Hydrogen in the EU: How do we plan the energy system of the future with so many unknowns?

Author: Guest writer, Arthur Daemers, Policy Advisor on Renewable Hydrogen and Skills at SolarPower Europe. Published: 19th Jan 2024

Hydrogen, in all its colours, has attracted a lot of attention in the last couple of years. Green hydrogen is made from renewable electricity, blue comes from natural gas, pink is nuclear-based. Which one is really sustainable? Are we going to have it available in large quantities in the near future? Is it going to replace gas, oil and coal in most end-uses? Can it be used for energy storage?

We can only give partial answers to all those questions. Yet, considering the urgency of the climate crisis, the energy transition is already late. We must plan for a system with significantly less fossils, and a lot more renewables, now. Hydrogen can help there, but how exactly? And how do we plan, considering there are so many unanswered questions?

Renewable electricity is the number one tool for decarbonisation.

Solar and wind are the cheapest and fastest sources of energy to deploy. Large solar projects, for example, can be deployed in just a few months and its production costs have seen an incredible drop in the last decade.

Renewable electricity can directly decarbonise most end-uses: power, cooking, home heating, transports, and an increasing share of industrial processes. Let’s take the example of residential heating. Imagine a solar park is connected to two residential districts: district number 1 uses the electricity to produce hydrogen, which will then be used to fire a hydrogen boiler. District number 2 directly uses the electricity to power a heat pump:

-        District 1: 50kWh comes from the solar park to an electrolyser. Given current efficiency numbers, you will produce ~33kWh of hydrogen. This hydrogen is then used in a hydrogen boiler, with efficiency numbers ranging from 70% to 90%. In the end, you will produce 23-30kWh of heat.

-        District 2: 50kWh comes from the solar park, directly to a heat pump. Heat pumps can have efficiency rates of 3 (300%). Therefore, you will produce 150kWh of heat.

Therefore, renewable-based direct electrification is 5-6 times more energy-efficient than hydrogen for heating. This is key: you would need 6 times more solar panels to heat a home with hydrogen than with heat pumps. Considering critical challenges in accessing grid connections, land cheap energy and materials needed to build panels, and the crucial citizen support required for deploying solar parks, being energy-efficient is far from trivial.

The picture for road transport is slightly more complex, but equally interesting. While individual electric cars are far more energy-efficient than hydrogen-powered fuel cell cars, it is not so straightforward for heavy-duty trucks. Most current truck routes could be undertaken by electric trucks, given the right charging infrastructure is deployed, but longer trips, colder temperatures and heavier loads make hydrogen interesting.

On the other hand, there are two unconditional reasons to consider hydrogen vital in our energy transition: seasonal storage and hard-to-electrify sectors.

We have the technological knowledge for utilising the potential of battery storage and pumped hydro to balance our electricity grid and complement variable renewable generation, in the short term (hours, days, weeks). The only remaining challenges there are around regulation and financing.

However, in an energy system dominated by variable sources of electricity, we will need longer-term options for storage, and ensure we can power our heat pumps throughout the winter. Hydrogen can play this role. Although electrolysis (hydrogen production) and compression lead to energy losses, the storage of hydrogen, for example in salt caverns, can be done without any significant loss for months. It will be key to develop this solution in the future.

Let’s not lose sight, nonetheless, of the shorter-term benefits that renewable hydrogen can bring, namely: decarbonising hard-to-electrify sectors. The most cited ones are: steel making, fertiliser (and other chemical) productions, as well as heavy-duty transports, specifically shipping and aviation.

Although I am describing hydrogen here as a solution for a small margin of our energy uses, we must remember the scale of the challenge. Decarbonising only our current use of hydrogen (in refineries and chemical sectors) requires 9Mt of renewable hydrogen, thus 80-90 GW electrolyser capacity deployed in Europe. We are currently at 3GW deployed. It also requires at least 150-200 GW renewable electricity capacity that is dedicated to renewable hydrogen production. For comparison, the entire solar generation capacity in the continent is approximately 263 GW. Once again, the scale of the challenge is far from trivial.

Coming back to our initial question: how do we plan for this transition, to a future with vastly more renewable electricity and renewable hydrogen, along with the phaseout of fossil fuels?

A historic level of collaboration will need to operate.

One sub-question that European policy makers have been attempting to answer for a while is: who should be in charge of planning for the buildout of hydrogen infrastructure (transmission and distribution pipelines, storage, terminals etc)? This is a complex question, as we are not fully sure who will use large volumes of the molecule, and where. We are not even sure, for several sectors, if direct electricity or hydrogen will be the best solution.

As hydrogen will complement the use of direct electricity, it might be best that electricity grid operators (ENTSOE) also plan for hydrogen infrastructure.

On the other hand, natural gas grid operators (ENTSOG) could repurpose their pipelines into hydrogen pipelines. This costs around 30% less than building new ones. Maybe they are in the best position to be in charge of the hydrogen infrastructure buildout.

After two years of negotiations among EU institutions, it was finally decided that an independent organisation would take care of the hydrogen planning. This entity, called ENNOH (European Network of Network Operators for Hydrogen), will bring together independent hydrogen network operators (companies independent from their gas or electricity equivalents) and act as one. The ENNOH would be responsible for establishing a horizontal dialogue with electricity (ENTSOE) and gas (ENTSOG), to constantly consider both the needs for complementing electricity, and the expertise of gas operators. For the first time, all three will put together a joint scenario for an infrastructure planning in the next ten years that is coherent with our climate targets.

It will also need to collaborate from a vertical perspective: with the local, regional, national and European levels. It is equally important that, on the one hand, it receives clear guidelines from the European political level about the need to decarbonise our end-uses efficiently and in line with our energy and climate policy, on the other hand with local actors to understand every single barrier to decarbonisation, such as topography, protection of urban or rural areas, cost estimations, skills shortages and more.

This vision was not self-evident, and it may be complex. However, from the point of view of renewable developers looking to decarbonise our power, transport, heating and industry in the fastest and most efficient way possible, this is the only viable option. We don’t have much time. We must get it right the first time.

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Arthur Daemers is a policy advisor on Renewable Hydrogen at SolarPower Europe.