Decarbonised hydrogen from natural gas

FSR online workshop series on Hydrogen Technology

2-hour online workshop

Watch the recording:

It is widely accepted that renewable and decarbonised hydrogen will need to play a major role in the EU’s future decarbonised energy market.

The first FSR online workshop will focus on decarbonised hydrogen produced from natural gas, or ‘blue’ hydrogen. In this special live event, we will analyse:

• the potential of producing ‘blue’ hydrogen
• the state of technology and industrial demonstration, and the current cost projections
• what needs to be done to bring the technology to maturity

This online workshop seeks to identify the bottlenecks of blue hydrogen production and discusses policy options for resolving them.

Download the Presentation

Programme

Wednesday 15th April, 10.00-12.20

Moderated by Andris Piebalgs and Christopher Jones, Part-time Professors, EUI

Pre-event poll: Which of the technologies is the most likely to play a major role in the EU’s energy system in 2050?

10.00-10.05: Opening comments: Christopher Jones, Part-time Professor, EUI

10.05-10.35 The role of renewable and decarbonised hydrogen in the EU’s future energy mix; policy options, funding priorities, their potential, and bottlenecks that need to be

Klaus-Dieter Borchardt, Deputy Director-General, DG Energy, European Commission.

Hélène Chraye, Head of Unit, Clean Energy Transition, DG Research and Innovation, European Commission.

Stefaan Vergote, Adviser for Emission Reduction Strategies, Research & Innovation, DG Clima, European Commission

10.35-10.45 Audience questions/discussion

The case for Pyrolysis

10.45-10.55      Alex Barnes, Director, A. Barnes & Associates LTD

10.55-11.05:     Stefan Petters / Dr. Klaus-Dieter Mauthner, GOU / CARBOTOPIA

11.05-11.15:     Christopher Brandon, EH Group,

11.15-11.35:    Audience questions/discussion

The case for Steam Methane Reforming and CCS

11.35-11.45: Henrik Solgaard Andersen, Equinor

11.45-11.55: Chris Gibson, Engineering Manager – CCUS & Hydrogen Group, Environmental Technology, BP

11.55-12.05 Audience questions/discussion

12.05-12.20: Concluding remarks:

Hélène Chraye, Head of Unit, Clean Energy Transition, DG Research and Innovation, European Commission.

Tudor Constantinescu; Principal Advisor, DG Energy

Workshop 2: Renewable Hydrogen

The potential for producing ‘green’ hydrogen; the state of technology and industrial demonstration, current cost projections; what needs to be done to bring the technology to maturity.

Wednesday 22nd April, 10.00 – 12.20

Moderated by Andris Piebalgs, Part-time Professor, EUI, and Christopher Jones, Part-time Professor, EUI

Pre-event poll: Which sector is the most perspective for the uptake of the renewable hydrogen? (Refining, chemicals, transport, buildings, power)

10.00-10.05: Opening comments: Andris Piebalgs, Part-time Professor, EUI

10.05-10.25: Introductory Presentations

Patrick Child, Deputy Director General and acting Director, DG Research, European Commission

Klaus-Dieter Borchardt, Deputy Director-General, DG Energy, European Commission

10.25-10.40: Audience questions/discussion

10.40-10.50: Jorgo Chatzimarkakis, Secretary General, Hydrogen Europe

10.50-11.00: Dolf Gielen, Director, IRENA Innovation and Technology Centre

11.00-11.10: Daan Peters, Associate Director, Guidehouse

11.10-11.20: Oksana Dembitska, VP for Green Hydrogen, BP

11.20-11.45: Audience questions/discussion

Respondents

11.45- 11.55: Catrinus Jepma, Professor, University of Groningen

11.55-12.05: Ronnie Belmans, Professor, KU Leuven

12.05-12.20 Concluding remarks

Christopher Jones, Part-time Professor, EUI

Tudor Constantinescu, Principal Advisor, DG Energy, European Commission

Watch more

Background

The European Commission’s Smart Sector Integration initiative

This initiative will cover a wide range of issues, including how to ‘kick-start’ the renewable and decarbonised gas market (in order to drive down costs and catalyze sufficient capacity in time for the 2050 decarbonisation deadline), how to link the RES and nuclear electricity and gas markets with one-another and the ETS (including notably through Guarantees of Origin), and how to ensure that the principles of the Internal Gas Market are retained, to mention but a few.

