# Moving energy: wires, pipes and ships: New carriers, the cost of distance and chokepoints

Source page: https://www.materialinsights.org/learn/energy/moving-energy/p4/

[Understanding Energy](https://www.materialinsights.org/learn/energy/) / [Module 9: Moving energy: wires, pipes and ships](https://www.materialinsights.org/learn/energy/moving-energy/) Part 4 of 4

## New carriers, the cost of distance and chokepoints

The energy transition adds new things to move, notably hydrogen and low-temperature heat, and puts more weight on wires. Comparing carriers on a common basis, cost per MWh moved 1,000 km, shows why some trades are almost free and others barely make sense. It also shows how much risk sits in a few narrow places.

### 4.1 Hydrogen is easy to pipe and hard to ship

Hydrogen holds more energy per kilogram than any fuel, about 120 MJ, but it is so light that a cubic metre at normal pressure holds very little. To move it in bulk there are three options, each a trade between how tightly it is packed and how much energy the packing costs.

The first is a pipeline at 70 to 100 bar, the cheapest option over land. Compressing 10 GW of hydrogen to move it 1,000 km uses well under 1% of the energy carried, and the European Hydrogen Backbone study estimated transport costs of about EUR 0.11 to 0.21 per kg per 1,000 km. Old gas pipes can often be converted, which cuts investment sharply: Germany's approved 9,040 km core network, costing EUR 18.9 billion, is about 60% converted gas pipe. But the steel must be checked for embrittlement, and hydrogen leaks more easily than methane.

The second is liquid hydrogen at minus 253 C. Liquefaction uses 30 to 36% of the hydrogen's energy with today's plants, and the liquid boils off at 0.05 to 0.25% a day.

The third is to bind hydrogen into a carrier such as ammonia, methanol or a liquid organic carrier. Ammonia liquefies at minus 33 C and is already shipped worldwide for fertiliser. But making ammonia uses 12 to 26% of the hydrogen's energy and cracking it back uses another 13 to 34%, so up to about half can be gone by the time pure hydrogen is recovered. That is why many export projects plan to use the ammonia directly, in fertiliser plants, ship engines or power stations.

Ambition still outruns construction. The IEA counts over 40,000 km of hydrogen pipelines announced to 2035, of which only about 9% are operating or committed. Shipping pure hydrogen costs at least USD 2 per kg including conversion, comparable to the cost of making it cheaply. The tile "Hydrogen and hydrogen carriers" sets out each route.

Process flowchart Shipping hydrogen as ammonia Inputs **Hydrogen from electrolysis**100 units of energy Process steps 1 **Ammonia synthesis**

hydrogen combined with nitrogen; uses 12 to 26% of the hydrogen energy
 2 **Ship as liquid ammonia**

minus 33 C at normal pressure; small losses
 3 **Cracking back to hydrogen**

uses 13 to 34% of the hydrogen energy
 Outputs **Hydrogen at the destination**about 50 to 75 units (calculated)

Using the ammonia directly, without cracking, avoids the last loss.
 Source: IRENA, Global hydrogen trade to meet the 1.5C climate goal, Part II: Technology review of hydrogen carriers (2022), https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2022/Apr/IRENA_Global_Trade_Hydrogen_2022.pdf  Common misreading

#### Hydrogen can simply use the gas grid

Partly true. Large steel transmission pipes can often be converted, and that is the basis of Germany's core network. But hydrogen embrittles some steels, escapes through smaller gaps and carries about a third of the energy of methane per unit volume, so compressors and valves must change. Blending hydrogen into gas networks is capped at low levels: EU rules allow 2% by volume at cross-border points.

- [IEA, Global Hydrogen Review 2026: Trade and infrastructure (2026)](https://www.iea.org/reports/global-hydrogen-review-2026/trade-and-infrastructure) · web
- [IRENA, Global hydrogen trade to meet the 1.5C climate goal, Part II: Technology review of hydrogen carriers (2022)](https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2022/Apr/IRENA_Global_Trade_Hydrogen_2022.pdf) · web
- [European Hydrogen Backbone initiative (with Guidehouse), Extending the European Hydrogen Backbone (2021)](https://www.ehb.eu/files/downloads/European-Hydrogen-Backbone-April-2021-V3.pdf) · web
- [Bundesnetzagentur, Bundesnetzagentur approves hydrogen core network (2024)](https://www.bundesnetzagentur.de/SharedDocs/Pressemitteilungen/EN/2024/20241022_H2.html) · web
- Smil, Energy: A Beginner's Guide (2006) · via Smil Mastery Course, M1 'Energy in matter: fuels and energy density'

### 4.2 Heat networks move warmth across a city, not a continent

Heat is the hardest form of energy to move far. It leaks through every pipe wall, all day, whether or not anyone is buying it. So heat travels across towns rather than countries, in district heating and cooling networks: insulated pipes that carry hot water, or steam in older systems, from central plants to buildings and bring the cooled water back to be reheated.

