European gas companies prepare pipelines for the hydrogen highway

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Nov. 18 (Reuters) – As world leaders struck a deal last week to slow climate change, gas engineer Michele Ricciardi tackled a practical problem: how thousands of miles of pipelines across Italy and the ‘Europe can safely transport hydrogen.

The Italian is at the forefront of efforts by gas carriers to prepare for a low-carbon future: if fossil fuels are phased out in the decades to come, natural gas companies believe it won’t. shouldn’t mean that the infrastructure that transports them has to disappear too. They want to reuse pipelines to transport zero-emission hydrogen after countries wean themselves off natural gas.

The effort of nearly two dozen companies reflects the accelerated pace of planning underway in the global oil and gas industry, from drillers to refiners, eager to adapt as governments and activists step up pressure to reduce greenhouse gases. Besides practical preparation, the transition puts companies in competition with other sources of energy for financing, even as they invest billions of euros in markets they cannot foresee.

The hydrogen project – involving the Italian Snam SpA (SRG.MI), the Spanish Enagas SA (ENAG.MC) and the German Open Grid Europe (OGE) among others – would draw on large solar parks as far as the Sahara Desert to create the energy needed to produce hydrogen from water.

This fuel would then be transported to the industrial heart of Europe along the existing pipeline network – a 198,500 km (123,300 mile) network that, if unraveled, could circle the equator four times. .

“Once we have the Sahara sun in German factories (…) it’s like the Roman roads we still walk on today,” Ricciardi boss Marco Alvera, managing director, told Reuters. by Snam. “This is forever.”

The companies want to form a European Hydrogen Backbone (EHB) to prevent pipelines from rusting and becoming what the industry calls “stranded assets”. They calculate that about 69% of existing pipelines can be converted up to 81 billion euros ($ 94 billion).

The project is one of hundreds of plans to build a hydrogen economy, which the European Union says could involve investments of up to 460 billion euros by 2030.

A hydrogen supply network could strengthen Europe’s energy security: the bloc currently depends on natural gas to meet 28% of its energy needs, with a third of the gas coming from Russia. Politicians recently accused Moscow of curbing supplies as gas prices hit record highs. Russia says it has fulfilled all of its contractual requirements.

“I think it’s a brilliant idea,” Frans Timmermans, EU climate action commissioner, told Reuters. Adapting existing natural gas networks to the transport of hydrogen accounts for around 25% of the cost of building new infrastructure for renewable energy, he said.

But the European Union does not provide money for the business – it has to come from industry or national governments. It will therefore need political and industrial support.

To be successful, gas networks must be able to direct 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 volumes large enough to be affordable.

Eventually, if green hydrogen can be supplied in large quantities, the automotive industry and home heating suppliers may also start to use it. But it wouldn’t be before 2030, according to studies.

Gas network companies say their main challenge now is the fact that Europe does not have a regulatory framework to adapt the network. “The regulation must define hydrogen as a gas that can be transported and used in the same way as natural gas,” said Maria Sicilia, strategy director at Enagas. If the regulations set standards, she said, networks can be interconnected.

VOLATILITY

Hydrogen is the most abundant element in the universe, mainly related to the oxygen in water. But it is also one of the most combustible. In the past, dozens of hydrogen blimps that have exploded or burned down, including the Hindenburg fire of 1937, have convinced many that hydrogen is very risky.

Snam and other companies say their industry has decades of experience, having built the infrastructure in the first place, so hydrogen doesn’t need to be more dangerous than other fuels in use today. . If hydrogen escapes into the open air, it increases and its concentration quickly drops below the explosive level, according to Zukunft Gas, a German gas lobby.

From his office near Snam’s gas flow critical room at the Milan headquarters, Ricciardi and his team have spent the past three years combing through Europe’s largest gas transmission network to ensure it can handle gas. Snam has said it is ready to spend more than 3 billion euros to replace hydrogen-compliant gas pipelines.

