Green light for Germany’s hydrogen economy

Why hydrogen matters

Global energy consumption is predicted to grow by 50 per cent by 2050; in developing countries and emerging economies it will increase by as much as 70 per cent. Hydrogen, and particularly green hydrogen, is essential to a successful energy transition and to achieving international climate goals. As an energy source hydrogen has countless potential areas of application, ranging from e-mobility to steel and cement and as a means to produce synthetic fuels. What’s more, it can serve as a medium to store renewable energies.

The technique of splitting water into its component elements hydrogen and oxygen has a long history, and the technology to do so is already highly developed. However, series production of electrolysers is lacking and stacks still have to be assembled individually, meaning costs are often prohibitively high.

Now, a blend of government-backed projects and private German enterprises are working hard to make the hydrogen industry more economical and finally convert hydrogen’s potential into reality.

National Hydrogen Strategy

The German government published its visionary National Hydrogen Strategy in 2020. The strategy will see some €9 billion being provided to help set up a hydrogen economy by 2030, at which point Germany aims to have 5 gigawatts (GW) of installed electrolysis capacity. In 2021, as a statement of intent, the German Ministry of Research announced a €700 million investment in research and development projects involving some of Germany’s most illustrious companies:

  • The H2Giga project, co-ordinated by steel firm Thyssenkrupp, will look at developing technologies for the serial construction of standard water electrolysers.
  • The H2Mare project, headed by Siemens Energy, will examine ways of producing hydrogen and its derivatives on the basis of offshore wind power.
  • The TransportHyDE project, under the leadership of the Fritz-Haber-Institute of the Max-Planck-Society, will develop, evaluate and demonstrate technologies for the transport of hydrogen.

Warning that “our competitors are not asleep,” Stefan Kaufmann, the Federal Government’s innovation officer for green hydrogen, said these three projects will see Germany take a major step towards becoming “a hydrogen republic.”

SMEs and the hydrogen economy

SMEs also play a key role in rethinking existing technologies and driving innovations. For example, Dortmund-based Water Electrolysis Works (WEW) is a system-independent technology provider which aims to supply the hydrogen industry with economical stacks, the core of a water electrolysis system. The company produces alkaline electrolysis stacks, the costs of which are significantly lower than market forecasts for 2030. The standardised stacks are designed to fit a wide range of applications and system sizes, catering for small projects in the megawatt (MW) range all the way up to large-scale GW projects.

Germany and the global hydrogen economy

The hydrogen market is not without challenges, some of which are location-specific. Producing hydrogen requires electricity, which is currently expensive in Germany. Also, for hydrogen to be truly green and thus contribute to climate goals, it needs to be produced using renewable energies. This gives an advantage to countries where abundant water and sun help drive down production costs. More than 30 countries are already investing heavily in hydrogen technologies, with Australia, Japan, China and South Korea at the forefront. In the future, it may well be that hydrogen is produced in one location and consumed elsewhere.

Nevertheless, the opportunities for Germany and its partners – including on a European level – are immense. What the country may lack in renewable energies it more than makes up for in technological expertise and research depth, making it well positioned to become a global provider of state-of-the-art hydrogen technology.

In the words of Stefan Kaufmann, “We may not have as much wind or sun as other countries, but we do have the necessary know-how for setting up a sustainable, secure, and efficient energy system of the future.”

With countless projects now up and running in Germany, the light for a clean, energy-efficient hydrogen economy has very much turned green.