Germany steps up hydrogen production infrastructure

  • Market: Electricity, Hydrogen
  • 15/04/21

Germany is stepping up its hydrogen production infrastructure, as the economy and energy ministry this week announced a second round of calls for hydrogen test fields

The economy and energy ministry's head of energy policy Thorsten Herdan said that the second call for projects to qualify as test fields will be issued before parliament dissolves in the summer, ahead of federal elections in September.

Test fields will become a "fixed part of the energy transition, and of [the government's] energy research policy", Herdan said at the inauguration of the hydrogen "northern field test" (NRL) covering the states of Hamburg, Schleswig-Holstein and Mecklenburg Western Pomerania.

The NRL project is one of 20 field tests that qualified in the first round of calls.

"Green hydrogen will be needed in quantities impossible to conceive," federal economy and energy minister Peter Altmaier said at the NRL inauguration. Altmaier added that it is not about whether hydrogen will be produced in Brazil or in Morocco or in other countries, "but it is about [hydrogen] being produced all over the world".

The NRL field test, made up of 25 individual projects, was awarded €52mn ($62mn), of total investment costs of €300mn borne by the partners, which include utilities and industry companies. NRL will make an "important contribution to the roll-out of Germany's hydrogen infrastructure", Altmaier said.

NRL includes plans for eight electrolysers with a total electrolysis capacity of 42MW. This will make it possible for the north's strong winds to be used by industry, including Europe's largest copper producer Aurubis, based in Hamburg, and for heating and transport uses, the city state of Hamburg's prime minister Peter Tschentscher said. Tschentscher pointed out that Germany's north must curtail around 3TWh of renewable power every year due to grid bottlenecks.

Junior energy minister at the economy and energy ministry Andreas Feicht said that projects such as NRL will "lead to the development of processes, products and models", which will make it possible "for us not just to have and to use hydrogen, but also to have low-cost hydrogen".

Herdan said the needs of the hydrogen customer, "the customer's point of view", will now increasingly be at the centre.

Disagreement persists in Germany over the extent to which hydrogen consumption should be rolled out, over the role that should be given to other types of hydrogen — such as "blue" hydrogen — or to imported hydrogen, and whether to locate electrolysers close to renewables generation sites, or close to off-takers.

NRL manager Werner Beba said that Germany should first build up its hydrogen industry "on a large scale", and "then think about imports".

Olaf Lies, the energy and climate minister of Lower Saxony, also a northern state, this week said that the "correct order" should not be to first extend green hydrogen production, and to decarbonise only once there is enough green hydrogen in the system. Rather, blue hydrogen — produced from natural gas, of which the carbon is sequestered and stored — will be necessary for an interim period, Lies said.

The federal government so far supports green hydrogen only, including imports of green hydrogen.

Research institute Fraunhofer IEG acting director Mario Ragwitz this week at an event of the opposition Green Party suggested that Germany, or Europe, take up a "pioneering role" in developing guarantees of origin for green hydrogen.

Ragwitz cautioned that the domestic uptake of hydrogen remains unclear in some sectors, for instance the heating sector.

Germany's competitiveness is also viewed as an increasingly pressing issue. Tschentscher voiced his fears of Germany being left behind by Japan and China regarding hydrogen technology. "But when I look at the test field, then I feel that maybe we won't be left behind," he said at the inauguration.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
28/03/24

