Economic stimulus package with hydrogen strategy: 7 billion and restrained euphoria

Research into hydrogen energy is also receiving something from the economic stimulus package. However, the Ministry of Economics remains cautious.

The forecast study sees little potential for hydrogen in transport – except for locomotives and trucks Photo: Patrik Stollarz/getty

Shortly before the announcement of the government’s "hydrogen strategy", the Federal Ministry of Economics warns against excessive expectations for the new form of energy. Hydrogen is necessary to achieve climate goals, but it is also more expensive than fossil fuels in the long term and has not yet been tested on a large scale. To produce hydrogen with renewable energies, the capacity of German green electricity is limited; the use of hydrogen would first make sense for trains, trucks, steel production and refineries.

These are the most important statements of a report published by the ministry on Friday. The study is available to the taz.

The comprehensive study, "Costs and Transformation Paths for Electricity-Based Energy Sources," was commissioned by Minister Peter Altmaier (CDU) from the Swiss consulting firm prognos. The authors calculate several scenarios of how and where hydrogen can be produced or transported to Germany. Hydrogen (H2) is seen as the clean energy source of the future if it is produced by electrolysis with green electricity; it is expected to replace oil and gas in transportation and industry.

However, the study says that the production of hydrogen or gaseous and liquid fuels derived from it, so-called power to gas (PtG) or power to liquid (PtL), such as methane and fuels, will remain more expensive until 2050 even if fossil fuels become significantly more expensive.

Only "green" hydrogen is promoted

In addition, capacities are scarce, he said. The current expansion path of renewable energies only allows for "a maximum domestic production of around 16 TwH (terawatt hours) of green hydrogen by 2030, provided that only renewable electricity is to be used." If Germany is to achieve its goal of being climate neutral by 2050, between 110 and 1,200 TwH of energy from hydrogen will be needed by then, according to various studies.

With the study, the Ministry of Economics is positioning itself in the government’s internal struggle over the future of energy supply. The "hydrogen strategy", which was actually planned for the end of 2019, has been repeatedly delayed due to differences. The SPD-led Environment Ministry and the CDU Research Ministry have achieved that public funds should only flow for so-called green hydrogen, which is obtained from renewable and not fossil sources. Research Minister Anja Karliczek (CDU) in particular is enthusiastic about hydrogen as a technology of the future and wants to make Germany the global market leader in this field.

Economics ministry puts the brakes on

Karliczek advocates the construction of electrolysis plants for the production of hydrogen with a capacity of 10 gigawatts in Germany by 2030. The SPD parliamentary group in the Bundestag is also backing such a scale – but it would mean significantly increasing the current plans for wind and PV plants (65 percent of electricity generation by 2030 from eco-plants).

The Ministry of Economics has long been skeptical about this – and has now apparently prevailed. In the government’s stimulus package, the plan is to build only 5 GW by 2030 and "if possible" to add another 5 GW by 2035, but to reach 10 GW by 2040 at the latest. The government plans to spend 7 billion euros on this and on research and subsidies, and the strategy is to be presented "in the short term."

"It is important that Germany can replace all fossil fuels with climate-friendly renewable energies in the long term," says Economics Minister Peter Altmaier (CDU). "Since hydrogen has a key function in this, we must now set the course for Germany to become the world’s No. 1 in hydrogen technologies. That’s why we’re working at full speed to finalize the hydrogen strategy with ambitious but achievable targets."

If not enough hydrogen is produced in Germany, it would have to be imported, says the prognos report. But that is not so easy: So far, there is hardly any ecologically produced hydrogen for transport on a large scale, in North Africa such a production, also built with European centers, could cause problems with drinking water.

It’s all about locomotives, trucks and steel

The paper rejects hopes that hydrogen could also be used to make buildings and car traffic green. There are cheaper alternatives, such as heat pumps and electromobility, it says. The use of hydrogen technology, on the other hand, would be worthwhile for locomotives that currently run on diesel, for truck transport, for replacing gas in refineries and in steel production. However, as soon as industries are in global competition, as is the case with steel, the additional costs would have to be offset.

In any case, the costs are high, write the prognos experts. For an additional cost of around 3 billion euros, the entire German H2 production in 2030 could produce around 8 percent of German steel in a climate-friendly way, thus saving around 5 million tons of CO2. For about the same money, you could have all domestic German air traffic flying on CO2-free kerosene – but only save half as much CO2.

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