An evidenced-based approach is vital if the EU is to find a cost-effective and efficient answer to these issues. Fully understanding the costs (and future cost curves) and potential of the different emerging hydrogen technologies will be essential in order to enable the Commission to design such a proposal.

For example, unless we have a clear view on inter alia the following issues, it is not possible to determine how and when to support the development of an H2 industry, or how to ensure that any public support during the first years of development is best targeted:

• the likely costs of renewable and decarbonised H2, what needs to be done to get costs down, how mature are these technologies, how robust are future price curves?
• the ETS price at which consumers of ‘grey’ hydrogen today (such as fertilizer manufacturers) and high heat energy intensive industry (cement, steel, chemicals) as well as transport would be likely to switch to renewable or decarbonised hydrogen
• the potential for the different hydrogen technologies in terms of energy production, taking into account, for example, CCS availability, or the ability of the EU to actually produce the RES electricity necessary to meet its (future increased) electricity demand and also be used to produce renewable hydrogen.
• Decarbonised H2 from natural gas can be produced from stream methane reforming combined with CCs, or pyrolysis (where the CO2 is ‘compressed’ into solid carbon and stored or used by industry).

The Florence School of Regulation proposes two Online Workshops to examine and discuss these issues in depth. The first will focus on decarbonised hydrogen produced from natural gas, or ‘blue’ hydrogen. The second will examine the potential regarding renewable hydrogen.

The EU Energy Sector

A webinar on the European Courts of Justice Case Law

The strategy for smart sector integration is an essential element in delivering the objectives of the European Green Deal. What impact will it make on the gas sector? In the absence of the Madrid Forum, the FSR organises a webinar to look for the challenges and opportunities of this approach.

Klaus-Dieter Borchardt, Deputy Director-General, DG Energy, European Commission, will join for the event and will provide introductory comments.

This event is on invitation only. Highlights from the workshop will be made available shortly afterwards.

The EU Commission is set to issue a Communication on Strategy for Smart Sector Integration, with legislation planned for mid-2021.

Whilst the final contents of this package are yet to emerge, it is widely expected that it will lay down the foundations for the long-term future of the EU’s gas market, setting interoperability standards for the integration of renewable and decarbonised gases into the natural gas network, guarantees of origin, and establishing principles for network development and operation. It may also define the parameters for the way in which the future zero-carbon electricity market will interact with the decarbonised gas market.

It is also likely to establish a regulatory framework for the renewable and low-carbon/decarbonised gas market. It is now widely accepted that the EU will need a great deal of zero-carbon gases in the medium to long term. Sector-coupling is the mechanism intended to ensure the integration of RES electricity and zero-carbon gases into the non-distorted single energy market of the future, driving innovation and a competitive zero-carbon market.

At the same time, however, it is emerging that the Commission will focus on actively kick-starting the future gas market, building on the experience of wind and PV, where driving demand through regulation pushed R&D, industrialisation and drove down costs. There are many different ways that the EU could catalyse a renewable and decarbonised gas market, from national targets, blending obligations, to fully exposing the fertiliser and energy-intensive industries to the ETS mechanism in combination with a carbon border tax. But no option is a ‘silver bullet’, and all have benefits and disadvantages.

Equally, smart sector integration means more than just renewable and decarbonised gases. It means developing an energy system whereby RES electricity and gases compete on a level playing field, taking account of their externalities such as CO2, in a non-distorted manner.

