Climate goals and resulting legislation have pushed the European electricity and gas transmission system operator associations (ENTSOs) to increase collaboration on joint infrastructure planning for almost a decade. Visible success can be seen in the ENTSOs joint scenarios for infrastructure planning.
This year’s dramatic developments with a war in Europe turned some basic paradigms and planning assumptions upside down. Decarbonization, formerly the main driver of European policies, is now accompanied by energy security, which has made it into the evening news. The European policies’ intention to change current fuel-import dependencies and to increase diversification has an immediate impact on gas infrastructure and gas distribution. Good cooperation between the gas and electricity sectors is essential and can now show its value.
European Gas Usage
Gas makes up about 22 percent of the European primary energy consumption overall. The residential sector accounts for the largest share of the gas demand (40 percent), followed by industry and power generation. The joint ENTSOs scenarios from February of this year anticipate gas use for electricity production of 13 to 14 percent in 2025.
These scenarios are more outdated than usual at the point of publication. There is always some time delay between data collection, data processing, and publication of the results. This time, energy policy objectives of both Europe and of member states have drastically been overhauled in recent months and are still changing due to current overlapping crises. In some member states, earlier firm policies on, for example, nuclear and coal phase-outs were or will be put on hold, in order to eventually release some gas for other usages such as heat production, which represents the main issue to be solved.
Legislation Addressing Overlapping Crises
Addressing the current situation, the European Commission launched the REPowerEU Plan in May. This plan comprises a set of measures to end dependency on Russian fossil fuels. These measures increase earlier targets set by the Green Deal and Fitfor55 packages, and aim at acceleration of the expansion of renewable energy sources (RES), diversification of energy supplies, and energy savings via efficiency gains. Currently, a new regulation is being discussed to reduce gas demand by 15 percent in the winter of 2022-2023. Member states must adjust their national emergency plans accordingly.
A fair distribution of gas in tense supply situations is ensured by European legislation from 2017. It defines several stages, starting with requirements to fill gas storage facilities up to a certain level (80 percent by November this year, which has been quite expensive so far) and ending with defining the consumers that will be protected in emergency situations. Households and hospitals are the last customers to be disconnected.
Planning for Moving Targets
While before the war the European Commission deemed the gas infrastructure to be good enough to accompany European decarbonization, recent developments increase the likelihood that some single pipelines and liquid natural gas infrastructure might be added. Over time, existing gas infrastructure is expected to increasingly be filled with biogas and/or at some point be completely repurposed to hydrogen or be decommissioned. European policies increase the likelihood for new hydrogen infrastructure to materialize as well.
While the ENTSOs investigations on short- and long-term electricity and gas supply are ongoing, input assumptions related to European and national policies and targets are in constant motion, which complicates the analysis of their impact on climate change, among other things. It is still unclear whether national plans jointly fulfill the European goals.
Two Sides of the Coin
Increasing the targets and executing related analysis are one side of the coin, but practical project implementation is the other side of the same coin. My feeling is that the coin is getting thicker — meaning, the distance between theory and practice is increasing over time. Example: Breaking the EU-27 offshore RES targets down means that starting from today’s 16 GW to reach the intended 60 to 70 GW by 2030, we will have to install more than 6 to 7 GW annually. What we see is, according to WindEurope, annual installations of 2.9 to 3.6 GW in the most recent three-year period and expected installations of 1 GW to 5.8 GW for the rest of this decade. This is far below what is needed. The reasons are the unavailability of materials, vessels, and workforce, and slow permitting. The same is true for infrastructure development, which may not be fast enough to reach the new targets.
Both infrastructure and RES expansion require permits, and related procedures have for many years been identified as one of the most time-consuming steps. To solve this, the REPowerEU plan intends to amend legislation and provides tools and data to accelerate the procedures. However, issues related to a stressed supply chain and missing workforce must be tackled as well. With its research and education agenda, the Global Power System Transformation Consortium offers a silver lining on the horizon to deliver some well-trained engineers.
Sector Integration and Three Types of Infrastructure
Significant RES application facilitates large-scale sector integration and decarbonization. Hydrogen development is pushed by the European Commission’s hydrogen strategy, aiming at the installation of two times 40 GW electrolysers by 2030. In practice, the question of where to put these assets needs to be solved. Should they be located close to hydrogen demand or close to RES-electricity production? This determines whether infrastructure for transport of electrons or molecules is needed. Another option is to create co-location areas: electricity, potentially produced offshore, would first be landed at an appropriate location and then combined with other energy infrastructure and applications, such as conversion into hydrogen. This hydrogen could be used directly for hard-to-abate sectors (e.g., some industries, aviation, ships) or be transported elsewhere. Conversion could release pressure on electricity grid expansion-needs, where renewable energy production is grid dimensioning; it could benefit flexibility options from hydrogen storage, and, if a regional or continental hydrogen network arises, hydrogen could be shared via international pipelines.
The location of new hydrogen systems in relation to the electricity network’s capacity and gas pipelines in the vicinity are of great importance for a cost-efficient and rapid sector integration. Both ENTSOs investigate how this could be solved efficiently and will address this in future onshore and offshore Ten-Year Network Development Plans.
Some transmission system operators such as Energinet, being responsible for the Danish electricity and gas transmission infrastructures, are already investigating this at a national level together with stakeholders. As Denmark is planning to build at least two energy islands with 2 GW or 3 GW of offshore wind capacity around 2030, part of the electricity produced might be converted to hydrogen, either off- or onshore. In addition, Energinet uses a new tool which has to do with allocation: network users are guided to places where they can expect fastest connection. Online capacity maps show locations where there is room for more electricity production or consumption.
The examples above illustrate ways of joining forces and sharing information that will help to accelerate the green transition.
Chief Engineer, Energinet