Pipe or cable? Companies split on best way to transport European energy

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Ambitious plans to construct a €2.5bn hydrogen pipeline below the ocean between Spain and France are exposing divisions amongst companies over the best way to transport energy from southern Europe to the continent’s northern industrial heartland.

The EU and a few large energy firms are betting on “green” hydrogen — produced from water utilizing renewable energy — as a long-term answer to pure gasoline shortages and a way to speed up cuts in greenhouse gasoline emissions.

But whereas France, Spain and Portugal are backing the long-distance export of the clean-burning gasoline through undersea pipeline, some enterprise leaders argue that it’s electrical energy that must be exported so it may be used to make hydrogen shut to the place it will likely be used, notably German industrial hubs.

Green hydrogen’s potential is unproven as it isn’t but produced on a commercially helpful scale. However, advocates say it’s going to ultimately be burnt in massive volumes to produce energy to run factories, vans and ships, and also will function a chemical feedstock and energy retailer.

If they’re proper, the talk over transporting the gasoline or its derivatives round Europe will go an extended way to figuring out which of the businesses investing in hydrogen revenue essentially the most — and which lose out.

Cepsa, Spain’s second-biggest oil firm by income, has aligned itself with the Barcelona-Marseille pipeline plans. It struck a take care of the port of Rotterdam in September to create a “green hydrogen corridor” to carry the gasoline from Spain — which desires to develop into Europe’s photo voltaic superpower — to northern Europe.

The hall will initially, from 2027, be a transport route as Cepsa plans to convert inexperienced hydrogen into ammonia then transport it by boat from the Spanish port of Algeciras. But Maarten Wetselaar, Cepsa chief govt, informed the Financial Times the corporate would “absolutely” use the undersea pipeline, which is due to be accomplished by 2030. “When the pipeline is there and big enough, it’s easy for us to scale up,” he mentioned.

The inexperienced hydrogen will come from deliberate Cepsa vegetation in Campo de Gibraltar and Palos de la Frontera that can produce up to 300,000 tonnes of gasoline a yr. They will price the corporate a complete of €3bn and be powered by photo voltaic and wind energy services on which it’s going to spend one other €2bn. Hydrogen might be carried from the vegetation to Barcelona by a home pipeline community nonetheless being deliberate by Enagás, Spain’s nationwide gasoline grid operator. To attain Germany by pipeline, France would additionally want to construct a community operating north from Marseille.

The EU goals to produce 10mn tonnes of renewable hydrogen by 2030 and match it with the identical quantity of imports, in accordance to plans for REPowerEU, an energy transition fund.

Iberdrola, Spain’s greatest energy firm, can also be investing in hydrogen manufacturing however has taken an opposing place on the undersea pipeline.

“The most efficient way to produce hydrogen is locally, transporting the green electricity needed to make it from elsewhere, if necessary,” mentioned Ignacio Galán, govt chair.

The argument towards hydrogen pipelines is that they’d price greater than pure gasoline pipelines and entail large engineering and security challenges as a result of the expertise for long-distance transportation of the gasoline, which is extremely flammable, doesn’t but exist.

Iberdrola’s investments assume hydrogen might be used primarily by heavy trade close to the place it’s made. It owns one of many few services in Spain that’s already producing the gasoline, albeit on a trial foundation. The set up in Puertollano, Castile-La Mancha, features a 100MW photo voltaic array that powers an electrolyser to separate hydrogen from water, then sends it to an adjoining plant the place one other firm, Fertiberia, makes use of it to make fertiliser.

For Germany, Iberdrola’s imaginative and prescient dictates that the best way to safe hydrogen provides could be to produce the gasoline itself utilizing electrical energy generated by renewables. This might embody energy despatched by cable throughout France from Spain, which desires to capitalise on its sunny climate to produce low-cost, ample renewable energy.

“This is why we need more electricity interconnections and more reinforcement of electricity grids,” mentioned Galán, who has beforehand echoed widespread frustration in Spain over the nation’s restricted cross-border hyperlinks with France, which has proven little curiosity in having extra.

Portugal’s prime minister Antonio Costa, European Commission president Ursula von der Leyen, Spain’s prime minister Pedro Sanchez and French president Emmanuel  Macron
Portugal’s prime minister Antonio Costa, European Commission president Ursula von der Leyen, Spain’s prime minister Pedro Sanchez and French president Emmanuel Macron at a summit on inexperienced hydrogen pipelines in Alicante earlier this month © Violeta Santos Moura/Reuters

Another sceptic on long-distance hydrogen exports is Lluís Noguera, chief govt of X-Elio, one in all Spain’s longest-standing solar energy builders. While he believes renewable energy is important in producing hydrogen, he says not sufficient house to construct energy technology services for electrolysers is on the market subsequent to most metal and cement vegetation or refineries.

Even if there have been room, the local weather of Europe’s industrial heartland just isn’t conducive to solar energy, though it’s higher for wind. He cites an X-Elio mannequin that calculated the typical price of manufacturing solar energy at €40-50 per megawatt hour in Spain however €60-70/MWh in Belgium, which is best positioned to provide Germany.

Instead, Noguera mentioned, electrical energy must be produced the place the solar shines then despatched through the grid to industrial websites so “the renewable power comes from where it makes sense to produce it and the hydrogen comes from where it makes sense to consume it”.

Hydrogen export advocates counter that it will likely be cheaper to transfer hydrogen than electrical energy. It would price €5/MWh to transport the gasoline in a 1,000km pipeline versus €12/MWh to ship the equal electrical energy through an overhead AC energy line, in accordance to the European Hydrogen Backbone, a gaggle of pro-pipeline energy operators. They additionally say that extra energy is misplaced in transmitting electrical energy than in piping hydrogen.

Cepsa’s Wetselaar mentioned the principle flaw within the argument for exporting electrical energy was that Europe’s grid was “undersized” and appeared set to stay so. It is not going to have the capability to transport quite a lot of energy to produce hydrogen, particularly as soon as demand for electrical automobiles accelerates, as a result of it’s a lot more durable to safe environmental approval for high-voltage cables than it’s for subterranean pipelines.

“It’s a bit theoretical, because governments would love to invest in the grid but they can’t get the permits,” he mentioned.

Map by Liz Faunce

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