Page 22 - Gi_Jun-Jul2021

the european hydrogen strategy

with green hydrogen having to rely
on more direct support schemes
until costs have reduced sufficiently.
Therefore, we envisage that successful
implementation of the strategy will
require several government-backed
auctions, both (a) for CCfDs and (b)
to promote green hydrogen projects ENERGY COMMISSIONER EU COMMISSIONER
specifically over the next 12 months”. KADRI SIMSON FRANS TIMMERMANS
Finally, the EU Hydrogen Strategy
foresees (i) a common low carbon
threshold/standard which would be
defined relative to the existing ETS
benchmark for hydrogen production
and (ii) comprehensive terminology
and certification for renewable and low
carbon hydrogen; thus, introducing a
certificate of origin for hydrogen and
enabling trading of green hydrogen.
However, the EU Hydrogen Strategy
does not introduce a new support scheme
in the form of a feed-in tariff, which
was criticised. The OEIS commented ZEPPELIN FLYING OVER LAKE CONSTANCE
on the need for member states to
arrange competitive tenders: “While of increasingly renewable systems. conversion of existing natural gas
the strategy document contemplates OEIS notes that while the strategy pipelines combined with (relatively
several possible support schemes, the document mentions both daily and limited) newly-built hydrogen-
detailed implementation plan is far from seasonal storage it does not recognise dedicated infrastructure. For example,
clear. If the 6GW target by 2024 is to that “hydrogen’s real advantage is over it expects that the hydrogen network
have any hope of being achieved, several longer periods beyond the capability in Germany and the Netherlands may
EU governments will need to arrange of batteries”. This brings up new consist of up to 90 per cent repurposed
competitive tenders for such projects possibilities for project developers gas infrastructure. However, the EU
in the next 12 months. Such tenders who could combine electrolysers and Hydrogen Strategy is vague on how
would need to provide direct support to hydrogen storage facilities with large this European hydrogen grid will be
a renewable hydrogen project, either by scale renewable energy plants. First regulated. OEIS comments: “the strategy
underwriting the costs or by providing project ideas pointing in this direction appears to downplay some of the
a bankable revenue stream to create a are already discussed in the market, complexity of converting natural gas
business case for a private investor”. The which involve offshore wind farms, pipelines to hydrogen service, but it does
latter is currently the most relevant issue hydrogen plants at sea and loading recognise that significant investments
for the EU Hydrogen Strategy. facilities for tank ships (comparable will be required and that regulatory
to LNG offshore terminals). However, changes will be required to enable that”
WHAT DOES THIS MEAN FOR THE ENERGY SECTOR? since for the time being batteries will and also: “while not stated explicitly,
The increase in green hydrogen be much easier to handle and install the strategy appears to be supportive
capacity will need to be matched by a (hydrogen is still a highly flammable of the concept that in the longer term a
similar scale-up in renewable energy substance) it will take a while until pan-European hydrogen network will
deployment, which are likely to be large hydrogen can play out its full advantage develop and co-exist with a methane
wind and solar plants. The strategy in terms of long-term energy storage. network, which will increasingly carry
notes that from now until 2030 “€220- bio- or synthetic methane”.
€340 billion would be required to scale
up and directly connect 80-120GW The increase in green SUMMARY
of solar and wind energy production hydrogen capacity will need With the EU Hydrogen Strategy, the EU
capacity to the electrolysers to provide to be matched by a similar sets the framework for the development
the necessary electricity”. scale-up in renewable energy of the hydrogen sector into one of the
Wind and solar farm operators may backbones of the European energy
therefore find potential for bankable deployment, which are likely to industry. It will be interesting to see if
business models through concluding be large wind and solar plants and when the EU manages to transfer this
long-term PPAs with the operators of strategy into directives and regulations.
hydrogen facilities. This model may Nevertheless, a first step is made,
be of particular relevance for facilities But the impact of the EU Hydrogen hopefully others will follow soon.
which are nearing the end of their feed- Strategy goes beyond the renewables
in tariff period and are looking for a sector. In order to achieve a European Watson Farley & Williams is an
business model following its expiry. market for hydrogen, energy international law firm advising on
In Phase 2, the EU Hydrogen infrastructure will become more and complex transactions and disputes
Strategy also sees hydrogen playing more important. In this regard, the through local knowledge and an
an increasing role as a form of energy EU Hydrogen Strategy contemplates integrated international network. For
storage to negate the intermittency hydrogen networks based on the more information, visit www.wfw.com

22

13/05/2021 12:10
EuropeanHydrogenStrategy.indd 3
EuropeanHydrogenStrategy.indd 3 13/05/2021 12:10