Hydrogen study - Opportunities, potentials & challenges in the global energy system - umlaut
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Hydrogen — study. Opportunities, potentials & challenges in the global energy system.
Contents
Introduction6
Transition to a zero-emissions economy 10
Seeing the path to the energy system 2050 as an opportunity 14
Modelling of a future energy system 16
Results of the simulation 17
Hydrogen supply – a global market 32
A zero-emissions energy system is achievable 40
The transformation – what does the German economy think? 44
Industry opinions at a glance 58
Pioneers in hydrogen 70
USA (California) 72
China 73
Japan 74
Europe 76
Germany 78
Bibliography88
3
Intro — duction.
Introduction Introduction
100% “Energiewende”
Germany’s total energy consumption of approxi- Looking at the cost of achieving the target by Production & logistics northern Germany are perfect to be used for
mately 2550 terawatt hours (TWh) has scarcely 2050 based on technologies known today, and Hydrogen will in future be produced in countries hydrogen storage, and for storing seasonal rene-
changed over the past 30 years. Just 10 per cent the associated development scenarios in terms of rich in solar and wind-resources and traded wable energies. Virtually no other country in
of this consumption is produced through rene- price, efficiency and capacity utilisation, there is globally. This exceptional gas, which has been Europe has this opportunity, so Germany could
wable energies. One of the reasons for this low one clear conclusion: hydrogen will need to play providing our sun with energy for around 4.5 even act as the hydrogen storage for Europe.
number is that, at 68 per cent, most of our ener- a considerable part if a zero-emissions energy billion years, thus has the potential to become the
gy requirements is imported - in the form of coal, system is to be achieved! In the scenario with a new energy medium of the energy transition and The use of hydrogen as a sustainable energy
mineral oil and gas. 95 per cent reduction in greenhouse gases, the replace oil and coal trade flows. It will drive the carrier should not be viewed exclusively from the
annual consumption of hydrogen will increase by global transition to renewable energies further point of view of mobility, since a large proportion
Currently, the decarbonisation of energy applica- more than ten million tonnes by 2050. The inten- forward. In addition to Germany, virtually every is also used in other areas. Hydrogen as a fuel will
tions is being driven primarily by the expansion of sive integration of hydrogen in the energy system large industrial country will need to import hydro- nevertheless make a major contribution to de-
renewable energies in the power grid. Although and industries is therefore the economically cost- gen in the future. A realistic price for the import carbonisation in the transport sector, for example
the proportion of electrical energy in total energy optimal option for achieving the climate targets of hydrogen for Germany in 2050 would be 3.6 in freight transport. For cars, conversely, the focus
consumption is constantly increasing, it currently set. For this, approximately 62 GW of electrolyser euros/kg - based on current purchasing power. is more on battery electric drives. However, hyd-
accounts for just 24 per cent. Assuming the target capacity would have to be built up. But realisti- One kilogram of hydrogen currently costs 9.5 rogen will be used in a comparable proportion
of an 80 or 95 per cent decrease in greenhouse cally, Germany will probably not be able to fully euros/kg at the filling station. here too, like the parallel use of petrol and diesel
gases by 2050 in comparison with 1990, one supply itself with sustainably produced hydrogen. today. Vehicle architecture will not differ greatly
question arises: Is this goal achievable only by Accordingly, more than half of the hydrogen re- The necessary infrastructure for the use of green from this, because the drive is always electrical.
swapping conventional primary energy carriers for quired but need to be imported from abroad. hydrogen does not have to be completely esta- In terms of fuel consumption, hydrogen is projec-
renewable energy? In the heating, transport and blished from scratch. Logistically, much of the ted to account for 36 per cent of car transport
industry sectors specifically, it is still not clear which existing infrastructure for the transport of natural and 72 per cent of freight by 2050.
technologies will be used, since there only a few gas can be used. Tankers are also a good option
zero-emissions solution options here. for the transport of gas. The salt caverns in
6 7
Introduction Introduction
1
For aircrafts, no long-term alternatives to traditional Hydrogen clean energy carriers. With increasing demand, an addition, sector coupling is blurring existing boun-
propulsion with kerosene via jet engines are fore- enormous capacity for hydrogen production and daries between sectors and the entire energy indus-
1,0079
seeable because here in particular, high energy applications will be needed. try will need become more closely connected.
densities with respect to the energy carriers are
crucial. Rising air passenger numbers, however, are Unfavourable regulations Despite all the benefits of using hydrogen as a
increasing pressure on governments and companies There is an opportunity to exploit the efficiency and green energy carrier, its further development will
in the sector to find a sustainable alternative to on the integration of hydrogen in industry and mo- experience of German companies in mechanical be hampered by unfavourable regulations. The
fossil fuels. As a raw material or the production of bility. Despite having different approaches, the engineering and plant construction as well as the companies consider lower taxes and levies for
synthetic fuels, hydrogen will also play a crucial role countries named have two things in common: a chemical sector and position themselves as a global electrolysers and creating demand through large-
in this respect. roadmap and a clear government position. technology leader in hydrogen. Companies survey- scale projects as crucial elements in establishing
ed by umlaut confirm this tremendous potential for hydrogen technology.
Enormous potential A survey carried out by umlaut among participants Germany as a business location, and rate German
Hydrogen technology has enormous potential to in the future hydrogen industry in Germany paints a industry’s position in an international comparison as With ever more demanding challenges in respect of
reduce costs across the entire energy transition and, clear picture. Company representatives agree that quite good, even though this lead is dwindling. global climate change by the middle of the century,
like photovoltaic and wind energy, needs start-up sustainably produced hydrogen is unavoidable in the the scale of hydrogen needs to become even more
financing. Subsidies for these renewable energies long-term if our energy system is to be transformed Traditional representatives of the energy sector will significant in benefiting society. Sustainable hydro-
mean the technologies today produce energy at in line with the energy transition. The international need to adjust to the new requirements with new gen offers enormous long-term potential as a uni-
competitive prices. Major industrial countries such hydrogen production will fundamentally change business models. Expertise in plant engineering and versal energy carrier and as a chemical base product
as China and Japan, as well as the US Federal State dependencies in global energy trade, and support in gas handling, however, also offers new players to replace fossil resources and facilitate CO2-free
of California, plus Canada, are increasingly focusing Germany and Europe in meeting their demand for along the H2 value chain the opportunity to grow. In emission-intensive processes.
