Development of trading and transport of energy is fundamental to the energy transition because it facilitates optimisation of renewable resources. As a result, electricity interconnectors have recently become a focus for investment.

For some uses we need to transfer ‘molecular energy’ (currently as natural gas/methane) as well as electrons. Can hydrogen take the place of natural gas to be the world’s molecular energy carrier?

The UK is an example of how electricity interconnection has expanded. For around 25 years Great Britain’s market (England, Wales and Scotland) had just one link with any other market, the Interconnection France-Angleterre (IFA), a joint venture between French Transmission Operator RTE and the UK’s then National Grid (now National Grid Ventures) which started operating in 1986. In 2002, Great Britain was connected to the island of Ireland, linking the Moyle interconnector to the Scottish and Northern Ireland markets.

But it was nearly a decade later that Great Britain’s electricity market started to expand links with neighbouring countries. Under EU policy, the EU set an interconnection target to allow at least 15% of the electricity produced on its territory to be transferred across its borders – a step up on the previous interconnection target of 10% by 2020. This will aid efficient power sharing in the EU’s Internal Energy Market (IEM). According to the European networks organisation ENTSO-E, interconnection between EU countries had reached 93 GW at the start of 2022.

Table 1: Great Britain’s in-service interconnectors

The EU expects 23 GW of interconnectors will be added by the end of 2025 and a further 12 GW by 2030. This expansion is facilitated by the European Commission, which includes interconnection in its list of ‘Projects of Common Interest’ for member states (PCIs).

Before the UK left the EU, its push for new interconnectors was partly driven by IEM targets. But even though Great Britain’s market is outside the IEM since Brexit, the case for new interconnectors remains strong.

Developers proposing new interconnectors have an option to ask bill payers to underwrite their investment, in a ‘cap and floor’ mechanism that guarantees a return while capping profit. Great Britain’s energy regulator Ofgem is the gatekeeper on the cap and floor mechanism and recent cost-benefit analyses for new projects concluded that bill payers benefit from underwriting further interconnection. In November, it gave the green light for three new planned interconnectors with neighbouring markets to be underwritten, along with two that would connect via offshore wind farms.

Can hydrogen follow?
Electricity interconnectors are good investments because resources to general electricity are variable and not sited near to users – and importantly, because there is no other option than to transport the necessary electrons at huge scale. Reliance on renewables has increased the drive for interconnectors, both in terms of numbers and of scale, with links now proposed that are thousands of miles long.

What does this tell us about the likely future of an international market in hydrogen? Clearly the same conditions apply.

Green hydrogen is most economically produced where renewable energy resources are abundant, but potential hydrogen buyers are seldom co-located with producers.

A number of countries with abundant renewable resources have announced hydrogen strategies that propose to rely heavily on export markets. Australia, for example, said in a consultation on hydrogen opportunities: ‘The development of a hydrogen export industry will support investment in the sector and also provides at least some offset to the likely reduction in export income derived from fossil fuel exports.’

Namibia has also launched a green hydrogen programme, saying its ‘world-class solar and wind resources’ give it ‘a long-term competitive advantage in producing green hydrogen and green ammonia’.

Brazil has a similarly ambitious programme: a Triennial Work Plan for hydrogen, published in mid-2023, said it expects eventually to produce around 35mn t/y of hydrogen from offshore wind-generated electricity. A law enacted in 2024 will provide tax credits for low-carbon hydrogen. Fernanda Delgado, Executive Director of the Brazilian Green Hydrogen Industry Association, said it presented ‘the opportunity to lead the production and export of this essential energy vector for the global energy transition’.

Electricity interconnectors are good investments because resources to general electricity are variable and not sited near to users – and importantly, because there is no other option than to transport the necessary electrons at huge scale. Reliance on renewables has increased the drive for interconnectors, both in terms of numbers and of scale, with links now proposed that are thousands of miles long. What does this tell us about the likely future of an international market in hydrogen? Clearly the same conditions apply.

What precedent is there for hydrogen pipelines?
This not the first time a global gas market has been developed. Methane (natural gas) in the past was typically transferred via by pipelines, but this has changed. Since December 1998, InterconnectorUK has been available to move natural gas between Great Britain and Europe (with a terminal in Belgium). In 2006, two new pipelines were added: a second pipeline from Bacton to the Netherlands, and the Langeled link bringing gas from Norway. But gas is often transported by ship, as liquefied natural gas (LNG) and Great Britain has built three terminals to import LNG (located at Grain, South Hook and Dragon).