Prospects for gas infrastructure

Online debate with IEA, ARERA, and GRTgaz

The 2019 edition of the World Energy Outlook examined, among other things, the prospects for gas infrastructure. This flagship IEA’s publication concludes that: “the next decade is a critical one for gas infrastructure. Short-term decisions on whether to invest in gas grids will have major long-term implications. Questions about the relative importance, and respective roles, of electricity and gas networks are central to the design of energy transitions to a low emissions future”.

Despite the rising agreement over the need to use both electrons and molecules in the decarbonised energy system, the future of gas infrastructure in Europe is far from certain. Some EU Member States continue to invest in traditional natural gas pipelines and interconnectors, while others such as the Netherlands announce ambitious plans for developing a ‘hydrogen economy’.

Watch the recording:

Download the presentation

This online debate aims to address the following questions:

• How could the recent European Investment Bank decision to stop financing the gas infrastructure after 2021 and the announcement of the European Green Deal influence the development of the new gas infrastructure in Europe? What are the trends in non-European countries concerning new infrastructure development?
• How to ensure that the levels of investment in the new gas infrastructure is compatible with both environmental and energy security objectives at an affordable price for EU citizens? How could the regulatory framework serve this purpose?
• How are infrastructure companies accommodating the uncertainties in investment decisions? Do they consider biomethane, hydrogen and other low-carbon gases as a promising investment opportunity?

This online event constitutes a part of the online block of the “Regulation of Gas markets” training, which will take place between 16 and 20 March 2020 in Florence. You can still register!

For more information, visit the course page.

Watch the recording:

Dive in deeper in our new online course: Electric Vehicles: a power sector perspective!

This specialised 5-week online course is specifically designed for professionals who wish to address the power sector challenges posed by the ever-growing number of EVs on a global scale. Learn more and save your seat!

About the Online Event:

We are witnessing the beginning of the EV revolution that will greatly impact two key sectors: power and mobility.

Where do we go from here? Join us for the FSR online debate ‘EV revolution: a power sector view on coupling with mobility’ to find out!

In this online debate, we will discuss:

1. How will the rapid uptake of Evs impact the power system in the near and long term future?
2. What are the key challenges and opportunities?
3. How is the global power sector preparing for these new challenges as well as make most of the opportunity it offers such as Vehicle-to-Everything (V2X)?

Engage key experts from academia, regulation and Industry on these questions, and your own during the Q&A session!

More from our knowledge hub:

In our February Topic of the Month series, FSR Global shared an overview of the current status Electric Vehicle’s (EV) sharing the Indian Perspective, insights from the Spanish EV observatory, a regulatory perspective on how the LAC power sector is gearing up for the EV revolution and early experiences with V2X (vehicle-to-everything) in practice.

You can also download a copy of our detailed report or policy brief “Charging up India’s electric vehicles: infrastructure deployment and power system integration” on the rapid growth in EV uptake in India and the challenges the country will have to address to meet its policy targets.

The Airspace Architecture Study (AAS), published in March 2019, set out a proposal for a future Single European Airspace System (SEAS) underpinned by optimised airspace organisation, progressively higher levels of automation and the establishment of common ATM data services, enabling seamless cross border air traffic service provision. The vision outlined in the AAS report (pictured in the figure below and proposed to be implemented by 2035) requires operational, technological, organisational and regulatory changes to the existing SES architecture.

Whilst the AAS focused on the operational and technical dimensions of the proposed future ATM architecture, a number of questions remain open in terms of regulatory aspects and service delivery arrangements (‘framework dimensions’).

The framework dimension, including the regulatory framework and the service delivery models, constitute the enablers without which the proposed future vision cannot be realised. Hence, the Commission has taken further action to explore and address the related aspects critical for the future SEAS, by launching a study in October 2019 on the legal, economic and regulatory aspects of ATM data services provision and capacity on demand as part of the future European air space architecture. Subsequently, a major stakeholder engagement workshop was held in Brussels in November 2019, to inform all stakeholders about the scope and timing of the study, and to allow for key stakeholder groups to provide initial inputs to the study. In addition to this, a dedicated civil-military workshop was also organised by the European Defense Agency, in involve military and defense dimensions from early on.