8 9Zero-emissions economy Zero-emissions economy
Transition to a
zero-emissions economy
At the 2015 United Nations Climate Change Con- however, it is foreseeable that preventing and climate change would entail costs in the region of
ference in Paris, 175 states declared their inten- reducing greenhouse gas emissions is also the five to 20 per cent of gross domestic product.
tion to reduce greenhouse gas emissions by 80 economically more favourable path compared
to 95 per cent compared with 1990. An interim with adapting to the harm caused by climate The world’s biggest database of harm caused by
target was set to reduce emissions by at least 40 change. The 2006 Stern Review on the Economics natural catastrophes, MunichRe’s NatCatService,
per cent by 2030 1. At the UN Climate Change of Climate Change2 already demonstrated that shows an increase in the number of natural disas-
Summit in New York at the end of 2019, 77 states - the transition to a sustainable energy system can ters just in the course of recent years. In response
including Germany - agreed to achieve a green- be estimated at around one per cent of global to these clear indications of climate change, se-
house-gas-neutral status by 2050. This means gross domestic products, whereas the effects of veral major reinsurance companies have announ-
these countries’ greenhouse gas emissions should ced the withdrawal of financial investments rela-
move towards ”net zero”. This target was set based ted to the use of coal3.
on the assumption that this will allow global warming
to be limited in the long-term to below 1.5 degrees It is self-explanatory that to minimise and prevent
Celsius compared with pre-industrial levels. In a zero-emissions energy greenhouse gas emissions, the use of fossil, car- ket because they are good for storage and easy
bon-containing primary energy carriers will in- to transport.
economy, hydrogen is
Achieving the medium-term targets for CO2 re- creasingly need to be reduced, and in the long-
essential in optimising the
duction calls for an almost complete shift in term be completely replaced by CO2-free energy Internationally, the challenge is to establish a
global final energy consumption. One challenge
overall costs and safeguar- carriers. Together, oil and coal account for appro- sustainable energy system that facilitates the
is to shape the transformation of the energy ding system security. ximately 60 per cent4 of the global primary ener- exchange of today’s fossil primary energy carriers
system and the introduction of new technologies gy demand. At the same time, these hydrocarbons for ”green” energy carriers across all relevant in-
in a socially acceptable way. At the same time, have ideal properties for the global energy mar- dustries and sectors.
10 11Energy— system —2050.
Energy system 2050 Energy system 2050
Seeing the path to the energy Final energy consumption in Germany by sector5 Fig. 01
system 2050 as an opportunity
TWh
3000
2500
2000
The transformation to a sustainable energy system is also a challenge to meet this high consumption
may present a challenge, but there is no alterna- with renewable energies. Although renewable
tive in terms of achieving the target of CO2-neu- energies now account for 46 per cent of electrici-
1500
trality. Furthermore, it opens economic opportu- ty consumption in Germany, their share of total
nities for countries with high potential in terms of final energy consumption is still less than 12 per
solar or wind energy, or for technology-driven cent. The task ahead is therefore to replace more
1000
nations, of which Germany is one. The opportuni- than 2550 TWh with renewable energy in the trans-
ties come in relation to the production, management formation of the entire system.
and maintenance as well as the export of plant
500
technology.
Status quo: Energy consumption in Germany Hydrogen technology thus
offers enormous global sales 0
Final energy consumption in Germany has changed
1990 2017 2050
only marginally since 1990. On the one hand this potential for Germany as an
is good news, because despite increased economic economic centre.
output and greater mobility, efficiency measures
Building Industry Transport
have taken effect. On the other hand, however, it
14 15Energy system 2050 Energy system 2050
Modelling of a future Results of the simulation
energy system
The results in Fig. 02 show that for the future, the- the most economical variant for achieving the CO2
re will be stronger demand for electrical energy. In reduction targets. in ”Scenario 80”, hydrogen
”Scenario 80” (CO2 reduced by 80 per cent com- supports this by reducing the overall costs. Indeed
pared with the base year of 1990), net electricity in ”Scenario 95”, hydrogen is a main pillar in achie-
To achieve the climate change targets, green- is thus established based on the target value for consumption increases to 726 TWh, and in ”Sce- ving the targets, and is indispensable.
house gas-neutral solutions will have to be found CO 2 reduction. nario 95” (CO2 reduced by 95 per cent compared
for electricity, heating, mobility and industrial with the base year of 1990) is rises to as much as The model is used to calculate energy-related
processes. Various technologies are available Using a novel model family developed by the 1008 TWh. On the one hand this is due to new demand for hydrogen, such as the use of hydrogen
in this respect, some of them showing consi- Jülich (IEK-3) research centre enabled German consumers who do not use the electricity imme- for vehicles powered by fuel cells, for example. The
derable potential in terms of cost reduction. To energy supply to be depicted in all its interactions diately (e.g. electromobility or Power-to-Heat), and potential need for hydrogen in steel production is
make efforts in research and innovation, as well and pathways. In concrete terms, this means that on the other hand the production of new energy depicted as a further hydrogen demand.
as private sector investment in the transforma- all sectors (energy, transport, household and in- carriers (e.g. hydrogen, synthetic fuels)6.
tion of the energy system, sustainable, the dustry) are incorporated into the model from a
question therefore arises as to what mix of technical and economic perspective, and their Despite the increase in electricity use, final energy
technologies is needed to create economically energy needs assessed. For optimisation purpo- use falls virtually identically under Scenario 80 and
the best development path. ses, the model selects neutrally from all current- Scenario 95, to approx. 1600 TWh. This illustrates The sales potential for
ly available technologies and primary energy the importance of implementing energy-efficient hydrogen in Germany will
Given the variance and complexity of a future carriers. Meeting the reduction targets and the measures as a crucial component in achieving the be 12 million tonnes by 2050.
