Dag 1: Nieuwe waterstof infrastructuur en vergroenen van de industrie, met Hans Coenen van Gasunie.

Certainly, Marian. It's great to walk along. You mentioned wind - well, there's enough wind today, but otherwise the weather is nice. Who am I? I am Hans Coenen, 55 years old, still young I think. Originally I have an agricultural background. I studied at the Agricultural University in Wageningen many years ago, and I've always had a love for nature, environment, and those kinds of issues.

That's funny. I started working at Gasunie quite early in my career. Gasunie is an infrastructure company that has infrastructure all over the country. Maybe you need to explain that because nowadays we have Gasunie and GasTerra. What is the difference? Is Gasunie a public company or a commercial company? Gasunie is a public company. Once Gasunie was an integrated company that did trading, supply, and transport of natural gas. But in 2005 it was split into a transport company, which is the current Gasunie, and the trading company GasTerra. So GasTerra handles the purchase and sale of natural gas, and Gasunie is the transport company that only manages the infrastructure. It is a public company, 100% state-owned. The Minister of Finance is our shareholder. That is also the nice thing, Marian, we'll talk about that later. Because the government is 100% owner, it can steer the energy transition through infrastructure. They have an important trump card: Gasunie and also TenneT, which is also 100% state-owned. TenneT manages the high-voltage cables in the Netherlands and part of Germany. So that's the electricity grid, and below that are the network companies that transport the rest of the electricity. We'll talk about them later in this walk.

Yes, in the future, actually we want that now and we are busy with it. We are an old natural gas transport company, but a few years ago we made the choice to transform into a sustainable energy infrastructure company. Not for electricity, because we have TenneT for that, but mainly for gases and other molecules. For example, in South Holland we are very busy with a large heat transport system, WarmtelinQ, transporting hot water to homes and greenhouses. We have made that choice very clearly. We are designated as the network operator for large heat transport systems in South Holland under the new Heat Act. Not for the small pipes to households, but from the Rotterdam port area, from large geothermal sources, to heat reception stations.

No, for hydrogen it is not always necessary. Three years ago we converted an existing natural gas pipe for hydrogen transport in Zeeland. We transport hydrogen from Dow Chemicals to Yara. That was important because we could show that existing infrastructure can be used for new energy forms. Dow is a chemical company and Yara makes fertilizer. So you can use an existing natural gas pipeline for hydrogen, even though hydrogen is a smaller molecule than natural gas. Does it leak? It is indeed a small molecule, the smallest in the periodic table. So you have to handle it carefully. For example, we transport hydrogen at a lower pressure than natural gas and with a constant flow. It is a very small molecule, you have to ensure it doesn't escape. We are not too worried about the natural gas pipes themselves, we have full confidence that it can work. But you also have intermediate stations where you can close the pipe. In Zeeland we took precautions, replacing certain flanges and fittings with new materials. Everywhere where one part connects to another, like shut-off valves, we need to ensure better connections because hydrogen is a very small molecule. So if you want to convert part of the current natural gas pipelines to hydrogen, you have to check all those non-pipe points and possibly improve them.

In total, we want to invest about 1.5 billion euros in the hydrogen backbone. With that 1.5 billion, we can mainly convert existing pipes and close them off, plus some new infrastructure. We cannot do everything with existing pipes; especially in industrial clusters, some new pipes are needed. But with that 1.5 billion, we can connect all industry in the Netherlands and also connect them to storage sites where we can store hydrogen.

There are five major clusters in the Netherlands: the North Sea Canal area (Tata Steel), Rotterdam, Zeeland, Limburg, and here in the North where we are walking now. We cannot start everywhere at once, so we have to be smart. We have already started preparations in Rotterdam and here in the North, and we want to connect the local clusters as quickly as possible, including via the North Sea Canal area so that Tata can be served soon.

That could be. I happened to speak with Hans van den Berg of Tata this Monday about their sustainability. You don't have to produce everything on site. Here in the North we have big plans, the North H2 project, with various partners to develop offshore wind and convert it to hydrogen. If you connect the different clusters in the Netherlands, you can bring it to Tata. You don't have to produce everything where you want to use it, because transport costs are a relatively small part of the total price, only a few percent. And you can use the land at Tata and Dow much better than building electrolyzers everywhere. So we have to be smart about that.

