New and existing offshore wind farms have the potential to generate substantial amounts of green hydrogen, supporting both the UK and EU to deliver on their net zero targets, but it must be possible to put the right infrastructure in place.
Crown Estate Scotland commissioned Xodus Group to look at the export potential for hydrogen produced by Scotland’s renewable electricity sector, following the conclusions of the Scotwind and INTOG leasing rounds, through which a significant number of projects signalled intentions to consider green hydrogen production as either an offtake option or a fundamental alternative to transmission system connection.
Xodus was therefore tasked with exploring the infrastructure needed to transport green hydrogen at scale, as well as the different commercial models that could be used to fund, own and operate that very infrastructure.
A number of hydrogen production projects are starting to emerge within the North Sea area. With relative proximity and shallow water depths, hydrogen can be transported through pipeline at distances of up to 2,000km without the need for intermediate compression. This means transportation costs and energy penalties that are relatively low in comparison to other options, such as ammonia, methanol or cryogenic liquid hydrogen.
A pipeline of 32” was therefore chosen as the basis for a commercial assessment of hydrogen infrastructure. This size would allow for a peak flow rate that matches the average output of 10GW of offshore wind, or peak production rate from 5GW of offshore wind. A scenario is envisioned where there is initially 5GW of electrolyser capacity from offshore wind, and where the pipeline capacity can be used more efficiently through using hydrogen storage upstream or electricity from the grid when wind speeds are low.
Around 1,000km in length, stretching between Scotland and Germany, the pipeline be able to transport around 2,200 tonnes of hydrogen a day at its peak, which equates to around 8% of the EU’s target for the import of hydrogen from outside of the EU. It would cost around £2.7bn and, assuming a potential seven-year project schedule, could align with Scotwind and INTOG developments. However, there are some key things that have to happen if that is to be a potential reality.
In terms of the commercial model to fund, own and operate such a pipeline, it could be fully publicly owned and operated, or adopt a completely privatised ownership structure. The main things that must be considered include defining the role of Scotland’s public bodies, as there are a range of different roles they can play in creating and operating a hydrogen pipeline export project; the uncertainty in the maturity of the hydrogen market, plus how a public body can de-risk things to enable private investment; the level of investment Scotland is willing to put in to enable a hydrogen export pipeline to be crated; and the timing of monetisation in a bid to create value for Scotland.
Looking ahead, key recommendations for the Scottish government, as well as the wider Scottish public sector, include taking steps to increase the international visibility of the export pipeline potential Scotland has to offer; establishing the timing of hydrogen supply that could be produced from offshore wind projects, including those from Scotwind and INTOG; and increasing engagement with partners in mainland Europe when it comes to different offtake opportunities.
