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D8.1 Admixing literature review

van Zoelen, Rob; Bonetto, Jorge; Jepma, Catrinus

In any future decarbonised energy system ‘green molecules’ such as biomethane and renewable hydrogen, are expected to play an important role. All green molecules, but especially hydrogen, are facing a chicken-egg problem, i.e. the risk of a mismatch between supply and demand and transport infrastructure. One of the pathways to overcome this are policies and measures towards mandatory physical and/or administrative blending of hydrogen into the gas system. Physical admixing refers to injection of hydrogen into the natural gas grid; administrative blending to a quota-based scheme obliging determined parties to forward certificates to ‘green’ (a share of) their gas consumption. An overview of the main considerations with regard to both is provided below.


Although from an analytical perspective the distinction between physical and administrative blending can be useful, in actual practice both aspects of blending will mostly occur in conjunction. If a mandatory regime focuses on physical blending, it is likely that an addition certification system will develop to monetise the green premium attached to the admixed hydrogen. In reverse, if a mandatory policy relates to administrative blending, certificates will be issued for use and trade that will ultimately be based on hydrogen that is introduced in any way into the energy system, possibly but not necessarily via physical admixing into the grid.

 

Physical blending

So far, to our knowledge, no mandatory physical admixing policies with respect to hydrogen do exist. However, a number of laboratory tests, pilots and testing experiments have been carried out in various countries in order to investigate to what extent physical blending poses challenges in terms of gas quality, grid integrity, pressure, safety, etc.


The literature on the various aspects of physical blending of hydrogen into the natural gas grid notes that admixing hydrogen may affect: the gas density, the gas viscosity, the gas pressure, the gas Wobbe index, and the conditions that may lead to two-phase flows. At relatively low admixing percentages (i.e. below about 20%) these effects do not seem to pose any insurmountable issues.


As far as the risks of embrittlement and induced cracking of the grid due to the admixing of hydrogen is concerned, for conditions reflecting the most common materials and operating characteristics, almost all the studies tend to conclude that no significant changes in the tensile properties of metals (low strength steel e.g. API5L gr B., cast iron, copper, yellow brass) can be observed when exposed to gas mixtures up to a 20 vol% hydrogen blend. In addition they conclude that for non-metallic materials, such as medium density polyethylene (PE80), hydrogen absorption does not affect subsequent squeeze-off or electrofusion joining of pipework [1]. No research was found that looks specifically in the differences between laminar and nodular cast iron and for asbestos cement as material, which are used both in the Dutch regional distribution grids.


The literature, on the other hand mentions some embrittlement risks with respect to compressor and flange components, because of the use of some specific metals, such as titanium and nickel.


The tolerance levels of various appliances and components in the gas value chain for admixing hydrogen vary quite strongly at the current state of equipment. New technological developments may increase tolerance levels significantly, sometimes against relatively low costs. Currently the lowest tolerance levels seem to be concentrated in engines, gas turbines and CNG tanks.


Typical safety issues that apply to many gases and also to hydrogen are: the need for odorization, the risks of leakage, permeation and excavation. On the whole, such risks will need to be taken care of with great caution, but do not seem to pose insurmountable challenges.


In the absence of a common and binding hydrogen limit requirement at EU level, it is up to the Member States the determine which hydrogen blending percentage is considered safe and feasible [2]. This is why the authorized concentrations vary significantly from one country to the other. For instance, in the Netherlands is set at ≤0.02 mol% in the HTL network and ≤0.5 mol% in the RTL and RNB net1 [3], while in Germany it is 10 mol% [4].


Next, some economic issues related to physical blending should be taken into account. The hydrogen energy density is about one third of that of natural gas and thus blending decreases the energy content of the supplied gas: A 3% hydrogen blend in a natural gas delivery pipeline will reduce the energy transported by about 2%. This point obviously will have metering and billing consequences that will need to be dealt with.


