GGP: A revolution: The Netherlands kisses gas goodbye

GGP: A revolution: The Netherlands kisses gas goodbye – but will it help the climate?

The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.

This is article was originally published by the Energy Post on June 7, 2017

Revolution in gas country the Netherlands: the Dutch government wants all residential buildings to be off gas in 2050. The objective is to reduce CO2 emissions from the built environment. But does phasing out gas deliver the expected results? Eline van den Ende spoke to experts and concludes that a ‘gas-less’ society makes sense only if additional measures are taken.

Unthinkable just a few years ago, but reality today. The Netherlands, a long-time major gas producer in which virtually all houses are connected to the gas grid, wants to remove gas as source of heating and cooking for all residential buildings. The main reason is that the government wants to reduce CO2 emissions from the built environment by 80% in 2050.

The first steps are already being taken. 31 municipalities, including the largest cities like Amsterdam, Rotterdam and Utrecht, have signed a ‘Green Deal’ for ‘gas-less neighbourhoods’, which will lead to the first residential districts being disconnected from the grid over the next two years. Many more will follow in the coming decades.

“The familiar, gas-fired condensed boiler will largely disappear over the next 35 years*

In climate policy debates, the focus is often on electricity generation, and lately on transport too, with the spread of electric cars. But heating is at least as important as energy source. In the Netherlands 38% of energy consumption goes to heating. Half of this is used by residential buildings. And 89% of Dutch houses have a gas-fired boiler. All in all, residential heating contributes to some 10% of Dutch CO2 emissions.

Disconnected

At the end of 2016, the Dutch government presented its “Energy Agenda” (Dutch-language link), which indicates the policies that should lead to an almost carbon-neutral economy in 2050. With regard to emissions from buildings, the two main policies are better insulation to reduce heat demand and the replacement of natural gas by alternative fuels with lower emissions.

Currently every house or residence is still legally entitled to a connection to the gas grid. This law will be annulled and replaced by a “right to a heating connection”. New houses will not be connected to the gas grid anymore in any case. The 7 million existing houses will be gradually disconnected from the gas grid.

From 2017 on, 170,000 houses should be disconnected every year. Local authorities will play a key role in this process. They will decide for each neighbourhood, block or even individual house what the best alternative heating source is.

“The familiar, gas-fired condensed boiler will largely disappear over the next 35 years”, says Jörg Gigler, director of TKI Gas, a national gas knowledge and innovation platform set up by the government. The goal of this platform, to which 200 companies and research institutions are connected, is to support the transition of the gas sector.

Vision

So how does the Netherlands intend to heat its homes in 2050 if not by gas? The KVGN – the Royal Association of Gas Companies in the Netherlands, which includes major parties such as Shell and transmission system operator Gasunie – earlier this year presented a vision (Dutch-language link) in which it indicated how the Netherlands can get rid of its gas addiction.

Electric heat pumps can only be used in well-insulated houses

As you can see in the graph below, according to the association, demand should decrease by 40% as a result of better insulation. 10% of demand will still be met with condensed boilers, 15% with electric heat pumps, 15% with hybrid heat pumps, and 20% with district heating networks. The latter will be run partly on waste heat (70%) and partly on geothermal sources (30%).

The question is, how effective will these alternatives be in reducing CO2 emissions? And how much will they cost? We will take a look at the alternatives in turn.

Electric heat pump

If you have an electric heat pump that runs on “green” (renewable) electricity, there are no CO2 emissions. But for all heat pumps to do so, it does mean that sufficient green power needs to be available. That’s not a given.

The use of heat pumps increases demand for electricity. On average electricity demand will jump from 3500 kWh now to 5000 kWh (on the assumption of 40% lower energy use), i.e. 50%.

Currently in the Netherlands only 12% of the electricity produced is green. Over 80% of electricity comes from fossil sources (coal and gas) and the rest from nuclear power and other sources.

If the heat pump works on fossil-fuel based electricity, CO2 emissions will amount to 925 kilos on average per house. That is 40% less than if a gas-fired condensed boiler were used. In other words, the production of green power must be expanded considerably to make electric heat pumps CO2-free.

Electric heat pumps have other disadvantages. They are quite expensive – including installation and low-temperature radiators the purchase price varies between 9,000 and 19,000 euros. An electric heat pump that uses outside air is cheaper on average than an electric heat pump that uses heat and cold storage. Moreover, electric heat pumps can only be used in well-insulated houses. An electric heat pump does not deliver high enough temperatures for houses that are not well insulated.

Hybrid heat pump

The hybrid heat pump is much more affordable than its electric counterpart: between 4,000 and 8,000 euros. Its efficiency, however, strongly depends on the temperature of the outside air. If that gets below 12° C, which happens quite a lot in the Netherlands, its efficiency is strongly reduced and natural gas has to be burned, on average between 20% and 50%.

The production of green gas must be scaled up drastically. At this moment a mere 0.2% of Dutch gas is green

How much CO2 is saved with a hybrid heat pump partly depends on how much green electricity is used, and on the type of gas that is used. If green power and biogas or “green hydrogren” is used, the hybrid pump is CO2 neutral. But if 50% natural gas is burned and the pump uses “grey” electricity, emissions are some 1200 kg CO2 per year, which amounts to a saving of just 20%.

