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Rethink Energy: pipelines and organic carrier ships to dominate hydrogen distribution

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Global Hydrogen Review,

The question of just how hydrogen will get around the world, and what it will cost, is key to putting in place global hydrogen infrastructure. A report out this week from Rethink Energy, part of Rethink Technology Research, shows that the bulk of the effort will be split between pipelines and liquid organic hydrogen carriers (LOHC), often transported in ships – and points to the limiting cost factors which shall define each transport use case.

The research has been compiled in consultation with planned hydrogen hubs using their 'rules of thumb', and cost estimates. As the sector emerges it is not just the cost of manufacture that will set limits on where hydrogen facilities can be but the cost of transport will be over 50% of the equation, and matter far more than the cost of making hydrogen.

Importing hydrogen to resource-rich countries will add between US$0.50 and US$1.86/kg, depending on the distance and the means through which it can be transported. With distribution accounting for nearly two-thirds of the final cost of hydrogen to the customer, these delivery mechanisms will dictate competition throughout the hydrogen market.

By 2050, Rethink Energy has forecast that 735 million tpy of green hydrogen will be produced, using renewable energy to power electrolysis. Spanning from aviation to steelmaking, the use of hydrogen to decarbonise new industries will be central to the economic shift away from fossil fuels towards those harnessing their own wind, solar, and hydropower resources.

The trade routes that have long defined the global energy map will have to be redrawn. Energy – both as hydrogen and electricity – will need new infrastructure focused on low-cost storage, distribution, and delivery.

"Globally, the average cost of hydrogen production will fall to US$1.50/kg by 2030", says Harry Morgan, Rethink Energy's Chief Hydrogen Analyst, "and while there will be a huge convergence in global production costs, which currently vary between US$3 and US$7/kg, countries like Australia, with exceptional wind and solar resources, will see costs fall as low as US$1.20/kg".

"Conversely, resource-constrained countries like Germany are likely to see production costs remain above US$2.60/kg through to the end of the decade. The disparity between these two numbers opens a huge argument for countries like Germany to import hydrogen, rather than to produce it domestically", adds Morgan.

Over distances of up to 5000 km pipelines are likely to provide the most cost-effective means of delivery. As the hydrogen economy emergences, and as hydrogen hubs and valleys aggregate industrial activity with renewable energy, these pipelines – with their long life cycles and low operational costs – will continue to be cost-effective. Using compression to deliver hydrogen at greater densities and volumes, pipeline delivery over a 1000 km distance will cost just US$0.54/kg.

The economics of such hydrogen pipelines will be significantly boosted if – rather than building them from scratch – existing natural gas pipelines can be safely repurposed for future hydrogen networks. With modern gas infrastructure requiring simple changes to hardware (valves, compressors, etc.), such an approach could add to the capital requirement by up to 45%.

But as distances get further, the large capital cost and lack of flexibility of a pipeline are limiting. Once beyond 7000 km, the ability to transport hydrogen onboard ships becomes more cost-effective – adding around US$1.45/kg of hydrogen over this range.

Shipping hydrogen as a gas is hugely inefficient. Vessels with storage tanks of around 160 000 m3, only around 13 t of hydrogen can be carried onboard; very little if the vessel’s round trip takes more than one month. However, if hydrogen can be carried as a liquid – at extremely low temperatures, as a constituent part of ammonia (NH3), or as other liquid organic hydrogen carriers (LOHCs) – up to 19 000 t can be carried by the same amount of storage capacity.

The cost of these approaches will depend on how efficiently hydrogen can be ‘packed’ and ‘unpacked’ from its respective carrier. Liquid hydrogen, which required very little processing to be ‘unpacked,’ has distinct advantages here. However, maintaining temperatures of minus 250°C poses a huge engineering challenge; boil off losses from liquid hydrogen increase with distance, reducing competitiveness.

LOHCs – with reduced packing costs – come in at between US$1.48 – US$1.86/kg over distances between 7000 – 20 000 km. Ammonia, despite being the densest carrier of hydrogen, is severely limited by the cost of cracking it into its pure hydrogen for consumption (approximately US$1.4/kg on average).

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