If you want to build a hydrogen valley, move now!

The Council of Ostrobothnia arranged a study visit to the Port of Eemshaven and the city of Groningen in the Northern Netherlands to learn about the successful development of offshore wind, the development of hydrogen valleys, and the central role of seaports in the green transition. The visit was a follow-up to develop a collaboration that was initiated after the Mission Innovation delegation from Groningen visited Vaasa in May 2022. Regional Mayor Mats Brandt together with fourteen delegates representing the different parts of the region of Ostrobothnia, from Kristiinankaupunki in the south to Pietarsaari in the north, took part in the study visit and gained valuable insights into how to prepare key actors on the west coast of Finland for the opportunities and challenges of offshore wind and green hydrogen. 

The visit gave many good insights into why building networks across borders and collaborating internationally, in general, is important: 

First, international cooperation is essential to accelerate the development of the green transition. 

The climate crisis is of such grand scale that dispersed activities that lack synchronization will not be enough. What is needed is coordinated action among actors with mandates and resources (national and regional governments, big companies, NGOs) that will have an impact on a global scale. The Paris Agreement and the UN Climate Change Conferences that have followed have been the arenas where political will has been mobilized to set climate work in motion. However, continuous collaboration across international borders and on different platforms is needed to reinforce action in such a measure that a true transition can be achieved. Local initiatives at the grassroots level are essential for building commitment and grounding activities in the local challenges of every community. Building global networks and cooperation across borders is vital for setting up the ambition level and moving forward together. 

Primary movers among regions have already left, and now it is critical to be a fast follower. 

We should not try to invent the wheel anew. The pioneering regions, such as the Hydrogen Valley in Groningen, have set the bar for other regions to follow. Through cooperation between regions (and actors within regions), we can accelerate the accumulation of knowledge and learn (!) from the mistakes that have been made previously. It is not feasible or even possible to simply copy solutions from one place to another. Through study visits to distinct locations and acquiring knowledge of a variety of ways of building ecosystems that tackle the climate crisis we can choose which practices could best fit our local needs. 

Essentially, being fast will be down to the people, the organizations, and their ability to cooperate and leverage upon their synergies for a common cause. 

We must acknowledge that different interests are being pursued and fight for dominance in the politics of the green transition. There are different ways to take part in steering the direction of the future. Building cooperation networks and proactively carving out the role of our own region in the transition are two important ways of impacting the course of development. 

Summarizing the key learning points on developing the hydrogen economy from the visit to Groningen and Eemashaven

The Groningen region hosts the HEAVENN project, which is recognized by the European Commission as the first Hydrogen Valley of Europe. Hydrogen Valleys have become a global phenomenon of leading hydrogen projects emerging all around the world. These Valleys are seen as the next-generation hubs for hydrogen market development. The Groningen region’s ambition and the goal of the HEAVENN project is to “learn and teach, inspire and cooperate: to help green hydrogen become the energy superhero!”. These are my take-aways from the example of HEAVENN, complemented with some additional readings, for building a Hydrogen Valley in our region: 

1. Build a common vision and strategy for the region that different actors commit to 

Focus on the needs and advantages of the region: 

The Groningen region is placed on top of a large reservoir of natural gas and has been characterized as a gas energy valley. However, due to earthquakes that have resulted from the extraction of the gas, a political decision was made for phasing out use of fossil gas and going NetZero by 2035. The concrete threat of earthquakes has been a key trigger in setting the green transition in motion. 

Take away: The strategy and vision for a region needs to be aligned with the particular opportunities and challenges of the region in question. Defining the route for the region to meet its own NetZero goals and leverage on the existing local assets to create business in the emerging hydrogen economy is key. Mapping the value chain coverage of the actors in the region is a first step, which must be followed by building common projects. 

Lead collaboration between key stakeholders: 

In Groningen, the goal has been to get both industry and regional public actors to agree on what they are ready to commit to and invest in to achieve the change. Government funding has been essential to start realizing these commitments and has required much awareness and knowledge building from the central government. Also managing controversial interests has been a challenge. It is still an ongoing process. 

Takeaway: Achieving the vision for carbon neutrality is only possible if all relevant stakeholders commit to the goals. A critical issue to be addressed is, who will take the lead in aligning different actors together and building up the consortium in the region. This actor must have enough legitimacy and muscle to get on board the ecosystem of actors that needs to agree on the common goals and commit resources to achieve them. Making agreements on roles and resource investments early on in building partnerships is essential for ensuring adequate commitment. 

Acquire adequate political support and both public and private funding: 

The flagship project for the development of the hydrogen economy in the Northern Netherlands is the HEAVENN project, which is a large-scale programme of demo projects bringing together core elements: production, distribution, storage and local end-use of hydrogen (H2) into a fully-integrated and functioning “H2 valley” (H2V), that can serve as a blueprint for replication across Europe and beyond. It is financed by a subsidy of 20 million euros from the European Union (Fuel Cells and Hydrogen Joint Undertaking, FCH JU, now Clean Hydrogen Partnership) with a public-private co-financing of 70 million euro, bringing up the total project size to approximately 90 million euro. This six-year project started in January 2020.  

Take away: The leading actors should start with mapping the funding possibilities that could be acquired for building a hydrogen valley in the region. A combination of private investments and regional support as well as government grants will be needed to close the gaps. This is one of the cornerstones of building up regional hydrogen valleys and one of the most critical and challenging parts of the development. 

