On 7 December 2021, the Polish government officially announced its Polish Hydrogen Strategy for 2030 with a view to 2040. The announcement came at a perfect time, amid price turbulence on the natural gas market in Europe and growing doubts whether natural gas (of which Europe has too little) is still a reasonable transition fuel for decarbonisation of the economy.
Will the turbulence on the gas market accelerate the hydrogen revolution?
We expect growing urgency to the question of whether hydrogen, which is supposed to naturally reduce the demand for natural gas, should be developed more quickly as a “green” fuel and, most importantly, a fuel produced in the European Union.
This approach is particularly pressing in Poland, which unfortunately has an undercapitalised, coal-based industrial power and heating sector. Hydrogen appears as a remedy for current problems and a fuel that would allow Poland to at least leapfrog the intermediate stage of large-scale generation of energy and heat from natural gas, which Poland has not yet entered, especially since natural gas is becoming increasingly problematic (and quite expensive).
Meanwhile, 5.9 GW of offshore wind farms are currently under development in Poland and auctions for an additional 5 GW will be held in the coming years.
Poland, the EU’s third-largest hydrogen producer
To many, it will probably come as a surprise to learn that Poland is the third-largest producer of hydrogen in Europe, after Germany and the Netherlands, with an annual production of 1.3 million tonnes. But the vast majority of the hydrogen here is produced by natural gas steam reforming, and is used primarily in the chemical industry (reduction and hydrogenation processes), refining, and the food industry.
Nevertheless, this makes it clear how important hydrogen is as an energy medium in Poland. Therefore, it is in the interest of not only the government but also heavy industry to develop a rational framework for producing hydrogen by alternative methods, primarily “green hydrogen.”
Main points of the Polish Hydrogen Strategy
According to the government, hydrogen is to play the role of energy storage and enable balancing of the electricity grid, as well as enable the reduction of emissions in sectors where electrification is not economically justified. The hydrogen economy itself is understood collectively as technologies of production, storage, distribution, and use of hydrogen and its derivatives, including centralised and distributed systems of production and storage, hydrogen transportation using the transmission and distribution network as well as other forms of transportation, and subsequent use in various branches of the economy.
Above all, green hydrogen
The Polish Hydrogen Strategy takes a technology-neutral stance, dividing hydrogen only by the criterion of production emissions into conventional, low-carbon, and renewable. While rejecting the arbitrary assignment of specific “colours” to hydrogen production, the Polish Hydrogen Strategy supports any low-carbon production technology. In doing so, it distinguishes technologies such as:
- Biomethane steam reforming
- Biomass gasification, fermentation or pyrolysis
- Waste gasification, pyrolysis and thermal treatment
- Gas steam reforming with carbon capture and storage or utilisation (CCS/CCU)
- Coke oven gas separation
- Hydrogen production in high-temperature nuclear reactors.
Objectives of the Polish Hydrogen Strategy
The objectives formulated in the strategy address three priority areas for hydrogen use: (i) energy, (ii) transportation and (iii) industry, as well as hydrogen production and distribution. In this respect, hydrogen is seen as a factor ensuring a combination of these areas, in line with the EU concept of linking sectors.
The strategy establishes and defines the following objectives:
- Implementation of hydrogen technologies in the power and heating sectors
- Use of hydrogen as an alternative fuel in transportation
- Supporting the decarbonisation of industry
- Production of hydrogen in new installations
- Efficient and safe hydrogen transmission, distribution and storage
- Creating a stable regulatory environment.
Objective 1: Hydrogen in the power and heating sector
The first objective applies to the implementation of hydrogen solutions in the power and heating sector. According to the strategy, power-to-hydrogen (P2H) installations with a total capacity of 1 MW will become operational by 2025. Hydrogen co-firing in gas turbines will also be tested. Support will also be provided for the development of cogeneration and poly-generation systems for apartment blocks, office buildings, small housing developments, and public facilities from 10 kW to 250 kW using fuel cells, energy storage based on hydrogen and its derivatives, and compact power-to-gas (P2G) and gas-to-power (G2P) systems.
