Hydrogen may be in wide use in Ukraine within ten years but major challenges exist, RGC

Aura Sabadus

24-Jan-2022

LONDON (ICIS)–Hydrogen could be widely used in Ukraine within the next seven to ten years while biomethane may be exported to Europe by the end of 2022, senior experts at the country’s largest distribution company, RGC said.

Speaking to ICIS, Oleg Nikonorov, RGC ceo, said much of the hydrogen generated in the country in the upcoming decade would be delivered within clusters of production, rather than transported over large distances.

He said RGC was currently developing a plan with key requirements for hydrogen injections in the network, which is expected to be published next year.

“After the publication, we will have another seven years to make investments, if they are available to us and replace parts where needed. There are many ifs on the way but if there is a production site, we can supply consumers with hydrogen, without changing the whole network,” Nikonorov said.

In its hydrogen strategy, the EU identified Ukraine as a potential exporter, predicting the country could establish around 10GW of electrolysed capacity by 2030 and sell the bulk of production to Europe.

Meanwhile, some Ukrainian academic studies suggested the country could produce around 500million cubic metres of hydrogen annually thanks to soaring combined wind and solar capacity which increased from around 0.7GW (excluding Crimea and the occupied territories) in 2015 to 8.3GW at the end of 2021.

Currently, there are around 10 projects for hydrogen production which are developed across Ukraine but Stanislav Kazda, RGC’s strategy director, explained the chances of exporting the output were limited.

The main reasons are linked to technical and regulatory constraints.

HEFTY INVESTMENTS

The distribution system, he said, was enmeshed with the transmission system, which meant it was difficult to uncouple the two. Furthermore, the distribution system itself would need significant investments to accommodate high blends of full shipments of hydrogen.

Kazda estimated the system would require around €13-€14bn for a complete redesign to accommodate hydrogen. Of these €10bn alone would have to be invested to upgrade the gas distribution network first.

Nikonorov explained that average investments in gas distribution would be €300m annually.

However, he said in Ukraine, the figure would be closer to €20m because of low distribution tariffs set by the regulator NERC.

An investment of €14bn would allow distribution companies to overhaul the grid completely but given the funding shortfall all they can do is focus on critical parts that would need replacements or upgrades.

“The Ukrainian gas infrastructure is so complex you have no chance to transport hydrogen without touching distribution. Transmission and distribution can’t be uncoupled. You’d need to build a new grid for hydrogen exports but this is not likely to happen in the next 10 years,” Kazda sai.

“Moreover, not even the European hydrogen backone initiative can handle big export capacity. Internal changes would be needed in Ukraine, Slovakia, the Czech Republic and even Germany for [long-haul] exports,” he said, noting that more likely options were to develop ammonia and export it via vessels.

BARBECUE PARTY

Even so, RGC has been testing different hydrogen blends at 15 sites with various types of consumers across the country. The tests have been focusing not only on the short-term impact of hydrogen on the pipelines but also aiming to understand its long-term influence in terms of corrosion or permeability.

Nikonorov added that with the exception of old Soviet style convectors, all heating and cooking appliances would work at blends of 20% or even higher.

“I can do my bacon and eggs on 20% or even 30% hydrogen blends and we are planning a hydrogen barbecue party in the summer to prove that this is doable,” Nikonorov said.

Apart from concerns linked to the ability of the transmission network to carry more than 20% blends, RGC is also analysing the ability of existing household meters to measure consumption.

Kazda said the appliances were built for natural gas and the membrane used to gauge consumption may not work for hydrogen.

He said the measurements could be adjusted thanks to mathematical algorithms, without requiring large investments to deploy new meters. However, he explained it would be difficult to explain the physical and mathematical formulae underlying the adjustment to government officials.

BIOMETHANE PROGRESS

In contrast to hydrogen, injecting and shipping biomethane would be much easier, Igor Gotsyk, decarbonisation team leader at RGC, said.

“For us, biomethane is the same as natural gas. There is no difference except for a few issues linked to a slightly different quality of gas, which will be solved at state level by changing the regulations to allow biomethane to be injected into the system.

He said there was a growing number of biogas plants in operation in Ukraine, which were interested in upgrading to produce biomethane.

“We have about 15 applications for connection and the number is increasing every week. We established a one-stop-shop where producers can get the information related to connecting and the cost of connecting to the grid,” he said.

It is two to three times more economically justified to produce biomethane than electricity [from biogas] because the calorific value of biomethane is higher than electricity, he pointed out.

The Ukrainian parliament adopted the law on biomethane at the end of last year, paving the way for the production and export of biomethane in the short-term.

There are different technologies of upgrading biogas to biomethane. The cost of upgrading is 10-20% of the development capex of biogas plants, Gotsyk said.

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