European gas operators expand hydrogen plan

  • Market: Hydrogen, Natural gas
  • 04/13/21

A group of Europe's gas system operators have substantially expanded a proposal to build a continent-wide hydrogen network using repurposed natural gas pipelines and new infrastructure.

Industry association European Hydrogen Backbone (EHB) has proposed building a 11,600km hydrogen transportation network by 2030, which would expand to 39,700km across 21 European countries by 2040. This is enlarged from last year's proposal for a 6,800km network by 2030 and 23,000km by 2040, connecting 10 European countries.

The previous plan was concentrated in the Netherlands, Germany, Belgium and France, but the newly-proposed network widens the project's reach to the UK and Ireland, much of central and eastern Europe, Finland, Estonia and Greece.

About 69pc of the proposed network would consist of repurposed existing natural gas infrastructure, with the remainder consisting of newly-built pipelines used to connect new offtakers and located in countries with small gas grids, EHB said. This is down from 75pc in the previous version of the proposal. A dedicated network is needed to integrate planned renewable electricity generation and to develop a liquid cross-border hydrogen market, EHB said (see planned pipelines table).

The network would eventually incorporate major existing gas infrastructure, including salt caverns and aquifer storage sites across the continent (see country-level table).

BBL or Interconnector to link UK

The UK's network would be connected to mainland Europe by retrofitting the Interconnector — which connects to Belgium — or the BBL, which connects to the Netherlands. And one of the two pipelines connecting Ireland and the UK at Moffat could be converted to carry hydrogen. The plan foresees four of the UK's five major industrial hubs connected to hydrogen production clusters by 2030 through a phased re-purposing of existing infrastructure.

EHB also proposed converting a number of pipelines that connect EU markets with gas exporters, including at least one of the five parallel lines that compose the Transmed route which connects Italy and Libya, the two undersea connections between Algeria and Spain, one of the pipelines used to deliver Norwegian gas to mainland Europe and the Trans-Adriatic Pipeline (Tap) — which only started up this year and delivers Azeri gas sent to Europe through Turkey. But this would likely require suppliers to produce hydrogen domestically for delivery to Europe, either through steam reformation of methane or through electrolysis, primarily powered by renewable electricity sources.

Major existing gas transit routes are also included in the proposal. The large-diameter Tag pipeline passing to Italy from Slovakia as well as connections through the Czech Republic and Slovakia could be repurposed if gas flows "drop significantly", freeing up one of two parallel lines, EHB said.

A "much more dynamic picture" has emerged for Germany compared with the previous proposal, the association said. Natural gas and hydrogen may compete for the same pipeline infrastructure by 2035, with decisions to depend largely on political support for the scale-up of hydrogen and general market developments of hydrogen and natural gas, EHB said.

Some operators mentioned Russia as a possible hydrogen source. The country yesterday said it plans to achieve a 20-25pc share of global hydrogen trading by 2035.

The proposal also incorporates new infrastructure, including hydrogen produced by excess renewables output on "energy islands" offshore the Netherlands, Germany and Denmark and a new subsea pipeline connecting Germany, Sweden, Finland and Estonia.

The expanded network would allow pipeline imports from Europe's eastern and southern neighbours — including Ukraine — as well as imports of liquid hydrogen at Europe's main ports, EHB said. And extending the network through central and eastern Europe would allow renewables to play a larger role in a largely coal-based power mix and enable hydrogen to decarbonise heavy industry concentrated in the region.

But the design of the network and timeline depend on market conditions for hydrogen and gas, as well as the introduction of a "stable hydrogen framework", the group said. Hydrogen supply and demand and its increasing integration in the energy system may lead to alternative or additional routes, as well as a shift in the timeline forward or backward, EHB said.

Investment costs down, transport costs up

The envisaged hydrogen network by 2040 would cost €43bn-81bn, EHB said. While up from the €27bn-64bn previously anticipated, the cost per kilometre is lower as the proposal now incorporates smaller diameter pipelines which are cheaper to repurpose.

But smaller diameter pipelines have higher operating costs, increasing the average transport cost to €0.11-0.21/kg hydrogen. This is attractive and cost-effective for long-distance transportation, taking into account an estimated future production cost of €1-2/kg, EHB said (see investment costs, project costs tables).