energy system, a technical analysis model is ap- foreseeable energy needs of the sectors allows targets. In a simulation where there is complete
propriate. If the energy supply continues to the most cost-efficient measures and strategies openness to technology, the supplementary and
function stably, the optimal energy system design to reduce greenhouse gases to be identified. in some ways intensive use of hydrogen represents
16 17Energy system 2050 Energy system 2050
Net electricity consumption in Scenario 80 Fig. 02
and 95 in 2050, in TWh6
Scenario Scenario
80 95
TWh
1008
1000
In the technology mix that is optimal in terms of tional hydrogen production, this is known as blue
800 costs, hydrogen consumption under ”Scenario 80” hydrogen. Zero-emissions green hydrogen is gene-
726
is around 145 TWh. This converts to four million rally produced in electrolysers using renewable
tonnes of H 2. Half of this hydrogen is extracted electricity.
600 by means of natural gas reforming, and the other Under ”Scenario 95” the required volume of hydro-
520 half through electrolysis. Because under ”Scena- gen, at 399 TWh – which converts to 12 million
rio 80”, 20 percent CO 2 is still permitted in the tonnes of H2 - is already three times the hydrogen
400 energy system in 2050 compared with 1990, the demand under ”Scenario 80” (cf. Fig. 03). For this,
model pushes cheaper natural gas reforming over domestic electrolysis capacity is expanded to 62
electrolysis as far as possible. In concrete terms, GW operating at an average of 2900 hours per
200 this means plant capacity of 10 gigawatts for annum at full load. The electrolysers’ huge energy
natural gas reforming, and 22 gigawatts of in- demand underlines the need to install them at
stalled electrolysis capacity. This involves opera- network nodes close to locations with considerable
0 ting the electrolysers for on average 2600 hours potential to produce renewable energies - predo-
Today 2050 2050 per annum at full, load. minantly in the north of Germany.
Germany in theory has great potential to produce
Hydrogen extracted from fossil energy carriers such hydrogen – particularly when involving the use of
Buildings & commerce, trade and services Industry as natural gas or coal is known as grey hydrogen. offshore wind power. The analyses show, however:
If the process is of CO2 capture and storage, which Particularly in a comparison with other countries, it
Sector coupling = Transport (e-mobility), PtX (measures), heating of buildings & hot water, process heat
avoids the greenhouse gas emissions of conven- is not possible to produce the entire hydrogen
18 19Energy system 2050 Energy system 2050
Demand for green hydrogen for energy production6 Fig. 03
Scenario Scenario
80 95
Mio t
10
requirement in Germany at optimal costs. Further- be installed would be so high that, given the cur-
more, the generation capacity that would have to rent challenges, it cannot be assumed that there 8
will be enough expansion of renewable energies for
Germany to supply itself. The reasons for this are
the lack of acceptance among the population, and 6
the immense space that would be needed.
The ”dark doldrums”
Under ”Scenario 95”, domestic hydrogen production 4
”Cold dark doldrums” is the term used
to describe the combination of
accounts for 45 per cent of hydrogen consumption.
unpredicted weather events which may This means that more than half the hydrogen needs
result in low renewable electricity would have to be imported. On the one hand this 2
production, and even complete a increases resilience throughout the entire system
shut-down in production. At the same
since energy carriers can be used even in poor
time, it is assumed that the outside
years for wind and solar; on the other hand, it re- 0
temperature is low, fuelling high
demand for heating consumption. This duces the total costs of the energy system. The Today 2030 2040 2050 2030 2040 2050
study is based on a period of two weeks reason: fewer uneconomical RE plants need to be
in the month of January dominated by involved in hydrogen production in Germany. De- Buildings Industry Energy Transport
the dark doldrums. spite the relatively high import ratio, there would
be a higher level of self-sufficiency in terms of Demand for green hydrogen under Scenarios 80 and 95 in the support years 2030, 2040
primary energy consumption compared to 2019. and 2050. Current ”grey” hydrogen is not depicted under ”Today”.
20 21Energy system 2050 Energy system 2050
Future hydrogen pipeline in ”Scenario 95”6 Fig. 04
Transmission pipeline
Steel manufacturing, for example, is currently one
97 – 363 of the biggest producers of industrial CO 2. The
363 – 628 The use of hydrogen is a processes within this industry cannot be repre-
sented by electricity consumption alone. Never-
628 – 894
technology to reduce CO2
theless: the so-called direct reduction process
across sectors – not just for
894 – 1160 for steel manufacturing using hydrogen represents
individual transport. a promising zero-emissions alternative to the
1160 – 1425 traditional furnace route. Thus under ”Scenario
Distribution pipeline 95”, the conventional furnace route will be fully
replaced by the hydrogen direct reduction process
Natural gas pipeline However, the 45 percent proportion of hydrogen by 2050. For this alone, an annual hydrogen
Salt caverns demand produced in Germany also demonstrates volume of 46 TWh is required. Hydrogen direct
that hydrogen produced nationally can compete reduction and the electric steel production pro-
even with the top international locations. cess are the technical processes on which entire
steel production must be based in the future.
In a virtually zero-emissions economic and energy
system under ”Scenario 95”, the remaining CO2 A further 88 TWh of hydrogen will be needed by
emissions are generated in industry, where the 2050 to provide process heat in industry. Demand
conversion costs are highest. Given the relatively for hydrogen will increase further if the scope of
0 100 200 300 km
high cost of converting industrial processes, de- the scenarios is expanded. The use of hydrogen
mand for hydrogen will develop here later than in as a chemical base product is conceivable, in
The comparable courses of natural gas and hydrogen pipelines highlight the repurposing potential comparison with other sectors. ammonia production, for example.
22 23Energy system 2050 Energy system 2050
Efficiency chains in the hydrogen economy in 2050 Fig. 05
73 % W2W
Compression Truck & Bus
350 bar H FCEV approx.