Long-term contracts needed to stabilise gas prices: MET

Long-term contracts needed to stabilise gas prices: MET

London, 28 March (Argus) — Germany and Europe need more LNG and business-to-business long-term contracts to even out supply shocks and stabilise gas prices, even as demand is unlikely to reach historical heights again, chief executive of Swiss trading firm MET's German subsidiary Joerg Selbach-Roentgen told Argus . Long-term LNG contracts have a "stabilising effect" on prices when "all market participants know there is enough coming", Selbach-Roentgen said. He is not satisfied with the amount of long-term LNG supply contracted into Germany, arguing that stabilisation remains important even now that the market has "cooled down" after the price shocks of 2022. Long-term contracts are important for the standing of German industry, Selbach-Roentgen said — not to be reliant on spot cargoes is a matter of global competitiveness for the industrial gas market, he said. The chief executive called for more long-term contracts in other areas as well, such as for industrial offtakers, either fixed price or index-driven. Since long-term LNG contracts are concluded between wholesalers and producers, the latter need long-term planning security for their projects, which usually leads to terms of about 20 years. But long-term LNG contracts in general do not represent a major risk for MET nor for industrial offtakers in Europe, Selbach-Roentgen said. LNG is a more flexibly-structured "solution" to expected demand drops in regard to the energy transition as the tail end can be shipped to companies on other continents such as Asia if European demand wanes, he said. Gas demand is not likely to recover to "historical heights" again, mostly driven by industrials "jumping ship", Selbach-Roentgen said. When talking to large industrial companies, the discussion is often about the option that they might divert investments away from the German market as the price environment is "not attractive enough" for them any longer in terms of planning security, the chief executive said. This trend started out of necessity in reaction to the price spikes but may now be connected to longer-term "strategic" considerations, he said. In addition, industrial decarbonisation — as well as industrial offtakers' risk aversion because of the volatile gas market following Russian gas supply curtailments — leads companies to invest less into longer-term gas dependencies in Germany, Selbach-Roentgen said. In addition, MET advocates for a green gas blending obligation of 1-2pc green gas or hydrogen, in line with legislative drafts under discussion by the German government. This has already met with interest by offtakers, despite uncertainties around availability and prices, and would provide a regulatory framework that allows firms to prepare for the energy transition, Selbach-Roentgen said. By Till Stehr and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

Stalling climate finance an energy security risk : WRI


28/03/24
News
28/03/24

Stalling climate finance an energy security risk : WRI

London, 28 March (Argus) — The "best bet" to achieving global energy security is through mitigation funding and multilateral cooperation, according to the World Resources Institute (WRI). WRI highlighted that governments are funding more domestic renewable energy projects but have increased oil and gas production in the name of "energy security" at home in the years following the Russia's invasion of Ukraine. The recent rebrand of energy transition funding to energy security funding has allowed some developed nations to justify domestic oil and gas licences and drag their feet on multilateral financial commitments. This is causing "real worry" among climate-vulnerable developing nations, WRI chief executive Ani Dasgupta said. He said that although the initial "shock" to the world's energy markets after the invasion of Ukraine "quickly went away", it has triggered "real worry among poorer countries that when push comes to shove, it won't be an even game, or have a fair outcome." Developing countries have long complained about the lack of access to climate funding. Richer nations have only recently met the $100bn/yr target in climate finance to developing countries agreed in 2009, while discussions on setting a new climate finance goal for 2025 at Cop 29 in Baku in November could prove difficult. President of the Republic of Congo (Brazzaville) Denis Sassou-Nguesso said last year that the $100bn/yr in climate financing to developing countries promised by rich countries "never reached us", adding that the annual UN Cop climate conferences have become little more than a talking shop. "Just after the invasion of Ukraine, every country started to think about energy security," Dasgupta said. "In theory, good things could have happened, countries could have concluded that their best bet to getting energy security is by going renewable". But it was not the case in key consumer countries or regions, Dasgupta pointed out. China bought the majority of Russian gas following the EU's withdrawal, he said, and has since upped production at coal-fired power stations despite an "extraordinary" acceleration towards renewables set for 2023-28, according to Paris-based energy watchdog IEA . In Europe, the UK and Norway continue to award new oil and gas licences . "In the US, the fossil fuel lobby argues that the best route to energy security is to invest more in fossil fuels". But the best route is to invest in more renewables, he said. "Even if the US produces a large amount of oil and gas, it is still a traded commodity, and so you have to pay a price for it that is set globally." The US special presidential co-ordinator for energy security Amos Hochstein has also suggested in September that a widening climate finance gap could ultimately threaten global security. "We have seen the percentage of dollars spent on the energy transition outside the OECD, in developing and middle income countries actually go down instead of up…" By Madeleine Jenkins Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Japan’s Renova starts Miyagi biomass power plant


28/03/24
News
28/03/24

Japan’s Renova starts Miyagi biomass power plant

Tokyo, 28 March (Argus) — Japanese renewable power developer Renova started commercial operations today at its 75MW Ishinomaki Hibarino biomass-fired power plant in northeast Japan's Miyagi prefecture. The power plant is designed to consume an undisclosed volume of wood pellets and palm kernel shells (PKS) to generate around 530 GWh/yr of electricity. Renova originally targeted to start up the power plant in May 2023 but postponed the start-up multiple times. Renova has been forced to delay the start-up schedules at several of its power plants. It previously targeted to begin commercial operations of the 75MW Omaezaki biomass power plant this month but postponed it to July, as the final adjustment of boiler and turbine units is taking longer than expected. It delayed the launch of the 74.8MW Tokushima Tsuda biomass power plant in September before it began commercial operations in December 2023 . Japan imported 1mn t of wood pellets during January-February, up by 14pc from the same period in 2023, according to the finance ministry. PKS purchases fell by 24pc to 466,186t. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Africa’s H2 project development lags behind: report


