Italy’s Snam says 70% of pipeline system now hydrogen-ready


Milan-based Snam is looking at new opportunities to collaborate with a wide range of companies in the electricity and gas sectors. It aims to develop low-carbon hydrogen technologies and initiatives in Europe and North Africa.

“Apart from our focus on Italy, our first playing field is in Europe, where we can use the links we have with our associates in Greece, Austria, and France,” We also deeply believe in creating an energy bridge between North Africa and Europe,” Cosma Panzacchi, executive vice president of Snam's hydrogen business unit, told pv magazine.

The Italian company plans to bank on its presence in other regional markets such as the Emirates, India, and China to develop global hydrogen-related mobility solutions and applications.

“Snam is already present through our associates or subsidiaries in these regions. The Emirates, India, and China are priorities of ours. This does not rule out more global partnerships to develop asset readiness solutions in other regions,” said Panzacchi, noting that future collaborations will be diversified across the energy sector.

Green or blue?

Snam owns and operates the largest natural gas transmission network in Europe, with 42,000 kilometers of pipelines. It is open to shipping any form of low-carbon hydrogen – green or blue.

“We will transport whatever type of low-carbon hydrogen, which needs to be transported. We must be an open platform. We are mandated to do so,” said Panzacchi. “We cannot decide which color of hydrogen to transport even though, of course, in some countries, one color will prevail over others. For instance, we see great potential for green hydrogen in Italy.”

Panzacchi said that 70% of Snam's pipeline system is hydrogen-ready. “This percentage will grow up over time,” he said. Other critical elements of the energy system need an upgrade, including compressors, gas chromatography, and storage. “Snam is conducting an in-depth analysis with the Politecnico of Turin regarding the usage of underground storage for hydrogen. The study will go on for at least a couple of semesters.”

Over the last two months, Snam has announced partnerships with ITM Power, De Nora, and Linde.

“Our cooperation with Linde is based on working on the development of the hydrogen ecosystem. We complement each other, and we have interesting potential synergies in geographical terms,” said Panzacchi.

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Mobility solutions will be one of the primary focuses of the non-exclusive partnership with Linde, which has the largest liquid hydrogen capacity and distribution system in the world. But Panzacchi said both cost components (electrolyzers and electricity from renewable sources) “need to go down.”

“Snam is working to bringing down the cost of electrolyzers, committing to electrolyzer capacity to secure demand,” he added, in reference to De Nora's “highly automated factory” and ITM Power’s 1 GW project in Sheffield, England.

Snam expects it net profit to grow by 2.5% per year throughout the 2020-24 period, while core earnings will rise by an average of 3.3%. Panzacchi said improvements in biomethane, mobility, and energy efficiency will drive growth, along with Snam's Italian assets.

“In the 2021-24 time horizon, hydrogen will have a minor impact on our growth, as the project development takes between 24 and 36 months,” he said. “It is something that is starting now.”

Snam's largest shareholder is Italy's CDP Reti Spa, which is a joint venture between state-run Cassa Depositi e Prestiti (CDP), State Grid Corp. of China, and other investors.

Global coalition

Snam said it is part of a seven-company global coalition that aims “to accelerate the scale and production of green hydrogen 50-fold in the next six years.” The Green Hydrogen Catapult alliance, announced earlier this month, includes Spain's Iberdrola, Denmark's Orsted, Australia's CWP Renewables, Saudi Arabia's ACWA Power, China's Envision, and Norway's Yara. The group is targeting the world's most carbon-intensive industries, including power generation, chemicals, steelmaking, and shipping.

“Recent analysis suggests a US$2 per kilogram price represents a potential tipping point that will make green hydrogen and its derivative fuels the energy source of choice across multiple sectors,” the alliance said in a press release.

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