05 Our external social value creation

In June 2021, Gasunie was asked by the Dutch government to develop the hydrogen transmission network. This is a milestone in the Dutch energy transition and a milestone for Gasunie. A substantial financial commitment from the Dutch government followed in September, limiting the risk posed by having an insufficient number of customers in the start-up years and, with that, insufficient income during that time. In December, a letter from the government to parliament provided more clarity on the future organisation of the hydrogen sector. These three developments are pivotal in determining our activities in the field of hydrogen infrastructure in the coming decades.

Gasunie has its sights on developing a transmission network for hydrogen in the Netherlands that will connect the five Dutch regional industrial clusters, other industrial locations, storage facilities and import locations, and which will have connections with neighbouring countries. With the help of this regional and national infrastructure, the Netherlands will become the gateway to Europe for the global hydrogen market.

Gasunie subsidiary Hynetwork Services is the party responsible for developing the transmission network. The development of hydrogen transmission in the five regional clusters is one of the priorities. Hynetwork Services is now in talks with producers, consumers and port operators in these clusters. The pace and manner of developing the transmission network in the regional clusters, in the rest of the Netherlands and for the connections to other countries may differ.

The ultimate goal is to have a national hydrogen backbone, including connections to other countries, in operation by 2030. Our current expectation is that the backbone will be 1,183km long and will consist for 83% of repurposed pipelines from GTS’ current national natural gas grid.

The Dutch government based its decision to have Gasunie develop the national hydrogen network on the HyWay 27 report, which described the findings of a study conducted by Gasunie, TenneT, PwC/Strategy& and the Ministry of Economic Affairs and Climate Policy and the Ministry of Finance. The study confirms that zero-carbon hydrogen is needed to achieve Dutch climate targets, and concludes that a national hydrogen transmission network and storage facility is essential in each of the four infrastructure scenarios in the 2030-2050 Comprehensive Infrastructure Survey (II3050) in order for hydrogen to gain the desired key position in the energy supply. In the HyWay 27 study, the future national hydrogen transmission flows have been calculated on the basis of the II3050 scenarios. HyWay 27 also shows that a completion time of four years must be taken into account for each individual section of pipeline.
 

It takes four years to develop a hydrogen pipeline section

The development of the hydrogen backbone received a major boost in September 2021. In the budget proposals for 2022, the Dutch caretaker government announced that it would reserve € 1.3 billion for energy infrastructure projects that are important for the climate/energy transition. € 750 million has been reserved for the backbone over the next seven years. This money is intended to cover the ‘slow uptake risk’, that’s to say to bridge the years when the backbone is already in place, but sufficient supply and demand for hydrogen may not yet have arisen. In addition, the government is making € 35 million available for the development of large-scale hydrogen storage facilities.

With a view to developing the hydrogen backbone, Hynetwork Services conducted a consultation among market parties in industry and other sectors who want to make use of the hydrogen backbone. The consultation revealed that these parties want the transmitted hydrogen to have a purity of at least 98%. Their preference for entry and exit pressure is 50 bar for entry and 30 bar for exit. In October 2021, Hynetwork Services published a complete overview of the technical specifications that market parties would like to see.

With the publication of the policy on hydrogen market regulation in December, the Ministry of Economic Affairs and Climate Policy has provided clarity on Gasunie’s future role in the hydrogen supply chain. In addition to developing infrastructure, from the start of the development of the hydrogen supply chain Gasunie has also committed itself to a number of key, innovative initiatives for electrolysis. In our opinion, the fact that the Ministry of Economic Affairs and Climate Policy has chosen to leave the upscaling of electrolysis to the market creates the desired clarity for everyone.

In concrete terms, this means that we will continue to participate in electrolyser-related feasibility studies, through which we can collect knowledge about how these installations will fit into our future hydrogen grid; however, we will not be a shareholder in either electrolysis installations or in consortia concentrating on the development of an integrated production network. 

Gasunie is of the view that the essential role of hydrogen in the future sustainable energy mix will only be fully realised once there is a genuine international network, so that supply and demand can effectively be matched – starting with the Netherlands and Germany. Therefore, in preparation for definitive transport connections between the two countries, an initiative must be taken in the short term to carry out tests and studies into the necessary technical and regulatory conditions for cross-border hydrogen transport.

Gasunie has organised hydrogen development activities along lines (‘pillars’) that focus on transmission, storage, conversion, offshore and import.

