Building a Hydrogen- ready Natural Gas Infrastructure

Building a Hydrogen- ready Natural Gas Infrastructure


Hemant Mallya and Tirtha Biswas

The recent pandemic has resulted in a slump in petroleum fuels and natural gas prices. This has made these hydrocarbon fuels even more attractive and green solutions less so in these times of economic distress. Decarbonisation of the industrial sector requires finding a substitute for hydrocarbon fuels (including coal) in the high-grade heat applications in sectors like iron and steel, cement, chemicals and fertilisers. Cheap natural gas is attracting a lot of attention as the cleanest of hydrocarbon fuels available for industrial energy needs. Even before the pandemic, the Ministry of Petroleum and Natural Gas had committed to making natural gas 15 per cent of the total primary energy share by 2030. Hydrogen, with its higher heat content on a mass basis compared to hydrocarbon fuels, is ideal for high heat industrial applications. Green hydrogen produced by the electrolysis of water using electricity generated from renewable sources, such as solar and wind, is showing promise. However, the cost of green hydrogen is not competitive with incumbent carbon-based fuels currently but is expected to be with technological advances in the future. The challenge then is to balance the economics of fuel with the need to decarbonise. One way to do this would be to build the infrastructure of tomorrow for hydrogen development while utilising it today for natural gas.

Natural gas and hydrogen are both gaseous fuels and are transported most efficiently in bulk through pipelines. Natural gas is transported over long distances at high pressure in large diameter steel pipelines and then distributed to the end-use customers at low pressure in small diameter steel or plastic (polyethylene) pipes. Hydrogen behaves differently than natural gas under high pressures and temperatures. It has a higher diffusion rate in steel and causes embrittlement, which results in cracks and failure of the pipe. However, fibreglass reinforced plastic (FRP) pipes have shown excellent resistance to hydrogen and can be used for high-pressure natural gas transmission pipelines. Polyethylene (PE) pipes already in use in distribution systems have shown relatively minimal deterioration when transporting hydrogen at low pressures. However, high-performance polyethylene pipes (HPPE) can handle pure hydrogen streams effectively.

Using FRP and HPPE in the natural gas transmission network will make it hydrogen ready. In fact, city gas distribution systems built using HPPE can in the future produce green hydrogen and inject it into their network without the need for getting natural gas or hydrogen through long-distance transport pipelines – a distributed generation and use of hydrogen.

Pipeline infrastructure is capital intensive and risky because anticipated demand may not materialise, resulting in stranded assets that can then be a barrier to the entry of hydrogen. Both natural gas and hydrogen can be compressed or liquefied for transportation and then re-gasified for end-use. An alternative to building pipelines for small demand volume locations is small scale LNG (ssLNG) where LNG is transported in cryogenic containers through regular modes of road (trucks), rail (wagons), or waterways (container carrying barges and ships). ssLNG systems are scalable and movable and inherently hydrogen-ready.

India has about 16,800 km of transmission pipelines operational, and an additional 14,200 km of pipelines has been either approved or under construction. ssLNG volumes are marginal but are expected to grow. City gas distribution systems are expected to cover 53 per cent of the country’s area and 70 per cent of the population by 2030. Therefore, the opportunity is ripe for the development of a hydrogen infrastructure of tomorrow using cheap natural gas as leverage.

As green hydrogen becomes cost-competitive, it can be introduced into the natural gas network as a blend with natural gas. Preliminary feasibility studies have shown that hydrogen can be mixed up to 15 per cent by volume in natural gas without any change to the existing transportation or end-use systems. This will provide the necessary impetus to hydrogen production systems. Subsequently, the blend proportion of hydrogen in natural gas can be increased as the system would be ready for up to 100 per cent hydrogen transport.

The availability of adequate infrastructure would enable India to quickly scale up green hydrogen usage by leveraging the ambitious renewable power capacity targets, declining tariffs and concentrated domestic markets for mobility and industrial applications. Analysis by the Council on Energy, Environment and Water (CEEW) indicates that green hydrogen is a promising alternative to the current steel production, and the production costs can break even with coal and natural gas-based processes by 2040. Similarly, production of green ammonia with favourable renewable energy sources can become competitive by 2030. The low cost of production also opens up an opportunity for catering to the export markets. Increasingly, major economies are now incorporating hydrogen into their low-carbon roadmaps, creating a lucrative export market in the near future.

The Atmanirbhar Bharat vision of a self-reliant India aims to scale up the existing domestic industrial base, support setting up of new units to integrate with global value chains, and manufacture products ranging from handlooms to defense equipment. However, a further increase in the industrial output with the existing energy mix will have an adverse impact on the efforts to decarbonise the sector in the longer term. The transition of fuels has always been a challenging proposition driven primarily by economics. As and when hydrogen production becomes competitive, the key barrier to entry will be transportation. India’s burgeoning natural gas infrastructure while beneficial now can become a barrier to industrial decarbonisation. However, the silver lining is that infrastructure growth has only begun and has the potential to be hydrogen-ready. How soon green hydrogen can make an entry into the industry and economy will to a large extent depend on the preparedness of the transportation and distribution infrastructure. Building a hydrogen-ready natural gas infrastructure can reap rich dividends for the country in the future and enable us to become atmanirbhar in energy supply.

Hemant Mallya is a Senior Programme Lead, and Tirtha Biswas is a Programme Lead with the Council on Energy, Environment and Water (CEEW).