Rystad Energy expects strong growth in hydrogen pipelines through 2035

Apr 01, 2023

Independent research and business intelligence company Rystad Energy estimates that there are about 91 planned hydrogen pipeline projects in the world, totaling 30,300 kilometers and due to come online by around 2035. Today, more than 4,300 kilometers already exists for hydrogen transportation with more than 90% located in Europe and North America, the company notes.

New hydrogen infrastructure is starting to materialize as the world seeks to accelerate its path to net zero. Hydrogen has a high gravimetric energy density and a low volumetric energy density. This means that among options, hydrogen pipelines will be far better than vessels at moving hydrogen over short to medium range distances, Rystad says.

In cases where hydrogen will be shipped (as hydrogen or its derivatives), it will eventually be distributed on land using hydrogen pipelines, which makes transport via pipelines a critical transportation mode for the gas. Hydrogen pipelines are already used to supply industrial hubs (at petrochemical plants for example). As supply scales up and moves from areas with abundant and renewable energy to demand centers, long transmission lines will be a necessity and these pipelines would require larger diameters and higher pressure for cost effectiveness and consequently higher steel grades.

Globally, Europe is at the forefront of efforts to produce and import green hydrogen and its attention is now turning to building the necessary infrastructure to get it to demand centers. According to Rystad Energy research, Spain, France, and Germany are among the countries committed or considering cross border pipelines to facilitate energy flows, while the UK with its extensive gas grid finds itself in a strong position to switch from natural gas to hydrogen.

The steady increase in pipeline projects for hydrogen is an early sign that the energy transition is gathering pace. Europe, with its extensive gas grid, is well placed to make the jump. Switching infrastructure from gas to hydrogen is possible and cost effective. However, the greatest barrier is not financial, but the physical properties of hydrogen itself which differ substantially from oil and gas.

Hydrogen is a key pillar in the EU's decarbonization as laid out in its hydrogen strategy in 2020, and its deployment received a boost with the ‘Fit for 55’ package. It also plays a central role in the REPowerEU Plan to phase out Russian fossil fuel imports—which aims to produce 10 million tonnes of renewable hydrogen by 2030 and import another 10 Mt in the same time frame.

Considering proposed green hydrogen projects in the EU, Europe is currently at 7.9 Mt of local supply with startup by 2030 (or only 2.1 Mt from target), with nearby supply amounting to 1 Mt in the rest of Europe—primarily UK and Norway—and another 1 Mt in the Middle East. Additionally, 3.4 Mt of proposed projects are in Africa, which could supply the largest amounts of hydrogen to Europe—by ship or pipeline.

To plan for the distribution of these within the bloc, the European Hydrogen Backbone (EHB) initiative—a group of 31 European gas transmission system operators (TSOs)—has published a vision paper for the future hydrogen pipeline infrastructure. This is based on national analysis of availability of existing natural gas infrastructure, future natural gas market developments, and future hydrogen market developments.

According to the EHB's 2030 hydrogen infrastructure map, a total length of ~28,000 km in 2030 and 53,000 km by 2040 is envisioned in the 28 European countries involved. Currently, dedicated hydrogen pipelines that will be available by 2030 amount to 23,365 km, which is 83% of 2030 target. Rollout of hydrogen pipelines in Europe would be gradual and the project start of transmission or distribution pipelines will depend on the demand.

The EHB vision for hydrogen pipeline network in Europe in 2040.

France, Spain, and Germany. Europe is taking the lead globally with pipelines planned on and offshore. The recently announced H2Med Barcelona-Marseille subsea hydrogen pipeline is budgeted to cost around $2.1 billion for a stretch of 450 km and it was recently announced that it will be extended to Germany too.

Four grid operators—Spain's Enagas, Portugal's REN, and French pair GRT and Terega—are currently conducting technical studies, potential pipeline layouts and cost assessments. Germany's first offshore hydrogen pipeline project, AquaDuctus, will transport green hydrogen from offshore wind installations in the North Sea to Germany. The pipeline stretches more than 400 km and according to one of its project partners, RWE, is said to be the most cost-effective option for transporting large volumes of energy over distances of more than 400 kilometers, compared to transporting power from a High Voltage Direct Current (HVDC) transmission system. For this reason, the option to transport power onshore using power cables is excluded.

Greece. The West Macedonia pipeline is a new natural gas pipeline that started construction in Greece earlier this year. It was designed to be capable to safely carry 100% hydrogen at a later stage at high-pressure through high-strength steel pipelines with large diameters. Greek gas transmission system operator DESFA will operate this 163-km pipeline, which is part of the EHB initiative.

