Gasunie is playing a crucial role in our country's energy transition, and Ulco Vermeulen, a member of the Gasunie’s Board of Directors until July 1, 2023, is a prominent voice in the national debate. “Electricity often takes center stage in any discussion on energy and the climate, but it only represents a fraction of the overall energy system. The conversation about fuels and resources is only just getting started. “Hydrogen, carbon storage: the scope of the energy transition is finally becoming more comprehensive.” After retiring as a board member, Vermeulen will remain involved as a consultant, with a focus on hydrogen and its role in the international community in particular. And for good reason, because Gasunie is betting heavily on hydrogen.

Nederlandse Gasunie is a 100% state-owned energy network company. Vermeulen: “Energy is a product, but it’s wholly different from sausages and BMWs. It’s fundamental for the economy and society as a whole: you can’t just leave it to the whims of the market. Energy has to be affordable, clean and reliable. In the past 15 years, one of those three elements would always be out of balance: energy would either be too expensive, too polluting, or unavailable. If you look carefully, you can see the balance shifting. At the start of the century, price was everything, prompting liberalization, globalization, and the split of Gasunie, for example. Ten years ago, the climate change debate took off, and climate concerns started outweighing the desire for cheap energy approximately five years ago. In the summer of 2021, even before the war in Ukraine, energy prices began to rise, so the past year was mostly about helping to get things back on track.” In the long run, Vermeulen believes that the climate component of energy will come to dominate, although he doesn’t make any promises, given the Dutch nitrogen crisis: “We’ve seen first-hand how periods of rapid growth can be followed by stagnation, but, with a view to CO2 emissions and rising temperatures, future generations will simply demand that we follow through. There is no other way. For Gasunie, serving society also means committing yourself to broad social welfare and focusing on the long term. The energy infrastructure must be secondary to the climate.”

"I expect our region to harvest the most energy from wind."

Mature energy system

Vermeulen sees Gasunie as a knowledge hub, with decades of experience with 80% of the country’s energy supply. “We started contemplating system integration a while ago, carefully plotting what we envisioned the system should look like in the coming decades. The first step is building a network of on-shore hydrogen pipelines, and the Dutch government has now also asked us to commit to hydrogen infrastructure in the North Sea and the link between hydrogen and electricity.” You would need a crystal ball to predict the actual energy mix of the future, he stresses: “But the role of hydroelectric power will be limited, given our onshore water resources. Solar energy, although an infinitely renewable resource, is not very efficient on the piece of earth we call home. We get 1,000 hours of sunshine a year, and a single solar panel generates just over 1,000 hours of energy per year. In other words, PV panels sit idle for about 8,000 hours a year, hardly a solid foundation for an entire country’s energy system. Wind energy is a lot more promising, especially if you set up shop in the middle of the North Sea. Worldwide, I expect that solar energy will become the most common energy source, while our region will harvest the most energy from the wind. That scenario is now gradually unfolding, with the government announcing plans to generate 50 gigawatts of wind power annually by 2040.” Vermeulen endorses the government’s plans: “It’s the one and only way forward for the Netherlands.” Setting up an integrated energy system is more complex than rolling out a gas grid, he explains: “While it’s still a massive project, it’s one-dimensional. The new energy system will become weather-dependent, so you will have to mold solar energy, wind energy and electricity into a mature, comprehensive system that can power society, with all the necessary conversion infrastructure and storage systems.”

