The CEO of Italian infrastructure giant Snam outlined a vision for the future of hydrogen on Friday, saying the “beauty” of it is that it can 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 from renewable sources as well as biofuels.
“If you turn up your heating in Italy now, the gas will flow in pipelines from Russia to Siberia,” he said.
“Tomorrow we will have hydrogen produced in North Africa, in the North Sea, with solar and wind resources,” said Alverà. “And this hydrogen can travel through the existing pipeline.”
Alvera said Snam tested various mixing percentages – including up to 100% hydrogen – in existing pipes and it worked.
“So this is an energy transition that uses the infrastructure we have,” he said. “And the very good news is that this new renewable energy will cost less than the existing fossil fuel, namely [a] real breakthrough. “
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Described by the International Energy Agency as a “versatile energy carrier”, hydrogen has a wide range of possible uses and can be used in sectors such as industry and transport.
It can be made in a number of ways. One method involves the use of electrolysis, where an electrical current breaks water into oxygen and hydrogen.
When the electricity used comes from a renewable source such as wind or sun, some call it green or renewable hydrogen.
Currently, the vast majority of hydrogen production is fossil fuel based and green hydrogen is expensive to produce.
In an interview with CNBC on Friday, Francesco Starace, CEO of Enel, said that “there is no competition for capital between hydrogen and renewables”.
“Hydrogen is a niche today, and it’s a niche that needs to evolve into a commercial standard and … a large, competitively-priced industry,” Starace said, signaling that such a shift would likely take 10 years.
“So it’s a big expense in research and development, it’s a big expense in prototypes, a big expense in pilot plants, but nothing compared to what’s going on today on the very large and competitive battlefield of renewable energies.”
While the potential role of hydrogen in the future is excited, there are still challenges.
A World Energy Council briefing earlier this week said low-carbon hydrogen “is not cost-competitive with other energy sources in most applications and in most locations.”
It is unlikely that the situation will change unless there is “significant support to bridge the price gap”.
The analysis, which was carried out in collaboration with PwC and the US Electric Power Research Institute, raised the question of where the funding for such support should come from, but also pointed to the increasing awareness of the industry and the associated positive effects.