CMS: Hydrogen projects in Romania

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An inventory by the IEA and available online totals 445 hydrogen production projects worldwide, of which around 300 are located in Europe. Of these, 124 are already operational and 54 are scheduled to come into operation before 2025. In Central and Eastern Europe, only the Black Horse project is identified, scheduled to come into production in 2030, involving four states: Poland, the Czech Republic, Slovakia and Hungary.

A multi-jurisdictional study carried out by CMS Cameron McKenna Nabarro Olswang LLP, in which Varinia Radu was one of the authors responsible for the chapter dedicated to Romania, shows that hydrogen is currently being used mainly in the chemical industry, specifically in refineries and for ammonia production. In Romania there are currently 13 industrial producers of hydrogen (all from fossil fuels), and the hydrogen market comprises of two main types of players: captive producers, which produce hydrogen for their direct customers or their own use; and by-product hydrogen resulting from chemical processes, the chlor-alkali industry.

Romgaz, the largest natural gas producer in Romania, plans to build an electricity plant that will integrate hydrogen into the production of electricity through a 200 MW natural gas power plant in Turnu Severin – Halânga. In June 2020, Romgaz and Liberty Galați, the largest integrated steel plant in the country, signed a memorandum for the construction of a gas plant alongisde wind and solar PV capacities. The aim of the 1.2 billion euro project is to develop greenfield investment projects, specifically the development of natural gas-fired electricity generation and hydrogen, to be used by the steel plant. The investment should make the Galați steel plant carbon-neutral by 2030.

Initiatives

In 2018 Romania signed the Hydrogen Initiative. By signing this proposal, Romania committed to continuing research and innovation into how it will use hydrogen as an energy source for the future. Hydrogen and its associated technologies are being explored for use in the electricity storage sector, the transport sector and in industry.

The National Hydrogen and Fuel Cell Centre (“ICSI”) develops and implements projects on new technologies (including hydrogen projects). The ICSI was a partner to the HyUnder project and has collaborated with the Joint Technology Initiative on Hydrogen and Fuel Cells Research Group and N.ERGY Group.

In 2012, the Romanian Association for Hydrogen Energy (“AEHR”) was founded. The AEHR aims to support actions related to the hydrogen economy and fuel cells, as well as the infrastructure and renewable energy associated with them. This will be achieved through: technology transfer, promoting Romanian contributions, close cooperation with international and national associations, supporting the implementation of educational policies and research and the promotion of education.

The “Choose Renewable Hydrogen” initiative currently includes companies and associations which are also active in Romania, such as EDP, Enel, Iberdrola, MHI Vestas. The initiative is expected to develop renewable hydrogen projects under the scope of the European Green Deal.

According to the Integrated National Plan in the field of Energy and Climate Change 2021-2030 (“PNIESC”), submitted to the European Commission in April 2020, Romanian authorities are considering the implementation of a number of pilot and demonstration projects to promote the use of hydrogen in the production of electricity and in the industrial sectors.

The Romanian Government has recently adopted a Memorandum initiated by the Ministry of European Funds and supported by the Ministry of Education and Research. The Memorandum proposes funding, in the next programming period (2021-2027), for Romania’s first hub dedicated to hydrogen, for research and development in respect to the use of hydrogen in transportation, district heating and nuclear energy generation, as the “fuel of the future”.

Financing

The use of pricing tools to provide incentives for low-carbon transport will be useful in helping deploy hydrogen in the transport sector in Romania. This deployment can be achieved by encouraging the purchase of “green” cars, the use of low-carbon fuels and reducing the use of cars, generally. Specific tools already implemented to achieve these objectives are represented in the application of tax reductions for green vehicles (e.g. hydrogen, methane and electric vehicles).

Hydrogen based projects may also be eligible for the Contract for Difference mechanism. This is currently being developed by the Ministry of Energy as a viable option for implementing a support scheme for the development of the new low-carbon generation sector in Romania.

The InvestEU programmed also provides support in developing infrastructure for alternative fuels: electricity, hydrogen and liquefied or compressed natural gas mixed with bio-methane (> 50%) and other low and zero emissions technologies.

Several companies that are active in wind energy production have proposed a number of storage projects to be financed by European funds, through the 10d mechanism – Modernization Fund. One of the projects, with a value of €50 million, “uses PEM electrolysers (alkaline electrolysers with proton exchange membranes – ed.) in order to balance the production of wind energy and to produce hydrogen from excess (or cheap) electricity, which will be introduced into the natural gas network or used in industrial applications for the decarbonization of industrial processes (steel industry, ammonia, petrochemical industry)”.

Legal challenges

Romania has yet not developed hydrogen specific legislation. This will be instrumental for the further deployment of hydrogen.

An amendment was made the Energy Law on 24 July 2020 in order to include hydrogen production provisions (“Law 155”). In accordance with Law 155, the general regulatory framework on hydrogen will be established by the energy regulator, ANRE. ANRE will elaborate on the technical and commercial regulations regarding the operation of a hydrogen terminal and the methodology of related tariffs, within 6 months from receiving an application to authorize the construction of the terminal. Tariffs for services provided by the hydrogen terminal operator, regarding the operation of the terminal (e.g. hydrogen storage facilities), are established by the economic operator concerned. These will be approved by ANRE and published on the operator’s own web page.

Generation Law 155 introduced the requirement for a license to be held for the commercial generation of hydrogen. Secondary legislation is soon expected which will provide further regulatory provisions in respect of licensing and the operation of hydrogen production.

Connection and distribution According to Law 155, ANRE will need to establish the conditions and standards for the injection of hydrogen into existing natural gas networks. This will facilitate hydrogen blending into the gas grid.

Transport, import and export In March 2017, the National Policy Framework for Market Development Regarding Fuel Alternatives in the Transport Sector and for the Installation of Relevant Infrastructure in Romania was established. The national legislation and policy framework do not include any specific number of hydrogen filling stations that are to be developed as demonstration projects.

In Romania, no specific legal framework has been developed regarding the design, authorization, construction and operation of hydrogen filling stations.

Regulation of hazardous activities Hydrogen is classified as a dangerous substance for transport and is included in the list of dangerous goods as per the European Agreement concerning the International Carriage of Dangerous Goods by Road (“ADR”), which has been implemented at a national level. From a legal and administrative perspective, the same regulations apply for the storage of hydrogen as the storage of other flammable and dangerous gases.

In order to promote decarbonization and the adoption of these new technologies, there will need to be a consolidation of the legal framework, intensifying dedication to research and innovation (in both state-owned and private companies), increasing and diversifying funding sources and developing educational resources, as well as supporting projects that promote the increased use of hydrogen.

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This articl first appeared in the printed edition of Energynomics Magazine, issued in March 2021.

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