EU: System Integration, Hydrogen Keys To Energy Future

Political, Economic group adopts energy strategy to help reach climate-neutral goals

The European Union (EU) has adopted twin strategies of energy system integration and promotion of hydrogen as a fuel source as it tries to achieve a climate-neutral economy by 2050.

To reach that goal, EU officials say the group must “transform” its energy system, which accounts for 75% of the EU’s greenhouse gas emissions.

“The strategies adopted today will bolster the European Green Deal and the green recovery, and put us firmly on the path of decarbonizing our economy by 2050,” said Executive Vice-President for the Green Deal, Frans Timmermans. “The new hydrogen economy can be a growth engine to help overcome the economic damage caused by COVID-19. In developing and deploying a clean hydrogen value chain, Europe will become a global frontrunner and retain its leadership in clean tech.”

According to the EU, which consists of 27 member states, the current model where energy consumption in transport, industry, gas and buildings is happening in ‘silos’ — each with separate value chains, rules, infrastructure, planning and operations — cannot deliver climate neutrality by 2050 in a cost efficient way; the changing costs of innovative solutions have to be integrated in the way energy systems operate. New links between sectors must be created and technological progress exploited.

The EU calls for energy system integration, meaning 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,” according to the EU’s statement. “For example, this means a system where the electricity that fuels Europe’s cars could come from the solar panels on our roofs, while our buildings are kept warm with heat from a nearby factory, and the factory is fueled by clean hydrogen produced from off-shore wind energy.”

There are three main pillars to this strategy, according to the EU:

  • First, a more ‘circular’ energy system, with energy efficiency at its core. The strategy will identify concrete actions to apply the ‘energy efficiency first’ principle in practice and to use local energy sources more effectively in buildings or communities. There is significant potential in the reuse of waste heat from industrial sites, data centers, or other sources, and energy produced from bio-waste or in wastewater treatment plants.
  • Second, a greater direct electrification of end-use sectors. As the power sector has the highest share of renewables, electricity should be used where possible: for example for heat pumps in buildings, electric vehicles in transport or electric furnaces in certain industries. A network of one million electric vehicle charging points will be among the visible results, along with the expansion of solar and wind power.
  • For those sectors where electrification is difficult, the strategy promotes clean fuels, including renewable hydrogen and sustainable biofuels and biogas. The commission will propose a new classification and certification system for renewable and low-carbon fuels.

The EU strategy sets out 38 actions to create a more integrated energy system. These include the revision of existing legislation, financial support, research and deployment of new technologies and digital tools, guidance to member states on fiscal measures and phasing out of fossil fuel subsidies, market governance reform and infrastructure planning, and improved information to consumers.

As for hydrogen, it can power sectors that are not suitable for electrification and provide storage to balance variable renewable energy flows, but this can only be achieved with coordinated action between the public and private sector, at the EU level. The priority is to develop renewable hydrogen, produced using mainly wind and solar energy.

However, in the short- and medium-terms other forms of low-carbon hydrogen are needed to rapidly reduce emissions and support the development of a viable market. According to the EU, this gradual transition will require a phased approach:

  • From 2020 to 2024, the EU will support the installation of at least 6 GW of renewable hydrogen electrolysers in the EU, and the production of up to one million tonnes of renewable hydrogen.
  • From 2025 to 2030, hydrogen needs to become an intrinsic part of our integrated energy system, with at least 40 GWof renewable hydrogen electrolysers and the production of up to 10 million tonnes of renewable hydrogen in the EU.
  • From 2030 to 2050, renewable hydrogen technologies should reach maturity and be deployed at large scale across all hard-to-decarbonize sectors.

To help deliver on this Strategy, the Commission also is launching the European Clean Hydrogen Alliance with industry leaders, civil society, national and regional ministers and the European Investment Bank. The Alliance will build up an investment pipeline for scaled-up production and will support demand for clean hydrogen in the EU.

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