Transmission pillar
Rijnmond
In the Rijnmond region, Gasunie is realising a regional infrastructure under the project name HyTransPort. This new hydrogen pipeline will soon form the backbone of the hydrogen infrastructure in Rotterdam and will run from the Maasvlakte industrial area to the Pernis district. HyTransPort will connect the conversion park in the Maasvlakte area with the petrochemical, chemical and heavy industries and import terminals in the port area. A 200-megawatt electrolysis plant belonging to Shell will be our launching customer. We aim to make an investment decision in 2022, with the pipeline coming into operation in 2024 and connection to the national backbone following in 2026-2028.

Northern Netherlands
The north of the Netherlands is a suitable region for developing a green hydrogen economy. We are currently working on the permits for the northern section of the backbone and the agreements are being finalised with the first producers and customers. If everything goes according to plan, the northern hydrogen infrastructure from the first phase will become operational in 2025. Connections to Emmen in the Netherlands and the Ruhr in Germany (second phase) are up next, as well as a route leading towards Hamburg and Bremen, which would follow shortly after.

North Sea Canal area
In the North Sea Canal (Noordzeekanaal) area, Gasunie wants to realise a hydrogen pipeline between the port of Amsterdam and the IJmond region, where the canal meets the North Sea. This would allow users and producers of hydrogen to be connected locally. We are currently discussing the details of the future infrastructure with potential customers and stakeholders. Assuming a positive investment decision, the regional system could be operational in the second half of 2026.

Zeeland
Gasunie and North Sea Port signed an agreement in September for the development of a regional hydrogen transmission network in the industrial area between Vlissingen and the Terneuzen canal area. Industry in the province of Zeeland accounts for 33% of the current demand for hydrogen in the Netherlands, and so also for a significant part of the carbon emissions. With the arrival of a regional hydrogen network, the delta region of the province can accelerate the reduction of carbon emissions. The planned Hydrogen Delta Network NL should take shape in the coming years. In 2027, this regional infrastructure can then be connected to the national Dutch and Belgian hydrogen infrastructure.

GZI Next
GZI Next is an energy hub in Emmen, for which Gasunie, as a consortium partner, expects to take an investment decision in 2022. Gasunie’s contribution to the GZI Next project would be the construction of a hydrogen pipeline, which would mean looking into the repurposing of existing pipelines and possibly constructing and commissioning a new pipeline. Lastly, the possibility of additional biogas production will be investigated. In anticipation of the investment decision, in 2021 we already ordered the materials with the longest delivery time.

HyPerLink

Gasunie wants to build the HyPerLink in the north of Germany, where GUD’s natural gas network is located. This hydrogen backbone will stretch out over 610 kilometres and have a planned capacity of up to 7.2GW. HyPerLink can be constructed in phases between 2025 and 2030.

The large-scale expansion of wind farms off the German North Sea coast in combination with onshore and offshore electrolysis plants will allow the green energy generated at sea to be converted into hydrogen, which can then be transported via the HyPerLink hydrogen backbone to storage facilities and industrial and other end users.

Like the Dutch hydrogen backbone, HyPerLink can be constructed cost-effectively by converting existing natural gas infrastructure to transport hydrogen and, where necessary, by building new infrastructure. As things stand now, construction and commissioning should take place in phases from 2025 to approximately 2030.

Storage pillar
HyStock
In the energy system of the future, fossil fuels will no longer play a role, or only play a very limited role in balancing energy supply and demand. We believe that this role will have been taken over largely by hydrogen. However, the national hydrogen backbone cannot function with the required level of stability and cost-effectivelywithout a large-scale central storage facility.

Gasunie is working on determining whether four salt caverns can be developed in Zuidwending for the large-scale storage of hydrogen. This would allow large amounts of energy to be stored safely, efficiently and reliably. The first results of our investigations in 2021 were positive. If the demonstration tests in the first half of 2022 also show good results, Gasunie can continue with the development of the salt-cavern storage facilities, with the first salt cavern fully operational in 2026. The aim is to build storage capacity that meets the need for hydrogen storage in line with the agreements in the Dutch Climate Agreement. In October 2021, we set up a separate entity for our hydrogen storage activities, HyStock.

Conversion pillar
Djewels 1
At the Chemical Cluster Delfzijl, Gasunie and HyCC (the new hydrogen company of Nobian and the Green Investment Group) are developing a 20 megawatt electrolysis plant under the name Djewels 1. The knowledge gathered in the course of this project will make it possible to scale up to larger installations in the future. At this chemical cluster, there are both suppliers and consumers of hydrogen and green energy. An investment decision is expected in mid-2022. Gasunie and HyCC aim to have the plant operational by the end of 2024. As a result of the decision of the Dutch government that Gasunie may not become active in electrolysis activities, we will only remain a shareholder in Djewels 1 just until the project reaches the operational phase.

