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Hydrogen produced using renewables will be able to travel through existing gas pipelines, Snam CEO says

The CEO of Italian infrastructure giant Snam on Friday outlined a vision for the future of hydrogen, saying the “beauty” of it was that it could be easily stored and transported.

Speaking to CNBC’s “Squawk Box Europe,” Marco Alverà spoke about how current systems would be used to facilitate the delivery of hydrogen produced using renewable sources as well as biofuels.

“Right now, if you turn on your heater in Italy the gas is flowing from Russia, all the way from Siberia, in pipelines,” he said. 

“Tomorrow, we will have hydrogen produced in North Africa, in the North Sea, with solar and wind resources,” Alverà said. “And that hydrogen can travel through the existing pipeline.”

Alvera said Snam had tested different percentages of blending – including as much as 100% hydrogen – in existing pipes, and it had worked.

“So that’s an energy transition using the infrastructure we have,” he said. “And the very good news is that this new renewable energy will cost less than existing fossil fuel energy, which is [a] real breakthrough.”

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Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a diverse range of applications and can be deployed in sectors such as industry and transport.

It can be produced in a number of ways. One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen.

If the electricity used in this process comes from a renewable source, such as wind or solar, then some call it green or renewable hydrogen.

Currently, the vast majority of hydrogen generation is based on fossil fuels, and green hydrogen is expensive to produce.

Challenges ahead

In an interview with CNBC on Friday, Enel CEO Francesco Starace said there was “no competition for capital between hydrogen and renewables.”

“Hydrogen today is a niche, and it is a niche that needs to develop into commercial standard and into … big industry, competitive pricing,” Starace said, signaling that such a shift would probably take 10 years.

“So it’s a big effort in R&D, it’s a big effort in prototypes, a big effort in pilot plants, but nothing compared to what goes on, on the very large and competitive battlefield of renewables today.”

Indeed, while there is excitement about the potential role hydrogen could play going forward, it still has challenges.

Earlier this week, a briefing from the World Energy Council said low-carbon hydrogen wasn’t “cost competitive with other energy supplies in most applications and locations.”

It added that the situation was unlikely to change unless there was “significant support to bridge the price gap.”

The analysis — which was put together in collaboration with PwC and the U.S. Electric Power Research Institute — raised the question of where funding for such support would come from, but also pointed to the increasing profile of the sector and the positive effect this could have.

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