Letters / What are the economics of sending hydrogen from Shetland to Germany?
The idea of delivering hydrogen by pipeline from Shetland to Germany has been mentioned but perhaps all that glistens may not be golden. What are the economics?
Hydrogen (H2) gas has a calorific value (GCV) of 242 kj/mol, whereas Methane (C1H4) gas has a GCV of 803 kj/mol, at 25 degrees centigrade and atmospheric pressure.
Therefore it needs 3.318 moles of hydrogen to equal and deliver the same energy as one mol of methane (natural gas), which in turn would necessitate transmitting approx three times the volume of hydrogen (need more energy/cost to do that vis a vis methane) gas through the pipeline to get the same “oomph” as natural gas.
What would that mean in practice? Hydrogen produced from offshore turbines nearby to Germany (using electricity) should be
priced according to its input relationship/contribution to methane presently delivered through the pipeline to industry, which itself is priced with reference to the natural gas traded on the Dutch TTF futures market.
Surely then, the value of German produced hydrogen offshore should be about one third of the TTF price, and hydrogen delivered
from a Shetland pipeline priced in conformity with that, but with an internal deduction at Sullom for the pipeline transmission costs from Sullom and the share of the financing costs of such pipeline.
What value then might be left to Shetland’s hydrogen producers (including Viking?) after these deductions are subtracted?
Hydrogen exported from Sullom (note, Shetland’s share in Viking, and perhaps from other developments) might be able to obtain a better price by considering a different route.
A plant is being built in the USA to produce synthetic natural gas (e-Gas) combining H2+CO2 (to obtain the same chemical formula
as methane), by using but removing large volumes of the latter. A similar plant could be constructed at the SGP, and therefore increase rental fees/lease to the SIC.
Some may argue that that would not be removing CO2 from the atmosphere, but others would say that the process is a circular
operation removing/using/replacing it in a continual loop, which would be a very large contribution by Shetland towards NetZero as decades unfold. What’s not to like about that?
Hydrogen should/could be available via electricity from local/offshore wind turbines and CO2 from North Sea pipelines, into
Sullom or delivered there by vessels from Norway.
Result: methane/e-gas could be exported via the existing SIRGE pipeline to the UK and – most importantly – get the price of its hydrogen increased as it will be reconstituted as part of the e-gas produced – but at the natural gas price, and not a seriously discounted hydrogen price via pipeline to Germany. It would also lend support for the continual use of the SVT and SGP and contribute towards Shetland’s general economy.
Congruent with the above hydrogen (15%?) could be inserted into the existing SIRGE pipeline to the UK allowing a calorific/price
adjustment to customers.
Surely as much hydrogen as possible should remain at Sullom for processing there into derivatives, adding value to Shetland’s future prospects and SIC funds before considering sending it onward by pipeline to Germany/Europe.
However Shetland could find more beneficial opportunities to use electricity other than producing hydrogen for export. Food for thought?
Cecil Robertson
Inverness