Offshore pillar
Winds out in the North Sea can be harnessed on a large scale to meet climate targets. The creation of a series of smaller ‘energy islands’ in the North Sea is a highly efficient way of doing just that. Gasunie is involved in three of these offshore hydrogen supply chain projects.

PosHydon
In the PosHydon research project, Gasunie and consortium partners are integrating offshore wind, offshore natural gas and offshore hydrogen on the Q13a platform of Neptune Energy. The process for making green hydrogen starts with converting seawater into demineralised water on the platform. This water is then converted into hydrogen using electrolysis, with wind power providing the electricity. The result is green hydrogen. With PosHydon, the project partners are gaining experience in the practical aspects of integrating energy systems at sea and producing hydrogen in an offshore environment, to see how offshore conditions, including salt, affect the electrolyser. The Netherlands Enterprise Agency (RVO) has awarded the pilot an Energy and Climate Innovation Demonstration (DEI+) grant of € 3.6 million. With this grant and a contribution from the consortium partners the pilot can get under way. Platform Q13a is located 13 kilometres off the coast of Scheveningen.

NortH2
NortH2 is a consortium in which Gasunie is working together with Equinor, Groningen Seaports, RWE and Shell Netherlands. The consortium is supported by the Province of Groningen. We are jointly investigating the feasibility of large-scale production, storage and transmission of green hydrogen. The aim is to be able to supply industry with around 4GW of green hydrogen over the next decade. But the ambition goes further than that. NortH2 wants to grow to approximately 10GW by around 2040 – meaning the production of approximately one megatonne of green hydrogen per year – cutting carbon emissions by 8 to 10 megatonnes a year. The electrolysis will initially take place in Eemshaven and later possibly also offshore.

We are currently working on a feasibility study. The first results are positive and provide assurance that work can be started on shaping a fully developed project in the foreseeable future. The consortium structure will change after the study phase. Gasunie will then stop as an investment partner, but will remain involved in the realisation of the required transmission infrastructure.

North Sea Wind Power Hub
The North Sea Wind Power Hub (NSWPH) consortium envisions building energy islands far out at sea, with connections to various countries. The islands would collect the electricity generated by surrounding offshore wind farms. Given the size and ambitions, the consortium partners expect that so much electricity will be produced that a large part will be converted into hydrogen. This is where Gasunie can be of great help, which is why we are an active partner in this consortium, which further includes network operators TenneT and Energinet.dk.

The initial capacity of the hub will be around 3GW, later to be extended to approximately 10GW. In February 2021, the Danish government took the decision to construct the first artificial island, which should be ready by 2030. The major challenge is bringing the anticipated huge amount of offshore wind energy generated to landing points onshore and integrating this into the energy system, especially given all the technical system adjustments and regulatory changes needed to enable this.

AquaVentus
The AquaVentus consortium intends to build 10GW in offshore wind farms near the North Sea island of Helgoland, combined with offshore conversion of electricity into hydrogen and transport of hydrogen to the German mainland through an infrastructure of pipelines. The AquaVentus programme has been subdivided into various projects, including the AquaDuctus project that involves the building of the required offshore pipeline network of approximately 400km that will be used to deliver the green hydrogen produced by the offshore electrolysis platforms to consumers on the mainland. Gasunie is an AquaDuctus consortium partner.

Element Eins/Clean Hydrogen Coastline
In November 2021, the parties behind the hydrogen projects Clean Hydrogen Coastline and Element Eins announced that they were merging these two initiatives. Clean Hydrogen Coastline (ArcelorMittal, EWE, FAUN, Gasunie, swb and TenneT) aims to develop a large-scale hydrogen supply chain in the north-western region of Lower Saxony. Element Eins (Gasunie Deutschland, TenneT and Thyssengas) envisions the development of a 100 megawatt electrolyser in Diele, Lower Saxony.

Together, these projects lay the foundation for an integrated hydrogen value chain that should be created by 2026, with hydrogen production, electricity infrastructure, large-scale hydrogen storage in salt caverns, and transmission via existing natural gas pipelines that have been repurposed as hydrogen pipelines. The collaboration agreement concluded in November forms the basis for further steps, including terminating the direct involvement of the participating network operators in the construction of the electrolyser, and obtaining financing. Clean Hydrogen Coastline has been granted IPCEI status*.