The LNG industry had been expanding – in 2022, Qatar, Australia and the US were the largest exporters, but other exporters included Malaysia, Indonesia and Nigeria, according to the UK Department for Energy Security and Net Zero (DESNZ). Growth of LNG sped up in 2022 after Russia’s invasion of Ukraine, as European buyers rushed to replace Russian pipeline supplies.

Fig 1: Project Union, mapped on to other UK gas pipeline networks

Source: National Grid 

Hydrogen is already transported by pipeline, although there are fewer than 5,000 km of hydrogen pipelines, according to the International Renewable Energy Agency (IRENA). Development of a far larger hydrogen market will require new interconnectors.

A European Hydrogen Backbone (EHB) initiative brings together 33 infrastructure organisations to give impetus to developing the necessary infrastructure in Europe. In Germany, the Federal Network Agency (Bundesnetzagentur) gave go-ahead in October 2024 to a 9,040 km hydrogen pipeline network connecting demand clusters with hydrogen sources. Between 2025 and 2032 methane gas pipelines will be repurposed and new hydrogen pipelines built. The Federal Network Agency will set the fees for the hydrogen core network, and KfW will provide a loan facility of €24bn.

The EU would like to see markets in natural gas and hydrogen develop across the bloc, and in 2024 it passed a new Directive (2024/1788) on common rules for the internal markets for renewable gas, natural gas and hydrogen. Gas projects are included in its PCI process.

Progress on the network for various gases is evaluated every two years by the bloc’s Agency for the Co-operation of Energy Regulators (ACER). The 2023–2024 gas network planning report increased focus on integrating low-carbon and renewable gases, along with decommissioning and repurposing existing gas infrastructure. Several countries have developed hydrogen strategies, legal frameworks and specific hydrogen planning activities, and EU member states are becoming more consistent in including hydrogen in their plans. ACER recommended that this work should be encouraged.

Hydrogen shipping is also under development, to transport hydrogen over large distances globally.

How can we transport hydrogen?
While the transport infrastructure for hydrogen is in the early development stage, other options may become a de facto transport route.

Hydrogen has important uses in industry, for example as ammonia for fertiliser. Global production of ammonia for this purpose is 183mn t/y, according to the International Energy Agency (IEA), using dedicated vessels similar to LNG transport. Ammonia has been proposed as an option for transporting hydrogen for other sectors, although there is a hefty energy penalty in converting it at both ends. Ammonia can also be used directly as fuel in gas turbines.

In a report in January 2024, DNV noted that: ‘Ammonia is considered a key future storage and long-distance transport medium for hydrogen. While the liquefaction, storage and transport of pure hydrogen requires enormous energy input and is technically complex, handling ammonia is comparatively simple and an established industrial practice. Furthermore, the energy density of liquefied ammonia is higher than that of liquefied hydrogen, making its transport more efficient.’

At the moment, in contrast, hydrogen transport by ship is still problematic. Kawasaki built Japan’s first LNG carrier in 1981 and describes itself as ‘the rare player who can combine shipbuilding and liquefied hydrogen cryogenic technologies’. But it recently pulled out of a consortium developing LNG-style tankers for hydrogen.

Meanwhile, one LNG tanker maker, GTT, has been awarded Approvals in Principle by accreditation company Bureau Veritas (BV) for a containment system that allows for the conversion of LNG fuel tanks for either ammonia or methanol fuels (methanol is another potential hydrogen product that in current modelling would be largely produced and stored at ports, with some transport required).

It is clear there is more than one option by which hydrogen could become the molecular energy transport medium we need. Diversity of supply routes would be helpful to give customers security of supply. However, it may be less helpful in developing a global market if it reduces the guaranteed volumes that are required to underwrite capital-intensive infrastructure like pipelines and shipping terminals.

• Further reading: ‘Designing the world’s first overground CO₂ pipeline for CCUS hub in Teesside’. Costain Project Manager Niku Nobakhti takes a closer look at two industrial projects in Teesside that will see approximately 4mn t/y of CO₂ collected from local emitters and safely transported for storage offshore via a new overground pipeline designed by Costain.
• Repurposing existing infrastructure such as pipelines to transport alternative fuels such as CO₂ or hydrogen can help accelerate the transition while reducing cost and waste. However, repurposing infrastructure is not without its challenges. For both CO₂ and hydrogen, repurposing must be demonstrated not to compromise safety. New Energy Institute (EI) technical guidance aims to assist industry in this regard, write EI Technical Manager, CCUS, Eva Leinwather and Technical Officer, Energy Transition, Chimwemwe Kamwela.