It could cover almost 1/4 of Italy’s energy needs by 2050
Today, 7 February 2024, Snam officially announces a market test on hydrogen in Italy in collaboration with Confindustria.
This is a survey that aims to collect data and information on the demand and supply of hydrogen in a specific market or sector. The goal is evaluate the current and future state of hydrogen consumption and productionboth as an energy carrier and as a raw material, and the possible opportunities for development and innovation.
Hydrogen is interesting for the ecological transition because it is a clean, renewable and versatile energy source, which can help reduce greenhouse gas emissions and decarbonise several sectors, such as industry, transport, construction and agriculture.
All elements that frame this element in line with the objectives of the European Green Deal and the United Nations 2030 Agenda, which include climate neutrality, zero pollution, adaptation to climate change, the restoration of biodiversity and ecosystems, the transition towards the circular economy and the bioeconomy.
The investigation by Snam in collaboration with Confindustria is important for Italy which is committed to achieve carbon neutral status by 2050through the National Ecological Transition Plan (Pte) and the Recovery and Resilience Plan (Pnrr), which provide for various measures and investments (also) to promote the use of hydrogen.
Snam and Eni for CO2 storage
Furthermore, Snam, together with Eni, will launch a collection of non-binding expressions of interest for the transport and storage of CO2 in Ravennaas part of the Carbon Capture and Storage (CCS) project launched previously.
The collection of expressions of interest for the transport and storage of CO2 at the Ravenna site has the objective of informing stakeholders about the Ravenna Ccs project developed in a 50-50 joint venture by Eni, as operator, and Snam. In this way it will be possible to collect some essential data on the affected emitters and, in a non-binding manner, their interest in this decarbonisation solution.
In both cases, the synergy with Confindustria will allow us to identify two strategic markets for Italian and European decarbonisation. The information collected will be provided to institutions to define the legislative and regulatory framework, guiding the development of the hydrogen and CCS supply chains in Italy.
“In an energy scenario like the current one – explains Piero Ercoli, Executive Director Decarbonization of Snam – security and energy transition are two sides of the same coin. Snam, in addition to guaranteeing continuous energy supplies, is committed daily to the development of an Italian and European system that aims to transport decarbonised molecules”.
A challenge that seeks to reconciling environmental sustainability with productivity: “With the launch of the market test dedicated to hydrogen and the collection of expressions of interest for the Ravenna CCS project, – continues Ercoli – we want to confirm Snam’s central role in facilitating the achievement of the country’s decarbonisation objectives, taking into consideration the characteristics of our industrial fabric”.
The potential of hydrogen
A study conducted by Snam with the analytical support of McKinsey has highlighted how Italy can represent a very attractive market for the development of hydrogen. This is thanks to the widespread presence of renewable energy and a widespread network for gas transport, including connections with North Africa.
Based on the results of this study, hydrogen could cover almost 1/4 of all energy demand in Italy by 2050, if we consider the 95% decarbonisation scenario, necessary to not exceed the 1.5 degree threshold, which was largely exceeded last year. The most attractive demand segments are transport, building heating, and some industrial applications (e.g. refining, high-temperature heat processes) and long-distance heavy transport will be one of the first segments in which hydrogen can be economically sustainable.
Snam and McKinsey highlight how Italian gas infrastructures are able to support the potential of hydrogen: the extensive infrastructure can allow the connection between the South of the country, rich in renewable energy, with the demand centers located in the North, and make possible the creation of highly independent and completely renewable energy systems on the islands.
How much does hydrogen cost?
A particularly interesting aspect that emerges from the study is that hydrogen will reach the total cost parity with diesel by 2030even without the application of system incentives.
The cost of hydrogen could be competitive as early as 2030 – ahead of other European markets.
Considering the strong presence of renewable energy in our country, “green” hydrogen will reach the break-even point with “grey” hydrogen derived from natural gas, 5-10 years earlier than in many other countries, including Germany. This makes Italy the ideal place for large-scale use of electrolysis.
Italy could import hydrogen from North Africa, at a 14% lower cost compared to domestic production. Solar panels could be deployed in northern African countries (“where the sun always shines”), and then hydrogen imported to Sicily through existing pipes. This could also incentivize hydrogen exports to other European countries via Italy.
Where are we at with renewable energy?
During 2023 alone, the overall renewable energy capacity of global energy systems grew by 50%, reaching almost 510 gigawatts (Gw). Of particular importance is the contribution of solar photovoltaic, which constitutes 3/4 of the overall increase, especially due to the role of China which has activated a quantity of photovoltaic systems equivalent to the entire world capacity in 2022. An interesting and positive acceleration for the environment, but also a threat to the West which risks finding itself behind as is already happening on the electric car front, which is experiencing a heavy setback in the EU.
Data presented in the International Energy Agency’s annual renewables market report reveals that the renewable energy sector is experiencing a notable boom, paving the way for significant progress towards global climate goals.
This acceleration offers concrete prospects for achieving the ambitious goal of triple the global capacity to generate electricity from renewable sources by 2030as set during the recent COP28 climate change conference.
According to a Eurobarometer survey
More than eight in ten respondents believe it is important for their national government (86%) and the European Union (85%) to take action to improve energy efficiency by 2030 (for example by encouraging people to insulate their homes, install solar panels or buy electric cars).
58% of European citizens believe that the use of renewable energy sources should be accelerated, energy efficiency increased and the transition to a green economy accelerated, considering spikes in energy prices and restrictions on gas supply due to Russia’s actions.
Three quarters of respondents (75%) agree that acting on climate change will lead to innovation that will make EU businesses more competitive and almost as many (73%) agree that the cost of damage caused by climate change is much higher
of the cost of the investment in a green transition (33% totally agree, 40% tend to agree).
Despite commitments on multiple fronts, in fact, the ecological transition is still significantly behind the objectives of the UN 2030 Agenda and the Fit for 55 plan. This is reported by the State of Climate Action 2023, a report that provides a series of guidelines guide to reduce global warming and minimize damage to the environment and biodiversity, the result of a joint analysis by various associations in which the United Nations and the World Resources Institute also participate.
The analysis shows that 41 of the 42 indicators analyzed are not in line with the objectives set for 2030. These are not always clearly insufficient results, sometimes the path taken is the right one but at a pace that is too slow.
Initiatives like Snam’s can accelerate the ecological transition. As requested by European citizens and the planet.