Can the Mediterranean become a powerhouse in Europe?
Tour tourists in Mallorca Perhaps now marvel at a new attraction on the Mediterranean island: a small economy fueled by “green” hydrogen. At its heart, two solar plants power an “electrolyser”, which splits water into oxygen and hydrogen, creating carbon-free fuel. The hydrogen can power buses, feed into the island’s gas grid and power fuel cells at hotels and the port. “The project shows what is possible,” says Belén Linares, head of innovation at Acciona Energía, a renewable energy company that is one of the project’s investors.
There is one snag: the hydrogen is yet to come. Due to a design flaw, the electrolyser, which is manufactured by Cummins, an American company, was recalled. It is impossible to import green hydrogen, which comes from renewable sources. Buses and fuel cells are not used. A newly elected local government seems to have little interest. The previous administration spoke “a lot of hot air”, according to a quote in local media by the new mayor of Palma, the island’s capital.
Unlimited possibilities, or hot air? The same question also hangs on the wider green-hydrogen economy, which European governments hope to see emerge in the Mediterranean basin, turning the region into a solar supporter to a dynamo north of its direction with a wind that is already shaping around the North Sea. The reward is great. If the plans to power southern Europe go well, it will give the continent access to cheap renewable energy and allow heavy industry to clean up its carbon footprint.
The Mediterranean has always been a conduit for energy. From the days of Roman rule to the 19th century it was manpower in the form of enslaved Africans. Today it is mostly natural gas. Half a dozen pipelines connect Europe with Africa and the Middle East. The EU relies on the region for more than a third of its natural gas imports. In the age of renewable energy, countries on the shores of the Med have some of the best conditions on Earth for harvesting natural forces.
Solar potential shows great potential. On average Spain consumes in annual hours 4,575 kilowatt (kWh) of sunlight per square meter and Morocco in 5,563 kWh, double what Germany will expect. Scarce numbers mean that Spain and Portugal have enough land for such plants, as do the deserts of northern Africa and the Middle East. In some parts of Morocco and Mauritania both sun and wind are abundant, creating rare sweet spots where hydrogen electrolysers can run almost non-stop. “There are only ten such places in the world,” explained Benedikt Ortmann, who runs the solar business of BayWa, a German energy and construction company.
Tapping this renewable energy source is not a new idea. In the early 2000s, an association supported by dozens of corporations, mostly German, came up with the idea of plastering the Sahara with giant sunflowers. But support for Desertec, introduced in 2009, quickly grew because of the cost of the technology. The development of better and cheaper methods for harvesting the sun’s rays is behind the revival of the idea. According to the International Renewable Energy Agency, the average electricity cost of utility-scale solar plants has decreased from $0.45 per k.Wh in 2010 to $0.05 last year.
It is now more feasible to transport the energy to the north, to where it is needed. Desertec’s plan included undersea cables, which have limited capacity. But now cheaper and more efficient electrolysers can convert electricity to hydrogen at the source. This can then be transported as a gas or derivative, such as liquid ammonia. Analysts expect that in a few years green hydrogen from northern Africa will cost less than $1.50 per kilogram, possibly making it cheaper than “blue” hydrogen, which comes from natural gas but requires the resulting carbon capture and storage.
Demand for energy from the south is much more likely to materialize than in the Desertec days as well. Hydrogen and its products will be badly needed as carbon-free feedstocks for Europe’s steel and chemical industries. Of the 20m tons that the them has set a consumption target by 2030, much will come from the southern and northern periphery of Africa.
However, the region’s position as the powerhouse of southern Europe is not mentioned. Europe must start a market for a new source of energy and do so in an unregulated field with many competing players. “It’s a chicken-and-egg problem,” says Kirsten Westphal of the German Association of Energy and Water Industries, a lobby group. Increasing demand and supply at the same time is a delicate balancing act. Companies are reluctant to commit to long-term lease agreements unless they are certain of hydrogen availability and prices. This, in turn, discourages agents from making critical investment decisions. It doesn’t help that political instability in North Africa increases risks and therefore the cost of capital.
But the biggest problem is connecting all sides of the market, which starts with establishing physical connections. Most of the hydrogen must first be transported by ship, probably in the form of ammonia (liquid hydrogen, which must be kept at -253°C, is difficult to move around). But shipping capacity is limited. James Kneebone of the Florence School of Management estimates that even if it were technologically possible, the existing global shipping fleet could only deliver around 6.5m tonnes per year. already able to transport liquefied natural gas. That leaves trust in pipes
Experts are divided on whether existing gas networks can be upgraded for hydrogen and that building new pipelines is expensive. Geopolitical turmoil could hinder investments in pipelines as well as hydrogen production. The three passages are marked by the them through which hydrogen could flow in the Mediterranean basin over troubled land. It would be better if hydrogen pipelines from Mauritania went through the Western Sahara but there is a dispute over Morocco’s control of the region. Another option being considered is an offshore route through the Canary Islands.
Once built, pipelines are vulnerable to political disruption. In November 2021, Algeria’s rocky relations with Morocco led to the severing of diplomatic relations and disruption of gas flows through the Maghreb-European pipeline, which connects Morocco’s gas fields with Spain, through its neighbor’s territory .
Closer to home, things are less complicated. A deal for an underwater pipeline linking Barcelona to Marseille, from which hydrogen could be transported from Spain via existing infrastructure via France to Germany, could be on hold in a spat between Germany and France over whether to consider “green” nuclear power. In addition, Air Liquide, a French company that is the world’s largest producer of industrial gases, is lobbying hard against a project that would value its own hydrogen pipeline network.
Europe has no choice but to confront these problems if it is to meet its ambitious targets to reduce carbon emissions. Some steps have already been taken. They include the announcement of half a dozen initiatives by the European Commission, from a “hydrogen accelerator” to spread the use of the gas, to a “European hydrogen bank” to start trading. More importantly, the Commission has allowed subsidies to flow by relaxing state aid rules, so that member countries can support companies in their efforts to decarbonise. Funds have also been earmarked for hydrogen pipelines, such as a 3,300km link from Algeria and Tunisia to Austria and Germany. And hydrogen projects in northern Africa will benefit from investment from institutions such as the European Bank for Reconstruction and Development.
Some member states want to move faster. Spain and Portugal have embarked on ambitious national strategies, aiming to turn the Iberian Peninsula into a green-hydrogen center. But it is Germany, which needs to import up to 70% of the hydrogen needed to decarbonize its mighty heavy industry, that wants to see it succeed. Germany has already set aside more than €8bn ($8.6bn) to help its companies go green. In a show of solidarity, a couple of years ago, the country’s foreign office started “hydrogen diplomacy”, with half a dozen “hydrogen embassies” in key countries. Recently, the ministry of economic affairs seeded H2Global, a platform for hydrogen trading.
Above all, Germany seems to admit that it must give in order to get. It seems that he is not only happy to build solar plants and electrolyser farms in Africa, but is ready to help create local jobs, upgrade grids and build de- recommended (electrolysers need a lot of pure water). In time Germany could even accept that parts of its heavy industry could migrate to where the hydrogen is produced. “The business map always follows the energy map,” said Simone Tagliapietra of Bruegel, a think tank.
Such schemes are essential if Germany is to avoid a situation in which it relies on unpredictable authoritarian regimes for energy, as it has done with Russia and natural gas. “To avoid a repeat with hydrogen, Germany must build real partnerships,” says Andreas Goldthau from the University of Erfurt. If all goes as planned and the dynamo of southern Europe rises, spots like Mallorca will live not only for the beaches and the nightlife, but for the energy that comes from hydrogen electrolysers. ■