Insight
New agreement on hydrogen pipeline between Denmark and Germany paves the way for great export adventures
The industry has long called for hydrogen infrastructure both internally in Denmark and in relation to foreign countries, and therefore welcomes the new agreement. The export possibility will give investors security and promote the industry, according to hydrogen stakeholders.
The hydrogen pipeline has been on the industry’s wish list for a long time due to the Danish target for electrolysis capacity in 2030 is set to 6 GW. This is far more than Denmark itself can utilise. Therefore, there lies a great export adventure in this new agreement, where the hydrogen now can be transported out of Denmark.
“It is a really positive step. We need infrastructure as quickly as possible so that we can build a strong hydrogen and PTX industry in Denmark with the possibility of producing much more green hydrogen that can help decarbonise European industry as well."
The Danish Minister for Climate, Energy and Utilities, Lars Aagaard, and Germany's Economy and Climate Minister, Vice-Chancellor, Robert Habeck, has shaked hands on a Danish-German agreement that a hydrogen pipeline between the two countries must be up and running in 2028.
What comes first?
The infrastructure is important, not least because of the large investments that the industry needs.
"It is an important prerequisite for making investment decisions on PTX projects in Denmark that the infrastructure is on track. This means that investors can invest and navigate with confidence that something is on the way."
Denmark and Germany thus tackle the chicken-and-egg problem that EU Deputy Commissioner Frans Timmermans has also referred to.
"There is, after all, a relationship of mutual dependence. You cannot have an infrastructure that no one wants to use. But if the industry does not have certainty that the infrastructure will come, then you cannot invest either. Therefore, it is an important step for which there is reason to praise both the German and Danish governments."
A new landmark for the industry
At Copenhagen Infrastructure Partners (CIP), the political agreement between Denmark and Germany is called "a milestone". For CIP specifically, the new agreement on the hydrogen pipeline means better conditions for the 1GW PTX project called Høst, which the company is currently constructing in Esbjerg.
"It is really important to release the potential that is in the North Sea. Not just for CIP, but equally for the Danes. But in general, the agreement opens up the wind projects that are in the North Sea and it becomes easier to plan around them. The electricity grid will not be able to absorb all the power that can be produced out there, so if there are no PTX projects or a hydrogen pipe that provides flexibility in relation to the grid, then you will not be able to move forward with the wind projects,"
Exactly how the pipeline, which is supposed to be market-driven, will be financed and where it will be located is not yet official. But the most obvious thing is, as the Energy Agency has previously pointed out, to convert one of the two gas pipes that run the 94 km between Egtved in Denmark and Ellund on the Danish-German border to hydrogen. They were inaugurated in 2013 and are currently used to transport methane.
The great export potential
If the sea wind is combined with hydrogen production at sea, the potential grows further, states the CIP Foundation. Altogether, this can provide a long-term export potential of up to DKK 100 billion. DKK annually.
Countries such as Belgium, Germany and the Netherlands have already announced a need to import hydrogen, and thus large buyers are already ready.
"Netherlands' and Belgium's hydrogen demand is so significant that we will be able to sell all of our excess hydrogen production from the start, and much more over time. Those countries are interesting because they have politically actively chosen to import green hydrogen as part of their strategy to achieve their green transition,"
According to the foundation, the three countries will have an import need of more than 140 TWh in 2030. Of this, Denmark can supply approx. 16 TWh. This corresponds to approx. 8 billion. However, significant growth in the market is expected after 2030, and therefore the total export potential is estimated to reach DKK 100 billion.
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