Hydrogen infrastructure

The broadly based political PtX agreement of 15 March 2022 sets the direction for the development of green fuels in Denmark. The aim of the agreement is to promote the development of green fuels and enable Denmark to become a Northern European power centre for the production and export of green power and green fuels, and a leader in the development of PtX technology.

Under the agreement, Energinet and Evida will be given the opportunity to establish and operate hydrogen infrastructure in Denmark, and explore the possibility of connecting a hydrogen grid in Jutland with the German system. It is also expected to include the possibility for Energinet to establish and operate a hydrogen storage facility. However, the framework for the ongoing development of hydrogen infrastructure in Denmark will only be finalised in 2023.

WHY DO WE NEED HYDROGEN INFRASTRUCTURE?

Energinet has witnessed an increasing interest in hydrogen infrastructure among Danish PtX players in recent years. Specifically, they express a need – within the foreseeable future – for access to flexibility and storage from hydrogen infrastructure. Several of these players have presented visions for establishing GW-scale PtX plants before or around 2030.

To meet the rising interest from Danish PtX players, Energinet and the Danish Energy Agency conducted market dialogue to collect data to shed light on the need for the transport of hydrogen through pipelines. Not surprisingly, the need for transport among several players was found to be closely correlated with the need for large-scale storage of hydrogen and exports to other countries.

The market dialogue found that hydrogen infrastructure can create significant value for PtX players, in the form of flexibility and access to larger markets, including exports to Germany. The majority of Danish projects are still at an early stage, requiring clarifications on key issues. This creates great uncertainty about the projects. However, clear needs were expressed to Energinet, and the signal is that hydrogen infrastructure will initially be of most interest in Jutland, with a connection to hydrogen storage and exports to Germany.

The players involved in the market dialogue particularly reported very specific interest in south Jutland in exporting hydrogen to Germany and access to hydrogen storage. Energinet is already working closely with German gas TSO Gasunie Deutschland on preparations for a hydrogen connection between Denmark and Germany. In 2021, Energinet and Gasunie jointly conducted a preliminary study of a connection, which could be ready by 2030, partly based on reuse of existing pipelines. The Danish-German collaboration will be expanded in 2022 to include more specific studies.

VALUE OF HYDROGEN INFRASTRUCTURE FROM A SYSTEM VIEWPOINT

The primary focus of a Danish PtX industry and large-scale hydrogen production will naturally be on producing the green fuels to replace fossil fuels in sectors that are difficult to electrify. However, production of hydrogen also paves the way for seasonal energy storage, and can thus help support security of supply in Denmark as we transition to a greener, more sustainable energy system.

Energinet also sees great potential in integrating the hydrogen system with the rest of the energy infrastructure, particularly in order to meet the increasing flexibility requirements in the electricity system. However, in order for PtX production to play a role in ensuring a robust green energy system, electrolysis plants must produce when electricity is green and plentiful – and reduce production when it is scarce and expensive. In addition to the right price signals, including up-to-date tariffs for the electricity grid, which Energinet is currently working to implement, PtX producers must also have access to selling and storing the hydrogen produced.

Hydrogen infrastructure holds great potential for supporting large-scale PtX production in Denmark, as it will make it possible to optimise production at the PtX plants and ensure that hydrogen can be sold to a developing market. There is potential for strong synergies with the electricity system if such infrastructure is planned carefully. It must help minimise the expansion of the electricity grid required to handle the rising production of renewable energy, and allow Denmark to be positioned to export hydrogen to our neighbouring countries.

A strong focus on the interplay between the future large-scale PtX plants and the rest of the energy system thus holds great potential for exploiting the Danish renewable energy resources, accelerating the electrification of Danish society and positioning Denmark as an exporter of green energy to the rest of Europe.

In addition to Energinet seeing great potential in establishing hydrogen infrastructure in Denmark, it will also be responsible for connecting electrolysis plants to the Danish electricity transmission grid. Connection of PtX plants will follow the processes already established for grid connection, which you can read more about here (in Danish).