Import pillar
Ammonia terminal
Studies such as II3050 and HyWay 27 foresee that north-western Europe will not be able to meet its own demand for green hydrogen in the future, despite large-scale production initiatives. This means that it will be necessary to import green hydrogen. Hydrogen can be transported and stored in various ways, including by putting hydrogen under high pressure (compressed hydrogen) or by cooling it down until it liquefies (liquid hydrogen). An alternative is to use compounds like ammonia or liquid organic hydrogen carriers (LOHC) to reversibly adsorb hydrogen and act as a ‘hydrogen carrier’. Ammonia offers various advantages in terms of transport and storage and is seen as one of the most promising hydrogen carriers. After transport and storage, the hydrogen can be extracted from the ammonia for direct application as hydrogen, or the ammonia can be used, for example, as a zero-carbon fuel or as a replacement for ‘grey’ ammonia in the production of fertiliser. Together with partners, Gasunie is exploring possibilities for building one or more final landing terminals for green ammonia in our core area.

WarmtelinQ is a hot water mains that for the most part runs underground. From 2025, the pipeline will take residual heat from industries in the port area of Rotterdam and make this available to around 120,000 homes and businesses in the province of Zuid-Holland. We made the FID to go ahead with the WarmtelinQ project at the end of 2021. Two important pieces of the puzzle for this fell into place in 2021: the signing of an agreement with Eneco, and the grant for WarmtelinQ announced by the national government when they presented the national budget on 21 September 2021. In addition to the investment decision for the heat transmission pipeline from the Port of Rotterdam to The Hague, consultations are underway with the parties involved in an extension of the pipeline from Rijswijk to Leiden. Whether there is sufficient financial and commercial support for this expansion is expected to become clear at the beginning of 2022.

In the Netherlands, the Climate Agreement has set 2 billion cubic metres (bcm) as the target volume of green gas that is to flow through the networks by 2030. Green gas is produced mainly through the fermentation and gasification of biomass. Being the same quality as Groningen gas and entirely carbon-neutral, green gas is a sustainable alternative to natural gas. In 2021, a total of 19 million m³ (185.4 GWh) of green gas was fed into GTS’ networks; for the GUD grid the figure was 113.6 GWh (11.6 million m³).

The Dutch Gas Act sets the boundaries within which GTS can facilitate the market for green gas. For example, GTS can transfer green gas from the grids of regional transmission system operators to the GTS network via green gas boosters, this way helping to increase the scope for injecting green gas into the regional grids. GTS is not allowed to take in, transmit, treat or blend biogas (untreated green gas), even though this could reduce the costs of green gas. For this reason, Gasunie supports the green gas market by making green gas production technologies scalable, such as with the SCW and Torrgas initiatives.

Producing green gas on an industrial scale is a process that presents technical challenges. This makes the development of green gas projects difficult to predict and financially more uncertain. Accordingly, in 2021 decided to remain involved as an infrastructure partner in the above two projects and to offer the green gas market upscaling potential.

Gasunie and SCW Systems are building a demonstration unit for supercritical water gasification at the Energy Innovation Park in Alkmaar. Gasunie and Perpetual Next plan to develop and build the Torrgas Delfzijl project. Together, they intend to build a demonstration installation that, based on Torrgas technology, will eventually be able to produce green gas from syngas in a sustainable manner, with the resulting gas distributed to customers via the existing gas network.

Carbon capture and storage (CCS) is one of the very few options that energy-intensive industries – refineries, chemical plants, steel producers, waste processors, cement producers and such – have to avoid large amounts of carbon emissions in the short term and at a relatively low cost. CCS allows these industries to contribute to meeting the climate targets and keeps them in our economy. Carbon capture and utilisation (CCU) can potentially play a key role in decarbonising the greenhouse agriculture sector and will also offer opportunities in other markets in the future. Consequently, carbon capture, utilisation & storage (CCS) is part of the Dutch Climate Agreement and the European Green Deal.

Gasunie is committed to facilitating the development of CCS by developing CO₂ transport and storage infrastructure together with partners from across the supply chain. The projects we are working on are Porthos, Carbon Connect Delta, Aramis and CO₂nnect. Our Athos CO₂ project was terminated in September 2021 because Tata Steel IJmuiden decided to go with DRI technology (‘the hydrogen route’) to accelerate the greening of its steel production. This decision means that too little CO₂ will become available in the Amsterdam-IJmond region for a profitable business case for transport and storage under the sea. Tata continues to have the option of storing CO₂ through Aramis or CO2nnect.

Porthos is on track to store 2.5 megatonnes of CO₂ from industry annually in empty gas fields under the North Sea from 2024. In June 2021, the government set aside € 2.1 billion in SDE++ grant money that can be paid out to the project’s customers Air Liquide, Air Products, ExxonMobil and Shell over the next 15 years. The actual funding that will be paid may be significantly lower if the emission allowances (ETS) rate increases in the coming years.