On the other hand, in 2030, it is planned to launch cogeneration and poly-generation installations of up to 50 MW powered by hydrogen, micro-generation installations of 1–10 kW to produce hydrogen for heating or electricity installations, expansion of photovoltaic installations with electrolysers and rainwater pre-treatment stations for production of renewable hydrogen, as well as starting the use of hydrogen in energy storage.
Objective 2: Hydrogen in heavy transport and public transport
The second objective, to use hydrogen as an alternative fuel for transportation, calls for 100 to 250 hydrogen-powered buses to begin operating by 2025, the construction of 32 hydrogen filling and bunkering stations, and the construction of hydrogen trains for operation on non-electrified rail lines.
In 2030, according to the Polish Hydrogen Strategy, between 800 and 1,000 hydrogen buses are expected to be in operation. The hydrogen fuelling and bunkering infrastructure is also to be further developed, as well as the use of hydrogen in heavy transport by road, rail, sea, river and air, and intermodal transport. The production of synthetic fuels based on hydrogen is also expected to be widespread. It is good to see some prudence on the part of the government to focus on the more likely technical development of the use of hydrogen in professional transport, rather than on its still questionable use in private transport.
Objective 3: Decarbonisation of industry
In the strategy, this goal is listed third, but looking at what is happening on the market, we think that hydrogen will first appear widely in industry. The first installations are already being implemented.
In 2025, achievement of the third objective, to support the decarbonisation of industry, will be determined by conducting activities and implementing pilot technology projects for the application of low-carbon hydrogen in the petrochemical, chemical, and fertiliser sectors, developing a strategy for deployment of hydrogen technologies in energy-intensive industries, and developing industrial “hydrogen valley” feasibility studies.
By 2030, in Poland, at least five hydrogen valleys are to be created, and the resulting investments will be included in the common European infrastructure.
Objective 4: Hydrogen from new installations—50 MW by 2025 and up to 2 GW by 2030
Under objective number four, to promote hydrogen production in new installations, synthetic gas production through hydrogen methanation and the use of low-carbon hydrogen in ammonia production will be operational by 2025. Low-carbon hydrogen production installations with a total capacity of at least 50 MW will also be built. In 2030, their total capacity is expected to reach 2 GW.
Objective 5: Efficient and safe hydrogen transmission, distribution and storage
Efficient and safe transmission, distribution and storage of hydrogen will require solutions to many technological challenges. Already, according to EU regulations, newly built gas pipelines should be ready for injection of renewable gases, including hydrogen. A north-south hydrogen pipeline feasibility study is to be developed by 2025. The existing natural gas infrastructure is also to be investigated for its ability to inject hydrogen and transport hydrogen-gas mixtures. Poland’s Energy Policy to 2040 provides for reaching the capacity of transporting through gas networks a mixture containing about 10% gases other than natural gas in 2030. By 2030, research is also planned to develop large-scale salt caverns for hydrogen storage, as well as to inject synthetic methane (from methanation from low-carbon hydrogen) produced in P2G systems into gas networks.
Objective 6: Legislative hydrogen package
In 2022–2023, implementation of the sixth objective, creation of a stable regulatory environment, is to include development of a legislative hydrogen package: regulations defining the details of market operation, implementing EU law in this area, and establishing a system of incentives for production of low-emission hydrogen.
The Polish government anticipates significant investments in the development of the hydrogen economy. Investments in public transport using hydrogen are expected to reach PLN 930 million by 2025, doubling to PLN 1.8 billion by 2030. Also by 2030, investments in electrolysers of various types alone is to exceed PLN 9 billion, which in total will generate investments of PLN 11 billion in these two areas alone.
Igor Hanas, adwokat, Rafał Pytko, Energy practice, Wardyński & Partners