DVGW wants to make market ramp-up transparent

22.11.2023


Source: Energie & Management Powernews

With the "H2 Market Index" now presented, the DVGW aims to illustrate the status of the German hydrogen ramp-up and draw attention to deficits.

The German Technical and Scientific Association for Gas and Water (DVGW) commissioned the Institute of Energy Economics at the University of Cologne (EWI) to present the development of the hydrogen ramp-up, backed up with figures, both qualitatively and quantitatively. The result is the H2 market index, which both presented to the public on November 21.

The index is the result of a six-week online survey of players in the hydrogen economy conducted in June / July. 373 index-relevant responses were received from stakeholders in the hydrogen economy, as David Schlund from the EMI told the audience at the digital press event. These included players along the entire value chain - from the provision of hydrogen to transportation and distribution to application, as well as the manufacturers of technology and equipment involved.

The index is intended to reflect the current perception of market participants. "We wanted to know where the shoe pinches during the market ramp-up and shed more light on the situation," says Gerald Linke, Chairman of the DVGW Executive Board. The aim of the tool is to identify the challenges in the ramp-up. The survey is intended to illustrate market satisfaction - particularly in the four areas of innovation environment, political/regulatory framework, infrastructure expansion and market development.

"Behaviorally neutral" overall assessment

The key finding that Linke drew from the first market survey is that the importance of climate-neutral hydrogen "cannot be overestimated". This is because: "84% of the participating market players have reported back that this is the key element for a successful transformation," says Linke.

The DVGW's H2 market index gives the overall assessment of the market ramp-up a score of 42 out of a possible 100 points - a "cautiously neutral" result according to Linke, which contrasts with the positive basic attitude towards green hydrogen. Background information: This value is the average calculated from the results of the surveys in the four areas of innovation environment, political/regulatory framework, infrastructure expansion and market development.

This overall result shows the industry's fundamental willingness to get involved in hydrogen. "But the course must be set so that everything can develop in the direction of hydrogen," said the DVGW boss. Creating a new market of this size and in such a short space of time is an ambitious undertaking. A large number of stakeholders along the value chain need to be coordinated and new rules and suitable framework conditions need to be created.

According to the association, political, economic and social interest in hydrogen as an energy source has recently increased significantly. However, according to the H2 market index that has now been presented, the political and regulatory framework is rated as rather low to neutral by the participating players with 41 out of 100 points. 43% of those surveyed even believe that this is currently the biggest challenge for the hydrogen market ramp-up.

New German pace required

In the opinion of the DVGW, the approval process for the expansion of the hydrogen infrastructure must be radically streamlined and simplified in this context. In line with its motto of a "new German pace", the German government should continue on the right path, as with the rapid approval of LNG terminals, in order to accelerate the hydrogen ramp-up. Discussions with companies made it clear that the financial incentives and clear regulations are lacking, Linke explained with regard to the operation of the hydrogen network, for example.

In addition, the association once again demanded that the focus should not only be on technologies with the highest efficiency, such as heat pumps. Those technologies that contribute to the stability and resilience of the energy system, such as CHP (combined heat and power) plants, should also be promoted.

The DVGW intends to continue the H2 market index at regular intervals - once or twice a year. Only by comparing the index values can the deficits in the ramp-up be better identified, according to Linke. The consequences of political developments, such as the decision in favor of a hydrogen core network or the recent budget ruling by the Federal Constitutional Court, can also be seen over time.

The "H2Market Index - Perception of market players regarding the development of a hydrogen market (November 2023)" is available for download from the DVGW via the EWI website.

Author: Davina Spohn