Europe has about 17,000 such networks with nearly 190,000 km of pipe, serving around 70 million people. In Denmark, Sweden and Finland they heat most city buildings. Their great advantage is flexibility of source. One network can take heat from a combined heat and power plant, a waste incinerator, a large heat pump drawing on sewage or seawater, factory waste heat, a data centre or a solar thermal field, and switch between them as prices change. In 2021 renewables and waste heat supplied more than 40% of the energy fed into European district heating. Large insulated water tanks attached to networks also make them cheap places to store heat for days.

Losses are measured over a year rather than per kilometre. Well-run networks in western and northern Europe lose about 8 to 15% of the heat they send out, older eastern European networks 15 to 25%, and sparse rural ones can lose over 40%. Pumping adds about 1% of the heat delivered as electricity. Newer fourth-generation designs supply water at 50 to 60 C instead of 80 C or more; running the same pipes at lower temperatures could cut heat loss by around 40%, and it lets heat pumps and low-grade waste heat feed in.

District cooling works the same way with chilled water and is growing fast in the Gulf, where cooling dominates building energy use. For dense new districts in hot Indian cities, where air conditioning drives the evening peak, it is an option worth examining. The "District heating and cooling networks" tile covers the technology.
 In the data

#### Heat travels short distances

Manhattan's steam system, the largest in the United States, has about 105 miles of pipe and about 1,555 customers. Dubai's Empower, which describes itself as the largest district cooling provider, had 1.7 million refrigeration tons connected at the end of 2025, about 6 GW of cooling (calculated). Both are huge, yet each serves a single city, because heat leaks away and pumping hot water far costs more than making the heat near where it is used.

- [International District Energy Association, summary of Euroheat & Power DHC Market Outlook 2023 (2023)](https://www.districtenergy.org/blogs/district-energy/2023/05/22/district-heating-and-cooling-is-instrumental-to-de) · web
- [Nussbaumer and Thalmann, Status Report on District Heating Systems in IEA Countries, IEA Bioenergy Task 32 (2014)](https://www.nachhaltigwirtschaften.at/resources/iea_pdf/reports/iea_bioenergy_task32_status_report_on_district_heating_systems.pdf) · web
- [Thorsen, Lund and Mathiesen, Progression of District Heating: 1st to 4th generation, Aalborg University (2018)](https://vbn.aau.dk/ws/files/280710833/1_4GDH_progression_revised_May2018.pdf) · web
- [Con Edison, Corporate facts (2026); IDEA, Empower's connected capacity (2026)](https://coned.com/en/about-us/corporate-facts) · web

### 4.3 The cost of distance differs a hundredfold between carriers

Putting every carrier on one basis, money per MWh of energy moved 1,000 km, shows a striking spread. The figures in the table are approximate and drawn from different places and years, so treat them as orders of magnitude, but the pattern is robust.

Big ships are cheapest. A VLCC moves crude for about USD 0.1 per MWh per 1,000 km in a normal market, and a Capesize bulk carrier moves coal for about USD 0.2 to 0.25. Large oil pipelines cost around USD 1 per MWh. Hydrogen pipelines would cost several times more, because hydrogen carries less energy per unit of pipe capacity. Electricity is the dearest bulk carrier. A Chinese ultra-high-voltage DC line recovers its capital for about USD 2 per MWh over 1,000 km, while a new 765 kV AC line in the United States works out at about USD 21 to 26 per MWh on the same basis, reflecting both higher construction costs and lower use.

LNG is different again, because most of its cost does not depend on distance. Liquefaction alone adds about USD 2 to 3 per MMBtu, or USD 7 to 10 per MWh, before a ship leaves port. That is why gas travels by pipe where it can and as LNG only where seas or politics block a pipe.

Three lessons follow. First, over very long distances it is usually cheaper to move fuel than electricity, which is why Japan imports LNG rather than power by cable, and why the proposed 3,800 km Xlinks cable from Morocco to Britain failed to win a government contract in 2025. Second, electricity's higher transport cost is offset by its value: it arrives ready to use, while fuels lose most of their energy in power stations and engines. Third, utilisation dominates: a line or pipe used half the time costs about twice as much per unit moved.