95 % 2 70 % 51 %
100 % 96 % 79 % Pipeline- 77 %
Transformer & Electrolysis compression
RE electricity rectifier
82 % 80 bar 65 %
96 % 97 % Compression Car W2W
700 bar H FCEV approx.
85 % 2 70 % 46 %
79 % 71 % Pipeline- 69 % 68% W2W
Otto engine
Sabatierprocess compression Transport
80 bar CH ICE approx.
90 % 99 % 4 30 % 21 %
97 %
Otto engine W2W
ICE approx.
79 % 58 % 57% 23 % 13 %
Fischer-Tropsch- Transport
synthesis
99 %
E-Fuel
73 % W2W
Aircraft
ICE approx.
35–45 % 23 %
100 % 90 % W2W
Battery & e-motor
Power grid
BEV approx.
90 %
85 % 77 %
100 % 40 % 36 % W2W
Mining and Battery & e-motor
Power grid
Coal PowerStation BEV approx.
90 %
40 % 85 % 30 %
100 % 85 % 83 % W2W
Extraction & Diesel engine
Transport
Crude oil refinery ICE approx.
98 %
85% 26 % 22 %
FCEV: Fuel Cell Electric Vehicle BEV: Battery Electric Vehicle
ICE: Internal Combustion Engine W2W: Well-to-Wheel
24 25Energy system 2050 Energy system 2050
Increasing expansion of volatile renewable energies For this, approximately 67 TWh of natural gas cavern distribution infrastructure. During the market intro- lines. Converting existing natural gas pipelines could
is raising demand for energy storage systems. They storage will become hydrogen cavern storage. For duction phase, this can be achieved with the help of again bring a significant reduction in infrastructu-
key storage requirement in terms of system secu- reconversion into electrical energy, an additional truck transport. There is potential for early conver- re costs compared with building new pipes.
rity is in long-term storage. This enables the back-up capacity of 13 GW of hydrogen-powered sion from natural gas to hydrogen pipelines, however.
seasonal balancing of the supply of solar and wind gas or gas and steam combined cycle power plants Fig. 04 shows a pipeline infrastructure for ”Scenario In summary, the future scenario modelled for
energy as well as the provision of energy to com- and 33 GW of hydrogen-powered fuel cells must 95” where only the construction of new hydrogen Germany results in the infrastructure concept of
pensate for an unforeseen period of ”cold dark also be considered. pipelines is assumed. The new pipelines would follow storage facilities (salt caverns) and transport and
doldrums”. To bridge the period of cold, dark dol- a very similar course to the existing natural gas pipe- distribution pipelines for hydrogen, as shown in
drums - the stress test for the energy system - a To supply mobility, under ”Scenario 95” hydrogen will Fig. 04. Geologically thanks to the salt caverns,
high volume of energy must be retained for this be used to produce synthetic fuels as well as for and because of the existing gas pipelines, Ger-
period under ”Scenario 95”. In Germany, the only direct use. Hydrogen can be used directly in trains, many is in an excellent starting position to expand
storage capacity of sufficient size is in the form of cars and trucks powered by fuel cells; in terms of fuel the use of hydrogen.
caverns and pore storage facilities. consumption, it accounts for around 36 per cent in
private car transport and around 72 per cent in freight To save process costs particularly at the start of
Due to its very good long-term storage properties, traffic. Conversely, cars powered by synthetic fuels the transformation process, it makes sense to
70 per cent of freight traffic
the reconversion of hydrogen in ”Scenario 95” is an account for 9 per cent, and freight traffic 20 per cent. introduce hydrogen in applications where it can
will be powered by hydrogen
important option in terms of maintaining a secure Air transport is entirely powered by synthetic fuels. be used directly and will quickly be competitive.
power supply. This means that in 2050, approxi-
from fuel cells in the future. The initial deployments are in direct feed-in into
mately one quarter of the hydrogen used will be The use of hydrogen on a large scale requires the the natural gas network or in the transport sector
for reconversion. development of appropriate domestic transport and (trains, buses, trucks).
26 27Energy system 2050 Energy system 2050
Summary
• In cost terms, the intensive integration of sustainably generated
hydrogeninto the energy system is the optimal way of achieving
Germany’s climate targets.
• The infrastructure for the distribution of green hydrogen is relatively
easy thanks to the existing natural gas network.
• The sales potential for hydrogen in Germany is 12 million
The demand-oriented development of a hydrogen Fig. 05 shows the efficiency curve from the rene- tonnes per annum from 2050.
infrastructure for trains (diesel propulsion), trucks and/ wable energy source through to the storable ener-
or buses is recommended initially, since this gene- gy carriers: hydrogen (H2), synthetic natural as (CH4) • To achieve a net zero economy by 2050, approximately 62 GW
rates a predictable and high demand for hydrogen. and e-fuels. Based on the respective fuels, the of electrolysis capacity will need to be installed in Germany.
This high capacity utilisation allows the construction Well-To-Wheel values are calculated for the sub-
and operating costs incurred to be distributed over sequent consumers. • Up to 55 per cent of the demand for renewable hydrogen
a high volume of hydrogen, enabling an early tran- will be imported in the future.
sition to economic operation. Feed-in to the natural Even though the Well-To-Wheel value for Battery
gas network must take account of connected con- Electric Vehicles (BEV) is over 70 per cent, it must
• In a zero-emissions energy economy, hydrogen is
sumers. Calorific value-based billing is recommen- be considered that the energy density of the fuel essential for system security.
ded here, rather than volume-based billing. In for a car with fuel cells is considerably higher. Shor-
• 70 per cent of freight traffic will be powered by hydrogen
certain circumstances, however, technical supply ting fuelling times and longer ranges result in
installations may need to be modified accordingly. greater convenience and practicability on long-dis-
from fuel cells in the future.
tance journeys. Furthermore, the overall infrastruc- • Hydrogen offers high Well-to-Wheel efficiency in comparison with
Although the topic of ”hydrogen” should not be ture costs from around 10 million vehicles 86 are
other renewable fuels.
considered exclusively in the context of mobility, an higher for BEV than for cars with fuel cells.
analysis of the resulting efficiencies for vehicles in
2050 is nevertheless appropriate.