With the study work now well underway, this workshop aims at providing the experts from different stakeholder groups with an overview of the first findings and results, as well as generating valuable discussions regarding the most important aspects of ATM data services.

More specifically, the workshop would seek to explore the following topics:

• Scoping and definitions of ATM data services;
• Costs and benefits associated with ATM data services;
• Future strategies of potential players of an ATM data services market;
• Economic regulation and other regulatory aspects.

Please note that this event is an online workshop and by invitation only.

Electricity and synthetic fuels: partners in the energy transition

Please note: This workshop has been cancelled. 

Due to the COVID-19 crisis, unfortunately, this workshop will no longer take place as planned. More details on an alternative arrangement will be posted shortly. 

Thank you for your understanding. 

In this workshop, we will bring together experts from EU institutions, academia and practice to critically evaluate the role of state aid in the rapidly changing EU energy environment, from a legal, economic and industry perspective.

In particular, we will focus on:

• The role of electricity versus decarbonised conventional fuels
• The definition of state aid after the EEG 2012 case with Germany
• The revision of the state aid guidelines
• State aid in arbitration awards
• The enforcement of arbitration awards

The audience in attendance will be composed of academics, representatives from EU institutions, governing bodies, NRAs and competition authorities, industry and practice, and NGOs. Built into the programme will be ample time for open discussion among panellists and with those in attendance.

The workshop will follow Chatham House rules to allow for free discussion.

Participation in this workshop is open and without a fee. However, due to limited places, priority will be given to FSR Energy Union Law Donors and invited guests.

FSR Regulatory Policy Workshop Series 2020

The Workshop will consider these and other related issues in assessing the way in which the new structure of costs of electricity generation (from renewable energy) might require an upgrading of the current electricity market design, taking into account the need to provide correct investment signals and correct short-term market signals that preserve efficient market outcome in the long and short term.

The Workshop will be structured in two sessions:

• Session 1 will explore the likely trends in electricity market prices in the future. It will also explore which instruments might be introduced or further developed to deal with the new market price dynamics;
• Session 2 will focus on which enhancements of the current design will be required to accommodate the new instruments and any regulatory implications.

Participation in this workshop is open to representatives of National Regulatory Authorities, ACER, the European Institutions, FSR Energy Donor companies, European, national, regional and local public administrations as well as publicly-owned research centres. Priority in the allocation of seats is given to National Regulatory Authorities, ACER, the European Institutions and FSR Energy Donor companies.

Background

The electricity market in the EU, at least in the day-ahead timeframe, has been designed on the basis of single/marginal-price auctions, where, in each market time unit (typically one hour) electricity is bought and sold (in each price area) at the equilibrium market clearing price, which reflects the prices indicated in the marginal bid and offer (the “last” bid and offer accepted in the merit orders of bids ranked in descending price order and offers ranked in ascending price order).

The transition towards a decarbonised energy sector is partly based on a significant increase in the penetration of generation from renewable energy sources. Much of this generation – e.g. wind and solar – has zero or very low marginal costs, but significant fixed (capital) costs. Therefore, when this type of generation is sufficient to cover demand, the resulting equilibrium market prices are likely to be zero or very low. With an increasing penetration of generation from renewable resources, low/zero prices will become more frequent, which will raise the issue of the recovery of fixed costs for these technologies, as well as for other technologies which may still be needed to cover demand as back-up capacity or at times when renewable energy generation is not sufficient.

The resulting profile of market prices may, therefore, be characterised by many periods of low/zero prices and some periods when prices might be very high to allow the recovery of the fixed costs of the generation capacity mix.

