Producing instead of buying-in

Electrolysis makes it possible to integrate renewable energies into the energy system. This aspect is not given enough anywhere near enough attention in the national hydrogen strategy. A commentary by Henning Uck.

How much hydrogen is needed? The German federal government has developed a new National Hydrogen Strategy. While it is largely well meant, the paper is far too heavily focused on the wrong initial question, and as such it only provides inadequate answers. A new perspective is required.

Three years ago now, in June 2020, the German federal government presented its first National Hydrogen Strategy (Nationale Wasserstoffstrategie, NWS), with the aim of ensuring a sufficient supply of hydrogen and its derivatives to cover demand in various application areas, and of securing the establishment of the required value creation chains. Now the first revision of the strategy is being published, in the form of the National Hydrogen Strategy 2023 (Nationale Wasserstoffstrategie 2023), which expands the various measures but still retains the overarching goal.

One thing to make clear: the strategy does not present a concrete guide to implementation. But then, that is not what it intends to do. Rather, the goal is to present a corridor that can serve as a guide for the political and industrial sectors as well as individuals: what are Germany’s intentions for hydrogen?

And the headings for this corridor initially read very well: the paper calls for an accelerated market ramp-up for hydrogen, its derivatives and application technologies, and says that sufficient availability of hydrogen must be secured. On the latter point, one striking aspect is the doubling of the target for domestic electrolysis capacity in 2030, from 5 gigawatts (GW) to at least 10 gigawatts. The other points covered, ranging from the development of a high-performance hydrogen infrastructure – including a core hydrogen network, with the ambitious target of completing the first 1,800 km by 2027/2028 – to the establishment of appropriate framework conditions, also send positive signals that should boost the ramping up of the hydrogen economy. Clearly then, the direction is right.

Now we come to the ‘but’ – and it’s a big one – the paper simply hasn’t been entirely thought through. This is evident, for example, in the aforementioned expansion target of 10 GW of electrolysis output by 2030. Although this is twice the target value specified in the previous National Hydrogen Strategy, it does not constitute nearly enough capacity for two reasons.

Firstly because electrolysis output of 10 GW is not even close to what is needed to cover the expected hydrogen demand in 2030 which is also outlined in the paper. The expected 10 gigawatts would meet only one quarter of the demand forecast in the strategy, at between 95 and 130 TWh. At this point, people are all too quick to respond with the usual argument that importing will be inevitable. But there is an inherent danger here: while the potential for domestic production output is underestimated, the import requirements – for which the National Hydrogen Strategy specifies there will be “a separate import strategy” – are, naturally, overestimated. This creates the wrong incentives and stimuli. Rather than focusing on hydrogen production, ramping up the hydrogen economy and focusing on the system adequacy of electrolysis, one company or another could also simply be inclined to import and even use subsidised hydrogen where possible. This would not only mean some loss of system adequacy, but would also see us entering into new dependencies.

And that brings us to the second reason why a planned electrolysis output of 10 gigawatts by 2030 is totally insufficient: system adequacy – in other words, the ability of electrolysis systems to support the energy system through its operating times, in particular by drawing energy for the production of green hydrogen, from overloaded grid nodes at times with high feed-in of wind and/or solar energy. This eases strain on the network while ensuring that the generated energy can still be stored and is usable. That is the systemic capability of electrolysis. This is what we need it for. And we need it here.

This consideration must take centre stage and must be promoted. After all, the planned expansion of renewable energies is expected to double the installed wind output to 115 GW by 2030, while solar output will actually triple to 215 GW. But power grids in many regions of Germany are already unable to cope with demand. Even with an ambitious expansion of the electricity grid, this situation will continue to worsen over the next few years. And it’s not just about the lack of network – there simply won’t be enough consumers for the energy. We will not be able to use the electricity generated. This 17 would normalise downregulation rather than consumption.

This approach endangers wind and solar energy expansion because it is not clear that such projects would even be funded if it could not be ensured that the generated electricity could actually be used or fed into the grid.

On all these points, one thing is especially clear: the hydrogen strategy has been designed and developed based on consumption. But is it really about generating a specific quantity of hydrogen? What if we thought about the topic of hydrogen from the perspective of the energy transition as a goal? The initial question shouldn’t be: “How can we obtain hydrogen as quickly as possible?” Rather, we should ask: “How can we use hydrogen to holistically transform our energy system in favour of renewable energies?” Adjusting the question in this was means that hydrogen becomes a means to an end.

The means for integrating renewables into the energy system. Wind and solar energy generation can be dependent on the weather. That means we need to promote any means that will help to integrate renewables into our overall energy system, with interim energy storage and supply to consumers. Electrolysis is especially valuable here because it ensures that energy, in the form of hydrogen, can be used without time constraints, and means that energy can be distributed by means of road transport, rail and pipelines.

So hydrogen is much more than simply an energy source that can be imported at will, as long as a customer is available to take it. The generation of hydrogen in our country – and the associated rapid development and expansion of our domestic hydrogen economy – is essential for future- fit energy systems and for the complete supply of households, industry and transport with 100% renewable energies.

This is precisely what the new National Hydrogen Strategy fails to take sufficient account of: it spends too much time circling the issue of what hydrogen some customer might possibly need sometime and where we can perhaps get it. The National Hydrogen Strategy is not truly innovative in this respect. Instead, it falls back on outdated ways of thinking and fails to sufficiently take account of the opportunities and possibilities presented by the massive energy transformation.