28 29Hydrogen— —market.
Hydrogen market Hydrogen market
Hydrogen supply: Hydrogen production locations
A global market Iceland Norway
Fig. 06
British Newfoundland UK + Ireland
Columbia + Quebec
Inner Mongolia
The comparatively high specific energy content and carriers based on renewable energy and trade
the ease of transport and storage have a conside- these globally8.
rable influence on the fact that oil and natural gas
(in the form of LNG) are traded worldwide and Importing part of the hydrogen needed is for many Chile
cover 60 per cent7 of global primary energy demand. reasons also an economic and geopolitical options
Patagonia
But because conventional energy carriers will all for Germany: on the one hand, acceptance prob- Average wind
speed in m/s
but disappear in the long-term due to their green- lems regarding expanding renewable energies in
house gas emissions, the following question arises Germany will cause the expansion paths of wind Future production locations for hydrogen from onshore wind, plus
wind potential based on mean wind speed at an elevation of 50 m9 2,6 4 5 6 7 8 9 10,3
how could global energy exchange be achieved in and solar energy to lag those for hydrogen pro-
a future energy system? ”Power-to-X” is currently duction. On the other hand, the import of rene-
the most promising option for producing energy wably produced hydrogen enables a long-term
global hydrogen market, and thus considerable Abb. 07
USA
opportunities for cost reduction. These develop- Marocco Libya Egypt
China
ments towards a global hydrogen market will also West Sahara Oman
Mexico Algeria
enable Germany not only to import hydrogen, Saudi
Arabia
Regions with plenty of wind but also to export technologies and expertise,
for example in the field of electrolysers or plant
or sunshine such as, for Peru
engineering. Namibia
example, Oman or Patagonia, Chile Australia
Because hydrogen production costs are signifi-
will become major producers cantly influenced by electricity generation costs,
South Africa
Average
of green hydrogen. the potential of renewable energies and the avai- global radiation
in kWh/m²·d
lability of water are central aspects when it comes Potential production locations for hydrogen from PV,
to selecting locations. Accordingly, in addition and solar radiation based on global radiation10 2,4 3 5 6 6,5
32 33Hydrogen market Hydrogen market
Hydrogen production costs and potential Fig. 08
Export potential in Mt/a to some countries that are already involved in electricity costs and the resulting costs of the
5,5
energy trading through oil and natural gas exports, electrolysis process. Technical and economic mo-
China 10 some new countries with high levels of wind are dels with high spatial and temporal resolution were
also appearing on a list of potential hydrogen ex- used to simulate the entire path - from renewable
Inner Mongolia 20
porters. The global distribution of hydrogen-expor- electricity generation and hydrogen infrastructure
H2 import costs into Germany EUR/kg H2
5,0 ting countries is thus increasing, which is boosting (electrolyser, pipeline, liquefaction and storage)
50 security of supply, and will result in competition in through to the export port in the country analysed,
Australia
USA terms of production and export costs. and transport to Germany. Fig. 08 shows the results
of these calculations.
100
Fig. 06 shows the mean wind speeds at an eleva-
4,5
Chile
Algeria tion of 50 metres above sea level. In highly simpli- Even considering transport of the hydrogen by ship
Norway fied terms, high average wind speeds mean low from e.g. Patagonia to Germany, hydrogen costs
Canada 200
electricity generation costs from wind turbines and of €4.0/kg at the import port in Germany are
Patagonia British Islands so low hydrogen production costs. If existing ice achievable (cf. Fig. 08). On the one hand this de-
4,0 cover, coastal access and altitude as well as the monstrates that regardless of the production
Iceland
Oman maximum wind speeds are considered, the eight route (wind onshore, offshore or PV) in the 25
500 regions shown in the figure result as future produc- countries identified, hydrogen export costs at the
Saudi Arabia tion sites for hydrogen from wind energy. port in the country of between €3.3 €/kg and
€4.6/kg are achievable. On the other hand, these
3,5
Applying the same conditions results in the 15 25 countries alone are today able to produce a
3,0 3,5 4,0 4,5 5,0 Preferred region for PV
regions named in Fig. 07 for hydrogen production total of around 1.4 billion tonnes of hydrogen per
H2 Production costs in the export country EUR/kg H2
Preferred regions for based on photovoltaic electricity. The total of 25 year. Remember: the total hydrogen demand for
onshore wind energy
countries analysed here are characterised by ex- Germany under ”Scenario 95” is approximately 12
ceptionally low production costs for hydrogen. million tonnes per year, which means that the
Hydrogen production costs and potential at the export port in each country and at the import These are mainly influenced by the full load hours potential of the countries examined is around 115
port in Germany (Graphic source: Forschungszentrum Jülich) of the renewable energies, which determine the times higher than demand from Germany.
34 35Hydrogen market Hydrogen market
H2 proportion of costs in €/kg Fig. 09
1,67
Chile, Patagonia and Oman should be highlighted there is high international demand for sustainably
in particular because of the low hydrogen export generated hydrogen in the future, Saudi Arabia will
1,25 costs at the ports there of between €3.3/kg and continue to be a major hydrogen exporter. Cur-
€3.6/kg. To these can be added Saudi Arabia, with rently, for example, hydrogen is sold at hydrogen
slightly higher costs of €3.7/kg. Viewed as a who- filling stations for fuel cell passenger cars in Ger-
1 le, however, it should also be considered that many at a standard price of €9.5/kg. At this price,
Saudi Arabia, with 517 million tonnes of hydrogen the cost of running a fuel cell car is comparable to
0,85 per year, has enormous production potential. If that of a car with a combustion engine.
0,75
0,6
0,54
0,5
0,33 Summary
0,25 • In the medium term, hydrogen will become the key energy
0,11 carrier in global energy trade.
0 • Regions with plenty of wind or sunshine, such as e.g. Oman or
Patagonia, will become major producers of green hydrogen,
LH2 LH2
Electricity Electrolysis Pipelines Liquefaction Storage Transport and trading partners of the future.
• Importing hydrogen from abroad reduces overall costs and
increases and increases the energy system’s resilience.
