New hydrogen infrastructure in Jutland (the Danish mainland) will generate profits of at least 30 Bn Kroner (£3.5 Bn), as a strong basis to create further value, according to an analysis by Energinet, the organization responsible for Denmark’s future hydrogen infrastructure.
The hydrogen infrastructure project aims to create a framework for producing and distributing hydrogen throughout the region. This initiative is supported by Brintbranchen, an industry organization focused on advancing the hydrogen sector in Denmark.
Energinet’s feasibility study found the potential gains to be substantial. Their calculations account for uncertainties related to the emerging hydrogen and Power-to-X (PtX) market. PtX is producing hydrogen, methanol, and ammonia from renewable energy sources. Factors such as market prices for PtX fuels, hydrogen consumption projections, and the extent of PtX connected to the infrastructure influence the potential socio-economic gains.
The hydrogen industry sees the infrastructure as essential for expanding hydrogen production based on market opportunities in Europe, projected to reach 20 million tonnes by 2030. The infrastructure will also facilitate the utilization of renewable energy resources to produce green fuels, meeting sustainability goals.
In 2022, various parties in Denmark agreed to aim to generate 4-6 GW of electrolysis capacity for PtX by 2030. The amount of ammonia this would produce is equivalent to 8-12 times the total fertilizer consumption in Danish agriculture.
Additionally, exporting hydrogen, primarily to Germany, is estimated to provide a societal benefit of 100 Bn Danish Kroner (£11.6 Bn) by 2050, according to the CIP Foundation. This benefit depends on further investments in wind and hydrogen production in Denmark.
The first stage of the hydrogen expansion project is scheduled for completion by 2028, with estimated infrastructure development costs ranging from 10 to 22 Bn Danish Kroner. A maturation project, approved by Climate Minister Lars Aagaard, will conduct detailed assessments of the project’s economic and operational aspects.
During the maturation project, Energinet will seek binding commitments from users to ensure the infrastructure’s viability. The project will determine specific details such as the optimal pipe placement, dimensioning, and tariffs for producers utilizing the infrastructure.
Energinet’s objective is to support political agreements on PtX in Denmark and hydrogen exports to Germany by collaborating with market players. However, industry representatives emphasize the need for a joint venture with the government to mitigate risks associated with establishing this new and complex infrastructure.
This study emphasizes the commitment to advancing the hydrogen industry in Denmark. It highlights the importance of timely action and collaboration between public and private sectors to achieve the desired outcomes of sustainable hydrogen production and utilization.
Source
Nye tal: Brintrør i Jylland vil give gevinst på mindst 30 mia. kr. [Hydrogen Infrastructure in Jutland to Generate Profits of at Least DKK 30 Bn], Børsen, 2023-06-23
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