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The import of green hydro­gen is not a fore­gone conclusion

Many gov­ern­ments and also the Euro­pean Com­mis­sion are aim­ing for cli­mate neu­tral­i­ty in 2050 or ear­li­er. One com­po­nent in many plans is import­ing green hydro­gen and methane from North Africa or the Mid­dle East, where reli­able sun­shine promis­es low elec­tric­i­ty costs to run elec­trol­y­sers. Syn­thet­ic fuels and heat­ing oil or gas from elec­tric­i­ty would have the charm of sim­ply con­tin­u­ing to oper­ate much exist­ing tech­nol­o­gy and infra­struc­ture in a cli­mate-neu­tral man­ner. But it is still unclear how gov­ern­ments can ini­ti­ate and eco­nom­i­cal­ly shape inter­na­tion­al trade in green fuels. A study with the par­tic­i­pa­tion of Fraun­hofer IEG has now com­piled the essen­tial aspects. It eval­u­ates the poten­tial of ener­gy imports from neigh­bor­ing Sun­shine States in the jour­nal Com­put­ers & Indus­tri­al Engineering.

Under the basic assump­tions made, the study cal­cu­lates detailed prices for green hydro­gen and methane of over 100 euros per megawatt hour in 2030 and just under 100 euros per megawatt hour in 2050. Cur­rent­ly, the price of methane on the Euro­pean com­mod­i­ty mar­ket is around 30 euros per megawatt hour. “The high costs show that import­ing e‑fuels into Europe is not a cheap panacea to cir­cum­vent bot­tle­necks in the expan­sion of renew­able ener­gies or to achieve a trans­for­ma­tion on the sup­ply side,” warns Ben Pfluger of Fraun­hofer IEG. The cost of e‑fuels must be weighed against oth­er options. Two things are cru­cial for the com­pet­i­tive­ness of hydro­gen imports from North Africa and the Mid­dle East to Europe: com­pa­ra­ble risk pre­mi­ums for invest­ment cap­i­tal as in Europe and low trans­port costs. In addi­tion, the slowed expan­sion of renew­able ener­gies in Europe, for exam­ple due to a lack of expan­sion areas for wind pow­er and pho­to­voltaics, may favor imports.

This detailed analy­sis of syn­thet­ic fuel pro­duc­tion chains and con­sid­er­a­tion of trans­porta­tion also high­lights the com­plex­i­ty and sheer scale of these poten­tial projects. Too often, green hydro­gen and fuel imports are used as stop­gaps in nation­al ener­gy tran­si­tion strate­gies. Clos­er analy­sis shows that these projects are too large and too cost­ly to be under­tak­en with­out strong polit­i­cal sup­port and a high degree of cer­tain­ty that the ener­gy prod­ucts will be pur­chased at agreed prices over the long term.

Pol­i­cy­mak­ers seek­ing to import green hydro­gen or fuels should begin devel­op­ing poli­cies in this direc­tion now, as infra­struc­ture projects of the scale dis­cussed here have a sig­nif­i­cant lead time. The analy­sis shows that while e‑fuel pro­duc­tion is attrac­tive in the region from North Africa to the Mid­dle East, espe­cial­ly due to the high solar poten­tial. How­ev­er, devel­op­ments in cap­i­tal and trans­porta­tion costs may reduce or even elim­i­nate the region’s advantages.

Experts from Fraun­hofer IEG, Fraun­hofer ISI and the DVGW Research Unit at the Karl­sruhe Insti­tute of Tech­nol­o­gy col­lab­o­rat­ed on the study.

Click here for the orig­i­nal sci­en­tif­ic pub­li­ca­tion of the study from the Decem­ber issue of the jour­nal Com­put­ers & Indus­tri­al Engi­neer­ing: “Sup­ply curves of elec­tric­i­ty-based gaseous fuels in the MENA region”.