In other words, the emission reduction from hybrid heat pumps will remain limited if no additional investments are made in the production of green power and green alternatives for natural gas.

Condensed boiler

KVGN scenarios show that in 2050 just one-sixth of remaining heat demand will still be delivered by a boiler, mainly in houses that have insufficient insulation, making an electric heat pump unprofitable. In addition, these houses are often unsuitable for a connection to a heating network because they are located in areas of low building density or where there is no room left to build underground pipes. Gigler estimates that in 2050 some 1 million out of 7 million houses will still need gas, probably in combination with a hybrid heat pump.

Thus, gas will still be used in both ordinary condensed gas boilers and in hybrid heat pumps in 2050. Most of this will be “green gas”, according to Gigler. The Dutch gas industry intends to expand its production of green gas (i.e. biogas which is processed to make it suitable to be delivered in the existing system) and hydrogen considerably over the next decades. In rural areas locally produced biogas can be used.

To be able to do this, however, the production of green gas must be scaled up drastically. At this moment a mere 0.2% of Dutch gas is green.

In addition to green gas, Gigler believes hydrogen will be an important sustainable alternative for natural gas in 2050. This can be produced by converting renewable electricity into hydrogen through electrolysis. However, at this moment hardly any production of such “green hydrogen” is taking place in the Netherlands. The hydrogen currently being used in industrial processes is based on natural gas. This too then will require new investments.

Heating networks

The fourth and last alternative for the gas-fired boiler is a connection to a heating network, also called district heating. To evaluate the emissions from district heating, we need to know what source is used for heating. This can be waste heat from a power plant, factory or waste processing facility, but also geothermal heat.

The big advantage of district heating compared to a heat pump is that houses do not necessarily need to be well insulated. Existing heating networks deliver heat of some 90° C to households. As part of this heat is lost in the network, the sources must be able to supply heat at 110° C. Facilities that can do this are, for example, biomass-fired plants, waste-burning facilities, combined heat and power plants, geothermal wells and waste heat from industrial processes. If houses are well insulated, lower temperatures may be used, in which case other sources can enter the picture, .e.g. data centres or skating rinks.

As to costs, in the Netherlands the government sets a maximum price each year for heating networks, which does not exceed the price of natural gas for heating. So for consumers there are no added costs as long as this policy remains in place.

The emission reductions that can be achieved with heating networks depend on the source of the heat. Research (Dutch link) from consultancy CE Delft from 2016 shows that a heating network can reduce CO2 emissions by 45-70% compared to a gas boiler. The biggest saving is achieved if waste heat from industry is used or geothermal heat. The smallest saving occurs if the heat comes from a gas-fired CHP plant, i.e. when it is a by-product of electricity generation.

“We should only build new district heating networks in regions where we know we can connect sufficient geothermal sources in future”

But heating networks have disadvantages and limitations too. First of all not anybody can be connected to a network. That depends on the availability of heat and the distance between source and customer. “Transport losses in heating networks are a concern if transport across large distances is needed. There shouldn’t be too much distance between the source and the user to be able to deliver heat efficiently”, says Gigler. “In a province like Zuid-Holland it makes sense to build a large heating network, because there is a lot of waste heat available from industry in Rotterdam and there is a high building density. For other parts of the Netherlands this can be different.”

Another disadvantage is that there will be long-term dependency on the heat supplier. This can lead to problems if the supplier moves away or closes. Another issue with waste heat is that it’s a secondary product. This can be a problem if there is demand for heat but the primary process is not running. These limitations can be partly addressed by connecting several sources to the network.

According to Gigler, heating networks should rely primarily on the existence of geothermal sources in the region. “We should only build new networks in regions where we know we can connect sufficient geothermal sources in future”, he says. This would prevent lock-in of fossil-fuel supply sources. The locations of geothermal sources in the Netherlands are being investigated by IF Technology (Dutch link).

100% emission reduction

So what can we conclude?

Suppose that we will disconnect 170,000 houses from the gas grid per year and that alternatives are deployed as sketched by the KVGN. And suppose that everyone invests in insulation in the coming 35 years. Even then it is not certain that the ‘gas-less neighbourhoods’ will lead to 80% reduction of CO2 emissions, as the government is hoping.

In the figure below we show the emission reduction potentials discussed earlier. It shows that the total emission reduction depends on the availability of green gas, hydrogen and green electricity. Only if all heat pumps run on green power and sufficient green gas or green hydrogen is available for hybrid heat pumps and boilers can we be sure that the transition to a gas-less society delivers the results aimed for.

In short, the transition to gas-less heating is far from simple. Tailor-made solutions are necessary, and even more: additional investments in sustainable electricity generation, hydrogen and green gas.

Editor’s Note

Eline van den Ende follows the Master’s Degree program Systems Engineering, Policy Analysis and Management at the Technical University Delft. She has written this article as part of a traineeship at Energy Post.

Natural Gas News