You have to be smart. You shouldn't want to produce hydrogen everywhere because that's not efficient in terms of scale and infrastructure, not only for us but also for TenneT, which has to supply the electricity to make it. So you have to choose the smart locations. For the backbone, we are working on a rollout plan: where do we start, what is logical. That is here and in Rotterdam. Here because we are phasing out Groningen natural gas, and there are many pipes from the North to the rest of the country that will become partially unused. Those pipes can be used to transport hydrogen. So if you have large-scale offshore wind here producing hydrogen, you can use those empty pipes to bring it everywhere. That's the logic to start here, and also in Rotterdam because it's a large industrial complex.

Exactly. We have two different gas qualities in the Netherlands: low-caloric gas (Groningen quality) and high-caloric gas. The low-caloric gas we will no longer extract here, so those pipes will become largely empty. The high-caloric gas system, which mainly flows to industry, we will still use for some time. Not everyone will be off gas next year. So for households that still use gas, where will their natural gas come from? We have the high-caloric network. We will have to convert high-caloric gas to low-caloric gas because that is the quality Dutch households use. Otherwise their boilers won't work. To convert high-caloric gas, you add nitrogen to lower the quality. That is a bit wasteful, I agree, but households will probably still use natural gas for a while. With the cessation of Groningen gas, we had to find an alternative, and this is how we do it.

I do have an idea, and it's not that difficult. Natural gas, like many other products, is a global commodity. It's a matter of supply and demand. What we see in Europe and the Netherlands is that the storage facilities are quite poorly filled for the winter. That drives up the price. When the price goes up, producers and suppliers want to sell, not store. So they don't store. I understand that for households there is enough stored because of regulations, but for industry there isn't much. But it's one market with one price, so even if we have enough for households, it doesn't matter; you can't give households a lower price than industry. Actually, households have a much higher price now than industry. There is a component related to the world market and a tax component. The tax component is very large for households, so the government could adjust that to make it easier for people. The cabinet has already decided to make some money available, a few hundred million, but that's relatively low per household. That's the only lever they have on price formation. The world market has rebounded after the Corona year, and now everyone wants natural gas at the same time. I also get the impression that Mr. Putin is not very generous with his gas. Does that have anything to do with it? I find that difficult. I don't believe that gas flows to Europe are being deliberately limited; we don't see that. OPEC has regulated oil prices sometimes, so if you are a big player you can influence prices, but I don't have the impression that's happening. I think it's more that demand is so high that supply is insufficient.

It depends. Many parties, traders, are watching how the winter goes. If a cold period comes and lasts long, that's favorable for traders, the price stays high. When the winter ends and there is no cold spell, it will undoubtedly collapse. But this also came from a kind of congestion after Corona. Will it normalize next year? I don't have a crystal ball. Also, in Germany, they are phasing out lignite and nuclear, so the demand for natural gas is increasing. So many factors interact. It's hard to predict. I agree that many factors are coinciding negatively and driving up the price. But now people are getting letters from their energy supplier saying they have to pay 300 or 600 euros more, and they get scared. They start asking: should I stop using gas faster, remove my boiler, get a heat pump? We see those questions increasing.

The hydrogen backbone we want to build is specifically for industry. We want to connect those five clusters. We can have the backbone fully ready by 2027. That means all clusters connected with storage in the North. That breaks the chicken-and-egg problem: we can tell industry, the infrastructure is there, you can connect supply and demand. You know we want to stay well below 1.5 degrees warming, so we need to change industry in 10 years instead of 30. Most industries were aiming for 30 years, mainly because of price reduction. Can we become almost emission-free in 10 years? Almost everyone says yes if they get help. It's not a technical problem, it's a financial and organizational problem. So it won't be because of us; the hydrogen infrastructure will be ready before 2030. We are ready. The cabinet, despite difficulties, made 750 million available, which I think is a courageous choice. The next step is to connect supply and demand, and especially the price of green hydrogen needs to come down the cost curve; it's still much more expensive than grey hydrogen today.

