03/03/2023
Source: Energy & Management Powernews
According to a recent study, northern Germany can become the center of the German hydrogen economy. For this, however, many regulatory obstacles would still have to fall.
The "Value creation potential for hydrogen production and offshore wind energy in northern Germany" was the subject of a study presented in Berlin on March 1. It was handed over at the same time to the Parliamentary State Secretary at the Federal Ministry of Economics (BMWK), Stefan Wenzel (Greens), and the Hydrogen Commissioner Till Mansmann (FDP) at the Federal Ministry of Education and Research (BMBF).
Authors were the market research institute Trendresearch in cooperation with the wind energy network Wab, the auditing company PWC and the states of Lower Saxony, Bremen and Mecklenburg-Western Pomerania. Dirk Briese, managing director of Trendresearch, presented results of the study. The authors conclude: because of its high wind power potential, northern Germany has the best prerequisites for becoming Germany's number one source of hydrogen.
The five northern German states, which also include Hamburg and Schleswig-Holstein, worked together for this in the "High 5" project. However, despite ambitious goals in the field of green hydrogen, "only rudimentary market structures exist" so far, Briese said. At the same time, however, he sees a rapid growth of projects. Sites for electrolysers are now being sought for 1,000 MW of capacity instead of 100 MW.
Developing infrastructure
As a risk to the hydrogen ramp-up, the study notes the lack of infrastructure and production capacities for both offshore wind power and electrolysis plants in Germany and the EU. State Secretary Wenzel also sees a "huge challenge" in infrastructure. This concerns ports, ships, converters, cables and pipelines for hydrogen. To expand the facilities, Wenzel also wants to attract more shipbuilding again. Wenzel called offshore wind power and hydrogen a "gamechanger for coastal countries." He sees locations for electrolysers in northern Germany first, so that hydrogen can soon compete with fossil fuels in terms of price. For example, he says, 1.1 cents/kWh production costs are possible in the Middle East-North Africa (Mena) region. "Last year, green ammonia was already cheaper to produce than blue ammonia," he stated. For Germany or northern Europe, he said, prices around 3 cents/kWh were "possible."
High hydrogen demand for climate protection targets
By 2030, up to 130 billion kWh of hydrogen could be needed to meet climate protection targets. Today's "gray" hydrogen from fossil sources would have to be replaced and enough would have to be made available for new areas, such as industry and transportation.
"Ironically, the Ukraine war has tended to accelerate the energy transition," Wenzel noted. More companies were now quickly turning to renewables - in part to escape the high prices of fossil fuels.
BMBF hydrogen officer Mansmann noted that despite all efforts, only 20 to 30 percent of Germany's demand could be generated domestically. Imports would therefore become unavoidable, for which the government was already signing contracts worldwide, he said.
The planned massive expansion of renewable power generation "only makes sense when coupled with hydrogen," Mansmann touted. The climate-friendly gas bridges periods with too little wind and sun. "Our goal is to continue to maintain Germany as an industrial location," Wenzel said. A European industrial electricity price should also help in the near future, he promised.
Business models still uncertain
Wab managing director Heike Winkler cited a lack of business models as one reason for the sluggish expansion of wind power and electrolysis. The study also focuses on reliable legal investment frameworks. The secretary of state referred to the payments for special energy areas in the North Sea, where electrolysers are to be built directly next to wind turbines. There is already a funded pilot project by Siemens, he said.
Wenzel doesn't see EU subsidies as a problem in keeping up with the U.S. and others, but the long decision-making processes. "Three years to make a decision on IPCEI is too slow," he said. IPCEI are "Important European projects of common interest." A tax model to promote renewables and hydrogen like in the U.S. would be "difficult to replicate" with 27 countries, he said. However, he sees a great willingness to unite since the Ukraine war and the energy crisis, Wenzel concluded.The study "Value Creation of Offshore Wind Energy in Germany" is available for download as a PDF.
Author: Susanne Harmsen
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