Cost contributions of hydrogen production, transport and storage from
the export port in Patagonia to the port in Germany; in 205011
36 37Zero— emissionsenergy —system.
Zero-emissions energy system Zero-emissions energy system
A zero-emissions energy Vision of a value chain for
the hydrogen market
Fig. 10
system is achievable
FC Energy
production economy
Electricity
production
A completely emissions-free energy system requires te targets. The production structure for the use of
a multi-faceted adjustment of the current infras- hydrogen is still in its infancy. For use on an indust-
tructure - both for the broader direct use of elect- rial scale, it requires above all powerful electrolysers Industry
ricity, and for the use of new energy carriers. This with high efficiency and high dynamics. H2
includes the development of a value chain for green Pipelines
hydrogen as depicted in Fig. 10. This chain, which Depending on the existing infrastructure, the pro-
can also be widely developed in Germany, is funda- duction of green hydrogen will mainly take place in
Operation
mental to the national use of green hydrogen, and the vicinity of wind turbines, solar parks and large H2 H2
of P2G Storage Sales
so this is explained in more detail below grid nodes for the feed-in of renewable energies. Transport consumption
plants
The electricity required for the electrolysers is then
Production not transported in the transmission grid, which
Overall, the number of energy carriers is decreasing means that the operator potentially does not have H2 Trucks
H2
compared to today’s energy supply due to the to pay network charges. This saving will be reflected Import
abolition of nuclear energy, natural gas, coal and oil directly in the cost of hydrogen. Furthermore, with Mobility
H2 -
by means of Federal Government decrees. Instead, high renewable generation capacity, the energy can Filling
a large part of energy consumption is based on the be stored in the form of hydrogen, thus reducing the stations
generation of electricity from renewable sources, and load on the grid. In the best-case scenario, this could
the products that can result from this. This in turn limit the need to extend routes for the transport of Electrolysis
means that coupling of the energy sector and end electricity. A further source of supply is the import plant Buildings
engineering
consumer sectors is increasing significantly. This of hydrogen from countries with low production costs
”sector coupling” plays a key role in achieving clima- for electricity from renewable sources6.
40 41Zero-emissions energy system Zero-emissions energy system
Transport are used for international sea transport, carrying the facilities, e.g. gas pressure tanks, liquid or cryoge- stock exchange, like what is common today for oil,
The connection between generation plants and hydrogen in liquid or chemically bound form. This nic storage, cover local and short-term demand. gas, coal and electricity. This requires the standar-
consumers is established by different transport also requires an appropriate port infrastructure, For mobile applications, special composite tanks disation of product properties, however, and a high
structures. Trucks are currently being used to sup- including a liquefaction plant and loading facilities enable gas to be stored at high pressure without level of transparency about production and con-
ply filling stations. Their advantage lies in the re- in the exporting and importing countries. diffusion losses for mobile applications, e.g. in sumption volumes. This will enable market-driven,
latively low costs in terms of small-scale use, the vehicles12. A series of key technologies is used for transparent pricing.
possibility of fast implementation, and their high Storage facilities storage, as well as for transport and tanking: lique-
degree of flexibility for short and medium-dis- For optimal technical and economical use, various faction facilities and compressors increase the Consumers
tance journeys. Cost efficiency can be further intermediate storage options are necessary. Sea- energy density of the hydrogen. At the end of the hydrogen value chain are all
improved in the future by adapting technical sonal, or even daily fluctuations in the production the consumers for whom green hydrogen repre-
specifications to the current state-of-the-art and of hydrogen can be offset by large storage facilities, Sales sents a suitable energy carrier. Related sectors
changing needs. National implementation will re- or by using the gas network’s storage volume. This Hydrogen is no longer used only as an industrial include mobility and the provision of heating. The
quire the construction of a pipeline network, and due to the possibility of variable electricity feed-in chemical gas; it now also plays an important role chemical industry, for example, often produces
the wider use of natural gas pipelines. from renewable sources. One such application is as an energy carrier. Until now, there has not real- hydrogen locally for its own use - although not
the generation of hydrogen using surplus solar ly been an efficient and liquid market. Most of the with zero emissions. Depending on the type of
The structure is thus also like that of the natural gas power in summer. The hydrogen can then be stored hydrogen produced is not traded freely. The emer- end user, the hydrogen must be treated at the
network, where transport network operators are until required for winter heating, and then be used gence of any such market is subject to an increase point of use. This is particularly important for
responsible for operation and maintenance, and grant to generate space heating by means of combined in demand. A further stimulus could come from the mobility, where hydrogen must be supplied at a
users’ access to the network for a fee. Transport ships heat and power. At filling stations, smaller storage trading of green hydrogen as a product on the pressure of up to 700 bar13.
42 43What does the German economy think? What does the German economy think?
The transformation – what does Results
the German economy think? Evaluation of the significance of hydrogen Fig. 12
Structure of the interviews Fig. 11
4%
57 % 4%
1 2 3 35 %
1 – Low
The importance of hydrogen: Global hydrogen development, Challenges to the increased use of 2 – Not very high
for decarbonisation in general & and Germany by hydrogen, and approaches to
for the future of companies international comparison promoting hydrogen technologies 3–N
either high
nor low
4 – High
5 – Very high
The intensive use of hydrogen in German industry close cooperation of all those involved in science,
and the energy system is often equated with a politics and business. As part of this study, inter-
fundamental shift. Although some processes do views were conducted with representatives of
indeed need to be changed significantly, it is companies from the relevant sectors of the hyd- Overall view of hydrogen technology Tobias Pletzer who represented Schleswig-Hol-
precisely at the beginning of the transformation rogen value chain. The aim of the interviews was As Fig. 12 shows, most of the companies sur- stein Netz AG in the study.
that existing structures and experiences can be to obtain views from industry representatives on veyed rate the significance of hydrogen techno-
tapped into. The transformation into a zero-emis- the increased use of hydrogen technologies. logies for the decarbonisation of their industry Comparing sectors, it is notable that represen-
sions economy is therefore not synonymous with Furthermore, the intention was to record the needs as high to very high. Indeed, more than half of tatives of the gas industry rate the importan-
a fundamental shift. Nevertheless, the success of of companies as a result of the transition to a the interviewees rate the relevance of hydrogen ce of hydrogen technologies for the decarbo-
such a transformation is highly dependent on the sustainable energy system. technologies as highly significant. Including Dr. nisation of their sector particularly highly.
