INVESTMENT AGENDA HYDROGEN NORTHERN NETHERLANDS Heading for emission-free hydrogen at commercial scale FEBRUARY 2019 EXECUTIVE SUMMARY Green industry of the future Growth of hydrogen to commercial scale The Northern Netherlands is actively building on the green The investment agenda includes an increase in scale, which takes industry of the future. Hydrogen has a vital role to play in this the annual production of emission-free hydrogen to an order transition, both as an energy carrier and as feedstock. The green of magnitude of billions of cubic metres. To give an impression: industry creates and retains jobs, ensures that our knowledge 1 billion cubic metres has an energy content of approximately 10.8 position is maintained and makes a concrete contribution to petajoules (PJ). Replacing one billion m3 of grey hydrogen with the Netherlands’ climate objectives for 2030. That is why we, emission-free hydrogen will save approximately 600 kilotonnes companies and governments in Groningen and Drenthe, have of CO2 emissions. This will be achieved through investments in established an investment agenda for the development of the green hydrogen production clusters, a blue hydrogen production hydrogen system in the Northern Netherlands. To realise these site, hydrogen and CO2 infrastructure and the conversion of investments, we have requested the central government to existing industry. The increase in scale is needed in the short term fi nance part of the fi nancial gap of hydrogen production. for cost reduction in technology and infrastructure. As a result of this cost reduction, the cost-effective production of emission-free Emission-free hydrogen hydrogen is expected to be possible in 2030. Until 2024, the part The hydrogen plan outlines the large-scale plans for production, of the investment which is not cost-effective, the fi nancial gap, infrastructure and use of emission-free hydrogen. The term averages 100 million euros a year. ‘emission-free hydrogen’ designates green and blue hydrogen, which is respectively hydrogen production using renewable Cover for fi nancial gaps electricity and hydrogen production using natural gas in Companies in the Northern Netherlands are very ambitious with combination with CO2 capture and storage. The companies the projects in this document and are prepared to accept part of have their own focal areas: some companies in this plan focus the fi nancial gap. Investments will not get underway without on green hydrogen projects, while others also focus on blue coverage of the remaining part of the fi nancial gap. We are hydrogen projects. However, they all see the opportunities therefore asking the national government to set up a subsidy for linked to scaling up the hydrogen system in the Northern hydrogen production. This has a positive effect on green chemistry Netherlands. A joint investment agenda has been written for and employment. The economic and sustainable opportunities in this purpose. the region are thus exploited. The Northern Netherlands is ready! Figure 1 gives an overview of the expected development of hydrogen supply and demand in the Northern Netherlands based on the projects in this investment agenda. The following parties contributed to this plan: Avebe | BioMCN | EMMTEC services | Eneco | Engie | Equinor | ESD-SIC Groningen Seaports | Lagerwey | Nederlandse Gasunie | NAM | Nedmag | Nouryon | Nuon/Vattenfall Provincie Groningen | Shell | Suikerunie | Teijin Aramid | Waterbedrijf Groningen 2 Investment Agenda Hydrogen Northern Netherlands WHY HYDROGEN? A transition to a sustainable energy system and a circular and sustainable industry is necessary to achieve a society that is (almost) completely CO2 neutral by 2050. The emissions released by the use of energy and feedstock must therefore be significantly reduced. Production, transport and storage must also be emission-free within such a system. This calls for emission- free energy carriers. These energy carriers are electrons or molecules. Electrification and energy efficiency alone are not sufficient to achieve this. These energy carriers must have the following characteristics: Hydrogen in mobility Time – they should always be available and not be affected Projects already realised or in progress: by day-night or seasonal cycles. Groningen - Leeuwarden hydrogen train Location – they must be economically viable for short and 22 hydrogen buses in the Groningen region - Assen in long distances. addition to 159 electric buses Use – they must be economically viable for small and very 8 hydrogen refueling stations large needs. Municipal road sweeping vehicles and garbage trucks Emission-free hydrogen is the most obvious way to achieve this. Of course, other systems also form part of the energy transition: