Sunday, December 4, 2022

New pipeline between France and Spain unlikely to solve energy problems, experts say

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An underwater pipeline connecting the ports of Barcelona and Marseille is unlikely to help ease Europe’s energy crisis in the short term, analysts said, with Spain and France both agreeing it may not be up and running until 2030.

The joint project between Spain, Portugal and France, agreed last month and dubbed BarMar, replaced MidCat, the gas pipeline which was planned to cross the Pyrenees from Spain into France.

Despite Spanish claims MidCat might be ready by 2023, it was vetoed by France because of political opposition to ecological damage caused by the proposed pipeline through the southwest of the country.

BarMar will mainly be used to pump green hydrogen and other renewable gases into the European grid.

Green hydrogen is produced by passing an electric current through water to split it between hydrogen and oxygen, in a process called electrolysis.

It is considered green because the electricity comes from renewable sources of energy which do not create any harmful emissions.

Hydrogen only emits harmless water vapour while fossil fuels emit harmful greenhouse gases when they burn.

Shipping company Maersk plans to produce up to 2 million tonnes of e-methanol a year in Spain by 2030 to supply its fleet of cargo ships and cut its carbon footprint. The €10 billion project is likely to involve investment from Spain and from EU recovery funds.

France, Spain and Portugal also hope that the pipeline would allow the transport of some natural gas to help alleviate Europe’s supply problems stemming from Russia’s war in Ukraine.

“This is a project that needs to be extremely safe… Our estimate is that we would need about four to five years,” Spain’s Energy Minister Teresa Ribera said at a briefing in Madrid last month.

France’s energy minister Agnès Pannier-Runacher concurred, confirming that the project would not be up-and-running until 2030.

“It will take longer (than MidCat), the deadline is 2030. It has one goal: to be able to essentially transport hydrogen instead of developing a gas infrastructure which could be later converted to hydrogen,” she told El Pais, a Spanish newspaper last month.

A December deadline has been set for the Spanish, French and Portuguese companies which will build the pipeline to present a detailed plan.

More details are expected to be revealed at a conference involving the three countries on December 9.

‘Not necessary’

Jorge Sanz, president of the Commission of Experts for Energy Transition, questioned the need for a pipeline between Barcelona and Marseille.

“To take gas from Barcelona to Marseille it is not necessary to build a pipeline between Barcelona and Marseille. (You can) divert the ships (that carry gas) so that instead of unloading in Barcelona, they do so directly to Marseille,” Sanz told Euronews.

He said that unless France adapts its gas pipeline infrastructure to transport green hydrogen then the pipeline between Barcelona and Marseille serves no purpose.

“France has no plan to undertake this investment because green hydrogen will have a smaller number of consumers because its use is limited and investment in networks for its transport will be difficult to recuperate,” Sanz added.

Spain accounted for 20% of the production of the world’s green hydrogen projects in the first quarter of 2022, making it the second biggest producer after the United States, according to a report by Wood Mackenzie consulting firm.

The war in Ukraine has forced Europe to look for other energy sources than Russian gas.

Though the sector is still in its infancy, Spain is championing green hydrogen because it has a renewable energy infrastructure and abundant resources of sun, wind and hydropower – as well as space – at its disposal.

Space is key because solar energy plants or wind turbines often require large areas of land.

Germany is a big producer of solar power but is 1.4 times smaller than Spain and with a population of 84 million has far less space to devote to vast fields of solar panels. In comparison, Spain has a population of 47 million and large swathes of the countryside are vacant.

Spain has another advantage over other European countries; it has a large natural gas network and Liquefied Natural Gas (LNG) terminals which can be used to transport green hydrogen.

At present, the drawback of green hydrogen is the high cost of producing the gas which means natural gas is cheaper.

It has been used to partly power local buses in Barcelona and steel and fertilizer plants.

Fernando Garcia, a London-based utilities analyst at RBC Capital Markets, said the BarMar route would “clearly” not fix Europe’s short-term supply problems.

“I don’t know if (BarMar) is going to be ready in 2030 but clearly it is not going to be in 2023 or 2024 so that means that it is not going to have an impact on the current crisis,” he told Euronews.

Garcia said the impact of green hydrogen was limited in the short and medium term at present.

“Green hydrogen is currently an expensive technology which is in its early stages in Europe,” he added.

Numisteamone

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