Pipe or cable? Companies are divided over the best way to transport European energy | Popgen Tech

Ambitious plans to build a €2.5 billion hydrogen pipeline under the sea between Spain and France are exposing divisions among businesses over the best way to transport energy from southern Europe to the continent’s northern industrial heartland.

The EU and some major energy companies are betting on “green” hydrogen – produced from water using renewable energy – as a long-term solution to natural gas shortages and a way to accelerate reductions in greenhouse gas emissions.

But while France, Spain and Portugal support the long-distance export of the clean-burning fuel via undersea pipeline, some business leaders argue that it is electricity that should be exported so it can be used to make hydrogen close to where it will be used, especially German industrial hubs.

Green hydrogen’s potential is unproven as it is not yet produced on a commercially viable scale. However, advocates say it will eventually be burned in large volumes to produce energy to run factories, trucks and ships, and will also serve as a chemical feedstock and energy store.

If they’re right, the debate over transporting the gas or its derivatives across Europe will go a long way in determining which of the companies investing most in hydrogen gain – and which lose.

Cepsa, Spain’s second largest oil company by revenue, has aligned itself with the Barcelona-Marseille pipeline plans. It struck a deal with the port of Rotterdam in September to create a “green hydrogen corridor” to bring the fuel from Spain – which wants to become Europe’s solar superpower – to northern Europe.

The corridor will initially, from 2027, be a shipping route as Cepsa plans to convert green hydrogen into ammonia and then transport it by boat from the Spanish port of Algeciras. But Maarten Wetselaar, chief executive of Cepsa, told the Financial Times that the company would “absolutely” use the undersea pipeline, which must be completed by 2030. “When the pipeline is there and big enough, it’s easy for us to scale up. ” he said.

The green hydrogen will come from planned Cepsa plants in Campo de Gibraltar and Palos de la Frontera which will produce up to 300,000 tonnes of fuel per year. They will cost the company a total of €3 billion and will be powered by solar and wind power facilities on which it will spend another €2 billion. Hydrogen will be transported from the plants to Barcelona through a domestic pipeline network still being planned by Enagás, Spain’s national gas grid operator. To reach Germany by pipeline, France would also need to build a network running north of Marseille.

The EU aims to produce 10 million tonnes of renewable hydrogen by 2030 and match it with the same volume of imports, according to plans for REPowerEU, an energy transition fund.

Iberdrola, Spain’s largest energy company, is also investing in hydrogen production, but has taken an opposing position 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,” said Ignacio Galán, executive chairman.

The argument against hydrogen pipelines is that they will cost more than natural gas pipelines and pose major engineering and safety challenges because the technology for long-distance transport of the fuel, which is highly flammable, does not yet exist.

Iberdrola’s investments assume hydrogen will be used mainly by heavy industry close to where it is made. It owns one of the few facilities in Spain already producing the fuel, albeit on a trial basis. The installation in Puertollano, Castile-La Mancha, includes a 100MW solar system that powers an electrolyser to separate hydrogen from water, then sends it to an adjacent plant where another company, Fertiberia, uses it to make fertilizer make.

For Germany, Iberdrola’s vision states that the best way to ensure hydrogen supplies will be to produce the fuel itself with electricity generated by renewable energy. This could include power sent by cable across France from Spain, which wants to capitalize on its sunny weather to produce cheap, abundant renewable power.

“This is why we need more electricity connections and more strengthening of electricity networks,” said Galán, who has previously expressed widespread frustration in Spain over the country’s limited cross-border ties with France, which has shown little interest in having more.

Another skeptic of long-distance hydrogen exports is Lluís Noguera, CEO of X-Elio, one of Spain’s longest-running solar developers. Although he believes that renewable energy is essential in the production of hydrogen, he says that not enough space to build power generation facilities for electrolysers is available next to most steel and cement plants or refineries.

Even if there were room, the climate of Europe’s industrial heartland is not conducive to solar power, although it is better for wind. He cites an X-Elio model that calculated the average cost of producing solar power at €40-50 per megawatt-hour in Spain, but €60-70/MWh in Belgium, which is better positioned to supply Germany.

Instead, Noguera said, electricity should be produced where the sun shines and then sent via the grid to industrial sites, so that “the renewable power comes from where it makes sense to produce it and the hydrogen comes from where it makes sense make to consume it”.

Proponents of hydrogen exports counter that it will be cheaper to move hydrogen than electricity. It would cost €5/MWh to transport the gas in a 1,000 km pipeline versus €12/MWh to send the equivalent electricity via an overhead AC power line, according to the European Hydrogen Backbone, a group of pro- pipeline energy operators. They also say that more energy is lost in the transmission of electricity than in hydrogen pipes.

Wetselaar from Cepsa said the biggest flaw in the argument for exporting electricity is that Europe’s grid is “undersized” and it looks like it will stay that way. It will not have the capacity to transport much power to produce hydrogen, especially once the demand for electric vehicles accelerates, because it is much more difficult to obtain environmental approval for high-voltage cables than for underground pipelines.

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

Card by Liz Faunce