Italy's Snam teams up with utility Hera on hydrogen project

Hera SpA

12/12/2023 13:29

MILAN, Dec 12 (Reuters) - Italian gas grid operator Snam
 SRG.MI  and utility Hera  HRA.MI  on Tuesday signed an
agreement to develop a green hydrogen production site near the
city of Modena in a move to offer clean fuels to their
customers.
    The project, which is expected to be operational in 2026,
will be funded mainly through the European Union's post-pandemic
recovery fund, the two groups said in a press conference.
    The 20 million euro ($21.6 million) project involves setting
up a photovoltaic plant that will supply green energy to an
electrolyser to produce hydrogen from water. At full capacity it
will make 200 tonnes a year of green fuel. 
    "Hydrogen is still expensive, but its price could halve to
around 5 euros a kilo if the government offers incentives to
reduce costs, in addition to existing ones on capex," said Hera
Chief Executive Orazio Iacono, adding the price could be
considered competitive by customers.
    The green fuel will go to local public transport groups and
could also be available to energy-intensive companies based near
the northern Italian city of Modena, including tile-makers and
automotive groups.
    In its business plan to 2026, Snam has earmarked 1 billion
euros for investment in decarbonisation, which also includes the
development of a pipeline to bring hydrogen from North Africa to
northern Europe, dubbed SoutH2 Corridor. 
    Snam Decarbonisation Unit Executive Director Piero Ercoli
said the group would launch a market test for cross-border
hydrogen infrastructure next year.
    
($1 = 0.9258 euros)

 (Reporting by Francesca Landini; editing by David Evans)
 ((francesca.landini@thomsonreuters.com; +39 02 66129437;
Reuters Messaging: reutersitaly.thomsonreuters@reuters.net))