Gasunie, Energinet outline Denmark’s hydrogen export potential

LONDON (ICIS)–European energy infrastructure company Gasunie and Danish energy system operator Energinet released a technical study last week that outlined Denmark’s capacity to supply 10-15% of Germany’s future hydrogen demand.

According to data from ICIS Power Horizon models, excess power generation in Denmark could support production of 3TWh of hydrogen by 2026, rising significantly to 13TWh by 2030, based on a 66% system efficiency.

German hydrogen demand is the highest in all of Europe. In 2018, hydrogen demand totalled 72TWh, roughly 22% of Europe’s annual demand.

By 2030, Germany’s demand is expected to rise to 90-110TWh, according to the German national hydrogen strategy released in 2020. Further, installed electrolysis capacity in Germany is expected to reach 5GW by the end of the decade, with output expected at roughly 14TWh of green hydrogen per year, based on 4,000 full load hours.

Currently hydrogen production in Germany totals around 2.5Mt/year, or roughly 83TWh/year. However, the majority of this is derived from unabated fossil fuels.

This means Germany will need to import green or low-carbon hydrogen from other regions to meet growing demand.

One such region is north Africa, an area endowed with abundant solar capacity potential, therefore offering cheap renewable power, which amounts to around two-thirds of the final price of green hydrogen.

DENMARK AS A SOURCE OF SUPPLY

According to the technical study released by Gasunie and Energinet, a new hydrogen pipeline infrastructure between Denmark and Germany could export up to 15TWh of green hydrogen produced from Danish offshore wind by 2030.

The pipeline network proposed in the study would run from either Esbjerg or Holstebro in Denmark, covering 350-400km to deliver green hydrogen to Hamburg in Germany.

Around 50-60% of the proposed pipeline infrastructure could be repurposed from natural gas networks, helping to limit costs.

Further, initial phases of the pipeline would have transport capacity of up to 2.5GWh/h of hydrogen without the use of compressors, with a capex of around €390m.

Capacity can later be increased to 8.6GWh/h, however this requires a compressor station, which would increase the capex to €670m.

According to McKinsey & Company’s Hydrogen Insights Report 2021, a future pipeline network could transport green hydrogen from north Africa to Germany at a cost of €0.42/kgH2. Comparatively, the European Hydrogen Backbone report found that transporting hydrogen over 1,000km across a European hydrogen network would cost between €0.11-0.21/kgH2.

Given the analysis from the Hydrogen Backbone, the potential 440km route proposed in the Gasunie-Energinet study would cost €0.07/kgH2 if using the central case of €0.16/kgH2 per 1,000km.

DENMARK RENEWABLE CAPACITY

Danish renewable output is expected to far exceed power demand by 2030 under the ICIS “High RES” scenario, under which the industry takes an aggressive stance to decarbonisation.

Under High RES, renewable capacity is expected to surge over the coming decade, increasing from 7.7GW of installed offshore and onshore wind combined, and solar capacity in 2021, to 18.7GW by 2030.

Output under this scenario would generate just under 56TWh/year from solar and wind, roughly 88% of Denmark’s total power generation in 2030. Meanwhile, demand under High RES would go from 36TWh in 2021 to 43TWh in 2030, as transport and residential energy sectors decarbonise with power. This means the surplus could generate roughly 13.5TWh of hydrogen.