The Netherlands is saving stranded pipelines by supplying them with hydrogen.
Most natural gas production will cease this year, forcing NV Nederlandse Gasunie to find new uses for its 15,000 km of pipes. The state-owned company is researching how to transport, produce, and store hydrogen over the next decade as the EU seeks to green its economy.
Groningen, home to Europe’s largest gas field, was shut down after decades of exploration and pumping caused earthquakes. Demand will also decline as the government commits to halving greenhouse gas emissions this decade. Gasunie now has 9,321 miles of pipe to fill, idle, or dismantle.
While fossil fuels meet 80% of the country’s energy needs, the domestic industry is a minor economic blip. According to national statistics, government revenue from natural gas fell to 140 million euros in 2020 from 10.7 billion euros a decade earlier.
Meanwhile, the country’s largest pension fund is selling fossil fuel producer holdings and Royal Dutch Shell Plc is moving to London to comply with a court order.
Plus, Europe’s benchmark carbon contract is setting new records. During the winter, as the continent struggles with an energy crisis, more price increases are expected.
That makes alternative sources like hydrogen more appealing and competitive. According to BloombergNEF, green hydrogen produced with renewable energy will be cheaper than gas in at least 16 countries by 2050.
Clean hydrogen could meet a quarter of global energy needs by 2050, the European Commission estimates. Europe aims to double the world’s largest energy plant, China’s Three Gorges Dam, to 40 gigawatts of green hydrogen capacity by 2030.
Carbon-free hydrogen — green or blue — is the continent’s main solution for sectors like heavy industry and transportation that lack alternatives to fossil fuels and cannot be fully electrified. This is the Netherlands’ view.
Green hydrogen isn’t expected to be cost-competitive until 2030. According to BNEF, production costs are currently four times those of natural gas. In the meantime, remodeled pipeline could sit idle for years.
En route to industrial centers or export, the master plan envisions connecting North Sea hydrogen production sites with modernized port infrastructure. One billion euros will be spent by 2027 to convert 1,200 kilometers of pipeline to pure hydrogen.
Assuring potential risks is half the government’s responsibility. Fennema estimates that up to 80% of the system could be rebuilt.
An estimated 25% of the UK’s gas pipelines could be repurposed to create a 2,000 km hydrogen “backbone.” Two German transmission companies want to use existing pipeline to help build a hydrogen hub in the east.
Start-up costs are high, and governments must maintain a consistent energy policy, while industries must invest in capital improvements. Leaks from pipes can also increase methane lifetime in the atmosphere, negating some of hydrogen’s advantages.
European competition will heat up as the continent strives to achieve carbon neutrality by 2050. Even now, Gasunie sees value in its fledgling role as a hydrogen intermediary.
