The European hydrogen market cannot develop until an integrated H2 grid is built to link industrial clusters, Orsted’s head of regulatory affairs told the Enlit Europe conference in Milan.
Peter Biltoft-Jensen said that investment in long-distance pure-hydrogen pipelines was therefore required as soon as possible — “earlier than you normally would have done”.
The Dane explained that the first steps of an H2 market will initially begin with industrial clusters — so-called “hydrogen valleys” that are already being planned all over Europe — where production nis directly linked to on-site consumers.
The next step would be “to connect them via an integrated grid”.
“And here I see a challenge,” said Biltoft-Jensen. “If we don’t get that integrated grid up and running, we will not get a market. And I think we really need the market to pull the development here.
“We don’t really want to be in a position where you have a lot of production but you don’t have the infrastructure to get it to where it’s most efficiently used and has the highest value.
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“Only once you establish that ‘real market’ will you get a transparent price… that gives input to other consumers to say ‘well, actually, the hydrogen is a good fuel for us, there is a market there, we know the cost of that and we have to pay the same as everybody else’. And that requires infrastructure.
“So you may actually have to invest earlier than you normally would have done, simply to create the basis for the infrastructure, and that then creates spaces for the market that gives you the growth.
“I think that’s the main challenge [facing the hydrogen industry].”
Within this market, there would be have to be some kind of green certificate scheme along the lines of the power industry’s Guarantee of Origin to ensure that the hydrogen being bought and sold was green (derived from renewables) or possibly blue (from natural gas with carbon capture and storage), the panellists agreed.
Biltoft-Jensen was speaking at the “Role of hydrogen in future markets” panel — which included executives from Shell and French gas distributor GRDF.
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