Gasunie has adopted a four-track approach to the energy transition: heat, green gas, hydrogen, andcarboncapture and storage, Vermeulen explains. “Hydrogen and CCS (carbon capture and storage, ed.) are the two workhorses, while heat and green gas should be seen as auxiliary engines. We think we’ll be able to produce 2 billion m3 of green gas in the Netherlands, which would only account for a few percent of our total energy needs. It’ll never be enough to significantly cut CO2emissions, but it may just help the few million homes that can’t go fully electrical to be climate neutral nonetheless. The same goes for heat. Hydrogen will become incredibly important five, ten or fifteen years from now, but the quantities will be very limited for the next three to five years. With a view to achieving the 2032 goals, CCS is the workhorse that you can get up and running first. It’s not the most elegant solution, and you’d prefer a fully circular system, but if Northwest Europe wants to reduce its CO2emissions quickly, CCS will have to be part of the solution. For now, we’re fully committed to CCS and hydrogen.” All self-respecting companies worldwide are now working on hydrogen, Vermeulen argues. “There is a lot of energy and money involved and companies have embarked on a rat race for control over new energy sources. That being said, the electrolyzer is yet to be developed and costs will have to be halved before hydrogen becomes feasible, affordable and scalable.” Exactly how long that will take is the big question that everyone’s trying to answer. “Time and time again, I’m overwhelmed by the speed of change. Things move at lightning pace.”

"In the new world, we need to pioneer more, and stick our necks out more often."

Reliable pioneering

Gasunie, in Vermeulen's words, specializes in reliability, security of supply and safety: “I’m not too proud to admit that these are three things we do well. In the new world, we need to pioneer more, and stick our necks out more often. We started doing just that about ten years ago, but we’ll also have to keep playing to our strengths.” Gasunie’s pioneering activities are not run by startups outside the company proper, nor have they been fully internalized: "As a board of directors, we decided to strike a balance between the two: we opted against setting up entirely new, innovative companies because we wanted to stay in the loop, while also ensuring that new initiatives are given sufficient latitude. Our pioneering branches are still fully integrated into the company, but they have enough autonomy to chart their own course. We've had an Energy Transition group, a Hydrogen Backbone group, and now we have a North Sea group and a Hydrogen Import group.” Vermeulen expects data technology to play a role of increasing importance in future processes. “We are on the eve of tremendous growth and development in the data-driven coordination between hydrogen and electricity. There are lots of questions to be answered: where should you locate switches, how much should you invest, and how will the market and the government interact and cooperate? An entirely new field will emerge, in which data will play a key role, because the supply side relies heavily on the weather, while demand rests on market needs. And there’s countless other factors to consider, too, like price incentives.”

To optimally advance the energy transition, Gasunie will have to make the right investments at the right time. “It’s quite a puzzle. We can’t tell when hydrogen will become abundant, but we will need to build infrastructure before that time. Fortunately, hydrogen can be transported through the same pipelines as gas, and building infrastructure for gas is 10 times cheaper than for electricity, which makes taking on a little risk a lot less scary. Besides, hydrogen will primarily be used by industry first, so we don’t need nationwide coverage right away. We will need about five years to build a pipeline backbone. We’ve invested € 2 million, which puts it at the lower end of transition projects.” The Netherlands will have to seek out more international partnerships to set up robust energy chains, Vermeulen points out. “Our country has built an outstanding logistics position for fossil energy. We can do the same for hydrogen. We have the North Sea, a great starting point. We have the Port of Rotterdam, we have Eemshaven, we have gas infrastructure that is compatible with hydrogen. The Netherlands can keep playing an important role in Europe’s new energy system.”

About Ulco Vermeulen

Ulco Vermeulen has held various strategic and commercial positions at Gasunie since 1990, where he was responsible for exporting gas to Germany and selling gas to Dutch energy companies. He led Gas Transport Services, serving successively as Director of Participations and Development, Director of the first LNG terminal in the Netherlands, and Director of Participations & Business Development. Since May 1, 2016, he had been a member of Gasunie's Executive Board, before being succeeded by Hans Coenen on April 1.

Ulco Vermeulen plays a crucial part in the social energy debate in the Netherlands and is the chairman of Groen Gas Nederland. He also chairs the Dutch Top Consortium for Knowledge & Innovation Gas, in which companies, knowledge institutions and government agencies work together to achieve sustainable growth and involve the entire gas sector in the energy transition and new innovations.