If Poland fails to expand the potential of its renewable energy sources to ensure sufficient green hydrogen generation, or doesn’t find safe sources to import this fuel from, the planned hydrogen valley near Rzeszów may be one day running on hydrogen from Nord Stream 2 – writes Wojciech Jakóbik, editor in chief at BiznesAlert.pl.
Hopefully Poland’s first hydrogen-fuelled CHP plant won’t run on hydrogen from Nord Stream 2
Poland has announced it would develop the Podkarpacka Hydrogen Valley near Rzeszów. The biggest challenge for this initiative is that there are no facilities where hydrogen could be produced in the vicinity of this town, even though there are industrial centers nearby, e.g. installations owned by Grupa Azoty, which could use the fuel in question to lower its CO2 emissions. Currently half of Poland’s hydrogen is generated at Azoty’s factories thanks to chemical synthesis. The Group sells about 600 tons of this fuel annually from Puławy and Kędzierzyn. This is why the company is researching whether it would be possible to use hydrogen fuel cells. However, the hydrogen from Azoty cannot be delivered near Rzeszów at this point.
“We are facing a decade of changes, which could seriously strengthen our state. Introducing a hydrogen technology is the basic element that will drive those changes. We are the fifth producer of hydrogen in the world and third in Europe, so this is a huge commitment. We want to develop five hydrogen valleys that will drive the hydrogen economy, one of them will be located right here – in Rzeszów. I am hoping this will be a cluster with a capital C, which will use the scientific and economic potential of this region,” Matusz Morawiecki, Poland’s Prime Minister, said about the hydrogen valley in Rzeszów.
The signatories of the letter on developing a hydrogen economy near Rzeszów included Ewa Leniart – the Voivode of the podkarpackie voivodship, Władysław Ortyl – Marshall of the podkarpackie voivodship, Marek Bajdak – acting President of Rzeszów, professor Piotr Koszelnik, PhD, DSc, Eng – Rector of the Rzeszów University of Technology, professor Sylwester Czopek – Rector of the Rzeszów University, professor Tomasz Gałka from the Institute of Power Engineering – Director of the Research Institute, Marek Grabowy, PhD from the Institute of Power Engineering – Research Institute, head of the Ceramic Branch CEREL in Boguchwała, Iwona Sierżęga – board member of Polenergia, Jacek Głowacki – Managing Director at Polenergia Nowa Sarzyna CHP Plant, Dawid Cycoń – Managing Director at ML System, Paweł Kolczyński – deputy Managing Director at the Industrial Development Agency, Rafał Kalisz – Managing Director at Fibrain, Jan Sawicki – deputy Managing Director and Marek Bujny – board member of „Dolina Lotnicza” (Aviation Valley), Adam Smoleń – Managing Director at Autosan and Tomasz Matuszewski Mayor of the town of Sanok.
It is worth noticing that the letter was co-signed by Polenergia, which, together with Germany’s Siemens wants to decarbonize the Nowa Sarzyna CHP plant. In the future the facility is to run on green hydrogen. “We believe in hydrogen and we want to quickly achieve a strong position on the domestic market in this sector. The existing CHP plant in Nowa Sarzyna, as well as the planned new gas units, are to be able to run on green hydrogen, which will contribute to developing a zero-emission energy group in the future,” Michał Michalski from Polenergia said in June 2020 after the signing the letter of intent with Siemens on this topic. Michał Kurtyka, the Minister of Climate and the Environment, said in Rzeszów that Poland would like to have its first hydrogen CHP plant in 2030. He was probably talking about the plant in Nowa Sarzyna. The facility is already connected to the Polish gas grid, because the CHP plant runs on gas, which means some day it could be supplied with hydrogen. However, at this point Poland’s first hydrogen CHP plant doesn’t have access to a safe hydrogen source. Poland needs to fight for it.
According to the definition of the European Commission, a hydrogen valley is a “geographical area, city, region or industrial area where several hydrogen applications are combined together and integrated within an FCH ecosystem”, which minister Kurtyka mentioned. However, it is not clear from where the valley in Rzeszów would get this innovative fuel. Contrary to the valleys planned in Pomerania and Lower Silesia, the areas near Rzeszów are devoid of hydrogen sources. This means it is pertinent to develop the local renewable energy sources, which will make it possible to generate green hydrogen in the future. Green hydrogen is the kind of hydrogen that is the most welcome in the EU hydrogen strategy, which means it can count on the biggest support. Hydrogen that generates emissions may be used in Rzeszów, but it will be harder to receive subsidies to support it. This means the costs of its usage in that region will go up, because of the necessity to develop large transmission infrastructure running from the production centers in Silesia or Pomerania. Valleys located close to such centers do not have this problem.
Importing hydrogen is an alternative. This is a challenge which hydrogen valleys across all of Europe will have to face, because the demand for this fuel may significantly outpace its supply in the European Union, especially if the bloc decides to promote green hydrogen only, which is produced thanks to the surplus of renewable capacity. It is worth reminding that even Germany, which has the most advanced technologies of this type, will not be able to generate enough hydrogen to make its economy green. So, Berlin’s solution is to encourage partner states from Africa and Ukraine to produce the gas. It may turn out that in the end Germans will have to import it via the Nord Stream 2 gas pipeline, which will russify the EU climate policy, which will still run on fuel from Russia, but this time hydrogen instead of natural gas. Poland can take action to limit the risk of such a scenario to occur.
Recommendations for the Polish hydrogen valley in Rzeszów
If the hydrogen valley in Rzeszów is to really become the center of hydrogen combustion, and not just a research facility, it will have to import this fuel from abroad. Hydrogen supply (including green) from domestic sources may not be enough, which is a visible trend noticeable across the entire European Union. One could use this demand to acquire funds from the EU to subsidize hydrogen transport in the existing transmission network (e.g. to supply hyrogen to the Nowa Sarzyna CHP plant), and to build new hydrogen pipelines, which in reality are natural gas pipelines, to import this fuel from domestic or external sources.
In this light, cooperation with Ukraine seems interesting, as the country is investing in hydrogen export in cooperation with Germany. The integration of the Polish and Ukrainian gas markets, which will be possible after 2022, may be the first step to the hydrogen market that is emerging in Europe. Ukraine would like to become an important supplier of hydrogen for the European Union, while Poland could acquire the financing for various hydrogen projects, as the potential intermediary. Such a configuration would make it possible to use the initiatives that promote the import of hydrogen from outside of the European Union to prop up low-risk suppliers, such as Ukraine, instead of bankrolling the transport of hydrogen via the contentious Nord Stream 2 pipeline. It could also force German companies, such as Siemens Energy, to focus on the safe hydrogen suppliers. Poland should start campaigning for this idea to become one of the priorities of the EU hydrogen economy. Whereas a label confirming an investment has been made to usher in climate neutrality, could help Poland maximize the usage of EU subsidies that are awarded on the basis of this criterion to its own purposes. The money could be used to, e.g. finance hydrogen pipelines between Poland and Ukraine.
Otherwise, Poland will develop a hydrogen valley in Rzeszów, which is a potential outlet for hydrogen, but it will not provide fuel on its own, which means the endeavor will be forced to become dependant on suppliers. Those may include Nord Stream 2, which is promoted by Germany and Russia as the future source of hydrogen. Therefore, we should not give a gift to Vladimir Putin, and instead design a hydrogen economy in a way that would be independent of him.