East Groningen industrial cluster may become Europe’s first regional hydrogen cluster
Companies allied in the East Groningen Industry Cluster want to go sustainable. Grid congestion threats and the current lack of alternatives to natural gas make blue and green hydrogen developments urgent. A preliminary study by New Energy Coalition into greening possibilities shows that hydrogen production from Eemshaven contributes to new economic prospects for industry in the Dutch northern region.
East Groningen Industry Cluster
The East Groningen Industry Cluster is a partnership of diverse companies in the Groningen-region that are all working to reduce their CO2 emissions as part of their contribution to the energy transition. As a group, they now use over 215 million m3 of natural gas a year, natural gas that is becoming increasingly expensive due to rapidly rising CO2 costs.
How can sustainability be achieved?
To investigate the sustainability opportunities for the cluster, Catrinus Jepma and Jeffrey Paays of New Energy Coalition, in collaboration with the cluster and the organisations responsible for energy supply, transmission and connection, conducted a preliminary study. Marieke Abbink-Pellenbarg, director of New Energy Coalition, says: ‘in order to go green, it is important to know what the different options are, what it costs and whether it is feasible. The results of this preliminary study were shared with the outside world today during the Wind meets Gas symposium in Groningen by presenting the report to Caroline Kollau, subs. Director General of the Dutch Ministry of Climate and Green Growth.’
The preliminary study shows that switching from natural gas to hydrogen that is also produced in one’s own region is a good option to reduce companies’ CO2 emissions, also because grid congestion and high grid tariffs are a bottleneck for electrification and electrification is technically not possible or difficult for some companies. The national hydrogen grid being rolled out from Eemshaven and the Groningen region’s commitment to becoming a leading hydrogen region to leave the natural gas era behind only make the choice to deploy hydrogen more logical. With this switch, the East Groningen Industry Cluster may even become Europe’s first regional hydrogen cluster. Thereby, also for cost reasons, a mixture of regionally produced green and blue hydrogen will probably be deployed first, with the role of green hydrogen gradually increasing[1].
Feasibility and urgency
The East Groningen Industry Cluster’s switch to hydrogen will help the companies to go sustainable and initiate the start-up of a regional hydrogen network with appeal to other/new companies. But such a switch involves high costs. First, for the construction of a hydrogen distribution network and technical adjustments in the companies. It is estimated that this could cost around €100 million on a one-off basis. In addition to these investment costs, operational costs will also increase because hydrogen costs more than natural gas in the initial period. This means that the switch to hydrogen will require financial support from the government. Then the switch to hydrogen from its own region can be realised before 2030. The companies of the East Groningen Industry Cluster will thus perpetuate their value as important providers of employment (approx. 10,000 jobs) and drivers of sustainability in the region.
About the parties participating in the project
IndustrieCluster Oost-Groningen is a partnership of 9 energy-intensive companies with 14 production sites in the Groningen-region working together to become more sustainable. Participating companies are Royal Avebe, Eska, Kisuma Chemicals, Nedmag, PQ Silicas, Smurfit Kappa, Solidus Solutions, Steenindustrie Strating and Wellness Pet Company NL. Other companies that participated in the preliminary study by New Energy Coalition are: Equinor, ENGIE, RWE, Enexis, NorthGrid, EBN and DNV.
[1] Green hydrogen is hydrogen based on renewable energy; blue hydrogen is hydrogen that does not release carbon because it is stored in Norway under the North Sea.