27/03/24
News
27/03/24

Africa’s H2 project development lags behind: report

London, 27 March (Argus) — The development of renewable hydrogen projects in Africa is lagging behind the global pace with only 1pc of African project volume having already reached final investment decision (FID) compared with a global average of 7pc, Brussels-based industry body Hydrogen Council said in a report. The projects that have moved to FID in Africa are small-scale ventures, located mainly in the southern part of the continent and focused on mobility or industrial applications, according to the Council's investment tracker. Even projects at an earlier stage in Africa are trailing behind development in other parts of the world. While 20pc of project investment volume are at front-end engineering design (FEED) stage or further globally, only 5pc of projects have progressed beyond FEED in Africa. The lag in project development is driven by perceived risks in African jurisdictions such as political and monetary instability, the Hydrogen Council said. Underdeveloped infrastructure also contributes to delays and uncertainty. Given the "right enabling conditions," Africa could supply 15pc of expected globally traded hydrogen volume which would translate into 1mn t/yr in exports by 2030, 5mn t/yr by 2040 and 11mn t/yr by 2050, according to the study. But realising these targets would require $400bn in investment. African countries offer promising cost-competitive renewable energy resources, but unlocking this potential will "require coordinated efforts across public and private sectors" and the creation of a "legal framework that helps mitigate risks," industrial gas firm Linde's chief executive and Hydrogen Council co-chair Sanjiv Lamba said. Most of the projects announced in Africa so far focus on exports to Europe and Asia, but demand within the continent could also drive adoption in the long-run, the authors point out. Applications in chemicals, refining and transportation in African countries could generate demand of 6.5mn t/yr by 2050. Industry participants in developing countries have long called for more financing mechanisms such as blended finance to help projects gather momentum in locations considered more risky and uncertain for investment. The largest projects in the pipeline are planned in North African countries such as Morocco , Egypt and Mauritania . By Pamela Machado Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Electrification key to cut UK offshore emissions: NSTA


27/03/24
News
27/03/24

Electrification key to cut UK offshore emissions: NSTA

London, 27 March (Argus) — The UK offshore oil and gas industry must make "decisive emissions reduction actions now and on an ongoing basis", with asset electrification and low carbon power central to making cuts, regulator the North Sea Transition Authority (NSTA) said today. "Where the NSTA considers electrification reasonable, but it has not been done, there should be no expectation that the NSTA will approve field development plans", the regulator said in a new emissions reduction plan. The NSTA set out "four clear contributing factors to decarbonising the industry" — including asset electrification, investment and efficiency and action on flaring and venting. It will also look at "inventory as a whole", ramping up scrutiny on assets with high emissions intensity. Relevant companies must produce emissions reduction action plans for offshore assets, the NSTA said. New developments with first oil or gas after the beginning of 2030 must be either fully electrified or run on "alternative low carbon power with near equivalent emission reductions", the NSTA said. New developments with first oil or gas before 2030 should be electrification-ready at minimum. If electrification is not reasonable, other power emissions reductions must be sought, the regulator said. The offshore industry must from 1 June provide "a documented method of the split of projected flaring and venting figures into categories", and must from 1 June 2025 have a plan and budget to "deliver continuous improvements in flaring and venting", it said. New developments — including tie-backs — must be planned on the basis of zero routine flaring and venting, which every asset must reach by 2030. Industry flaring almost halved between 2018-22, the NSTA said. The regulator has flagged a particular focus on methane emissions. The NSTA may require developers to agree to cease production of assets with high emissions intensity "with reference to societal carbon values", it said. Societal carbon values are calculated by the UK government to reflect the marginal cost to society of additional CO2 emissions. It will discuss end dates for production for assets with greenhouse gas (GHG) emissions intensity 50pc over the average for the UK offshore, and which intend to produce oil or gas beyond 2030. This represents a slight watering down of the initial plan the NSTA consulted on last year. The North Sea Transition Deal, agreed in 2021, commits the UK offshore industry to reducing its production emissions of GHGs by 10pc by 2025, by 24pc by 2027 and by 50pc by 2030, from a 2018 baseline. Industry has itself committed to a 90pc reduction by 2040 and a net zero basin by 2050, the NSTA said. It "would welcome industry owning and delivering these reductions", it said, adding that its plan is focused on emissions cuts and "emissions offsetting will not be considered towards meeting the obligations." By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more