The construction of new dedicated hydrogen pipelines will be complemented with repurposing of existing gas networks. According to the EHB, 60% could be repurposed by 2040, while according to pipeline projects in the works, this currently accounts for 40%.

New build pipelines will be needed but may face a range of hurdles concerning traffic movements, construction management and environmental protection, especially if it stretches long distances and goes through residential areas. For example, Cadent's new 125 km HyNet North West pipeline in the UK could hinder the development of the project. HyNet will produce, store, and distribute hydrogen, in addition to capture and store carbon from industry in the Northwest.

The pipeline, which could be UK's first 100% hydrogen pipeline at scale, is set to distribute hydrogen produced at Stanlow Manufacturing Complex to several industrial gas customers across the region. However, the regulatory model for hydrogen pipelines in the country hasn't been agreed upon yet, and Warrington Council, one of the local authorities on the pipeline's route, claimed it would disrupt a local housing development.

Repurposing of pipelines offers a compelling alternative from an economic perspective, and can be fast-tracked too, compared with laying down new pipelines, Rystad says. Europe has an extensive gas grid and repurposing this for hydrogen as gas declines will breathe life into a system that might otherwise have gone to rust. After modifications, repurposed steel natural gas pipelines can accommodate 100% hydrogen gas. However, when hydrogen is blended with gas, the percentage is restricted to about 20% where its end-use purpose is direct or indirect heating.

Repurposing natural gas pipelines. Relevant studies estimate utilizing existing natural gas grids for hydrogen transport is four times more cost-effective than constructing new pipelines. There are only limited differences in operating expenses between a hydrogen transmission network based on repurposed natural gas pipelines and a hydrogen transmission network made up entirely of new pipelines. Given that transportation is generally heavier in terms of capital expenditure than operational costs, this could also be a reason why there is limited difference in transporting hydrogen instead of natural gas.

The feasibility of repurposing natural gas pipelines revolves around overcoming technical concerns related to pipeline transmission, which include hydrogen embrittlement of steel and weld, hydrogen permeation and leakage.

The ability of hydrogen to dissociate on metal surfaces, dissolve into the metal lattice and to change the mechanical response of the metal leads to hydrogen-assisted fatigue and fracture, a process called hydrogen embrittlement, which poses a substantial challenge to existing steel natural gas pipeline. The small molecules of hydrogen can permeate the material resulting in leaks. To overcome the challenges of transporting hydrogen, coating, sleeves, and casing of material with adequate resistance to hydrogen embrittlement and permeation can be used, but to date this has not been tested on a commercial scale in transmission pipelines.

There is a strong potential for using reinforced thermoplastic pipes (RTP) in distribution pipelines for hydrogen as RTP can be obtained in lengths that are substantially longer than steel, and the installation cost for RTP pipelines is around 20% cheaper than for steel pipelines.

In the UK, 62.5% of the existing gas distribution network has been upgraded with polyethylene inserted into the iron pipe, and most of these networks are considered for future hydrogen use. Due to safety concerns, large parts of the distribution network of iron pipelines will gradually be upgraded as part of the UK iron gas mains replacement program and it is estimated that 90% of the legacy gas distribution network will use polyethylene by 2032. This means that serendipitously, the UK in a good position to fast-track distribution of hydrogen by pipelines when and where that is needed.

Nevertheless, a recent study by Open Grid Europe together with the university of Stuttgart concluded that existing steel pipelines installed in the German gas network are "hydrogen-ready" and can already carry up to 100% hydrogen. They were found to "possess no differences in terms of their basic suitability for transporting hydrogen compared to natural gas". This applies to all steel grades used in gas pipelines over Germany and in some other parts of Europe.

As part of the research, samples of the types of steel used in German pipelines were subjected to exhaustive measuring methods that, in contrast to previous studies, considered additional variables such as the influence of hydrogen pressure.

However, Rystad notes, discussions with pipe manufacturers have shown that some of them find the study's conclusion optimistic. Hydrogen embrittlement may affect the pipes depending on their metallurgical and mechanical properties and the current condition of the pipe, after years in service. As a result, Rystad Energy expects more variability in terms of existing pipeline suitability to carry hydrogen. Even though this conclusion covers only pipes, and not the compression, valves, or other components, at best, gas pipelines can be made hydrogen-ready with relatively little effort compared to what was previously thought.

Posted on 11 April 2023 in Europe, Hydrogen, Infrastructure, Market Background | Permalink | Comments (4)