Scotland should capitalise on hydrogen pipeline exports to Europe – NZTC report

LONDON (ICIS)–Scotland should seek to capitalise on the country’s large renewable resource by exporting renewable hydrogen to Continental Europe through a purpose-built marine pipeline, a report published on 31 August by the Net Zero Technology Centre (NZTC) said.

The Hydrogen Backbone Link project could meet 10% of Europe’s renewable hydrogen import requirements by the middle of the next decade and maintain this proportion through until 2045, the report said.

NZTC’s report also said that the renewable hydrogen could have a delivered cost of €3/kg, cheaper than imports from other global regions despite the higher production costs due to the lower transport costs.

The CAPEX investment is estimated at £2.7 billion to build the new pipeline running from Scotland’s east coast to Emden in northwest Germany, with a transportation tariff of £0.32/kg.

SCOTLAND’S HYDROGEN AMBITIONS

Scotland has ambitions to become a net exporter of renewable hydrogen by 2045, taking advantage of its large renewable resource in the form of offshore wind turbines.

Indeed, Scotland has some of Europe’s highest capacity factors for offshore wind at around the 60% mark, and with over 30GW of projects capacity accepted through both Scotwind and Innovation and Targeted Oil & Gas (INTOG) leasing rounds, offshore wind capacity is set to swell in the coming years.

The NZTC report puts renewable hydrogen production costs at €2.60/kg, which is higher than the estimated €1.70/kg forecast for other global regions such as North Africa or the Middle East, but the Hydrogen Backbone Link is estimated to see transport costs of €0.40/kg compared to shipping costs of €1.40/kg from other regions.

This would allow the delivered cost of renewable hydrogen from Scotland to be lower than from other global regions due to the lower shipping costs, with a delivered cost of €3/kg for a European customer.

Moreover, the hydrogen transported through the Hydrogen Backbone Link will not have the be processed once arriving onshore, with shipped imports most likely to be in the form of ammonia which will have to be cracked back into hydrogen once delivered.

The European Union is seeking to develop a 20 million tonne/year hydrogen economy by 2030, of which 50% will be imported into the block from other regions.

The NZTC report suggests that Scottish Export to the Union could be 35TWh by 2030 and 94TWh/year by 2050, representing approximately 10% of total Union import demand.

ICIS VIEW

This could potentially be a marriage made in heaven between Scotland and the European Union.

Scotland has high renewable potential in the form of offshore wind, however, this resource is geographically isolated and is not located close to any significant demand source, so the hydrogen produced will have to be transported away from the north of the country in one form or another.

The pipeline option plays well as it eliminates any requirement for additional energy producing and cracking ammonia or any other form of hydrogen carrier and shifts hydrogen away from the production site towards high demand areas along northwest Europe’s coastline.

Critically, the pipeline option reduces transport costs compared to shipping ammonia from other global regions and reduces energy intensity of the transport process by not converting the hydrogen into ammonia and back into hydrogen.