Could Germany lead a hydrogen revolution?

Julian Turner 5 October 2020 (Last Updated October 2nd, 2020 17:03)

The German Government has announced plans to gradually increase the country’s reliance on hydrogen, launching a 38-step programme to improve infrastructure and kick-start a European hydrogen power market. We talk to German Energy Agency CEO Andreas Kuhlmann.

Could Germany lead a hydrogen revolution?
Outside of Europe, US company Air Products intends to move power- to-hydrogen technology towards using ammonia. Credit: Air Products

Andreas Kuhlmann has been chief executive of the German Energy Agency since July 2015, increasing its profile as a driver and pioneer of energy transition and climate protection. Previously, Kuhlmann worked at the European Parliament, for the Social Democratic Party of Germany, within the Federal Ministry of Labour, and for the German Association of Energy and Water Industries. Now, as the country looks to position itself at the forefront of a European hydrogen power revolution, we find out from Kulhmann what it will take and why now is the time.

Julian Turner (JT): What benefits do hydrogen and its derivatives offer as alternative energy carriers compared with other renewables and fossil fuels?

Andrea Kuhlmann (AK): Hydrogen will be a key pillar of future energy systems. It has many uses as an energy carrier to be stored; for example, in fuel cells in cars and buildings, or to replace coal in steelmaking. It can also be converted into other carriers, which can then be used or stored even more easily; for example, as liquids.

Many of these derivatives are easier to use and can directly replace fossil fuels in aircraft, ships, and cars. Next to biofuels, whose sustainable potential is limited, all of these power fuels – gaseous and liquid – will be needed for the energy transition. With limited renewable potential domestically, Germany will remain a large importer of energy, but we will move away from oil and gas towards hydrogen and power fuels.

Hydrogen can be an enabler of renewable energy imports in the future, leveraging the renewable potential in other regions of the world.

JT: What are the main barriers preventing the uptake of hydrogen as a major energy source?

AK: As we are seeking to ramp-up the market for hydrogen, the main challenge was a lack of incentives. We have learned from the examples of solar and wind energy that early market phases need public support in order to scale and reduce costs. The same has to happen for hydrogen.

However, we also have to be cautious. In many applications for power fuels it will be very difficult to reach the current levels of fossil fuels. Climate protection comes at a cost, but one that we should be willing to pay. Once incentives are set, I am sure that innovators and industry will follow to develop the hydrogen power plants as needed.

JT: What is the 38-step National Hydrogen Strategy launched by the German Government?

AK: Germany’s National Hydrogen Strategy is the result of an ongoing discussion about the potential of renewable electricity-based energy carriers. There has been a fascination with hydrogen for several decades, but a thorough understanding of hydrogen as part of the energy system only began to emerge more prominently during the last ten years.

Within the German Energy Agency, we founded a “strategy platform” in 2011 to discuss the arising technical, economic, and regulatory questions with various stakeholders. The subsequent years saw many pilot projects emerge all over the country, but it has only been in the last few years that the topic has come to dominate the energy policy discussion. We have arrived at a consensus in industry and policy that renewable electricity will have to be complemented by renewable molecules such as hydrogen in order to achieve the energy transition.

We see the strategy and its implementation as an ongoing process. Therefore, to make that vision a reality, the government has developed a governance structure involving the relevant stakeholders and created a national hydrogen council. The federal government also developed a list of 38 measures that will bring us closer to a hydrogen society. The aim is to develop a domestic market with 5GW of capacity initially, until 2030. But the strategy goes beyond that, to define goals for the definition of sustainability criteria and infrastructure for instance.

JT: How does the programme align with the German Government’s new stimulus package, the soon-to-be-adopted European Hydrogen Strategy, and the recent Green Recovery Plan?

AK: The strategy has been developed and refined in parallel to the negotiations on the government’s stimulus package. This is a tremendous opportunity, as it has created an opportunity to accelerate the transition of our energy system. Overall, the stimulus package delivers €7bn for the domestic market, and equally important, €2bn for international cooperation to address the need for imports.

At the same time, it is important to remember the European dimension. The EU published its ambitious hydrogen strategy shortly after, and the Green Deal and stimulus package also provides ample opportunities for a swift transition. Overall, both strategies align well in emphasising the opportunities from international cooperation, being ambitious about boosting low-carbon hydrogen supply, and addressing many sectors of the economy. The German Government will further use its EU presidency to foster the topic of hydrogen at the EU level.

Having agreed on the national hydrogen strategy and stimulus package, the next step is to implement the strategy. For this purpose, among other things, a coordination office is to be established to ensure the participation of all relevant stakeholders and a timely implementation of the related measures. As the German Energy Agency, it is our goal to accompany and help shape the implementation of the strategy.

JT: What can be done to increase the limited generation of renewable energy in Germany?

AK: Thanks to decades of effort in increasing energy efficiency, primary energy consumption in Germany has been constantly decreasing since 1990, despite rising incomes and economic growth.

Yet Germany remains a strong manufacturing base and therefore is the sixth-largest consumer of energy in the world. We have managed to transform the power sector by deciding to phase out nuclear energy and coal power plants, and building 60GW of wind and close to 50GW of solar plants.

Still, more than half of Germany’s energy needs are covered by net imports, and space availability constitutes a hard constraint for the development of renewables in the long term. So we have to talk about changing those imports to something sustainable; only international cooperation will enable Germany to reach its ambitious climate goals.

Currently, the federal government maintains close cooperation in energy with more than 20 countries. In many of them we are in intense dialogue with national governments, research institutions, and industrial stakeholders – addressing technical, regulatory, and economic questions. With the €2bn aimed at developing larger-scale bilateral hydrogen projects, we can expect to see significant investments as well.

JT: What impact has the Covid-19 pandemic had on the development of hydrogen and other plans to decarbonise energy systems in Germany?

AK: The stimulus package in response to Covid-19 has acted as a catalyst for investment in hydrogen, energy efficiency measures in buildings, and the transformation of industry, to name a few.

In coordination with the European efforts in this area, these bold efforts in uncertain times may deliver the necessary impetus and mark an actual turning point in our efforts to achieve the energy transition, not just in Germany, but also abroad.