Source: Energy & Management Powernews, November 10 2022
Is Germany moving fast enough to meet the targets set by the German government? Eon answers with a resounding "no" with its first-ever H2 balance sheet.
The goals of the German government are clear: By 2030, an electrolysis capacity of 10,000 MW is to be created on German soil. 80% of the German hydrogen demand is to be added on top by imports. However, according to the H2 balance sheet presented by Eon in Berlin on November 9, these targets are unrealistic, at least at the current pace. With a view to 2030, the H2 balance attests to the ramp-up of the hydrogen market in Germany several shortcomings.
On Eon's H2 balance, the Essen-based energy company wants to issue Germany a kind of hydrogen report card every six months from now on. "We need provable data, in order to recognize whether we must readjust," stressed Eon executive Patrick Lammers with the presentation of the balance. It is intended to be a snapshot of the hydrogen ramp-up in Germany. Indicators include the production capacity of green hydrogen, import volumes and infrastructure. The data basis comes from the Energy Economics Institute at the University of Cologne (Ewi). Figures on concrete projects up to 2030 are also included.
The H2 balance commissioned by Eon arrives at the following results:
- Generation capacity : 33 electrolysers with an installed capacity of 65 MW are currently in operation in Germany, Eren Cam stated at the presentation of the balance. Cam is Manager and and Head of Energy Commodities at Ewi. If all the electrolysis projects planned to build up electrolysis capacity by 2030 are taken into account, Germany will have a generation capacity of 5,600 MW. This is only slightly more than half of the government's targeted generation capacity.
- Import Demand : Currently, of course, hydrogen imports to Germany do not yet have significant relevance, Eren Cam explained. The balance refers to the lead study of the German Energy Agency (Dena), which forecasts a hydrogen demand of 66 billion kWh for 2030. As it stands, however, the 2030 balance assumes an import gap of 50.5 billion kWh, roughly equivalent to Germany's monthly natural gas consumption in September 2022, he said. Eon manager Lammers also pointed to the following dilemma: "If the development of national hydrogen production does not proceed more quickly, the existing import requirement will increase even further."
- Infrastructure : Currently, according to the balance, there is a 417-kilometer-long hydrogen network in Germany - "that doesn't even get you from the planned Wilhelmshaven terminal to the Bitterfeld Chemical Park," clarified manager Lammers. The length corresponds to 0.1 percent of the German gas network.
Lammers named various construction sites that provide uncertainties in the market and slow down the hydrogen ramp-up. Politically promptly would have to be addressed the following points:
- Definition of green hydrogen : The lack of clarification at EU level, what is to be understood concretely by "green" hydrogen, inhibits investment decisions. Plant operators would not know whether their current planning will meet the future criteria.
- Construction of the hydrogen network : The EU Commission's proposal to unbundle the network - so-called unbundling - would not allow natural gas and hydrogen networks to be managed within one company in the long term. "Depending on the design of the unbundling, companies would be forced to sell their converted hydrogen network," Lammers said. This would remove the incentive for gas grid operators to convert their grids to hydrogen from scratch.
- Subsidy environment in Germany : Subsidies are not yet mature enough for a completely new industry to emerge by 2030, he said. However, the market ramp-up requires a pragmatic funding framework for investments in hydrogen projects, he said. Particularly through financial support for operating costs, companies can be persuaded to switch to green alternatives.
- Approval procedure : Eon is calling for the legal classification planned for wind energy and photovoltaics as projects "of overriding public interest" to be applied to hydrogen projects as well. This provision has already been included in the current legislation for the construction of new hydrogen pipelines, but only for a limited period until the end of 2025. However, Eon estimates that the major investment phase will not occur until after 2035. Only if this time limit is lifted, there would be long-term planning security in the operating business.
The data of the first H2 balance sheet published by Eon are available for download on the Eon Group website.
Author: Davina Spohn
Accessibility
Language