A new pipeline unveiled by the Net Zero Technology Centre (NZTC) today (31 August) could allow Scotland to meet up to 10% of Europe’s projected hydrogen import demand by the mid-2030s.
The Hydrogen Backbone Link, a proposed purpose-built marine pipeline connecting Scotland to mainland Europe, could support Scotland’s ambition to become a powerhouse for green hydrogen production and exportation – but pace and investment is required.
According to a supplementary report on the pipeline, which acts as phase one of the project, the necessary CAPEX investment required to fully build this hydrogen backbone would be in the region of £2.7 billion. The potential of this investment, however, could be lucrative for Scotland in terms of scaling its presence on the global stage for green energy.
It is important to note that Scotland has established a target to have 25GW of renewable or low-carbon hydrogen production by 2045.
Should the project be developed, the resulting transportation tariff of 32p/kg would yield a 6% initial rate of return for investors. The report states “balancing the (albeit higher) production and (predicted lower) transportation costs, Scottish green hydrogen will be cost competitive to other globally sourced hydrogen from countries and regions with lower production costs such as Canada, Chile and the Middle East”.
This could also bolster the UK’s own hydrogen prospects and vitally could act as a catalyst for Scottish hydrogen production in the late 2020s and early 2030s supporting the creation of a booming hydrogen economy. It could also be crucial in helping Scotland meet its green export ambition.
NZTC’s research also determined that although the idea of repurposing existing oil and gas pipelines for the use of hydrogen could well reduce the costs, the technical complexities of repurposing and the current use of hydrocarbons means that a new, purpose-build pipeline would be preferable.
The project has received support from funding partners including Shetland Island Council, EnQuest, Kellas Midstream, Crown Estate Scotland and Shell, contributing members Xodus, DNV-GL, Wood., Wood Mackenzie and Worley, and strategic partners National Grid and SGN.
Phase two of the project will examine the next steps required to progress construction and start-up of the Hydrogen Backbone Link.
Callum Milne, Hydrogen Backbone Link project manager at the Net Zero Technology Centre, said: “Scotland is poised to utilise its abundant natural resources, skilled workforce and proximity to an energy hungry market in north-west Europe but to maximise this, will take accelerated and increased government and industry investment, rapid development of infrastructure and cross border collaboration over the next decade.
“The Hydrogen Backbone Link project is a key early enabler for this, providing cost-effective transportation to market for Scottish hydrogen producers and supporting the transition to a low-carbon energy system.”
To help the project’s development and cement Scotland’s role in the global hydrogen ecosystem, NZTC provided several recommendations to take forward.
These include rapid acceleration of public and private investment to deliver the backbone pipeline, continued investment in hydrogen and wind deployments to deliver security of supply, development of a National Energy Storage Strategy, cross-border policy and standards alignment and financial support to accelerate technology development and infrastructure deployment to turn vision into reality.