sustainable electricity and heat from residual heat position and retains and creates employment. This is a route or geothermal energy. Carbon chains will also continue to that the northern industry itself has initiated and continues exist for industrial products; the carbon will be of non-fossil to be developed. origin as far as possible. Other reasons include the process involved in industry making Hydrogen can be used for numerous and demanding a Northern Netherlands contribution to the Dutch energy applications, both as an energy carrier and as a renewable and climate agreement, the many projects currently being feedstock for the chemical industry. Hydrogen can be developed in the region, the prospects for Groningen and the transported inexpensively, allowing it to be transported over Regiodeal in which hydrogen plays an important role. longer distances. Since hydrogen is convenient to store in large volumes, it can be used at any time. Hydrogen is therefore Because of its history with natural gas, the Northern an ideal, clean energy carrier and feedstock. The Northern Netherlands is the energy region of the Netherlands and Netherlands can become the centre of the Netherlands’ a driver behind our prosperity. Even now, the Northern hydrogen system. Northern industry, companies and Netherlands qualifi es as a centre for a sustainable energy governments fulfi l this role together. This investment plan system with an important function for hydrogen because: creates the necessary foundation for this. There is physical space for the production of electricity to hydrogen via electrolysis and via natural gas conversion. Why the Northern Netherlands? There are also suffi cient coupling opportunities to make The Northern Netherlands has been actively working for years good use of the residual heat. on a green energy system and the industry of the future. This is how the Northern Netherlands manifests itself as a leader 1 See for example: The Hydrogen Coalition (2018), “Vier pijlers onder een duurzame waterstofeconomie and looks to seize the opportunities this position brings with in 2030” and Industrietafel Noord-Nederland (2018), “Noord-Nederland gee�t gas op CO2-reductie” it: the Northern Netherlands extends the acquired knowledge 2 See also: Northern Innovation Board (2017), “The Green Hydrogen Economy in the Northern Netherlands” Investment Agenda Hydrogen Northern Netherlands 3 There is already a lot of knowledge about producing green The increase in scale could make a concrete contribution to the hydrogen by electrolysis (chloralkali and water electrolysis). climate objectives of the Netherlands (49-55% CO2 reduction) Hydrogen is already produced on a large scale as a by- by achieving it in 5 to 7 years. Investments in the necessary product of chlorine. infrastructure also remain affordable due to economies The existing natural gas transport system makes it possible of scale. This will also contribute to a cost reduction in the to create simple and cost-effective connections for the required technology such as electrolysis devices. This requires transmission of hydrogen. Not only within the region, but a quick decision to invest in: also for the export of hydrogen to other regions at home and abroad, and at a later date also the import of hydrogen. Clusters for the production of green hydrogen of at least Hydrogen can conveniently be stored due to the presence of 100 MW; salt caverns near EnergyStock, Veendam. A blue hydrogen production site of at least 1.2 GW, needed There are important clusters in the region where the for the baseload volume for industry; hydrogen can be used in the economy. These clusters are Infrastructure for hydrogen storage and transmission and the chemical industry, electricity generation and logistics. for CO2 capture and transport; The region has unique research and test sites (including the Conversion of existing industry and electricity generation Hydrohub test centre) at the EnTranCe field lab in the city of to hydrogen. Groningen. Here, hydrogen applications can be developed. Cooperation between companies and knowledge The above forms the necessary and indispensable core for institutions takes place within the New Energy Coalition the rapid growth of hydrogen production and use. This and training courses from vocational education to scientific investment plan gives substance to this. The increase in scale education in the field of energy transition and hydrogen are can be achieved on the basis of economic added value and offered or developed. government support for innovation, economic development The presence of seaports could provide alternative and the reduction of greenhouse gas emissions. hydrogen transport, import of hydrogen and a base of operations for the offshore wind