85% of hydrogen doesn’t move at all in Europe. It’s consumed right where it’s made. So why so little part of the produced hydrogen is being transported?
Hydrogen Value Chain
Keep in mind that hydrogen itself is not the energy source, but rather an energy carrier. The energy itself must be generated by other means like natural gas, petroleum, coal, or renewable energy.
There are 3 key stages of the hydrogen value chain:
- storage, transportation & distribution;
The progress in the hydrogen value chain will enable wide ranges of application of this gas.
The utilization can be grouped to:
Industrial consumers are interested in hydrogen due to decarbonization pleas. Steelworks, glassworks, chemical plants, power stations will lead to initial adoption. Then hydrogen will go to housing.
So how people feel about Hydrogen coming to their homes?
For instance, the HyDeploy project aims to show hydrogen deployment in UK homes. Despite the pandemic, the goal has been to deliver hydrogen in 20% blend with natural gas for 700 houses by Q1 2021.
Looks like people tend to trust an established DSO will deliver new fuel safely. An established DSO has the trust but new entrants might face resistance especially on the safety side.
Still, consumers don’t like disruption and don’t like extra costs. Meanwhile, people are fine to small cost spike to save the planet by decarbonizing.
The final Phase 3 of the project starts with putting 100% hydrogen into around 50 homes. Then slowly increase to more 100% hydrogen homes. End of Phase 3 aims to make thousands of homes across the UK fully energized by the new fuel.
Storage, transportation & distribution
Common ways of transporting hydrogen today:
- Compressed gas cylinders or cryogenic liquid tankers.
- Pipelines build for pure hydrogen.
- Blending with natural gas through the existing natural gas grid.
In Europe distribution is more blending and still on small scale. UK, Germany, Netherlands, France are leaders in distributing it that way.
Pure hydrogen networks are rarer in Europe. Few small live projects are happening in Netherlands, Germany, and UK. But there are firm plans for purpose building with 100% hydrogen networks to new areas and existing homes.
Key challenges to achieving cost-competitiveness of hydrogen distribution and storing:
- Hazards – compressed hydrogen can be explosive.
- Regulations are various and sometimes not established in different parts of the world.
- Blending hydrogen and natural gas is challenging.
- Hydrogen can damage existing pipelines and storage materials.
So, what’s next in hydrogen distribution? Blending with natural gas as a steppingstone or purpose building for pure distribution?
Net Zero means no to natural gas. So, incumbent natural gas grid operators want to remain relevant in the Net Zero World. Hydrogen is a key way for decarbonization. Thus, they are trying their best to fit into the hydrogen value chain.
The key question: can we use existing pipes to distribute hydrogen to end-users safely and economically?
A 20% degree of blending is optimal from an engineering point of view today where there is no material impact. Some say 30% is also valid – you can find some cases of that in Germany today.
Blending serves two purposes:
- reducing emissions.
- stimulating the production of hydrogen.
The gas grid is there so let’s use it. Correct? Well, some say it is sunk cost fallacy of gas DSO. The problem is you can’t use the existing infrastructure to distribute a bigger blend of hydrogen because you need to replace a lot of it. Thus, the effect of diminishing return gets into play.
Another camp of industry observers claims that gas DSOs are simply trying to find a way to adjust their current business model to the hydrogen hype.
Besides that, is 20% blend decarbonization at all? While blending 20% hydrogen consumers ought to burn 14% more fuel to get the energy content of 100% gas. There is a drop in the energy content in the volume of fuel. Isn’t the net improvement in greenhouse emissions negligible?
At the same time, few countries are studying hydrogen mass deployment as part of decarbonization. An example of state sponsorship is the H21 project in the UK. It is a suite of projects to support UK gas networks to carry 100% hydrogen.
But then, of course, there is a bigger obstacle of compression in the long-distance transport of hydrogen.
To switch to 100% hydrogen, you need to change compressors, high-pressure piping for low-temperature heating. Hydrogen has extremely low volumetric density – 3.2 times lower than natural gas, and 2700 times lower than gasoline. Hence, you need to compress or liquify hydrogen to make it economic. Compressors are too small because hydrogen volume is higher.
You know that the steel industry needs high-temperature heating. Despite the steel industry’s curiosity, the real application of hydrogen for the steel industry is as reductant not as heat. Because heat from hydrogen is too expensive for steel makers who run very cost-driven businesses.
Further technical and operational challenges of blending:
- For blending you need a blending station and inject it assuming you have the security of supply (reliable production and delivery when you need it). So, you need to have an active Hydrogen Backbone.
- As a DSO you must make sure that the grid components are intact so it can take whatever blend you want to inject. It is easier when you have a polyethylene grid because it can go up to 100% hydrogen comparing to steel, cast wrought, or ductile pipes. Around half portion of pipes are steel, third polyethylene, the rest cast wrought or ductile pipes. Anything less than 20% blend – keep an eye on metering. Anything goes beyond 20% blend – keep an eye furthermore for smaller components made of steel joints.
- End-users should have boilers & heat pumps, and hydrogen-ready appliances.
- Metering. While blending different gas in natural gas mix how to maintain accurate billing? A new billing method needed to continue mixing.
- Regulatory & market challenges. Customers pay for a certain type of gas composition/content and the quality they are receiving. Safety is key here also.
At some point, the diminishing returns due to technical challenges, additional materials, components, appliances costs will force us to ask ourselves if it’s worth blending or we better purpose build a 100% hydrogen grid.
Dedicated hydrogen pipelines are the best way to deploy the new type of fuel on a mass scale in the long term.
Worldwide there are more than 4’500 km of hydrogen pipelines total. The longest pipelines are operated in the USA, while Germany and Belgium following next.
The majority of those pipelines are operated by hydrogen producers.
But building new pipeline infrastructure is a very expensive endeavor, which will pay off with large volumes of hydrogen. We are in the chicken and egg situation. Dedicated pure hydrogen grid infrastructure doesn’t exist, and you lack an adequate supply of hydrogen to justify building the distribution infrastructure economically.
I suppose that the best way forward is the steady creation of pure distribution regional/local networks while gradually increasing hydrogen production.
Close cooperation, benchmarking best practices, and joint working groups between European DSOs, TSOs, and producers is the best way forward to tackle blending challenges today. At the same time, energy market stakeholders should prepare the conditions to purpose-build a pure hydrogen distribution network tomorrow.
That’s why Prospero Events Group is bringing together key experts from leading energy companies for the ”Hydrogen Transportation & Distribution” virtual conference on 6-7 of May 2021. The speaker panel consisting of senior representatives from National Grid (UK), Linde (Germany), Southern Company (USA), Energinet (Denmark), EDP (Portugal), and Snam (Italy) will be prompting discussions about establishing a global hydrogen market. European Hydrogen Backbone. Large-scale testing of infrastructure for repurposing to hydrogen.
One of the sessions will be led by Torben Brabo (CEO, Energinet Gas TSO, Denmark). He will be sharing his vision about benefiting from existing infrastructure and regulation.
Join this exclusive meeting to get all your questions answered. All. Because more minutes of net interaction you get at a Prospero event than any other energy conference in Europe.
When you move so little portion of produced hydrogen there is a reason behind it. And the reason is cost. You ought to stimulate hydrogen production to bring the cost down. This can’t take off itself without the state stimulation to achieve economies of scale. Is there enough political will to impose the right balance of carrots and sticks today?
- March 2, 2021