Companies
Companies
The Enagas logo can be seen on March 18, 2016 at the headquarters in Madrid, Spain. (Photo: Reuters / Andrea Comas)
When the heads of state and government were drafting a deal to slow down climate change last week, gas engineer Michele Ricciardi was grappling with a practical problem: like thousands of miles of pipelines through Italy and Europe, hydrogen safely.
The Italian is at the forefront of gas companies’ efforts to prepare for a lower carbon future: if fossil fuels phased out in the decades to come, natural gas companies shouldn’t mean the infrastructure they run transported, also has to go. They want to repurpose pipelines to carry zero-emission hydrogen after countries wean themselves from natural gas.
The efforts of nearly two dozen companies reflect the accelerated planning pace in the global oil and gas industry, from drills to refineries, eager to adapt as governments and activists increase pressure to reduce greenhouse gases. In addition to the practical preparation, the changeover puts companies in competition with other energy sources for financing, even if they invest billions of euros in markets that they cannot predict.
The hydrogen project, in which Italy’s Snam SpA, Spain’s Enagas S.A. and Germany’s Open Grid Europe (OGE) would use huge solar parks as far as the Sahara desert to generate the energy needed to produce hydrogen from water.
This fuel would then run along the existing grid routed by natural gas pipelines into Europe’s industrial heartland – a 198,500 km (123,300 miles) long network that, if untangled, could circling the equator four times.
« Once we have the Saharan sun in German factories … it’s like on the Roman roads we still walk on today, « Ricciardi’s boss Marco Alvera, CEO of Snam, told Reuters. « It’s forever. »
The companies want to create a European Hydrogen Backbone (EHB) to prevent the pipelines from rusting into stranded assets, which the industry calls. They calculate that around 69 percent of the existing pipelines can be upgraded for up to 81 billion euros (94 billion US dollars).
The project is one of hundreds of plans to build a hydrogen economy that, according to EU data, are up to 2030 could include investments of up to 460 billion euros.
A hydrogen supply network could contribute to Europe’s energy security: The block currently covers 28 percent of its energy needs with natural gas, a third of the gas from Russia. Politicians recently accused Moscow of holding back supplies when gas prices hit record levels. Russia says it has met all of its treaty requirements.
« I think it’s a brilliant idea, » Frans Timmermans, EU commissioner for climate protection, told Reuters. Adapting existing natural gas networks to transport hydrogen accounts for around 25 percent of the cost of building a new renewable energy infrastructure, he said.
But the European Union does not provide any money for the company – industry has to do that or come to national governments. So it will need political and industrial support.
To be successful, gas grids must be able to route the hydrogen mixed with natural gas to customers who can use it – such as steelmakers, chemical companies and refineries. The supply must be secure and the quantities must be large enough to be affordable.
At some point – if green hydrogen can be made available in large quantities – the auto industry and heating suppliers could also begin with it. But that wouldn’t be before 2030, studies show.
Gas network operators say their biggest challenge now is that Europe does not have a legal framework for adapting the network. « The regulation must define hydrogen as a gas that can be transported and used in a similar way to natural gas, » said Maria Sicilia, strategy director at Enagas. If the regulation sets standards, the networks could be networked.
Hydrogen is the most common element in the universe, which is mostly bound to oxygen in water. But it’s also one of the most flammable. In the past, dozens of hydrogen airships that exploded or burned, including the 1937 Hindenburg fire, convinced many that hydrogen was a high risk.
Snam and other companies say their industry has decades of experience and built the infrastructure primarily so that hydrogen does not have to be more dangerous than other fuels used today. If hydrogen leaks into the open, it rises and its concentration rapidly drops below the explosion limit, according to the German gas lobby Zukunft Gas We have combed Europe’s largest gas transmission network piece by piece over the last three years to ensure that it can handle the gas. Snam is ready to spend more than 3 billion euros on replacing hydrogen-compliant gas pipelines.
« We have been moving natural gas for 80 years, » says Ricciardi, whose job it is to establish standards that the industry can agree on to make the pipes safe. « Now we have to do it with hydrogen. »
Flammability is only a problem. Compared to natural gas, hydrogen escapes more easily because its molecules are smaller. Its flow patterns are different and it even attacks some types of steel and makes them brittle.
The changes required will vary depending on the gas network, but companies need to meticulously examine the pipes to make sure the steel is intact and the seals are airtight are. Compressor stations along the way may need to be adjusted, and installations will be fitted with sensors to track leaks and then vent and divert.
The oil and other industries are already using hydrogen as a raw material – Germany’s supply is roughly a tenth of its own Electricity consumption, mainly in steel and chemicals. However, this gas is made from fossil fuels and is known as « gray » hydrogen [nL4N2S72U5].
The pipeline network already comprises four lines connecting Algeria, Morocco, Libya and Tunisia with Spain and Italy.
» The problem now, of course, is that it is filled with natural gas, « said Ad van Wijk, Professor of Future Energy Systems at Delft University of Technology. But « the backbone is already there, » he said. He advocates connecting Europe and Africa in order to run Europe’s energy system with 50 percent renewable energy and 50 percent green hydrogen.
The costs are another concern. So far, “green” hydrogen has mainly been produced for experimental projects. It costs four to five times more to make than the gray variety.
Alvera von Snam says solar panels in southern Spain, the Sahara and parts of the Middle East can provide cheap renewable electricity for electrolysis plants that pump hydrogen into the reused pipes. Spain is already one of the cheapest locations in Europe to generate electricity from renewable energies, according to the industry association Solar Power Europe, and costs are expected to decrease However, the resulting emissions are intercepted – known as « blue » hydrogen.
Thomas Deser, Senior Portfolio Manager at the large German fund Union Investment, is skeptical. « Before the middle of the decade, you couldn’t make money producing green hydrogen without subsidies, » he believes.
The hydrogen backbone is now competing for government funding. Germany is Europe’s largest energy consumer. Berlin has pledged 9 billion euros for the development of a green hydrogen industry by 2030, including two billion for imports from partner countries such as Morocco, Chile, Saudi Arabia and Australia.
But electricity is also a rapidly growing source of relatively clean electricity, and there is also increasing demand for the power transmission network in Germany. Germany wants to spend 1 billion euros on the charging infrastructure of electric vehicles by 2025, plus hundreds of millions more for purchase bonuses and tax breaks.
The country is home to the world’s largest-volume automobile manufacturer, Volkswagen AG, based in Wolfsburg. While car companies are developing hydrogen fuel cell prototypes in addition to battery cars, European car manufacturers do not see hydrogen as their first choice.
VW has already committed billions of euros for battery-based electric vehicle technology. It told Reuters it believed that changes in mobility need to happen in large quantities. VW boss Herbert Diess tweeted in May that « the hydrogen car is demonstrably NOT the climate-friendly solution ».
Nevertheless, there is a new demand for hydrogen: According to the Hydrogen Council and the consulting firm McKinsey, 359 major projects had been announced by July 2021 80 percent of the new initiatives in Europe concerned.
According to his own statements, Snam has successfully tested a mixture of natural gas and 30 percent hydrogen to fire furnaces at an Italian steel company.
« We are working on the new set of rules, to make sure the network is up to the task, « said Ricciardi. « There is a lot of riding. »
This service is not intended for people residing in the EU. By clicking « Subscribe » I consent to receive news and promotional materials from Mediacorp and Mediacorp’s partners.
We know switching browsers can be a chore, but we want your experience with CNA to be fast, safe, and as good as possible.
To continue, upgrade to a supported one Browser or download the mobile app for the best experience.
Keywords:
