Secret plans for hydrogen in Germany: What industry and consumers need to know now

Hydrogen under scrutiny: potential, limitations and controversies

Hydrogen, the smallest and most abundant element in the universe, has become a central topic in the global energy debate in recent years. As the world community searches for ways to reduce dependence on fossil fuels and combat climate change, hydrogen is often touted as the ultimate solution. Proponents see it as a clean, versatile energy carrier that can play a key role in shaping a sustainable future. However, alongside the enthusiasm, there are also critical voices warning against overhype and pointing to the significant challenges associated with hydrogen technology.

The question of whether hydrogen is truly the hoped-for key technology for the energy transition or merely a short-lived hype is complex and multifaceted. To get to the bottom of this question, it is essential to examine the technology more closely, realistically assess its potential and limitations, and analyze current developments and challenges in business, industry, and society.

The experts' perspective: Opportunities and challenges of the hydrogen economy

Experts from the Federal Association of Freelance and Independent Experts (BVS eV) and the Fraunhofer Institute for Machine Tools and Forming Technology IWU have intensively examined the opportunities and challenges of the hydrogen economy. In specialized seminars and expert discussions, the economic, technical, and political aspects of hydrogen technology were analyzed and discussed. The expertise of these institutions, which combines both scientific research and practical experience in industry and technology development, provides a sound basis for a nuanced assessment of the topic of hydrogen.

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• Decarbonization strategies: Challenges in the production and use of renewable hydrogen for steel and chemical companies

Green hydrogen as the key to climate neutrality: An ambitious goal

The current discussion focuses primarily on "green" hydrogen. This is produced by electrolyzing water using electricity from renewable energy sources such as solar, wind, and hydropower. Green hydrogen is considered climate-neutral because its production and use generate no or only minimal greenhouse gas emissions. In contrast, "grey" hydrogen is produced from natural gas and causes significant CO₂ emissions, while "blue" hydrogen, although CO₂ is captured during its production, still relies on fossil resources.

The vision of a climate-neutral future, in which green hydrogen plays a central role, is ambitious and requires a comprehensive transformation in energy production, distribution, and use. However, the transition to a hydrogen economy is not only important from an ecological perspective, but also offers significant economic opportunities for Germany and Europe.

Germany and Europe in the race for hydrogen leadership

Germany and Europe have set themselves ambitious goals in the field of hydrogen. The European Union is pursuing a comprehensive hydrogen strategy aimed at making Europe a global leader in hydrogen technology. The German Federal Government has also developed a national hydrogen strategy and is planning massive investments in expanding hydrogen infrastructure and production.

These initiatives are not only politically motivated but also economically sound. Hydrogen technology offers significant growth potential for companies in various sectors, from energy production and the automotive industry to the chemical and steel industries. Developing a high-performing hydrogen economy could give Germany and Europe a decisive competitive advantage in the global market and create new jobs.

The challenges on the path to a hydrogen economy: supply and demand out of balance

Despite the promising prospects, Germany and Europe face considerable challenges on the path to a widespread hydrogen economy. One of the biggest hurdles is the imbalance between supply and demand.

The demand for green hydrogen is increasing rapidly, but production and availability cannot currently keep pace, explains Dirk Hennig, Head of the Federal Department for Machinery, Plants and Operating Equipment at BVS eV. To meet the demand in the various application areas, a comprehensive expansion of production capacities for green hydrogen is therefore necessary.

Currently, around one million tons of hydrogen are produced worldwide each year. However, a large portion of this is grey hydrogen, which is derived from fossil fuels. According to current estimates, Germany alone will need approximately 4.5 million tons of hydrogen annually until 2030 to meet its climate targets and decarbonize its industry. These figures illustrate the enormous discrepancy between current supply and future demand.

Economic viability of the entire supply chain: A crucial factor

To ensure a comprehensive and market-ready supply of green hydrogen, it is not enough to simply promote individual hydrogen production projects. Rather, it is necessary to make the entire supply chain economically viable. This includes not only the production of green hydrogen, but also its transport, storage, and distribution.

Dirk Hennig from BVS eV emphasizes that simply promoting green hydrogen projects is not enough. Rather, the entire supply chain must be made economically viable to ensure a market-ready and nationwide supply. This demonstrates that the success of the hydrogen economy depends on all links in the value chain functioning efficiently and cost-effectively.

Diverse applications of hydrogen: mobility, industry, building technology and energy supply

Although hydrogen remains an abstract topic for many, there are already numerous applications where the technology plays, or will play, a significant role in the future. The potential uses of hydrogen are wide-ranging, from mobility and industry to building technology and energy supply.

Hydrogen in mobility: Emission-free drives for cars, trucks and more

In the field of mobility, hydrogen is considered a promising alternative to conventional combustion engines and battery-electric drives. Hydrogen-powered vehicles, especially fuel cell vehicles, offer a number of advantages. They are emission-free, as they only emit water vapor, and compared to battery-electric vehicles, they allow for greater ranges and shorter refueling times.

Hydrogen could play a crucial role, particularly in heavy-duty transport, public transport, and shipping. For long distances and high payloads, fuel cell drives are often more efficient and practical than battery-electric solutions. The use of hydrogen propulsion is also being increasingly researched and tested in aviation and rail transport.

Hydrogen in industry: Decarbonization of steel production, chemicals and other sectors

Another important application area for hydrogen is industry. Many industrial sectors, particularly steel production and the chemical industry, require large amounts of energy and generate significant CO₂ emissions. Hydrogen can make a substantial contribution to decarbonization in these sectors.

In steel production, hydrogen can increasingly replace carbon-based reduction processes. Traditionally, steel is produced in blast furnaces using coke, releasing large quantities of CO₂. By using hydrogen as a reducing agent, these emissions can be drastically reduced. Hydrogen can also serve as a raw material and energy carrier in basic chemical production, for example, in the production of ammonia and methanol, replacing fossil fuels. Furthermore, there are numerous other industries where hydrogen can be used for heat and power generation as well as a process gas, such as in refineries, the glass and cement industries, and food production.

Hydrogen in building technology: Heat supply and decentralized energy generation

Hydrogen also offers promising applications in building technology. Initial projects demonstrate the use of hydrogen for heating in residential and industrial buildings. Fuel cell heating systems, for example, can be used in homes and commercial properties to generate heat and electricity. The use of hydrogen in combined heat and power (CHP) plants for decentralized energy generation is also conceivable.

Another interesting approach is the seasonal storage of hydrogen for heating. In summer, when renewable energies are abundant, hydrogen could be produced and stored through electrolysis. In winter, when heating demand increases and renewable energies are less available, the stored hydrogen could then be used for heating. This could help reduce dependence on fossil fuels for building heating and strengthen sector coupling between electricity and heat.

Hydrogen in energy supply: Sector coupling and energy storage

Hydrogen plays a key role in sector coupling, i.e., the integration of electricity, heat, and mobility. It can act as a link between the various energy sectors and contribute to creating an integrated and flexible energy system.

Pilot projects are investigating the use of hydrogen storage as an integral part of sector coupling. Hydrogen can serve as a long-term storage medium for renewable energies. Excess electricity from wind and solar power plants can be used to produce and store hydrogen through electrolysis. When needed, the hydrogen can then be converted back into electricity or heat, for example, using fuel cells or gas-fired power plants. This power-to-gas-to-power technology enables more flexible use of renewable energies in terms of time and location, and increases grid stability.

Furthermore, hydrogen can also serve as a feedstock for the production of synthetic fuels (e-fuels). E-fuels are produced from hydrogen and CO₂ and can be used as a climate-neutral alternative to fossil fuels in combustion engines. This could be particularly relevant for sectors where direct electrification is difficult, such as aviation and shipping.

Germany's ambitious hydrogen targets: 10 gigawatts of electrolysis capacity by 2030

Germany has ambitious goals for hydrogen. The German government has set itself the goal of creating a production capacity of 10 gigawatts for green hydrogen by 2030. This capacity is to be achieved through the construction of electrolysis plants that use renewable electricity to produce hydrogen.

This goal is part of the national hydrogen strategy and aims to make Germany a leading location for hydrogen technologies. The German government supports the expansion of the hydrogen economy with extensive funding programs and investments in research and development. The European Union is also promoting the development of a European hydrogen infrastructure and industry with billions of euros in investments.

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• Renewable hydrogen: EU auditors demand a reality check – The ambitious targets in the EU, their challenges and prospects

The Reference Factory H2 in Chemnitz: Innovations for mass hydrogen production

At the Fraunhofer IWU's Reference Factory H2 in Chemnitz, experts are working on industrial solutions for the mass production of electrolyzers and fuel cells. This factory is a key component of Germany's hydrogen strategy and is intended to help reduce production costs for hydrogen technologies and accelerate their market launch.

The Reference Factory H2 serves as a test environment for new production processes and technologies in the field of hydrogen. Here, innovative approaches to the automation and digitalization of electrolyzer and fuel cell production are tested and optimized. The goal is to enable the mass production of hydrogen technologies and to develop Germany into a global production center for these key technologies.

Challenges and obstacles: Investment costs, production capacities, safety and infrastructure

Despite ambitious goals and promising developments, Germany and Europe face major challenges in implementing their hydrogen strategies. Dr.-Ing. Ulrike Beyer, an expert in hydrogen technologies at the Fraunhofer IWU in Chemnitz, highlights several key aspects. High investment costs and limited production capacities hinder widespread supply. Furthermore, the specific physical properties of hydrogen necessitate new safety concepts for transport and storage. In addition, the development of a secure and efficient infrastructure is essential to ensure stable supply chains in the long term.