Data Approximate cost of moving energy 1,000 km

| Carrier | Cost per MWh per 1,000 km | Basis |
|---|---|---|
| Crude oil by VLCC | about USD 0.1 | Normal-market freight, Gulf to China, early 2026 |
| Coal by Capesize ship | about USD 0.2 to 0.25 | Western Australia to China benchmark rate, February 2026 |
| Crude oil by large pipeline | about USD 1.2 | Toll for a full 1 million barrel a day line |
| Electricity by UHVDC (China) | about USD 2.2 | Capital recovery only, Changji to Guquan |
| Hydrogen by pipeline (planned) | about EUR 3 to 6 | European Hydrogen Backbone estimate, 2021 |
| Electricity by new 765 kV AC (US) | about USD 21 to 26 | Line cost only, 60% utilisation |
| LNG liquefaction (any distance) | about USD 7 to 10 | Fee of USD 2 to 3 per MMBtu |

All values are calculated from the cited sources and exclude energy losses; they mix years and regions and are orders of magnitude only.
 Source: Calculated from Thunder Said Energy (2026), Breakwave Advisors (2026), Hitachi Energy and Power Line Magazine (2019-2020), European Hydrogen Backbone (2021), MISO cost guide via PUC Texas (2024) and Argus Media (2026), See module sources  Worked example

#### Coal by rail or power by wire

A power station in coastal Gujarat can burn coal brought by rail from Odisha, imported coal brought by ship from Indonesia, or be replaced by a plant near the mine that sends power by wire. The ship is cheapest per tonne-km, rail is slower and congested, and the wire avoids moving fuel but costs most per MWh-km. Which wins depends on distances, rail capacity and how fully the line would be used.

- [Thunder Said Energy, Oil tankers: the economics (analyst model, 2026)](https://thundersaidenergy.com/downloads/oil-tankers-the-economics/) · web
- [Breakwave Advisors, Panamax freight view on Indonesian thermal coal flows (2026)](https://www.breakwaveadvisors.com/insights/2026/2/27/panamax-freight-view-on-indonesian-thermal-coal-flows) · web
- [Thunder Said Energy, Pipelines: the energy economics (analyst model, 2026)](https://thundersaidenergy.com/downloads/pipelines-the-energy-economics/) · web
- [Hitachi Energy, The world's most powerful transmission system (Changji to Guquan) (2020)](https://www.hitachienergy.com/it/it/news-and-events/features/2020/07/the-world-s-most-powerful-transmis-sion-system-facilitated-by-hi) · web
- [European Hydrogen Backbone initiative (with Guidehouse), Extending the European Hydrogen Backbone (2021)](https://www.ehb.eu/files/downloads/European-Hydrogen-Backbone-April-2021-V3.pdf) · web
- [MISO (M. Tackett), Discussion of EHV and HVDC, presentation to ERCOT (2023)](https://www.ercot.com/files/docs/2023/06/27/2_ERCOT%20Discussion%20of%20EHV%20and%20HVDC_MISO_Tackett_20230626.pdf) · web
- [Argus Media, Qatar outage widens US-European LNG spread to 2029 (2026)](https://www.argusmedia.com/zh/news-and-insights/latest-market-news/2804708-qatar-outage-widens-us-european-lng-spread-to-2029) · web
- [Enerdata, UK backs away from CfD for 3,800 km Morocco-UK HVDC interconnection (2025)](https://www.enerdata.net/publications/daily-energy-news/uk-backs-away-cfd-3800-km-morocco-uk-hvdc-interconnection.html) · web

### 4.4 Chokepoints concentrate the risk

Much of the world's traded energy passes through a few narrow places. The EIA's list is headed by the Strait of Malacca, with about 23 million barrels of oil a day in the first half of 2025, and the Strait of Hormuz, which carried about 21 million barrels a day in that period along with more than a fifth of world LNG trade. Bab el-Mandeb and the Suez Canal link the Red Sea to the Mediterranean; the Danish straits, the Bosporus and the Panama Canal also matter.

The year 2026 tested this system harder than any since the 1970s. After war broke out on 28 February, oil flows through Hormuz fell to an average of 2.7 million barrels a day from March to May. Dated Brent reached a record USD 144 a barrel in early April. Within two weeks IEA members agreed their largest ever emergency release, 400 million barrels. Bypass pipelines suddenly mattered: Saudi exports from the Red Sea port of Yanbu, fed by the East-West pipeline, rose from about 2 to over 5 million barrels a day by June, and the UAE's 380 km line to Fujairah carried about 1.8 million. Those lines then became targets themselves. Meanwhile attacks by Yemen's Houthis kept Suez and Bab el-Mandeb traffic far below normal, sending ships the long way around Africa.

