Hitting the Gas: H2 Is the Future

With billions of euros in government investment and ample infrastructure already in place, Germany’s hydrogen sector is the next big thing. Foreign investors are actively encouraged to join the country’s hydrogen revolution.

November, 2020

A decade ago, power utilities serving the area in and around the city of Mainz in the western German state of Rhineland-Palatinate had a problem. The city was keen to promote renewables like wind and solar, but the power grid struggled to absorb surpluses on particularly sunny or windy days. On the other hand, when renewable electricity output dropped, the power company had to make up the difference.

“We wanted a way to relieve the pressure,” says Birgit Scheppat, a professor at the Hochschule RheinMain/University of Applied Sciences in Wiesbaden and a specialist in hydrogen (H2) and fuel cell technologies.

The wind turbines that drive the electrolysis plant are located behind the Mainz Energy Park, developed by Siemens, the Linde Group, the RheinMain University of Applied Sciences and Stadtwerke Mainz. © picture alliance/Andreas Arnold/dpa

In 2015, work was begun on the Energy Park Mainz facility, which converts electricity generated from renewables to hydrogen. The gas can then be stored, sold or pumped into pipelines serving local heating plants. Known as power-to-gas or power-to-hydrogen, the technology addresses one of the biggest hurdles to Germany’s transition to clean energy or Energiewende.

Smoothing out energy supply

Power-to-gas is an efficient way of smoothing out the peaks and troughs, stocking up energy when generated and releasing it when needed. Hydrogen is the most plentiful substance in the universe and is easy to produce via a process called electrolysis, which uses electricity to split water molecules into O2 and H2. If the electricity is drawn completely from renewable sources, the product is what’s known as “green” H2. Scheppat describes power-to-gas as “the missing link between renewable energy sources and a ­zero-emissions future.”

The workings of the electrolysis plant are visible to visitors inside the Energy Park Mainz. © picture alliance/Andreas Arnold/dpa

The German government is also fully backing the power-to-gas sector. “Solutions that will let us transform renewable electricity into other forms of energy are key to a ­successful energy transition,” explains Stefan Kaufmann, Innovation Commissioner for Green Hydrogen at the Federal Ministry of Education and Research (BMBF), who leads the ministry’s Power-to-X efforts. “Power-to-X has a big role to play in reaching those goals,” he says. The BMBF strategy includes measures designed to spur long-term, effective investment, including tax breaks for industrial electrolyzers and EUR 2 billion designated for investment in international partnerships.

Attracting serious investment

The Energy Park Mainz has proven to be a model for other projects. When it went operational in 2018, it was the largest facility of its kind in the world, capable of converting 6MW of electricity a year into H2. “We showed how to do it, what safety measures were needed, and that it could be done,” Scheppat says.

Germany has committed to dramatically expanding its hydrogen fuelling infrastructure. © Philipp Wente/laif

Investors from inside and outside Germany took notice. Last year, German and Dutch power companies TenneT, Thyssengas and Gasunie Deutschland announced plans to launch a power-to-gas plant in Germany’s industrial heartland. With a planned 100MW capacity, it would dwarf its Mainz predecessor.

Siemens is also expanding its capacities by leaps and bounds. “At the moment, we have facilities in the 10MW class and are developing ones for more than 100MW” says Armin Schnettler, CEO of New Energy Business of Siemens Energy. “We’re expanding our overall production capacity into the gigawatt dimensions.” Schnettler welcomes the H2 initiatives of both Germany and the EU, which has set a strategic objective of installing at least 6GW of renewable H2 electrolyzers in the bloc by 2024.

Facts & Figures

»Europe’s H2 strategy
is pursuing the
right goal.«

Armin Schnettler,
CEO of Siemens Energy’s New Energy

Siemens already has hydrogen power facilities in the 10MW class and is developing 100MW. Schnettler is expecting to ramp up productioninto “gigawatt dimensions.” Read the full interview here

“The European hydrogen strategy is pursuing the right goal as well: creating a new competitive industry that serves European and global markets, generates and preserves jobs, and has the potential for being climate neutral,” Schnettler says.

“With its experience with numerous projects such as the Energy Park Mainz, its excellent research institutes and its stated goals, Germany provides the perfect soil for innovative hydrogen companies from across the world to expand to the country,” says GTAI senior manager investor consulting Heiko Staubitz.

Decarbonizing industry

Perhaps unsurprisingly, petroleum companies are also getting in on the act. The industry giant Shell Oil recently broke ground on a power-to-gas plant at its refinery in Wesseling, Germany. “Shell is excited by hydrogen and sees huge potential in it,” says Shell’s executive VP for New Energies, ­Elisabeth Brinton. “That is why we are committed to its development – as a storage vector for renewables and a net-zero energy source for commercial, industrial and transportation customers.”

Partially funded by the EU, the REFHYNE project will be capable of converting renewable electricity into 1,300t of H2 per year. That can be employed in a variety of ways (see box), for instance in the chemical and steel industries, both of which use hundreds of thousands of tons each year.

“Green electrolysis has the potential to decarbonize many industrial processes that use hydrogen,” says Graham Cooley, CEO of the British company ITM Power, which specializes in electrolyzers, and H2 for fuel cells.

Hydrogen tanks are stacked up in a trailer, ready to fill up the first vehicles at the H2 filling station in the Energy Park Mainz © picture alliance/Andreas Arnold/dpa

Using existing infrastructure

Much of the infrastructure needed to store and transport H2 is already in place, thanks to more than a century of natural gas use in Germany. It would be theoretically possible to store nearly 200TWh of electricity in the existing gas network, about 5000 times as much energy as could be kept in electricity storage systems. That’s enough to power thirteen cities the size of Berlin for a year.

The potential network is huge, and that’s the good thing, Germany already has this infrastructure. Expanding or modifying existing infrastructure to carry more green H2 is easier than building new high-capacity power lines. “In the north of Germany, we’ve got lots of extra power generation capacity,” Scheppat says. “We can build one gas pipeline to move all that across the country, or 12 electricity transmissions networks.”

Industry Insight

Germany’s National Hydrogen Strategy

The aim of the government’s plan is to turn Germany into an “H2 republic.”

In June 2020, the German government made a major commitment to the hydrogen sector, pledging more than EUR 9 billion to develop technology and infrastructure over the next decade as part its National Hydrogen Strategy. That sum includes EUR 2 billion for international partnerships.

Underscoring the government’s commitment to hydrogen, no fewer than five ministries jointly announced the strategy. Minister for Economic Affairs and Energy Peter Altmaier has said Germany aims to become the “world No 1” in H2 technology. Promoting hydrogen is a main focus of Germany’s drive to become carbon neutral by 2050. The strategy is explicitly targeted at the future markets of H2 production, industry, transport and heating. Germany’s plans dovetail with the EU’s strategy, which was adopted in July and foresees the creation of a multi-billion-euro market supporting up to one million jobs by 2050.

The National Hydrogen Strategy can be accessed on the ministry’s website here