E.ON is in discussions with multiple offtakers for its planned hydrogen distribution network in Germany, Europe's biggest energy network operator told S&P Global Platts Nov. 24.
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E.ON company was talking to a "significant two-digit" number of potential end users for its 80,000 mt/year H2.Ruhr renewable hydrogen and ammonia project in the Ruhr region, E.ON vice president strategy energy networks Carsten Borchers said on the sidelines of the Global Manufacturing and Industrialization Summit in Dubai.
"We are working with Spain's Iberdrola and Italy's Enel on establishing a green hydrogen value chain," Borchers said.
E.ON plans to establish a distribution network and corresponding infrastructure for renewable hydrogen and ammonia to supply industrial and mobility customers."
The hydrogen production will be powered by new solar photovoltaic and wind plants in Italy and Spain, as part of the CEO Alliance of 12 European companies to promote cross-border low-carbon projects, E.ON said in a statement in October.
In Spain, the hydrogen produced by electrolysis of water will be converted into ammonia and shipped to Germany, with exports starting in 2024.
Renewable power generation in Italy will be exported to Germany for hydrogen production from a new 20-MW electrolyzer, planned to start by 2025, with the scope to expand capacity.
"Green hydrogen is the only truly sustainable option for decarbonizing industrial processes," E.ON CEO Leonhard Birnbaum said in the statement.
"For this, we will require much more hydrogen in Germany long term, than we can produce ourselves," Birnbaum said. "What we need are strong pan-European partnerships and efficient supply chains, which must be established now."
The green hydrogen will be fed into the pipeline network between Duisburg and Dortmund by 2032.
E.ON hopes to make a final investment decision in 2022, subject to establishing offtake agreements to underpin demand, and securing EU subsidies.
Borchers said the project would require an investment of hundreds of millions of euros, "comparable to any kind of pipeline project", while the exact figure would depend on the extent to which existing pipelines could be repurposed.
The company expects growing demand for hydrogen in the Ruhr region, from 17 TWh/year at present to up to 150 TWh/year by 2050.
Borchers told Platts the project would provide a model for other industrial regions to decarbonize, with the potential for hundreds of such networks to be deployed in Europe.
Renewable hydrogen production costs are expected to fall dramatically this decade, driven by lower green power costs.
S&P Global Platts assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur11.82/kg ($13.24/kg) Nov. 23 (Netherlands, including capex), based on month-ahead power prices. PEM electrolysis production was assessed at Eur14.13/kg, while blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur5.96/kg.