The European Commission this morning unveiled new strategies for energy system integration and hydrogen that are designed to be key investment pillars of Europe’s Green Deal and also its post-Covid19 recovery.
They were launched by Energy Commissioner Kadri Simson and Executive Vice-President for the Green Deal, Frans Timmermans, who said that he believed both strategies were “crucial for our Green Deal”.
“They are ambitious, they are necessary… and they put us firmly on a path towards climate neutrality.”
He added they would also allow to EU to “retain global leadership in clean tech” and put climate action at the heart of Europe’s economic recovery from the coronavirus pandemic.
“The Green Deal remains our compass throughout this recovery,” he stressed.
And he added that the two new strategies were vital if the Europe had any realistic hope of hitting its target of being climate neutral by 2050.
Timmermans said the Energy System Integration Strategy is designed to provide the framework for a green energy transition and “break the silos” of the existing energy model, which he said allowed the energy consumption of transport, industry, gas and buildings to each have separate value chains, rules, infrastructure, planning and operations. He said this model was becoming “a relic of the past”.
“Energy system integration means that the system is planned and operated as a whole, linking different energy carriers, infrastructures, and consumption sectors. This connected and flexible system will be more efficient, and reduce costs for society.”
There are three main pillars to the integration strategy. The first is a more circular energy system that puts energy efficiency at its core. The EU states that there is “significant potential in the reuse of waste heat from industrial sites, data centres, or other sources, and energy produced from bio-waste or in wastewater treatment plants”.
The second pillar is greater direct electrification of end-use sectors, while the third, for those sectors where electrification is difficult, is the promotion of clean fuels such as renewable hydrogen and sustainable biofuels and biogas.
Hence, the Hydrogen Strategy, which is designed to spotlight how – with the right investments, regulation, market creation and research and innovation – hydrogen can help decarbonise industry, transport, power generation and buildings across Europe.
And the strategy is certainly ambitious: between now and 2024 it intends to support the installation of at least 6 GW of clean hydrogen electrolysers in the EU, and the production of up to one million tonnes of renewable hydrogen.
Then from 2025 to 2030, it envisions hydrogen becoming “an intrinsic part of our integrated energy system, with at least 40 GW of renewable hydrogen electrolysers and the production of up to ten million tonnes of renewable hydrogen in the EU.
And finally it forecasts that from 2030 to 2050, renewable hydrogen technologies “should reach maturity and be deployed at large scale across all hard-to-decarbonise sectors”.
To help deliver on the strategy, the EC today launched a European Clean Hydrogen Alliance which will include industry leaders, national and regional ministers and the European Investment Bank.
Timmermans said that the alliance would build up an investment pipeline for scaled-up production and support demand for clean hydrogen in the EU.
“Clean hydrogen is key for a strong, competitive and carbon-free economy,” he said, adding that Europe was “leading the world in this technology… but we need to make an extra effort to stay ahead, because the rest of the world is catching up.”
Energy Commissioner Kadri Simson said: “With 75 per cent of the EU’s greenhouse gas emissions coming from energy, we need a paradigm shift to reach our 2030 and 2050 targets. The EU’s energy system has to become better integrated, more flexible and able to accommodate the cleanest and most cost-effective solutions.
“Hydrogen will play a key role in this, as falling renewable energy prices and continuous innovation make it a viable solution for a climate-neutral economy.”
Players in the European energy sector welcomed both strategies. Eurogas secretary-general James Watson said that while “there are many different pathways to achieve an energy system integration for a climate-neutral Europe… the Commission strategies “confirm that we will need gaseous molecules to deliver climate neutrality in the most affordable and cost-effective way for EU citizens”.
“This is going to be a step change for the gas sector and one which we [Eurogas] are embracing and leading,” he added. “We have already called for targets for renewable and decarbonised gas to be set for 2030.”
“Ramping up hydrogen is a future-proof solution to achieve climate neutrality and provide Europeans with millions of jobs in clean technologies made in Europe.”
He said the European Hydrogen Alliance will make sure that all clean hydrogen technologies – carbon capture and storage, pyrolysis, electrolysers – are used to kick-start the hydrogen economy.
And he added that investing in carbon capture and storage “is a no-regrets option that can deliver the foundations of the future hydrogen market without delay. We also need mass deployment of renewable electricity, coupled with the increased speed of coal retirement in the electricity sector, to deliver renewable hydrogen and quick carbon reductions.”
Kristian Ruby, secretary-general of Eurelectric, said that the integration strategy “spells out direct electrification as a key principle to reach carbon neutrality”.
“Creating synergies between siloed structures of the energy system is essential for building a more efficient, flexible and decarbonised system.”
And while Ruby backs widespread electrification, he said that hydrogen “would play an important complementary role in the decarbonisation of energy intensive sectors”.
He said the plan to establish a clean hydrogen value chain was is comprehensive yet cautioned that “while implementing it, it remains critical to ensure that due attention is given to direct electrification measures, as they will be the most efficient and account for the larger CO2 abatement effects in the short and medium term”.
The European Geothermal Energy Council welcomed the integration strategy but stressed that “it is important that the Commission recognises a ‘one-size-fits-all’ approach is impossible in the EU, as the national energy systems are so diverse”.
EGEC secretary-general Philippe Dumas said energy system integration “should not be based on simplified terminology with no clarification. It must also include a modelling for heating and cooling decarbonisation.”
And he added that “we regret the lack of reference to a ‘made in Europe’ manufacturing and production of the energy systems structured around local renewable energy sources such as geothermal”.
He also said the integration strategy “should have tackled more thoroughly the issue of heat poverty, which affects between 50 and 125 million people in the EU”.
Frauke Thies, executive director of European energy business association smartEn said that the EC’s integration strategy “has got the priorities right”, adding that “it is no longer just about energy savings, but about an energy system that makes the best use of available and clean resources”.
“This means bringing renewable electricity into the heating, transport and industry sectors, while making use of these sectors’ demand-side flexibility to ensure resilience and balance supplies.”