Pipelines and cables have chokepoints of their own. A Russian strike at Brody in Ukraine stopped Druzhba crude flows to Hungary and Slovakia from late January to late April 2026. A ship's anchor damaged the EstLink 2 power cable between Finland and Estonia on Christmas Day 2024, and it was out of service for months.

For an importer such as India, which buys most of its crude and much of its LNG from the Gulf, the practical lessons are clear: diversify suppliers and routes, hold stocks, keep spare import terminal capacity, and value domestic energy, including power from local sun and wind, partly for the security it brings. Storage is the other half of the answer.
 Worked example

#### Why importers keep idle terminals

World LNG import terminals could take in about 1,100 million tonnes a year, but trade was 437 million tonnes in 2025, and terminals ran at under 40% of capacity on average in 2024. This looks wasteful, but the spare capacity is insurance. When Russian pipeline gas to Europe was cut after 2022, and when Gulf LNG was cut in 2026, buyers with spare terminals could turn to other sellers quickly.

- [US EIA, World Oil Transit Chokepoints (updated March 2026)](https://www.eia.gov/international/content/analysis/special_topics/World_Oil_Transit_Chokepoints) · web
- [IEA, How global oil supplies have readjusted to help fill the huge gap left by the Strait of Hormuz shock (2026)](https://www.iea.org/commentaries/how-global-oil-supplies-have-readjusted-to-help-fill-the-huge-gap-left-by-the-strait-of-hormuz-shock) · web
- [Lloyd's List Intelligence, Red Sea Brief, 15 October 2026 (2026)](https://www.lloydslistintelligence.com/resources/blog/red-sea-brief-15-october-2026) · web
- [Bloomberg, Oil flow to Slovakia and Hungary halts after Druzhba damage (2026)](https://www.bloomberg.com/news/articles/2026-02-12/ukraine-says-russia-damaged-druzhba-pipeline-halting-oil-flow) · web
- [Elering, EstLink 2 connection back to market (2025)](https://elering.ee/en/) · web
- [International Gas Union, World LNG Report 2026, press release (2026)](https://igu.org/press-releases/world-lng-report-2026) · web
- [International Gas Union, 2025 World LNG Report (2025)](https://www.connaissancedesenergies.org/sites/connaissancedesenergies.org/files/pdf-actualites/1763396210-1747916410-igu-world-lng-report-2025.pdf) · web
- Smil, How the World Really Works (2022) · via Smil Mastery Course, M14 'Globalization and its prime movers'

### See it in the table
[H₂O Water](https://www.materialinsights.org/commodities/water/)[St Steel](https://www.materialinsights.org/commodities/steel/)[H2 Hydrogen](https://www.materialinsights.org/chemicals/hydrogen/)[NH3 Ammonia](https://www.materialinsights.org/chemicals/ammonia/)[MeOH Methanol](https://www.materialinsights.org/chemicals/methanol/)[H2T Hydrogen and hydrogen carriers](https://www.materialinsights.org/energy/e_h2_transport/)[DHN District heating and cooling networks](https://www.materialinsights.org/energy/e_district_heat_net/)[CHP Combined heat and power](https://www.materialinsights.org/energy/e_chp/)

### Check your understanding

Which is generally the cheapest way to move a MWh of energy 1,000 km?
 In a normal market a VLCC moves crude for about USD 0.1 per MWh per 1,000 km, far below any wire or pipe.

Why do many hydrogen export projects plan to use ammonia directly rather than crack it back to hydrogen?
 Synthesis plus cracking can consume up to about half the hydrogen's energy, so skipping the cracking step saves a large loss.

In 2026, what let Gulf producers keep exporting some oil while Hormuz was largely closed?
 The Saudi East-West line and the UAE line to Fujairah carry crude to ports outside the strait.

[← Part 3: Moving molecules: pipelines, tankers, LNG and coal trains](https://www.materialinsights.org/learn/energy/moving-energy/p3/)[Mark read · Wrap-up →](https://www.materialinsights.org/learn/energy/moving-energy/review/)

## Other sections

- [Module overview](https://www.materialinsights.org/learn/energy/moving-energy/index.md)
- [Why electricity travels at high voltage](https://www.materialinsights.org/learn/energy/moving-energy/p1/index.md)
- [Grids are machines that must balance every second](https://www.materialinsights.org/learn/energy/moving-energy/p2/index.md)
- [Moving molecules: pipelines, tankers, LNG and coal trains](https://www.materialinsights.org/learn/energy/moving-energy/p3/index.md)
- [Key terms, quiz and sources](https://www.materialinsights.org/learn/energy/moving-energy/review/index.md)