The Workshop will aim at:
- Identifying the challenges, but also the benefits of holistic planning of the needs for electricity, gas, and hydrogen transport services, based on the forecasting of the level and geographical pattern of demand for the different energy vectors and hydrogen in particular (being the newest among them), and taking into account the interlinkages with other contiguous sectors;
- Assessing how the hydrogen network could be best planned, taking into account the existing gas infrastructure available for repurposing, but also the opportunity and cost of developing new dedicated assets;
- Considering how the cost of the hydrogen network should be recovered through the charging for their usage.
Background
The European Union is committed to decarbonise its energy system at a large scale. The targets are set, the path – energy efficiency first, electrification as far as possible, usage of hydrogen and other types of “low-carbon gas” in the hard-to-electrify sectors – is agreed as well. The EU decarbonisation challenge is characterised by the need for speed, cost-efficiency, and the subsidiarity principle on the one side and the existing infrastructures, market and regulatory frameworks for electricity and gas on the other hand. The mantras of legal and regulatory certainty, transparency and predictability are still very valid, maybe even more so in times of such a fundamental transformation of the whole EU economy and energy system.
The European Commission has proposed the first set of rules in its Fit for 55-package1 in July 2021, focusing on the (renewable) energy source and sink aspect at large. Further proposals focusing on the infrastructure and market aspects, also for decarbonised gases, are expected by the end of 2021.
In fact, an effective, efficient, and affordable energy transition will require:
- a more holistic approach to network planning, including the electricity, gas and hydrogen grids in a consistent framework, taking the interlinkages with other contiguous sectors – e.g. transport and heating and cooling – and the opportunities provided by digitalisation into account. In the future, hydrogen may support the electricity sector by providing additional and more effective opportunities for storing energy and thus to help manage the likely mismatch between the variable electricity generation from renewables and the demand profile of consumers, as well as congestion in the electricity grid. Hydrogen is currently produced and consumed in localised clusters, which are expected to develop into “hydrogen valleys”. It is however still uncertain if and when a hydrogen “backbone” network will be needed, which will depend on the demand for hydrogen by the different consuming sectors, the geographical pattern of demand and supply, and on the extent to which hydrogen imports will be needed to meet demand;
- an efficient and no-regret path to the development of hydrogen transport capability. The expected decrease in gas demand in Europe and the resulting reduction in gas volumes in the existing network will make some gas infrastructure available for possible repurposing to transport hydrogen. However, the availability of such infrastructure should not be the main driver in planning a future hydrogen backbone. A cost-benefit analysis should be carried out, comparing different ways of transporting hydrogen: in new pipelines, in repurposed pipelines or using non-pipeline facilities;
- a charging structure for the use of the hydrogen transmission infrastructure which is conducive to the development of competition and the creation of an internal market for hydrogen. The current tarification of the gas network has served well the transition of the gas sector from its previous vertically integrated structure and contracts with delivery at flanges and destination clauses. However, it has also shown its limits, with tariff pancaking distorting competition in the internal gas market. Therefore, the opportunity for a different approach for the hydrogen network needs to be considered.
Correspondingly, the Workshop will be structured in three sessions:
- Session I will focus on the challenges and benefits of a holistic planning of the demand for energy network services in Europe;
- Session II will zoom into the planning of the hydrogen network;
- Session III will aim at identifying the main principles for a hydrogen tariff structure which is conducive to undistorted competition and a well-functioning internal market for hydrogen.
Please note that this event is by invitation only.
