix and profit from the demand and infrastructure that has been created by the earlier introduction of blue hydrogen.
TNO (2020), Towards a sustainable energy system for the Netherlands in 2050: https://energy.nl/en/publication/towards-a-sustainable-energy-system-for-the-netherlands-in-2050/
Berenschot & Kalavasta (2020), Climate neutral energy scenarios 2050 (in Dutch): https://www.rijksoverheid.nl/documenten/rapporten/2020/03/31/klimaatneutrale-energiescenarios-2050
IEA (2019), The Future of Hydrogen: https://www.iea.org/reports/the-future-of-hydrogen