High investment costs and profitability: A critical factor

One of the biggest challenges is the high investment cost of hydrogen technologies. The production of green hydrogen is currently significantly more expensive than the production of grey hydrogen from fossil fuels. The costs for electrolyzers, fuel cells, and the infrastructure for transport and storage are also still relatively high.

To make the hydrogen economy economically viable, significant cost reductions are necessary. This can be achieved through technological innovations, mass production, economies of scale, and decreasing costs for renewable energies. Political frameworks and support measures also play a crucial role in improving the competitiveness of green hydrogen compared to fossil fuels.

Limited production capacities and technological development: Avoiding bottlenecks

Another challenge is the limited production capacity for electrolyzers and other hydrogen technologies. To achieve the ambitious goals of the hydrogen strategy, a massive expansion of production capacity is necessary. This requires significant investments in new production facilities and the further development of the technologies.

There is still potential for innovation in the field of electrolysis. Various electrolysis processes, such as alkaline electrolysis, PEM electrolysis (proton exchange membrane), and SOEC electrolysis (solid oxide electrolysis cell), are at different stages of development. Research and development focuses on improving the efficiency, lifespan, and cost of electrolyzers and on developing new, more cost-effective materials and production processes.

Safety concepts for hydrogen: transport, storage and application

The specific physics of hydrogen places particular demands on safety during the transport, storage, and use of the gas. Hydrogen is highly flammable and has a low density, which necessitates special safety precautions.

There are various options for transporting hydrogen, such as pipelines, tank trucks, and ships. Pipeline transport is the most cost-effective option for large quantities and long distances, but it requires the development of a new hydrogen infrastructure. For smaller quantities and shorter distances, tank trucks or ships can be used.

Hydrogen can be stored in various forms, such as compressed gas, liquid hydrogen, or chemically bound forms (e.g., in LOHC – Liquid Organic Hydrogen Carriers). Each storage method has its advantages and disadvantages in terms of cost, energy density, and safety.

Comprehensive safety concepts and standards are required for all hydrogen applications, whether in vehicles, industrial plants, or buildings. These must take into account the specific properties of hydrogen and ensure that handling the gas is safe and hazard-free.

Building a high-performance infrastructure: pipelines, storage facilities and filling stations

Another key challenge is building a secure and efficient infrastructure for the hydrogen economy. This includes the construction of hydrogen pipelines, storage facilities and filling stations, as well as the integration of the hydrogen infrastructure into the existing energy system.

Building a hydrogen infrastructure is a long-term and costly undertaking. It requires significant investments in the construction of new pipelines and storage facilities, as well as in the conversion of existing infrastructure. Developing a comprehensive network of hydrogen refueling stations for vehicles is also a major challenge.

The planning and development of hydrogen infrastructure must be carefully coordinated to leverage synergies and avoid duplication. Integrating the hydrogen infrastructure into the existing energy system also requires close collaboration between various stakeholders from politics, business, and science.

Independent expertise from specialists as a catalyst for the economy

The BVS eV, as an association of qualified experts, provides well-founded and practice-oriented assessments of technological innovations, including in the field of hydrogen. "We are consulted by companies and authorities on hydrogen issues – our task is to provide fact-based answers," explains Dirk Hennig.

Experts play a crucial role in evaluating hydrogen projects and technologies. They can support companies and authorities in their decision-making by providing objective and independent assessments. Their expertise is particularly important in a field as complex and dynamic as the hydrogen economy.

The independent expertise of specialists can help avoid poor decisions and direct investments toward the right technologies and projects. They can also help minimize risks and ensure safety standards. In this respect, specialists are important drivers for the successful and sustainable development of the hydrogen economy.

Hydrogen – Potential and Realism for the Energy Transition

Green hydrogen offers enormous potential to make a significant contribution to the energy transition and the decarbonization of the economy. Its diverse applications in mobility, industry, building technology, and energy supply demonstrate that hydrogen can be a key technology for a sustainable future.

At the same time, it is important to realistically assess the challenges and obstacles on the path to a widespread hydrogen economy. The high investment costs, limited production capacities, safety requirements, and the development of a high-performance infrastructure are significant tasks that can only be overcome through joint efforts by policymakers, businesses, and scientists.

The BVS eV will continue to actively promote the discussion surrounding hydrogen technology and advocate for an objective and nuanced assessment. It is crucial to harness the potential of hydrogen while simultaneously addressing the challenges. Only through realistic planning, economic scalability, and continuous innovation can hydrogen become an integral component of a successful and sustainable energy transition. Expert advice will play an indispensable role in paving the way for a hydrogen-powered future.

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