2. Leverage the unique capabilities and resources of the region 

Build on the existing resources and industrial infrastructure:

 The building blocks of the vision for hydrogen development in the Groningen region will be: 1. Substantial increase of renewable energy production from off-shore wind, 2. Utilizing existing gas infrastructure and modifying it to be used with hydrogen, 3. Storing hydrogen in salt caverns, 4. Retrofitting existing energy applications for hydrogen (such as burning natural gas in heating applications) and creating new ones (using hydrogen in the transport sector). The strategy is to be a net importer of hydrogen, transitioning away from the use of fossil gas. The port’s strategic focus is to be the hub for building offshore wind in the North Sea area. 

Take away: The hydrogen strategy in Ostrobothnia and the larger Gulf of Bothnia region must focus on leveraging the particular strengths of the region, which are different from that of other parts of Europe. Recent scenarios1 2point to the opportunity of Finland and especially the West-Coast being a net exporter. Accelerating wind power both onshore and offshore will be a critical factor. If the amount of wind power is to be increased according to future prospects, also hydrogen could become a new cornerstone of the Finnish economy. 

The location on the coast can become a clear asset if important infrastructure investments are made in a timely manner. As a recent study suggests3, port ecosystems are expected to play a crucial role in the expansion of the European hydrogen market through 2050. Ports will be important as landlords of import/export hubs of hydrogen, alliance builders, and as critical hydrogen economy infrastructure investors (export terminals, storage, and bunkering). Besides port infrastructure, other important infrastructure developments include pipelines and tanking stations. The Nordic Hydrogen Route pipeline could be used both for hydrogen storage and transport connecting the whole region of the Bothnia Bay. These are massive new investments that are required.  

Carve out a clear role for the region on global scale: 

The region of Groningen aims to be a forerunner in the green transition on a global scale, having already started implementing changes in its energy production system and decrease of dependency of fossil fuels. The building of the Hydrogen Valley sets an example for other regions on how to change local energy systems away from fossil energy dependency. However, what the region seems to be lacking is local technology companies that would offer solutions developed in the region for global export. 

Take away: Despite the potential of the hydrogen economy for Finland and the Bothnia Bay area in particular, the question remains, what should the focus on the end product that is exported be. At the moment first off-takers for hydrogen seem to be Central-European users of e-fuels (green hydrogen used for producing synthetic methane, methanol and ammonia). In the future, the biggest users of green hydrogen in the Gulf of Bothnia region will be steel factories and fertilizer producers. Defining the regional off-takers and building the hydrogen consortiums together with these actors is key to launching the hydrogen economy in the region. 

In the Ostrobothnia region several leading companies are already planning pilot and demonstration plants, where technology and process expertise is used for building solutions in different parts of the hydrogen economy’s value chain. Through these projects companies develop the needed knowledge and capabilities for offering the solutions also for global export. Municipalities and energy companies can have a central role in providing much-needed demonstration platforms for technologies to local companies. By being a forerunner in the energy transition on a global scale, there is opportunity for regional companies to get a head start in offering tested solutions for the global markets. 

Ensure political backing and buy-in from the local communities: 

On top of the needed economic and technological resources, questions regarding acceptability and knowledge needs must be addressed. The Northern Netherlands region, of which Groningen is part, has received funding from the European Just Transition Fund for the transition to a climate-neutral economy. Due to the decision to terminate gas extraction in the Groningen region and an economic structure that is heavily dependent on fossil raw materials and fuels, some 20,000 jobs in the Northern Netherlands will be affected. However, the transition also offers opportunities for new jobs and economic activities. 

Take away: Raising awareness among the general public early on, providing adequate information through knowledge campaigns and dialogue events will bring understanding and help to make the requirements and benefits of the transition transparent. Buy-in from politicians and local communities must be gained, and this will only be done through taking into consideration different perspectives, incentives and motives of all stakeholders. Although Finland is not heavily dependent on fossil fuels in its energy system and labour market compared to many other regions, the hydrogen economy will have a great impact on questions of land-use, development of new skills and jobs, and the way the risks and profits of the hydrogen economy will be shared. These are all questions that need reconciliation between different perspectives and creating win-win for stakeholders that are affected if the development of a hydrogen economy in the region is to succeed and be sustainable in the long term.  

Sources:

“Pre-study on the transition to a hydrogen economy, specifically in Northern Ostrobothnia” published by the Technical Research  Centre (VTT) at the event “Northern Power - H2 NOW!” 22 March 2023
(https://www.both2nia.com/application/files/6816/7949/3478/Pre-study_on_transition_to_hydrogen_economy_specifically_in_Northern_Ostrobothnia_final_16_3.pdf)

Sivill, Leena; Bröckl, Marika; Semkin, Nikita; Ruismäki, Antti; Pilpola, Henriikka; Laukkanen, Olli; Lehtinen, Hannele; Takamäki, Saana; Vasara, Petri; Patronen, Jenni (2022): Vetytalous – mahdollisuudet ja rajoitteet. Valtioneuvoston selvitys- ja tutkimustoiminnan julkaisusarja 2022:21

https://www.clean-hydrogen.europa.eu/media/publications/study-hydrogen-ports-and-industrial-coastal-areas_en
 

Read more about the journey of the Heavenn project into the first European Hydrogen Valley: https://www.newenergycoalition.org/en/knowledge-base/report-from-heavenn-to-sustainable-hydrogen-valleys/ 

Read more about how the most advanced Hydrogen Valleys in Europe deal with obtaining funding and actor support: https://h2v.eu/analysis/best-practices