44 45What does the German economy think? What does the German economy think?
Opportunities presented by hydrogen technologies Fig. 13
”Hydrogen technology is one of the potential key
technologies with respect to fulfilling the goals of the
Paris climate agreement.“
Dr. Tobias Pletzer, Schleswig-Holstein Netz AG
Import and transport of renewable energies
Tap into new business areas or markets
Of the companies surveyed, 23 per cent are in What opportunities do hydrogen
the gas industry, these being distribution network technologies present?
operators, transmission system operators and Many of the company representatives interviewed
Secure long-term existence of the industry
stakeholder organisations. Within the gas indus- have a fundamentally positive attitude to the in-
try, 80 per cent consider hydrogen technology creased use of hydrogen technologies. In the course
to be of very high significance, with 20 per cent of the interviews, it became clear that the benefits
Form new partnerships
considering it to be at least of high significance. for these companies could extend far beyond the
decarbonisation of their own activities. Fig. 13 shows
On the other end of the scale, just 8 per cent of the opportunities most frequently identified by the
Decarbonisation of other sectors/industries
company representatives consider the significan- companies surveyed in connection with the increa-
ce of hydrogen technologies for decarbonisation sed use of hydrogen technologies.
to be not very significant, or of neither high nor
low significance for their industry. These views In the interviews, 68 per cent of companies refe-
come from companies whose core business is renced the import of renewable energies in the form 0 10 20 30 40 50 60 70
energy production. However, the electricity com- of green hydrogen as an opportunity. Import will
panies sur veyed see green hydrogen as an initially be an economic opportunity for Germany.
energy carrier with the help of which the elect- Benjamin Jödecke of H2-Mobility Deutschland, for
ricity industry can contribute to the decarboni- example, emphasises that the import of renewable
sation of other sectors. energies is crucial for sustainable energy supply. Number of references as [%]
46 47What does the German economy think? What does the German economy think?
Challenges associated with the increased Fig. 14
use of hydrogen technologies ”For the energy transition to succeed a sustainable
energy carrier will be needed to facilitate the continued
import of energy. We will not be able to meet our
high power costs for electrolysers (fees, levies, taxes)
entire energy requirements with our own production
regulatory framework conditions (approvals, unbundling, uniform framework, etc.) of renewable energies. In this context, hydrogen will
become a very important energy carrier.“
lack of sales market for green hydrogen
Benjamin Jödecke, H2-Mobility Deutschland
high investment costs for electrolysis facilities and hydrogen applications
no/few FCEV from German manufacturers
lack of acceptance in society Furthermore, 18 per cent of the companies see For 32 per cent of the companies, it is about securing
the import of green hydrogen as an opportuni- the long-term existence of their own industry: All re-
ty to expand their own portfolio of services. Half presentatives of the gas economy sectors mentioned
no subsidy for the use of green hydrogen the companies surveyed think hydrogen techno- see in hydrogen technology the opportunity to secu-
logies are an opportunity to tap into new business re their own business for the long-term. The other
areas. As well as manufacturers of electrolysis mentions are from representatives of the mineral oil
facilities, components for fuel cell applications industry. In addition, 27 per cent of the companies
0 10 20 30 40 50 and electricity companies, these include organi- surveyed cited forming new partnerships and support
sations that are expected to act primarily as for decarbonisation in other sectors as an opportunity for
Number of references as [%] consumers of hydrogen. the increased use of hydrogen technology.
48 49What does the German economy think? What does the German economy think?
„Investment costs are not the decisive factor in the
realisation and operation of electrolysers. Far more
important are the operating costs, and specifically
the price of electricity – driven by the payment
of levies and charges on the economic operation
of electrolysers.“
Ilona Dickschas, Siemens Gas and Power
doing so in the future. A further 28 per cent of the market roles. For example, 40 per cent of the men-
companies manufacture electrolysis facilities. tions come from company representatives assigned
to different market roles on the consumer side.
There are, however, numerous challenges standing Head of Strategy and Business Development Hy- 45 per cent see a key challenge in the regulatory
in the way of the opportunities which the increased drogen Solutions at Siemens Gas and Power explains framework conditions that go beyond the com- Overall, 32 per cent of the companies see the lack
use of hydrogen technologies might yield. Fig. 14 the cost structure in view of the current mood position of the electricity price. Examples cited of a sales market a major challenge for green
shows the sticking points from the perspective of among potential buyers of electrolysis facilities. include lengthy approvals processes for establishing hydrogen. In this context, approximately 9 per cent
the companies: most frequently mentioned are the electrolysis facilities and the construction of hyd- of the companies point out that the green pro-
high electricity costs associated with the opera- It is notable that manufacturers of electrolysis rogen filling stations. Restrictions on the operation perties of sustainably produced hydrogen are
tion of electrolysers. In particular, the companies facilities and plant operators see the high electri- of electrolysers due to the unbundling of energy currently not rewarded on the market. Almost 10
say that the full payment of levies, taxes and net- city prices as a major barrier to establishing hydro- supply and the lack of a uniform legal framework per cent of the companies cite both the lack of a
work fees mean it’s virtually impossible to operate gen technology. Of the approximately 50 per cent for renewable gases are also criticised, however. In sales market and the absence of a premium for
electrolysers profitably. Half the companies sur- of the companies that specified the high cost of contrast to the high electricity costs, the regula- green hydrogen as an obstacle.
veyed see this as a major obstacle to the deploy- electricity as a major challenge, 55 per cent are tory framework conditions are regarded as a 23 per cent of the company representatives sur-
ment of hydrogen technologies. Ilona Dickschas, already operating electrolysers or can imagine challenge by companies with w very wide range of veyed see a problem in the high investment
50 51What does the German economy think? What does the German economy think?
