Germany Makes Hydrogen Pitch [GasTransitions]

Germany will take upon itself a “global leadership role in hydrogen”, German economics minister Peter Altmaier told magazine Der Spiegel in January. The Germany Economics Ministry has been working on a long-awaited “hydrogen strategy” for many months. Altmaier told Der Spiegel it is ready, but still has to be discussed with other ministries.

The main thrust of the German hydrogen strategy, however, is not a secret: Germany intends to go all-out for “green hydrogen”. Altmaier already said in November last year that “Germany must beat Asia” in the “hydrogen technology race”. Michael Müller, parliamentary state secretary in the education and research ministry, said that “Green hydrogen is tomorrow’s oil.” He added he saw “huge export opportunities” for German hydrogen technologies.

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According to Der Spiegel, the new strategy aims for Germany to have 3 to 5 GW of electrolysis capacity in place by 2030. The green hydrogen produced by these electrolysers, however, will only be about 20% of all hydrogen used in Germany. The remainder would be covered mostly by imports. Germany wants to “invest in energy partnerships” – in particular with African countries – “to equip them with the means to produce hydrogen” for export, according to the strategy.

Other news from the report in Der Spiegel: the German government intends to strongly expand the number of hydrogen filling stations and to invest in infrastructure that will stimulate the use of hydrogen in certain industrial and heating applications. And: Berlin will install a Hydrogen Council of “up to 13” experts (“Expertinnen und Experten”) that will advise the government on next steps.

Remember Desertec

What to make of these brave plans? At this moment electrolysis capacity in Germany is still negligible. Shell and ITM Power are currently building what they claim to be “the world’s largest hydrogen electrolysis plant”, REFHYNE, at the Shell Rheinland refinery in Wesseling, Germany, which will become operational in the second half of 2020. This has a capacity of just 10 MW.

Building a global hydrogen import chain, as Germany wants to do, is also fraught with difficulties. Energy partnerships with African countries have been tried before. Most readers will remember the failure of Desertec, which was supposed to bring solar power from North Africa to Europe by way of high-voltage networks? An important reason why Desertec  did not get off the ground is because it makes more sense for African countries to use their solar and wind power for their own electricity needs. The same will apply to any hydrogen export effort.

Hydrogen ambitions currently have another big obstacle to overcome: low natural gas prices. Many “green hydrogen” projects are in limbo at this moment because they are too expensive in current market conditions.

Then Germany faces the dilemma whether to invest in “blue hydrogen” (based on natural gas with CCS). Altmaier and Chancellor Angela Merkel have both expressed support for carbon capture and storage, but NGOs like Greenpeace in Germany fiercely resist what they decry as “the continued use of fossil fuels”.

Hydrogen Valley

Germany is also seeking hydrogen partnerships closer to home, with the Netherlands and the UK, although these too are still embryonic. On 29 January, the German Economics Ministry announced that Germany, the Netherlands and the German State of North Rhine Westphalia have commissioned a “feasibility study” to investigate the possibility to build a “transnational value chain for green hydrogen from the North Sea to the Ruhr area”. Two research institutions, TNO in the Netherlands and JÜlich IEK-3 in Germany, will produce a report later this year that will identify the “conditions needed to create profitable business cases in green hydrogen”. 

Like Germany, the Netherlands has an ambitious hydrogen agenda. In the “Climate Accord” of December 2018, a key document in Dutch energy and climate policy, the government says it wants to have 3-4 GW of electrolysis capacity built by 2030, in combination with required infrastructure. Meanwhile, the Port of Rotterdam is working on a major “blue hydrogen” project, H-Vision/Porthos, with carbon storage in the North Sea, in which BP, Gasunie, Uniper, Air Liquide, Vopak and Shell are involved. This project is making progress, but is still awaiting FID.

In the Northern Netherlands, the region that is home to natural gas production, there is also a strong drive to move from natural gas to hydrogen. In February 2019, provincial authorities and regional businesses presented an ambitious €2.8bn (US$3.1bn) investment agenda with 33 hydrogen projects. In September 2019, the European Commission announced that it would award the Northern Netherlands a €20mn grant to become Europe’s “flagship green hydrogen region”. The grant will be leveraged by €70mn in private and public funds to turn the region into Europe’s number one “Hydrogen Valley”.

The biggest project so far in this envisioned Hydrogen Valley is a 20 MW electrolyser to be built by Nouryon, Gasunie and four other partners in the port of Delfzijl. On 22 January, the consortium announced that it will receive an €11mn subsidy from the EU under the Fuel Cells and Hydrogen Joint Undertaking (FCH-JU) programme. Still, no FID has been made yet.

At the same time the companies have expressed the intention of scaling up the electrolyser in Delfzijl to 60 MW or even 100 MW. “We are already looking at building a 100 MW electrolyser, together with French energy company Engie. And we are talking with them about a 1 Gigawatt electrolyser,” a spokesman of Gasunie told Gas Transitions.

Gas grid

An encouraging bit of news for German and Dutch hydrogen ambitions is that German gas grid operators have said they “need few new pipelines” to build a hydrogen network. According to the financial newspaper Handelsblatt, “Germany's gas industry plans to establish a pipeline network measuring 5,900 km to enable the large-scale use of hydrogen in the country.” Handelsblatt cites a plan made by the gas transmission grid operator umbrella organisation FNB Gas which “intends to use mainly existing infrastructure to transport hydrogen from future generation sites in the north of the country to industrial centres in the west and south.”

According to the story, “Transmission grid operators are committed to also using the existing gas infrastructure for hydrogen. We are working at full speed on concrete technical and network planning solutions to ensure that the integration can be successful," FNB Gas head Ralph Bahke told the newspaper. More than 90% of the hydrogen grid planned by the operators will be based on the existing network used for transporting natural gas. The hydrogen grid would also allow for the import of hydrogen via ships or pipelines.

The German government’s hydrogen plans also get support from German industry. German industry association BDI has welcomed the government’s focus on hydrogen. “The current hydrogen hype is justified,” the BDI wrote in a position paper published last year. “Ambitious climate action in German industry can only be done with hydrogen,” said deputy managing director Holger Lösch of BDI. “Besides a long-term perspective, the BDI expects that a national hydrogen strategy sends a strong signal for initial applications on an industrial scale.”

ThyssenKrupp, Germany’s largest steelmaker, has expressed the intention to become carbon-neutral by 2050. In November 2019, the company announced that “it has launched a series of tests into the use of hydrogen in a working blast furnace aimed at reducing CO₂ emissions from steel production,” according to Clean Energy Wire. “The use of hydrogen instead of coal at this step in the production process could lead to CO₂ savings of 20%”, ThyssenKrupp said in a press release.

Salzgitter, another German steelmaker, has also developed technology to replace coal in its production processes with hydrogen. If implemented, the company could manage to reduce German’s total greenhouse gas emissions by 1%, all on its own. Currently, however, notes Clean Energy Wire, “Salzgitter can’t realise [the] plan yet because it will cost billions of euros. [It] couldn't be sold at present because it is too expensive.”

And while Germany aims for hydrogen leadership, other countries, in particular China, might be one step ahead on key technologies, such as hydrogen production, according to researchers Matthias Deutsch and Andreas Graf from Berlin-based think tank Agora Energiewende. The reason: Chinese manufacturers “have much lower capital expenditures than their European counterparts,” they write on the website EurActiv.

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