Hydrogen Import Terminals in the Port of Rotterdam

Abstract

Hydrogen is widely considered an essential
energy carrier that has the potential to accelerate the energy transition. The
Netherlands does not have the resources to fulfil the expected hydrogen demand
by domestically produced hydrogen. By realising hydrogen import terminals, the
Port of Rotterdam can maintain its dominating position as the (renewable)
energy port in North-West Europe. This study, in which the Port of Rotterdam is
used as a case study, focuses on the uncertainties hampering the realisation of
hydrogen import terminals. While earlier studies have been conducted on
hydrogen import, we identify two research gaps: 1) the necessity to optimise
the scaling of hydrogen import terminals and 2) the inclusion of hydrogen use
in multiple sectors. Through a literature review, three categories of
uncertainty have been identified that are often present in hydrogen systems;
economic, technical, and geopolitical uncertainties. The categories of
uncertainty have been used as a guideline to identify uncertainty present in
assessing the integrated hydrogen system in the Port of Rotterdam. A model that
represents this system has been developed in Linny-R. Linny-R is a graphical
specification language to solve Mixed-Integer Linear Programming problems. This
model allowed us to adjust input parameters such as production capacities and
prices, hydrogen demand, and infrastructural changes to study the identified
uncertainties through sensitivity analyses and scenarios. The results of this
research illustrate the need for hydrogen import to meet the projected hydrogen
demand. However, hydrogen import is not cost-competitive compared to domestically
produced hydrogen. This study highlights the potential to reduce costs in the
production, conversion to the carrier, and shipping stage of the supply chain.
Currently, Ammonia (NH3) is the cheapest hydrogen carrier followed by Liquid
Organic Hydrogen Carrier (LOHC), and Liquid hydrogen (LH2). Long-term contracts
are required to manage the hydrogen import transactions to resolve economic
uncertainty. Technical uncertainty relates to the scaling of hydrogen import
terminals and the end-user sectors’ preferences for a specific hydrogen
carrier. Based on the technical characteristics of the three hydrogen carriers,
LH2 shows the highest potential to supply all end-user sectors. However, LOHC
and NH3 also have advantages in specific areas. Moreover, the early stage of
development in LH2-technology fuels the need for LOHC and NH3, leaving the
debate on which hydrogen carrier is preferred open. Furthermore, the scaling of
hydrogen import terminals is complicated by the presence of salt-caverns in the
northern part of The Netherlands because they provide a cheap alternative for
large-scale hydrogen storage. Geopolitical uncertainties related to the
hydrogen import supply chain processes are highly dependent on the production
capabilities in the export countries and the distance of those countries to the
Port of Rotterdam. Additionally, other nearby located ports can also realise
import terminals, attracting hydrogen import, diminishing the potential
dominant position of the Port of Rotterdam. However, a first-mover position
could manifest the Port of Rotterdam as a dominant player in the global
hydrogen market. More generally, hydrogen import terminals could provide
security against geopolitical forces as it safeguards the diversity of the
Dutch energy mix. We identified several avenues for future research. First,
researchers interested in expanding the model’s functionalities could focus on
1) modelling a variable renewable electricity price, 2) including salt-caverns
and specific hydrogen export, 3) adjusting our model by allowing only filled
vessels to arrive, 4) including the Willingness To Pay (WTP) of various
end-user sectors, 5) applying a method that allows the investigation of
numerous possible futures. A more general recommendation is to add a new model
to analyse investments and support companies’ business cases by integrating
hydrogen end-user sectors’ WTP. Finally, we especially encourage policymakers
to explore and support the possibility to realise one or more hydrogen import
terminals, even in case of a lacking business case, to improve the strategic
position of the Port of Rotterdam with regards to economic and geopolitical
advantages.