Poland May Become a Green Hydrogen Tycoon

Poland may become a green hydrogen tycoon.

In 2050, Poland may become one of the most competitive producers of green hydrogen in the European Union. In addition, we could export it to other countries, using the already existing infrastructure – e.g. the Yamal gas pipeline.

According to analysts of the Polish Economic Institute (PIE), in the next three decades Poland could become a very competitive producer of green hydrogen. Particularly economically beneficial in Polish conditions would be the production of hydrogen based on energy from onshore wind energy.

The averaged cost of energy would be in the range of about 2.33 to 3 euros per kilogram of hydrogen and about 70-92 euros for one megawatt hour (MWh), according to economists from a Polish think tank.

A more expensive variant would be hydrogen generated by photovoltaic power plants. Its price would be above 4 euros per kilogram and about 123-129 euros per 1 MWh.

If we relied on wind energy in the development of hydrogen production and produced this renewable gas at an average cost of EUR 2.6 per kilogram and EUR 78 per megawatt hour, Poland, along with Sweden, Croatia and Ireland, would be one of the most competitive hydrogen producers in the EU.

Green hydrogen will replace Russian gas

Hydrogen is expected to play a central role in the long-term strategy to phase out fossil fuel supplies to the EU, replacing up to a third of Russian gas supplies to the EU.

By 2030 – that is, in the next few years – about 20.6 million tons of hydrogen are to replace between 25 and 50 billion cubic meters of Russian gas per year in the energy sector.

At the same time, it is to be “green” hydrogen, i.e. produced in a non-emission way. Electrolysers, used to obtain hydrogen, are therefore to be powered by renewable energy. The gas is to be imported into the EU or produced in the Community.

PIE economists said.

Persistently high natural gas prices in Europe will continue to increase the relative profitability of its renewable substitutes.

“Average gas prices at the Dutch TTF hub in the first quarter of 2022 were €100.8 per 1 MWh.”

Therefore, they were more than 5 times higher than in the same period of 2021. and compared to the first quarter of 2020, as much as 10 times higher.

With gas prices above €133/MWh, green hydrogen could become a cheaper fuel than natural gas.

Importantly, Poland has a very important role to play in the development of the hydrogen market. It may be a transit country to the Baltic States and Finland (after 2030) as well as to the Visegrad Group countries and Romania (after 2040).

The starting point for cooperation may be an agreement signed between the Polish, Romanian, Slovak and Hungarian gas transmission system operators.

According to the estimates of these operators, associated in the European Hydrogen Backbone initiative, achieving the ambitious objectives of the EU energy policy (REPowerEU) will be possible only with the implementation of a separate transmission network intended for the international transmission of hydrogen on the EU internal market.

For this purpose, it will be necessary to build new infrastructure or adapt the existing one used for gas transmission. This will require some adjustments – hydrogen has different physical properties than methane, which translates into about 20% lower capacity of hydrogen gas pipelines.

However, it is possible to adapt parts of existing gas pipelines, compressor stations and reduction and measurement stations, previously used for the transport of natural gas, for the transport of hydrogen.

What’s more, it is also more profitable than building a completely new infrastructure. Assuming the assumptions of the authors of the European Hydrogen Backbone reports, to which PIE analysts refer, only for Polish would mean savings of about 1.6 billion euros.

Poland could use the part of the Yamal gas pipeline and the Poland-Lithuania gas pipeline located on its territory to transport hydrogen.

As for the estimated costs of creating infrastructure for the transport of green hydrogen, this would be more than €1.47 billion if a pipeline for west-east transmission had to be built from scratch, and around €0.5 billion for transmission to the Baltic States.

The adaptation of the Yamal and Poland-Lithuania gas pipelines would cost €263 million and €90 million respectively, so it would be 80% cheaper than the new project. Thanks for staying up to date with Hydrogen Central.

Also, the fact that the Polish part of the Yamal pipeline is owned by Russian entities does not have to be an obstacle. As PIE analysts believe:

The example of the German Network Agency (Bundesnetzagentur) taking over the management of the strategic assets of Gazprom Germania GmbH shows that the current Polish-Russian ownership structure of the Polish section of the Yamal gas pipeline does not have to prevent the development of this infrastructure (…).

“This would also make it possible to maintain the use of the Polish section of the Yamal gas pipeline in the event of the abandonment of Russian gas supplies to the EU.”

READ the latest news shaping the hydrogen market at Hydrogen Central

Green hydrogen instead of gas in Yamal? Yes, if Poland makes good use of its opportunities, April 15, 2022