“We’ve been transporting natural gas for 80 years,” says Ricciardi, whose job it is to set standards that the industry can accept to make pipelines safe. “Now we have to do it with hydrogen.”

Flammability is just a problem. Compared to natural gas, hydrogen also leaks more easily because its molecules are smaller. Its flow patterns are different and it even attacks certain grades of steel, making them brittle.

The changes needed will vary depending on the gas network, but companies should carefully examine the pipes to make sure the steel is sound and the joints are airtight. Compressor stations along the way may need to be adapted and facilities will be fitted with sensors to track leaks, then ventilate and divert them.

Oil and other industries already use hydrogen as a raw material – Germany’s supply is about a tenth of its electricity consumption, mostly in steel and chemicals. But this gas is made from fossil fuels and is known as “gray” hydrogen. [nL4N2S72U5].

The gas pipeline network already includes four lines connecting Algeria, Morocco, Libya and Tunisia with Spain and Italy.

“The problem now, of course, is that it’s filled with natural gas,” said Ad van Wijk, professor of future energy systems at the Technical University of Delft. But “the backbone is already in place,” he said. He advocates linking Europe and Africa to make the European energy system work with 50% renewable energy and 50% green hydrogen.

Cost is another concern. So far, “green” hydrogen has been produced mainly for experimental projects. It costs four to five times more than the gray variety to produce.

To reduce this, industry and consumers must increase production and demand.

Alvera de Snam says solar panels in southern Spain, the Sahara and parts of the Middle East can provide cheap renewable electricity to power electrolysis plants that pump hydrogen through pipes reused. Spain is already one of the cheapest places in Europe to generate renewable electricity, according to the industry association Solar Power Europe, and costs are expected to come down.

Meanwhile, the companies say they can also transport gas produced from fossil fuels, but the resulting emissions of which are captured – known as “blue” hydrogen.

Thomas Deser, senior portfolio manager at huge German fund Union Investment, is skeptical. He believes that “before the middle of the decade, without subsidies, you cannot make money by producing green hydrogen”.

RIVAL CLAIMS

The hydrogen backbone is now competing for state money. Germany is the biggest energy consumer in Europe. Berlin has pledged 9 billion euros until 2030 to develop a green hydrogen industry, including two billion to boost imports from partner countries such as Morocco, Chile, Saudi Arabia and the Australia.

But electricity is another rapidly growing source of relatively clean energy, and Germany’s electricity transmission grid is also in increasing demand. Germany plans to spend € 1 billion by 2025 on electric vehicle charging infrastructure, along with hundreds of millions more on the purchase of bonuses and tax breaks.

The country is home to the world’s largest automaker by volume, Volkswagen AG, based in Wolfsburg. While automakers are developing prototypes of hydrogen fuel cells alongside battery-powered cars, European automakers don’t see hydrogen as their first choice of energy.

VW has already committed billions of euros to battery-electric vehicle technology read more. He told Reuters he believed the changes in the mobility power supply had to take place in high volumes. Herbert Diess, CEO of VW, tweeted in May that “it is proven that the hydrogen car is NOT the climate friendly solution”, saying that “electrification has prevailed in traffic”.

Nonetheless, a new demand for hydrogen is emerging: Globally, 359 large-scale projects had been announced by July 2021, according to the Hydrogen Council and McKinsey consultants, who said 80 % of new initiatives were in Europe.

Snam says it has successfully tested a mixture of natural gas and 30% hydrogen in fire furnaces at an Italian steel company.

In Milan, Ricciardi says increasing mixing rates is tricky, so standards are crucial.

“We are working on the new rulebook to make sure the network is up to par,” Ricciardi said. “There is a lot to do on it.”

($ 1 = 0.8648 euros)

With reporting by Vera Eckert in Frankfurt, Stephen Jewkes in Milan and Isla Binnie in Madrid; Edited by Veronica Brown, Richard Valdmanis and Sara Ledwith

Our Standards: The Thomson Reuters Trust Principles.


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