Country-level, selected proposed H₂ commitments
CountryEmission commitments / H₂ plans or possible outcomes
AustriaBy 2030, 100pc renewable electricity
By 2030, blending to/from existing cross-border infrastructure
By 2035, bi-directional repurposing of one TAG string
By 2040, additional interconnector to Germany for Ukrainian H₂
By 2040, carbon neutrality
BelgiumBy 2040, demand expected to exceed production
Czech RepublicBy 2035, possible transit to Germany from Slovakia
By 2035, possible transit to Germany from Germany via Gazelle pipeline
DenmarkBy 2030, 70pc emisssions reduction
In 2030, two "energy islands" of 2GW each
In 2030, 3GW electrolysis capacity
By 2040, one island expanded to 10GW, offshore H₂ production
FranceIn 2030, 6.5GW electrolysis capacity
By 2040, "mature" network with three interconnectors with Spain
Most pipelines would be repurposed
GermanyIn 2030, H₂ demand of 90-110TWh
Imports from Netherlands, Czech Republic
UKBy 2030, 5GW H₂ production capacity
By 2030, 40GW offshore wind capacity
By 2030, four low-carbon industrial clusters
By 2035, all five industrial clusters potentially connected
By 2040, repurposed connection to Ireland
Most pipelines would be repurposed
GreeceBy 2040, two main industrial clusters connected by new H₂ pipelines
Plans for 7GW of wind capaciy and 8GW of solar capacity
Possible export connection via TAP or south-east Europe
HungaryBy 2030, 6GW solar capacity
By 2035, possibility of mature work with six interconnections
By 2035, a transit country for Ukrainian H₂
By 2050, carbon neutrality
IrelandBy 2030, 5GW offshore wind capacity
By 2040, reconfiguration of Dublin gas network
ItalyBy 2030, repurposing of pipelines enabling import via Tunisia
By 2035, onward connnection to Austria, Slovenia
By 2040, possible interconnection with Switzerland
NetherlandsBy 2027, first 'backbone' of repurposed pipelines available
By 2030, 10-15GW network capacity
By 2050, 180GW offshore wind capacity
PolandBy 2030, 2GW electrolyser capacity
By 2030, 5.9GW offshore wind capacity
By 2040, 11GW offshore wind capacity
Post 2040, all industrial clusters connected
Repurposing of existing pipelines difficult due to gas demand projections
SlovakiaTransit market for Ukrainian-sourced supply
By 2035, repurposing of one existing pipeline from Ukraine
SpainBy 2030, 4GW electrolyser capacity
Long-term H₂ production and supply ambition
By 2035, connection to France, north Africa
By 2040, additional connection to France
Estimated project costs
Cost scenarios
CapexLowMediumHigh
Pipeline capex (small, new)€mn/km1.41.51.8
Pipeline capex (medium, new)€mn/km2.02.22.7
Pipeline capex (large, new)€mn/km2.52.83.4
Pipeline capex (small, repurposed)€mn/km0.20.30.5
Pipeline capex (medium, repurposed)€mn/km0.20.40.5
Pipeline capex (large, repurposed)€mn/km0.30.50.6
Compressor station capex€mn/MWe2.23.46.7
Assumptions
Weighted average cost of capital%5-75-75-7
Operations and maintenance (ex. electricity)€/yr as % of capex0.8-1.70.8-1.70.8-1.7
Electricity price€/MWh405090
Depreciation (pipelines)yrs30-5530-5530-55
Depreciation (compressor stations)yrs15-3315-3315-33
Planned hydrogen infrastructure, EHB*km
RepurposedNew
Pipeline diameter
Small (<28in, <700mm)3,172.01,586.0
Medium (28-37in, 700-950mm)11,498.55,154.5
Large (>37in, >950mm)12,688.05,551.0
Total27,200.012,450.0
*Total differs from elements due to rounding
European Hydrogen Backbone costs, 2040 bn
LowMediumHigh
Pipeline cost33.041.051.0
Compression cost10.015.030.0
Total investment cost43.056.081.0
Operational expenditure (/yr)0.81.11.8
Electricity costs (/yr)0.91.12.0
Total operatonal cost1.72.23.8

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