In June 2021, after a European tender process construction company Denys was awarded the contract for the design and construction of the onshore pipeline. The decision on the integration plan and four permit requests (all-in-one permit for physical aspects for the compressor station, all-in-one permit for physical aspects for the P18-A platform, permit for the offshore CO₂ transport pipeline, and amendment of the permit for permanent storage of CO₂ in reservoir P18-4) are available for inspection.

In November, environmental group Mobilisation for the Environment (MOB) lodged an appeal against the all-in-one permits for physical aspects for the compressor station and the platform and against the integration plan. In December, Air Liquide, Air Products, ExxonMobil and Shell signed final transport and storage contracts with Porthos.

The final decision to proceed with the project is expected in 2022, once the permits for construction and use of the infrastructure and installations have been obtained and the suitability of the contemplated undersea gas field and wells for CO₂ storage has definitively been confirmed by the currently ongoing studies into this. Construction of the Porthos system (onshore pipeline, compressor station, offshore pipeline, offshore platform modification) will take approximately two years. In the meantime, the companies will be installing their carbon capture systems. The first ‘deliveries’ of CO₂ can then be stored in 2024.

In the Delta region of Zeeland and Flanders, Gasunie worked in a consortium with Smart Delta Resources, North Sea Ports and Fluyxs on a study of the feasibility of CCS in the region. Under the name Carbon Connect Delta, the cross-border consortium made plans that could reduce CO₂ emissions from industries in Terneuzen, Vlissingen and Ghent by 1 to 6.5 megatonnes a year. An SDE++ grant was requested for the Dutch part in 2021 to build the infrastructure that would be needed to transport CO₂, as envisioned, by ship instead of pipeline.

We believe that the need for processing captured CO₂ goes beyond Rotterdam and Zeeland. Since 2021, CO₂nnect, a consortium of Gasunie, Vopak and Gate terminal, has been gauging interest in an independent, open access terminal for the offloading, storage, trans-shipment and delivery of liquid CO₂. The terminal would be located in the Maasvlakte area of the Port of Rotterdam. The market survey focuses on industrial companies and clusters without a direct connection to a CO₂ pipeline. They can transport CO₂ to the terminal by coaster, inland waterway vessel and perhaps also by train or truck. In its first phase CO₂nnect could process 7 megatonnes of CO₂.

CO2nnect is working on its market study together with Aramis, a consortium of Gasunie, TotalEnergies, Shell Nederland and Energie Beheer Nederland that started in 2021. Aramis aims to build a pipeline to transport CO₂ from a CO₂ collection point and compressor station in the Port of Rotterdam area to the offshore platforms where the CO₂ would be injected into empty gas fields using existing wells. These gas fields are located about three to four kilometres under the North Sea bed. The Aramis infrastructure must also be freely accessible so that industrial customers and operators from other fields can gradually be added to the system. Aramis aims to make a final investment decision in 2023 with an operational start in 2026. The CO₂ transport infrastructure could transfer 5 megatonnes of CO₂ to the storage fields every year.

The project teams behind CO2nnect and Aramis are looking at mutual synergy and collaboration with Porthos. The plan is to connect the CO2nnect terminal to the Aramis pipeline.

Reducing our carbon footprint is hugely important to us. We are reducing our methane emissions by using:

1. Emission-free regulating equipment
2. LDAR programme
3. Nitrogen displacement
4. Mobile recompression
5. Mobile flaring

In 2021, for the first time we set a corporate-wide target for both our CO₂ and methane emissions. This makes it easier for us to compare the emission reduction results of our various business units, and third parties can better compare our total results with that of other network operators.

• 2030: our methane emissions should be about 50% lower than in 2020. To achieve this, the methane emissions must fall below 70 kilotonnes of CO₂e.

• 2030: we want to reduce our total CO₂ emissions (i.e. including methane emissions) relating to our natural gas transmission (Scope 1+2) by 30% by 2030 compared to 2020, assuming constant transmission volumes. The formula for this is
  CO₂e (kton) = 70 (kton CO₂e) + (0.137 × transport volume)

To be able to make the right investment decisions in the design, construction, use and replacement of installations, Gasunie uses internal carbon pricing. In line with market trends, this price has risen sharply:

• 2020: € 25 per metric tonne CO₂
• 2021: € 50 per metric tonne CO₂
• 2022: € 100 per metric tonne CO₂

Our methane emissions over the past five years were as follows (in tonnes of methane):