This greater variability of market prices represents a risk for generators and may discourage investment in generation capacity. This is the issue that capacity remuneration mechanisms aim to address, by providing a more stable stream of revenues for generators and other resources needed to balance electricity demand and supply. High variability of electricity prices might also represent a risk for consumers, who may prefer more predictable and stable price levels.

Therefore, beyond the introduction of capacity remuneration mechanisms, which should be the very last resort (as also indicated in the Clean Energy Package legislation), the issue arises of whether additional trading instruments should be developed which might be used to hedge the somewhat symmetric risks faced by generators and consumers.

Deadline for registration: 1 November 2020

On December 11 2019, Ursula von der Leyen unveiled the European Green Deal – a proposal designed to put the European Union on track to become the world first climate-neutral economy by 2050.

Achieving the climate neutrality objective requires substantial reduction of all greenhouse gases (GHGs), beyond mere carbon dioxide (CO2) emissions mitigation.

Methane, the second most important GHG, contributes to 25% of the anthropogenic warming that the planet is experiencing today, which makes it a natural candidate to focus on when it comes to emissions reduction. This highly potent (but short-lived) greenhouse gas accounts for roughly 10% of total EU GHGs mainly originating from agriculture, the waste sector, and the energy sector.

However, methane is at the same time the major component of natural gas, which constitutes around one-quarter of the EU energy mix and is expected to retain its crucial role even in future, decarbonised scenarios. The unabated methane emissions occurring along the entire gas supply chain, also outside the borders of the EU Member States, could compromise the environmental case for gas.

This online debate aims at addressing pressing questions relating to EU strategies to deal with methane emissions expected in the early 2020s:

• Should methane emissions reduction in the energy sector be a top priority for the Green Deal?
• What could be the best instruments that the EU should employ to deliver sustainable results globally?
• How to monitor the results achieved, and how to convince the public, regulators and investors about the efficiency and effectiveness of the approaches taken?

Moderator:

Andris Piebalgs, FSR

Panelists:

• Poppy Kalesi , EDF
• Monika Zsigri, European Commission, DG ENER
• Maria Olczak, FSR
• Tania Meixus Fernandez, Enagas

The research team of the FSR Energy & Climate is pleased to invite you to a seminar day in Villa Schifanoia, Florence. On this day, we will host two different presentations followed by Q&A sessions.

Seminar Agenda:

2-2.30pm:

Which way is the transition in the Brazilian electricity sector going? Does it matter?

Speaker:

Alex Feil

Abstract: The Brazilian electricity sector has very interesting characteristics, including a predominantly clean and renewablegeneration matrix, a centrally operated transmission system of continental dimensions, active participation of numerous international investors and well-structured institutional actors. This environment is not immune to the disruptive processes underway globally but may react unexpectedly depending on the action of local drivers. This might complicate the design of reliable future scenarios, but the effort to do it may offer interesting results. The presentation aims to share some of the experience about the Brazilian Electricity Sector and discuss the ongoing research that seeks to identify, in the context of the current energy transition, the main drivers that will shape its future in the long term.

20′ Q&A session

*  *  *  Break  *  *  *

3-3.30pm

Peer to Peer Energy Trading, Community self Consumption & Transactive Energy – Blocks and Missing blocks in legal research

Speakers:

Nikolas Klausmann & Lucila de Almeida

Abstract: Peer-to-peer trade (P2P), community self-consumption (CSC), and transactive energy (TE) are notions that have been recently introduced into the debate over energy regulation and rapidly become fashionable among scholars and policy markets. This development goes hand in hand with the new pro(con)sumer centric energy policy by the push towards digitalization.P2P and CSC are notions that often refer to new models of doing business, exchange energy, or a collective sharing of self-production. TE, instead, is a more generic expression that encompasses both P2P and CSC as a means to a more decentral and reactive approach to managing power exchanging.
There is growing research regarding P2P energy trading, CSC, and TE within fields of economics, engineering, management, and law. Within the first part of the fifth sub-task of the International Energy Agency Global Observatory, the presentation will introduce the preliminary findings of the literature review on the subjects mentioned above in the fields of law and regulation. Literature review, in this context, means the task of systematizing what the scholars and organizations (e.g., policymakers, think tanks, and international organizations) have focused most while making descriptive or normative propositions regarding P2P, CSC, and TE. This is the part of the literature we refer to as blocks. But even though there is quite an amount of research done already, we identify that almost nothing has been said about the intersection of P2P, CSC, and TE and general fields of law. Except for consumer law and data protection, this topic seems untouched so far by the literature. The literature review therefore will outline these missing blocks, namely the expected legal issues that might arise with the implementation of P2P, CSC, and TE but are not represented in legal research so far sufficiently.

