Pipeline plans: Malta studying ‘availability’ of hydrogen from Sicily

Malta’s prospects of developing a €400 million ‘hydrogen ready’ pipeline are linked to a pilot project by Italian energy giants ENI and ENEL to produce green hydrogen from renewable energy sources in Gela, MaltaToday has learned.

A spokesperson for the energy ministry did not give any details on how the hydrogen will be sourced by Malta for its prospected pipeline – which could qualify for EU funds – but confirmed that the “next step is to study the availability of hydrogen in the vicinity and determine the necessary infrastructure to deliver it to Malta.”

Gela in Sicily is already the site of ENI’s bio-refinery, where “grey” hydrogen is used to produce biofuels. The town is still reeling from the closure of its petro-chemical plants built in the 1960s and is increasingly dependent on ENI’s energy investments – energy-hungry Malta may well end up boosting the town’s economy.

The prospect of securing EU funds for a hydrogen-ready pipeline were boosted after energy minister Miriam Dalli secured a derogation in 2021 to have Malta’s gas pipeline, which lost out on the funding, be once again in with a chance as an EU project of common interest.

This may enable Malta to proceed with its plans for a gas pipeline to Gela which would eventually be used to transport hydrogen.

When quizzed by MaltaToday, the ministry did not give specific details on how Malta will access the “green” hydrogen market, recognizing that the technology is in fact still in its infancy, though promising.

“Although green hydrogen is still an emerging technology, it is expected to develop at a fast pace,” a spokesperson for Dalli said. The next step is studying “the availability of green hydrogen in Malta’s vicinity in order to determine the necessary infrastructure to deliver it to Malta”.

Ministry officials have tagged the project cost at some €400 million, but this estimate may vary “depending on the price of metals at the time of construction”. Malta will collaborate with Italy as the host country of the sending terminal station.

ENI currently uses hydrogen for making hydrotreated vegetable oil (HVO) biofuels in its Venice and Gela biorefineries. Most of its hydrogen is generated through steam methane reforming (SMR), which is considered to be a grey hydrogen.

In December 2021, ENI and Enel announced they were working together to develop green hydrogen projects through electrolyzers that are powered by renewable energy. The electrolyzers will be located near Eni refineries in Taranto and Gela.

In Gela, ENI plans to complement existing plants using grey and blue hydrogen, with green hydrogen to explore how these can “interact and integrate with each other”.

Only in May, Enel Green Power’s gead of hydrogen business Paola Brunetto acknowledged that green hydrogen was more expensive to produce than grey hydrogen, and that the emergence of a green hydrogen market depends on public incentives.

Green vs grey hydrogen

Unlike grey hydrogen, which is produced by using fossil fuels, and blue hydrogen which relies on expensive and unreliable carbon capture and storage technology, green hydrogen, the option being considered by Malta, is produced by electrolysis: the use of electricity from renewable energy sources, to split water into hydrogen and oxygen.

Presently on a global level, only around 2% of global hydrogen production is from electrolysis, with most hydrogen made directly from fossil fuels like lignite, coal and methane.

Environmentalists are generally wary of the new technology, fearing that this could prolong the dependence on fossil fuels, but energy companies have hailed it as the energy of the future.

According to a PWC analysis of global energy markets, production costs will decrease over time, due to continuously falling renewable energy production costs, economies of scale, lessons from projects underway and technological advances. “As a result, green hydrogen will become more economical. The challenge is anticipating those trends and acting in time,” PWC says, forecasting demand for green hydrogen to accelerate from 2035 onwards.

And although indications show that green hydrogen will become more affordable in the future as renewable energy becomes even cheaper, at present it remains more costly than hydrogen produced from natural gas, and relatively inefficient when compared to other energy sources.

Governments promises investment in offshore renewables

But allaying fears that hydrogen could divert interest from solar and wind energy, Dalli insists that hydrogen is being seen as complementary to a greater investment in large-scale offshore renewable energy plants and the second interconnector.

“In line with Malta’s greenhouse gas emissions reduction obligations and our ultimate aim of decarbonisation, government is committed to continue to increase the share of renewable energy,” a spokesperson told MaltaToday.

To achieve these targets, a number of investments are being planned in large-scale and offshore renewable energy project. But in order to cope with variations in the supply of wind or solar energy and ensure continuity of service to consumers, “a strong grid is essential”.

In the government’s evolving energy policy, the second interconnector is pivotal in meeting ever-increasing energy demands from rising economic growth and increased consumption. It will also ensure security of supply and deliver a stronger connection with the European grid.

When asked why Malta is not limiting itself to energy-derived renewables and the interconnector, the energy ministry insists this plan “needs to be complemented with local generation and access to new fuel markets”.

Dalli’s ministry also said the derogation from the EU ensuring that Malta’s gas pipeline – now hydrogen-ready – be newly recognised as a Project of Common Interest, has “opened the door for Malta to access new technologies, particularly green hydrogen originating from renewable sources”.

But of note is the fact that Malta’s LNG gas pipeline fell at the last milestone when the new Von der Leyen Commission decided to change tack on energy policies, favouring hydrogen over fossil fuels.

FOE sceptical on hydrogen plans

Environmental NGO Friends of Earth Malta is wary of a hydrogen-ready pipeline, fearing that this could prolong dependency on fossil fuels.

While in favour of getting rid of the LNG tanker from Delimara, FOE insists that a hydrogen-ready pipeline is not a long-term solution to Malta’s energy provisions. “Having a second interconnector and investing more in renewables, coupled by a drive to reduce energy consumption should be the main solutions to implement,” FOE spokesperson Martin Galea Degiovanni told MaltaToday.

While agreeing that Malta should diversify its energy provision by relying on a mix of sources the country “cannot depend on a source which is currently in experimental stages” at a time when most hydrogen sources are still coming from non-renewable sources linked to fossil fuel generation (grey and blue).

Galea Degiovanni described hydrogen as simply a vector to store and move energy around. “If the production of hydrogen releases CO2, as that from splitting methane gas, it worsens global warming,” he said.

He dismissed the fossil fuel industry’s claims that it can in future capture and store the carbon. “In reality, the large-scale and secure storage of carbon remains unproven and uneconomic.”

Moreover, he adds that compared to solar and wind energy, hydrogen produced both by fossil fuels and by renewables is also inefficient. “Five times more wind or solar farms would be needed to heat our homes with (green) hydrogen than if we were to heat them directly with electricity using a heat pump. It is a similar story with hydrogen cars versus electric cars.”

He also warned that retrofitting existing power stations to hydrogen is very expensive. “The question is, do we want to risk having a pipeline that leads to nowhere or will this be yet another opportunity for contractors to syphon off public funds?”

The energy ministry did not answer MaltaToday’s questions on the cost of retrofitting the existing LNG operated power stations at Delimara. MaltaToday is informed that retrofitting the BWSC plant, which has already been retrofitted from heavy fuel oil to natural gas, and eventually to hydrogen, is very difficult.

But the Electrogas plant has been designed by Seimens to cater for the eventuality of a conversion to hydrogen.

Neither did the ministry reply to questions on whether Malta is considering other funding mechanisms if the European Commission refuses to fund the proposed hydrogen ready pipeline. An Environmental Impact Assessment on the construction of the LNG pipeline between Gela and Delimara has already been presented and the project is expected to be approved by the Planning Authority in the next weeks.