Industrial energy hubs

A solution for the Dutch industry to keep its short-term sustainability goals within reach
Energy Hubs integrating smart grids and energy storage for optimized local energy systems
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MatthewDoe

I am the lead consultant for industrial flexible power solutions and decarbonisation. As the energy system transitions a multitude of challenges arise, from grid congestion to economic viability. By embracing the complexity and applying new concepts, opportunities open up to empower industry towards a sustainable future.
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GeorgeKoolman

As a lead consultant for industrial energy hubs, I specialize in helping industries meet their strategic needs by navigating the challenges of grid congestion and adopting new forms of energy. In a world where business continuity for industries heavily relies on decarbonizing their sites while maintaining low utility costs, decision-makers require both technical and strategic approaches to move forward effectively.

Industrial Energy Hubs: a solution for the Dutch industry to keep its short-term sustainability goals within reach

Despite the Dutch industry ambitious plans for CO2 reduction, namely a target of 10 GW electrified processes by 20301, the realisation of these is not on track. For example, a queue of around 5 GW of grid capacity requests is building up since 2024 and most grid expansions are not expected until after 20302 . Moreover, a recent survey of 330 companies revealed that more than 73% of sustainability plans cannot be realised due to a lack of heavier grid connections or hydrogen infrastructure3. This delay is also evident in the boardrooms of industrial parties, where decision-making on electrification projects is becoming increasingly complex and is accompanied by organisational uncertainties. All this constitutes a worrying development that threatens to block the sustainability of industry.

Energy hubs are the sustainable solution of choice for short and long-term impact

By strategically coordinating different energy building blocks, energy hubs optimise the use of existing grid capacity. This makes them essential for addressing local grid congestion and achieving the targets set for 2030. They serve a dual purpose for the industry: in the short term, energy hubs offer a direct solution to grid congestion, while in the long term, they can play a key role in ensuring the security of energy supply within an increasingly variable grid environment.

Developing energy hubs in the industry is a complex and capital-intensive process that requires careful decision-making and organisation before implementation is possible. To create viable energy hub models, our research has identified key recurring factors that must be considered:

  • Generation and storage only are often not enough: collaboration and optimization of existing processes and utilities are essential.
  • Flexibility in electrification: leverage the adaptability of electrification to align with new alternative grid rights.
  • Consider the nitrogen emissions and available space: evaluate the impact of nitrogen emissions and spatial constraints as crucial determinants. 

Industrial energy hubs go beyond combining generation and storage

Industrial hubs are all about multimodality, with heat and molecules such as hydrogen playing a key role alongside electricity. For companies with high energy demands, the emphasis is on the intelligent use of processes, collaboration with nearby businesses, and optimising utility use with shared infrastructures4. For example, by connecting to nearby networks, such as steam, heat, or hydrogen grids, companies can meet their heat or electricity needs in alternative ways. This approach also promotes cooperation for additional heat integration or energy sharing, allowing better use of existing capacity.

Flexibility of energy hubs are a great match with alternative grid rights (ATO forms)

The electrification of industrial processes also introduces opportunities for flexibility. By linking energy hubs to industrial processes, new forms of contracts for flexible transmission capacity allow them to make optimum use of the grid during off-peak hours.

Additionally, capacity can be made available for other parties by feeding electricity back into the grid during periods of congestion. A so-called 'congestion reliever5 is therefore first in line for obtaining capacity in congested areas. This enables industrial parties such as Sappi6 to carry out further electrification despite grid congestion. With new contract forms such as the capacity limiting contract (CBC) and the flexibility of energy hubs, industrial electrification plans and large electricity demands can still be realised, even in areas where there is grid congestion.

Emissions and space are important determining factors for feasibility

In addition to grid congestion, the Netherlands faces challenges with limited space and nitrogen emission issues. Although energy hubs can help meet grid capacity requirements, a back-up energy supply, often provided by gas engines, is necessary to ensure reliable energy availability. However, the use of fossil fuels results in nitrogen emissions, which can be problematic near sensitive ecological areas. Depending on the situation, a maximum of 5% to 30% of the energy demand will still have to rely on a steady generation source (i.e. gas turbines). These nitrogen emissions can be minimised by using catalysts or blending with alternative fuels such as hydrogen or methanol, for example. 

Well-informed investment decisions are crucial for electrification projects

Grid congestion is increasingly threatening business continuity in industry, forcing decision-makers and investors to make strategic choices based on technical issues. Due to the industry's scale and complexity, an approach that extends beyond traditional generation and storage is necessary, incorporating process-related solutions and other strategic decisions within the organization. Furthermore, these investment decisions should be informed by independent and objective advice, supported by technical results linked clear decision-making criteria.

Energy hubs provide a promising solution to the major sustainability challenges facing industry. Through smart collaboration, flexibility, and well-informed decision-making, we can accelerate industry sustainability and keep the targets for 2030 within reach.

Want to know more? Contact our experts or continue reading about Energy Hubs and learn how we can help your energy resilience by making new energy hubs a reality.

References:
1 https://topsectorenergie.nl/documents/28/TKI_Energie__Industrie_-_Routekaart_Elektrificatie_in_de_Industrie_-_211001.pdf
https://energeia.nl/netbeheerders-kondigen-ook-in-zuid-holland-congestie-aan/
https://energeia.nl/vergroening-lokale-industrie-stokt-op-gebrek-infrastru
https://www.portofrotterdam.com/nl/nieuws-en-persberichten/eerste-paal-uitbreiding-botlek-stoomnetwerk-een-feit
wetten.nl - Regeling - Netcode elektriciteit - BWBR0037940 – Annex 22
https://www.enexisgroep.nl/nieuws/meer-ruimte-op-het-elektriciteitsnet-door-uniek-contract-tussen-papierfabrikant-sappi-en-enexis/

 

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