20′ Q&A session

Introduction

Regulation 1008/2008 (the “Air Services Regulation”) is the basic legal act organising the EU internal market for air services. It was adopted in 2008 as the legal successor of the three “aviation packages”, which have progressively established the EU internal aviation market. It also codifies the rules of three Regulations from 1992 (on licensing of carriers, on access to the EU market and on air fares and rates).

The Regulation contains provisions on the following main topics: Operating Licences, including on 1) EU carriers’ Principal Place of Business and temporary licence and 2) Ownership and control (O&C) of EU air carriers; 3) Leasing; 4) Freedom to provide intra-EU air services; 5) Public Service Obligations (PSOs); 6) Traffic distribution rules (TDR); and 7) Price transparency.

The evaluation of the Air Services Regulation

As announced in its 2015 Aviation Strategy, the Commission carried out an evaluation of the Regulation and published in July 2019 a Commission report.

The objective of this evaluation was to provide insight into the actual performance of the Air Services Regulation and its overall intended and unintended impacts. While the Regulation does not include any specific social provisions, the indirect impacts associated with its application and the liberalisation of the air services market on employment and working conditions of air crews formed part of the analysis. The impacts on the environment and the ongoing initiatives to address concerns about CO2 emissions and noise were also analysed. The Evaluation report concluded that the Regulation and its predecessors have brought sizeable EU added value in creating the EU internal aviation market by removing barriers to competition, such as restrictions on the routes, increasing the number of flights, allowing entry of new market operators, in particular in the low cost segment, and increasing the range of advertised fares. The Air Services Regulation has been very effective in achieving its objectives (market efficiency, safety and consumer protection). At the same time, it has revealed that there are still areas where some improvement would be beneficial.

Impact assessment study

As a follow up to this evaluation, the Commission (Directorate-General for Mobility and Transport) launched a study to help it assess whether further measures could further contribute to a well-functioning internal aviation market and its global competitiveness, while also contributing to the protection of consumer interest and to safeguarding high EU safety, social and environmental standards.

In the course of this work, the Commission developed a number of preliminary policy options for the various areas identified in the evaluation and asked its external consultant to assess the possible impacts of these options. Interviews of a representative sample of stakeholders and a targeted consultation among all relevant stakeholder categories were conducted in the third quarter of 2019 to gather stakeholders’ views, among other things, on the proposed options for the various topics identified. Taking into account the input gathered, the Commission has been able to further refine its initially identified options.

The Workshop

In this context, the Commission together with the Florence School of Regulation’s Transport Area is co-organising a workshop on the Air Services Regulation to exchange views on the refined policy options. The discussions will take place in the following thematic sessions : i) ownership and control, ii) operating license and principal place of business and temporary licence, iii) applicable labour law and competent jurisdiction, iv) leasing, v) price transparency, vi) traffic distribution rules and vii) public service obligations. At the same time, the workshop will provide an opportunity for a discussion on the Air Services Regulation in the context of the Commission’s Green deal.

The workshop will gather policy makers and representatives from all interested stakeholder groups namely airlines, airports, air crew and consumer organisations, travel industry, and investors for a well-timed discussion.

For more information contact FSR.Transport@EUI.eu

Consult the 13th Florence Air Forum’s final programme here