Hydrogen industry moving faster than expected: Snam

The addition of hydrogen-based projects across Europe has beaten initial expectations over the past year, Italian system operator Snam said today at the virtual European Gas Conference.

But more "concrete actions" are required to bolster further industry growth, executive vice-president of Snam's hydrogen business unit, Cosma Panzacchi, said.

The expansion of the hydrogen business should pivot around demand for the energy sector, with many "top-down" projects failing across Europe in the past because of insufficient demand.

An efficient infrastructure system is required in the form of a hydrogen-ready grid, adequate to "deliver hydrogen at scale to industrial customers". Adapting the existing European gas grid for the processing and transport of hydrogen can increase the efficiency and shorten the lead time of the transition, he said.

Other challenges include the development of inexpensive compressors, measuring devices and ways of producing and storing the hydrogen.

Potential industrial users of hydrogen have raised concerns about the additional cost associated with green hydrogen — which is produced by electrolysis powered by renewable electricity — as opposed to blue hydrogen, obtained from processing methane and capturing the resulting carbon dioxide. But Snam expects the price of green hydrogen produced in southern Italy to fall over time and become competitive with the blue quality produced in Europe by 2030. The increasing availability of renewable energy sources will contribute to enabling economies of scale in the hydrogen industry, while lowering the cost of electrolysis, which accounts for 30-40pc of the total cost of hydrogen production at present, Snam said. A reduction in capital expenditure for electrolysers will provide further costs savings, Panzacchi said.

Snam has invested heavily in hydrogen for the transportation and industrial sectors.

By Jacopo Casadei