Absolutely. That collaboration is essential. Everyone is often in their own silo: one with pipes, one with turbines, one with factories. Who ensures they communicate and know they can invest because it will be okay? That's a valid point. We need to think in chains and develop large projects like the North H2 project. We are in intensive talks with wind developers like Vattenfall, Eneco, etc., who are also working on hydrogen because they see it's necessary and there's a decent business model. What we also see is that they are thinking about offshore hydrogen production, either via a large factory offshore or integrated electrolyzers inside the wind turbine. So you have a wind-hydrogen turbine, with the electrolyzer inside the tower. Those are serious plans. The ratio of wind output and electrolyzer size fits. Wind turbines are getting better, bigger, more powerful. It looks like it can be made profitable. Then you need to connect the hydrogen pipeline from the turbine to land, that's our work. So we are talking about that. Is it already done somewhere? The first wind turbine with hydrogen in its tower will probably not be in the Netherlands but somewhere in Europe. When? Within 5 years, I hope within 3 years. So it's starting to look like something. Then we tell the turbine builders what we need to extract the hydrogen and how to connect the pipe.

Yes, we are working on that with TenneT and Energinet (the Danish TSO). We need so much offshore wind that we can't solve it per country; we have to do it together in Europe and think big. Energinet is already far advanced with the development of two energy islands, one in the North Sea and one in the Baltic Sea, west and east of Denmark. They haven't made the final decision yet but are very far in planning. Those islands are for wind and hydrogen, energy hubs. They aim to have them ready by early 2030s. That would be great if industry is also ready, then we can all switch around 2030. Do we also need one for the Dutch coast? Some industrial parties and dredgers are thinking about such an island. Is that a serious plan? Absolutely, and we are already talking with TenneT and the government about it. You call it a 'woman on the moon' project, but it's real. You have to think big. The advantage of an island is that you don't have to lay a cable from every wind farm to the coast. You connect the wind farms to one energy island and then go to the coast with one big pipeline. That avoids many cables and environmental impact. We need to think systemically: design the whole offshore infrastructure in one go, not project by project. That's not happening yet; it's still too much project by project. Concepts like North Sea Wind Power Hub are good because they think from a larger perspective. So we add an island to the 'woman on the moon' package. Design it all at once for 2030, with big pipes to the coast, instead of each project separately. That would avoid many discussions. I know you are very ambitious. Is 2030 realistic for such big concepts? We plead for a crisis approach. Normally we would take much longer, but if we look back in 2050, we'll think we should have done it differently. It's becoming a mess and we are too slow. I agree. I know the Danes hope to have their island ready by 2032, so if we want 2030, we have to work hard. But if it helps to accelerate, let's go for it. Technically it's not a problem if we want it and free up resources and people because we consider it a crisis. It's very important to think from the big picture and design the infrastructure in one go. I'd rather lay one big pipe to the coast than endless small garden hoses.

Energy storage is the crux of the energy transition. Today we store enormous amounts of energy via natural gas. If you compare the peak demand of the gas system (350 GW) with the electricity system (20 GW), you can imagine that when we switch to other energy forms, we will still need that peak capacity. We also need to lower the peak, not all charge cars and heat at the same time, but even if we reduce from 350 to 200 GW, that's still 10 times the current electricity peak. So we have a lot to do. We can do that with hydrogen. Recently we started a first demo project for hydrogen storage in Zuidwending. Where do you store it? In salt caverns, hollowed out underground, not in gas fields (porous rock). These are cavities in the ground where natural gas is currently stored. They are quite large. They already exist, but since we still need natural gas caverns for a while, we will have to leach out new caverns for hydrogen. That is done by companies like Nobian (formerly Akzo Nobel) for salt. We work together: they extract the salt, and we make the caverns suitable for gas storage. This summer we did the first test: a borehole to 1700 meters depth, and we injected a small amount of hydrogen at about 200 bar. We are testing it. If successful, we can store in real caverns. I've also heard of plans to store nuclear waste there, but that's not for me to decide. I think that's a bad idea. We are going for hydrogen. In Groningen, people are traumatized by earthquakes. Does this have any effect? In Zuidwending, we are in very good contact with the local residents. They are familiar with us from natural gas storage, and we involve them closely in all hydrogen storage plans. We write in local papers, invite them for barbecues, and take them along every step. So far it's going very well. They understand we need to move to a different energy future. Do you think hydrogen storage will not cause earthquakes? We monitor carefully. With gas storage, we don't get earthquakes, and we expect the same for hydrogen. The gas extraction was from porous rock, but here we have a different system: cavities under pressure, and salt is plastic at depth, so it's incomparable. But I understand people are concerned, so it's important to engage with them. So far it's perfect.

You're welcome. It was fun. We'll work on those 'woman on the moon' projects, Marian. See you.