Ireland’s hydrogen strategy aligns with REPowerEU plan

Dublin-based Garrett Monaghan of Pinsent Masons was commenting after the Department of the Environment, Climate and Communications (DECC) opened a new consultation on developing a hydrogen strategy for Ireland. The drive for production of green hydrogen correlates strongly with the rapidly developing Irish offshore wind sector and significant bankability signals under REPowerEU and wider European energy policy, he said.

The paper puts an emphasis on green hydrogen over other forms of hydrogen. Green hydrogen is created by electrolysis – the passing of an electrical current through water powered by a renewable energy source. This makes green hydrogen carbon neutral. Globally, there are a range of hydrogen ‘colours’ proliferating, referring to the diverse techniques in hydrogen production. These include ‘blue’, ‘brown’ and ‘pink’ hydrogen.

Under the published consultation, Ireland’s new strategy will be squarely focused on the production and use of green hydrogen

“Ireland has significant potential to produce green hydrogen from renewable electricity sources given our offshore and onshore wind energy potential – we have one of the most energy-productive offshore renewable energy resources in the world,” Monaghan said. “In addition, Ireland’s gas network is one of the most modern in Europe with a network comprised of polyethylene pipes – early studies indicate that the distribution system is already capable of transporting hydrogen or hydrogen/natural gas blends.”

The DECC consultation is open until 2 September 2022. The department is seeking submissions on the possible role and opportunities for green hydrogen in Ireland, and input in relation to hydrogen research; hydrogen demand; hydrogen supply; hydrogen transportation and storage; export opportunity; safety and regulation; supports and targets; and energy security.

The publication and importance of the Irish consultation also needs to be considered against the recent acceleration in steps to secure European energy security, Monaghan said. Specifically, energy security is one of the twin aims – along with combating the climate crisis – of the REPowerEU plan, which was published by the European Commission in May.

The REPowerEU plan includes new targets for EU domestic hydrogen production and for hydrogen imports – 10 million tonnes of each by 2030 – and is supported by Commission legislation that concerns the definition and production of renewable hydrogen, which is designed to promote decarbonisation from greater use of hydrogen. The development of new hydrogen-related standards and three new “hydrogen import corridors” were among the other initiatives identified by the Commission as central to meeting the new hydrogen targets.

Monaghan said plans for a new hydrogen strategy for Ireland are aligned with the REPowerEU plan as well as wider national policies in Ireland concerning climate change and energy security.

“In line with the Climate Action Plan and the National Energy Security Framework, the development of an integrated hydrogen strategy in Ireland is a priority,” Monaghan said. “In addition to Irish legislative plans, the EU has prioritised the development and acceleration of hydrogen strategies across its member states.”

“A critical feature of the REPowerEU plan is the establishment of the EU Energy Platform, which aims to enable the common purchase of LNG, gas and hydrogen by pooling demand, optimising infrastructure use and coordinating outreach to suppliers. This platform should assist with the build out and viability of new green hydrogen projects, as bulk buying from the EU should guarantee certainty for developers,” he said.

“Domestically produced green hydrogen would reduce reliance Ireland’s reliance on imported fossil fuels, and cement Ireland’s energy security. In addition, there is significant revenue-generating potential for Ireland through the export of green hydrogen in the medium to long term, if developed in parallel with domestic demand, in particular to markets like Germany and The Netherlands,” he said.

“Both Ireland’s opening of a hydrogen consultation process and the establishment of the EU Energy Platform are excellent market signals for offshore wind and hydrogen developers,” Monaghan said. “Sponsors, investors and funders will note these policy and market-making objectives – resource pooling and bulk buying will only increase the potential funding and bankability of offshore wind farm projects and potential hydrogen and power revenues.”

Monaghan said a “strong regulatory framework” is also needed to support a vibrant hydrogen economy in Ireland.

“This consultation process for Ireland’s hydrogen strategy is crucial, as although Ireland has a clear offshore wind resource, the opportunity to develop an upstream and downstream green hydrogen industry will have a bearing on the speed of the offshore rollout. In that respect, the offshore and green hydrogen regulatory frameworks need to be developed in as consistent and compatible way as possible” he said.

Co-written by Shani Stallard of Pinsent Masons.