Industrial green hydrogen could become a global commodity but local production is needed for transport uses

A fuller understanding of the cost of solar and wind-powered electricity across the globe will be necessary to help policymakers in regions with expensive electricity to plan whether to import or generate green hydrogen, according to an EU policy paper.

Staff from EU research body the Joint Research Centre (JRC) have modeled the anticipated costs of transporting green hydrogen – electrolyzed in a process powered by renewables – from parts of the world where solar and wind power is cheap to consumer markets where such prices are considerably higher.

In a policy paper published on Friday, the JRC study found the transport of 1 million tons per year of green hydrogen for industrial use, from a point of production to a single recipient 2,500km away, could be economically cheaper than generating the energy carrier in the destination market, provided the renewable electricity price at the point of origin of the hydrogen is at least €20/MWh cheaper than at the point of consumption. The economics become particularly attractive if the hydrogen is transported as a compressed gas along a dedicated pipeline, the researchers found.

Local hydrogen for local people!

However, a more complex scenario, involving the transport of just 100,000 tons per year and further dispersal to a network of hydrogen transport refueling stations within 500km, could prove more expensive than local green hydrogen production, even in markets with a high renewable electricity price, the paper stated. The fact hydrogen for transport use is more costly than the form used for industry reinforced that conclusion, although the researchers pointed out they did not consider the use of a dedicated hydrogen pipe network for such distribution, instead modeling road and rail transport for that leg of the journey.

The academics considered the transport of compressed and liquefied hydrogen as well as its conversion into chemical hydrogen carriers such as ammonia and liquid organic hydrogen carriers. Methanol was not considered as a form of hydrogen transport as it causes extensive CO₂ emissions and the cost of mitigating them was considered to be more expensive than the other options studied.

Solar power prices

Two electricity cost scenarios were considered, given the anticipated energy input required to convert the green hydrogen into an appropriate form for transport and then convert it back into its usable form at the consumer site, referred to in the paper as ‘packing' and ‘unpacking' the energy carrier. In a low-cost electricity scenario, power would cost €10/MWh at the green hydrogen production site and €50/MWh at the unpacking location. In the more expensive case, the relative costs modeled were €50 and €130/MWh, respectively. In each case, the use of green hydrogen for some energy requirements of the transport and conversion processes was considered, at a cost of €1.50/kg in the simple, industrial-use scenario and €3.50 in the case of green hydrogen for transport. The former also considered the availability of waste heat, at a cost of €20/MWh, for hydrogen packing and unpacking and the researchers added, they assumed the availability of salt caverns to store compressed hydrogen at consumption locations.

In the industrial-use model, compressed hydrogen was found to be cheapest to export, whether shipped or piped, with liquid organic hydrogen carriers almost as attractive if the €20 waste heat is available. Liquefied hydrogen transported by ship “would not be much more expensive,” stated the paper.

The researchers stressed their modeling was based on newly-installed, dedicated, long-distance hydrogen pipelines, hinting the re-purposing of the existing natural gas network could offer much bigger savings. However such infrastructure would have to be dedicated solely to hydrogen, added the paper, as blending was presumed to be unable to supply the required quantities of green hydrogen at the destination site after travelling such long distances.

The researchers found the transport part of the equation contributed much less to the total cost of moving liquid organic hydrogen carriers and ammonia, where the biggest expense is related to packing and unpacking. That opens up the possibility of much longer supply routes. With Germany having recently committed to exploring hydrogen imports from Australia, the JRC study said compressed hydrogen – especially when piped – offered the best business case up to 3,000km, making way for liquefied hydrogen and liquid organic hydrogen carriers (LOHC) over long distances, and LOHC and ammonia above 16,000km.

While liquefied hydrogen offered the best business case in the more complex scenario associated with exporting the energy carrier for transport uses, question marks remained over its competitiveness with local production.

Pipe down

Extrapolating the results, the paper suggested hydrogen transport within and around the EU would be most competitive in its compressed and liquefied forms, particularly via pipelines and especially if it can bring the savings of more than 50% suggested by the natural gas industry if existing infrastructure is adopted.

Chemical carriers LOHC and ammonia offer a business case which would render global hydrogen supply feasible, the paper found, for use by a single end-user for industry, with optimization of the associated packing and unpacking processes making the economics more attractive.

The potential importance of re-purposing natural gas pipes for hydrogen prompted the report's authors to suggest more research into how this can be achieved and they also called for R&D investment into hydrogen packing and unpacking. Along with a desire for more extensive mapping of global renewable electricity prices, the JRC document also emphasized the need to ensure adequate safety guidelines are in place if green hydrogen production is to be established in new global regions.