Potential solutions for establishing Fig. 15
”From our perspective, German industry is not cur- hydrogen technologies
rently presenting a good picture of the range of fuel
cell electric buses. We would of course love to see a Investment security with a political roadmap
German manufacturer of fuel cell electric buses. 5 9 18 68
It would be nice if the taxes paid to promote purchase
Reduction of electricity procurement costs for electrolysers
stayed within German industry.“
5 5 13 77
Jens Conrad, Department for Alternative Drives, Regionalverkehr Köln GmbH
Gradually increasing CO2 pricing
9 24 29 38
Regulatory measures
13 5 41 18 23
costs for electrolysis facilities, and the lack of ac- ment for Alternative Drives at Regionalverkehr Köln
Government investment programme
ceptance and education among the population GmbH is particularly interesting. It is noticeable that
and businesses. Furthermore, they consider the the interviewees scarcely consider the availability 9 32 32 27
small range of fuel cell vehicles by German vehic- of hydrogen technologies and other technological
le manufacturers to be a considerable barrier to aspects to be a major challenge. Several compa-
the increased use of hydrogen technology in Ger- nies mention only expected scaling effects in the 1 – Ineffective 2 – Not very effective 3 –Neither effective 4 – Effective 5 – Very effective
nor ineffective
many. With respect to this latter point, the per- production of technologies, in connection with high
spective of Jens Conrad who heads up the Depart- investment costs. all figures as a %
52 53What does the German economy think? What does the German economy think?
Summary
• Many companies surveyed rated the significance of hydrogen
technologies for the decarbonisation of their own activities
as ”high” or ”very high”.
Promotion measures Fig. 15 provides an overview of the interviewees’ • For many companies, the increased use of hydrogen technologies
To promote the use of hydrogen technologies in opinion of the measures. It is evident that the offers opportunities, particularly in opening of new markets, and the
Germany, various possible solutions are under companies consider measures 1 and 2 to be the
import of renewable energies.
discussion among expert circles. Prior to the start most effective. Well over half the respondents rate
of the round of interview, current publications were these two possible solutions as ”very effective”. • High electricity costs and obstructive regulatory framework conditions
analysed, and five measures selected which are Exemptions from levies, taxes and grid fees to pose the biggest challenges for the companies.
particularly frequently requested in a similar form. reduce the electricity price to be paid received the
highest approval, achieving an average score of • The reduction of electricity procurement costs for electrolysers is
1. T he creation of investment security through a 4.6 on the evaluation scale. Promoting hydrogen crucial in establishing hydrogen technology.
political roadmap for the topic of hydrogen. technologies by means of regulatory measures
2. The reduction of electricity procurement costs meets with the least approval. Fewer than half the
for electrolysers through exemptions from levies, company representatives surveyed considered this
taxes and grid fees. solution to be ”effective” or ”very effective”. The
3. T he introduction of gradually increasing CO 2 effectiveness of gradually increasing CO2 pricing
pricing of non-sustainable energy carriers. and a government investment programme recei-
4. The enforcement of regulatory measures. Exam- ved mixed ratings from respondents.
ples cited included a ban on internal combus-
tion engines and a quota system for the feed-
in of renewable gas.
5. T he launch of a government investment pro-
gramme to expand the H 2 infrastructure and
convert public fleets to fuel cell vehicles.
54 55Industry— —opinions.
Industry opinions Industry opinions
Industry opinions
at a glance ”With respect to the quality of the products, there’s
currently no question that we purchase our equipment
for hydrogen applications from European
manufacturers. But manufacturers from China and
First, it is noted that many of the respondents con-
sider Germany to be fundamentally well positioned
for hydrogen drive applications from European ma-
nufacturers. But manufacturers from China and other
other Asian countries are catching up.“
in the field of hydrogen technologies. 69 per cent of Asian countries are catching up."
Arne Jacobsen, Vattenfall
the companies surveyed are of the opinion that
Germany is one of the leading nations by internatio- A total of 46 per cent of the company representatives
nal comparison. In the respect, the companies refer express concern that Germany could lose its position
to the very well-developed filling station infrastruc- as one of the leading nations in the area of hydrogen
ture, the extensive expertise in the construction of technology due to the obstacles described above. population for the integration of hydrogen in the Hydrogen technologies as a German export
electrolysis facilities, and the large number of players With respect to Germanys future energy supply, many energy system in the future. A further aspect in product
who are already interested in the topic of hydrogen. of the companies surveyed assume that Germany the context of an international hydrogen value So, while Germany will in the future become an im-
will import hydrogen in the future. While most inter- chain is the opportunity, by using hydrogen, to porter of green hydrogen from an economic point of
Despite this good starting position, many companies viewees emphasise the great potential for hydrogen reduce dependence on energy imports from a few view, the situation on the other side of the value chain
view future developments with concern, and they fear production in North Africa and the Arab region, some countries. Whereas many fossil energy carriers is quite the opposite. 55 per cent of the company
that the German economy could its connection with companies are urgently calling for hydrogen produc- traded globally currently originate from a small representatives surveyed point out that, under the
other countries due to political neglect. In this context, tion and trade to be established initially within Euro- number of export countries, an international hyd- right conditions, hydrogen technologies could in the
the interviewees refer primarily to the Asian region. pe. In addition to making optimum use of the poten- rogen market could see considerably more count- future become one of the German economy’s most
Arne Jacobsen of Vattenfall describes the current tial within Europe for producing renewable energies, ries emerge as energy exporters. Many countries important export goods.
situation from the perspective of a company that is this could help to strengthen European integration. which today are largely detached from the flow of
already purchasing hydrogen technologies: "With operations could establish their own value-added Expertise in the area of manufacturing electrolysis
respect to the quality of the products, there’s cur- Furthermore, developing a European supply chain chains through hydrogen. This would facilitate li- facilities is repeatedly emphasised. But German
rently no question that we purchase our equipment could also strengthen acceptance among the beration from other counties. companies could also establish themselves as
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