Because on the whole the market value of the carbon neutral hydrogen admixed to the gas flows will surpass the market value of the other gas (typically natural gas and/or syngas), a certificate-based system may be a logical component of mandatory physical admixing schemes in order for the suppliers of the hydrogen to capture their green premium.

Administrative blending

So far mandatory administrative blending or quota schemes have only been implemented with regard to electricity or liquid fuels, not to gases. So, for lessons learned with respect to the optimal design of blending schemes for gases one can only learn indirectly, from experiences elsewhere. Moreover, on the whole there is relatively little literature in the public domain on mandatory administrative blending.


From the existing mandatory administrative blending regimes it can be learned that the most critical design characteristics are:

  • if quota sections for various qualities of the admixed substance will be distinguished, and therefore different types of certificates per scheme;
  • if the scheme applies generically, or to specific sectors/company types only (e.g. based on competitiveness considerations);
  • if the certificates can be traded, are traceable, and if a certificate expires at some date, or can be banked forever;
  • if explicit measures are taken to prevent fraud and abuse;
  • if certificate prices are maximised or facing minimum levels, or both;
  • if the overall quota level varies with the economic conditions and/or the environmental targets;
  • if certificate trading on the market will be restricted to specific areas (e.g. the issuing country), or instead is left free to the international market;
  • if the acceptance of certificates in an administrative blending scheme is contingent upon the existence of a satisfactory level of physical blending.

The actual design of a mandatory administrative admixing scheme will be based on a mix of targets and the weight attached to each of them, such as: environmental goals; the reliability and credibility of the scheme and its certificates; the scheme’s flexibility in implementation; the recognition of aspects of international competition; the impact of the scheme on investment and innovation in hydrogen production and use; the minimization of the overall societal costs of this mitigation instrument.


Insofar as environmental goals are considered a criterion in the administrative blending design, it is often considered important what other gases or energy carriers are displaced by introducing the renewable hydrogen, because the mitigation impact of blending will vary. For instance, the mitigation impact of replacing ‘grey’ hydrogen (i.e. hydrogen produced from natural gas while releasing the CO2 from the production process into the air) is higher than if natural gas is displaced, etc.


One of the clear advantages of introducing mandatory admixing schemes is that they may kick-start a specific and predefined level of market demand that will provide clear market guidance to potential investors in the admixed fuel; a disadvantage of the scheme may be that certificate prices are determined by the supply and demand balance on the market, and therefore are difficult to predict a priori. Also, actual practice has learned that the risks of fraud should not be underrated.


Although it is likely that administrative blending will lead to physical blending as well (see above), it is possible to steer the actual physical blending levels such that any desirable technical or safety issues related to that can be prevented; e.g. an administrative blending scheme could be fulfilled by a combination of small physical admixing options and pure hydrogen flows transported in dedicated systems.


Precisely because a mandatory blending scheme may create an immediate market for specific carbon neutral fuels (e.g. hydrogen), it is considered important in practice to make sure that such sudden demand jump will not crowd out the underlying energy carrier (e.g. green power in case of green hydrogen) from being used for other applications. That is why sometimes an additional condition for the blended hydrogen is propagated, namely that the producer of hydrogen will have to show that it is generated from green power that is produced in addition to what otherwise would have been produced. Sometimes such an additionality condition is even strengthened to the extent that it needs to be proven that the additional production volumes of hydrogen is synchronised with additional volumes of green power.


It is still an open question if and to what extent in the EU subsidized green power is allowed to be used to generate green hydrogen to be used for fulfilling a possible mandatory quota. For a successful launch of a mandatory administrative hydrogen blending scheme, it is imperative that this issue is resolved timely and clearly.
 

Dit project is medegefinancierd door TKI Energie uit de Toeslag voor Topconsortia voor Kennis en Innovatie (TKI's) van het ministerie van Economische Zaken, onder referentie nummer TKI2020-HyDelta.
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