Germany’s energy policy has been disrupted by the war in Ukraine.
Germany’s dependence on Russia has been reduced from 35% to 12 % and Russian gas from 55% up to 35% since the beginning of the war.
Moscow still has a lot of income from energy trading. According to CREA, the Finnish thinktank, Germany spent almost EUR9bn for Russian oil and natural gas imports in the first two months.
Veronika Grimm, an economist professor at the University of Erlangen–Nuremberg, is currently one of three special advisors to Germany’s federal government, known as Economic Sages.
She says, “We must diversify and decarbonise energy sources more quickly than we originally planned.” Ms Grimm says the nation should “ramp up” its hydrogen use to help reach that goal.
Hydrogen can store large amounts of energy, replace natural gases in industrial processes, power fuel cells on trucks, ships, or planes, and emits no water vapour.
According to the International Energy Agency, an energy research organization, dozens have published national hydrogen strategies or are in process of doing so.
Despite all the interest, it is not yet clear if large-scale hydrogen use can be made economically viable.
There has been similar excitement in the past: after two oil crises in 1970s and again in the 1990s when climate concerns arose. Both of these excitements ended in failure. Is today’s hype different?
Skeptics claim that hydrogen industry representatives, who dominate the majority of hydrogen councils worldwide, are biased in favor of hydrogen because it promises subsidies and keeps up the demand for existing assets like pipelines, tanksers, turbines, boilers, or turbines.
They argue that politicians prefer big, green-sounding plans to a distant future over more complicated solutions.
Environmental groups remain cautious as they warn that hydrogen cannot ever be used to make primary fuels. It must be made in two different ways, each one marked with a colour code.
The electrolyser converts electricity from renewable energy into green hydrogen. However, these machines and the electricity required to operate them are still expensive.
According to the IEA, these costs mean that emission-free hydrogen accounts for only 0.03% global hydrogen production at present.
Grey hydrogen, which is made from natural gas or oil, can be up to five times more affordable than regular hydrogen. However, due to losses in production, approximately 50% more CO2 is released than if natural gas was directly burned.
Blue hydrogen is a similar technique. Blue hydrogen is a similar process but captures 60-90% of carbon emitted during production for storage or re-use.
This method has a drawback: it costs roughly twice as much and does not have large-scale production facilities. Only 0.7% of hydrogen produced globally is blue.
So, despite its environmentally-friendly image and potential, the global production of hydrogen currently emits almost three times as much CO2 as a whole country, France, for instance.
It will all depend on how countries choose to produce hydrogen.
Some countries have an already clear priority: to power electrolysers, most sun-baked nation bets on solar power while France depends on nuclear energy.
China, however, treasures the cheap grey hydrogen produced from coal and natural gas and is open to investing in green alternatives.
Blue hydrogen is being promoted by the United States, Canada, UK and Norway. They inject captured carbon into oil and natural gas fields for long-term storage or enhanced oil recovery.
However, in Germany the picture is not as clear.
Volker Quaschning is a professor at Berlin’s University of Applied Sciences for renewable energy systems. He criticizes Germany’s hydrogen strategy. “Merkel’s government used this as a red herring in order to hide its own failures during the energy transition.”
He claims that solar and wind power should be expanded faster to enable future green hydrogen production, a step Germany’s new government has pledged to take.
The governing coalition, three of the responsible ministries and the hydrogen council disagree on hydrogen. They all internally debate whether to focus on green hydrogen or accept the blue option to temporarily fill the shortage.
Ms Grimm is the majority opinion on the hydrogen council, favoring a multi-colour mixture.
She argues that accepting blue hydrogen will create the supply needed for a budding sector. It will encourage technological advancements in Germany as well as potential suppliers to green hydrogen production.
Robert Habeck, Economy Minister, announced in January an ambitious push for renewables. He also stated that the domestic target for green hydrogen production to grow by 150 percent from 70 MW to 10 GW by 2030 was being doubled.
This target is 25% of the EU’s total goal of 40GW and more than France’s goal at 6.5 GW.
Germany is now looking for hydrogen suppliers abroad, even as its domestic production grows.
Andreas Kuhlmann is the head of the German Energy Agency (a government-owned agency that facilitates the energy transition and coordinates the Hydrogen Council), and he claims Germany has significantly accelerated international negotiations to purchase hydrogen.
This could be done by developing hydrogen pipelines that connect to southern Europe. There, favorable conditions for wind and solar power permit the production of hydrogen at a cost-efficient rate.
He is constantly visiting energy exporters. He visited five countries to sign cooperation agreements within a week, including Norway, Qatar, and Norway, where he completed a feasibility study to build a hydrogen pipeline.
Expect the first delivery from the UAE to arrive in 2018 or later.
Other countries that Mr Habeck has identified as hydrogen-rich include Australia, Saudi Arabia and Oman, Chile, Namibia, Chile, Chile, Chile, Chile and Oman.
Although he recognizes the necessity to import hydrogen, Mr Quaschning shatters some of Mr Habeck’s hopes. He explains that it will be slow, inefficient, and costly to import hydrogen from desert plants.
Every step of the supply chain consumes some of the original energy. These include desalinating the seawater to obtain fresh water, electrolysis for shipping, liquification of shipping, transport via tanker and local transport via pipelines in Germany.
Mr Quaschning states that these steps together would consume at least 70% of electricity produced in the desert.
“A solar panel in the desert can produce 80% more electricity than one in Germany. However, the losses along the way are so large that it would be twice the effective to directly generate solar power in Germany.
Hydrogen is often called the Champagne of the energy transition because of its high cost. Who will be the first to sip?
Most observers are in agreement on this point. Felix Matthes, an energy expert at Oko-Institut and member of Germany’s hydrogen council, says, “It is vital that we only allocate hydrogen to those industries, which direct electrification cannot be possible.”
He argues that it should be used in the first place to make steel, chemicals, and glass.
The next sectors include shipping, long-distance truck transport and planes that can fly medium or long distances. He adds that other uses for heating or cars are inefficient, expensive, and impractical distractions.
Matthes states that Mr Habeck’s push for renewables will increase our need to balance our electricity supply. This hydrogen could be done with electrolysers producing hydrogen during sunny, windy days, as well as large-scale storage for winter days.
Germany is under pressure to cut its dependence on Russian energy. However, it will be difficult.
Many people will hope that hydrogen makes the transition easier by fulfilling its promise.
