(Stuttgart) – In 2035, around 550.000 tons of hydrogen with an energy equivalent of 16,6 terawatt hours will be required in Baden-Württemberg. To meet the forecast demand for green hydrogen and its production, “a significant increase” in renewable energies is required. There are currently no climate-neutral alternatives for some industry segments. This emerges from the new study “Analysis of the current situation of H2 demand and generation potential in Baden-Württemberg”.
Costs for green hydrogen are not competitive for the time being
However, the costs for hydrogen produced regeneratively using electrolysis will not yet be competitive compared to fossil fuels until around 2025. In the best case scenario, production costs in 2035 would be 2,55 euros per kilogram (7,66 cents per kilowatt hour). However, if hydrogen continues to not be taxed, price parity with taxed mineral oil products could arise as early as 2030.
In the industrial, heat and conversion sectors, however, hydrogen remains comparatively expensive compared to natural gas. If rather pessimistic learning curves and high electricity costs are assumed, the production costs could also be 3,50 euros per kilogram (10,5 cents per kilowatt hour). For this reason, the study recommends “creating the framework conditions for the use of hydrogen in basic chemistry and energy supply now.”
Transportation is a challenge
In addition to producing the necessary quantities, transporting the hydrogen is also a challenge. The repurposing of the existing gas pipeline network “represents by far the most cost-effective option,” is one of the authors’ conclusions. If the gas suppliers' extensive distribution network were used, a large proportion of the industrial end customers who depend on hydrogen could be supplied directly.
However, the changeover is initially only possible “where there are parallel supply structures in place to ensure the continued supply of gas that is necessary for the time being”. If it is not possible to reallocate natural gas networks in a timely manner, consideration must be given to completely rebuilding hydrogen pipelines. Other transport options, such as ships, trains and trucks, should also be further developed.
Expand renewable energies faster
The self-imposed goal of achieving climate neutrality at the state level by 2040 and at the federal level by 2045 is leading to a significant increase in electricity demand, for example for battery-electric vehicles or heat pumps. An increase of around 2035 percent is expected by 16 and over 2045 percent by 44. Added to this is the need for electrolysers.
Therefore, the electricity generation potential from renewable energy sources in Baden-Württemberg must be expanded much faster than is currently the case as an “indispensable prerequisite for a hydrogen economy,” advise the authors of the study. The state government should identify and make sufficient suitable areas available. State legal hurdles to the expansion of renewable energies must be eliminated and the requirement to generate solar power on roofs must be implemented quickly.
Since January of this year, new non-residential buildings and new open parking spaces with more than 35 spaces have been required to install a photovoltaic system. Since May 1, 2022, this also applies to new residential buildings, and from January 1, 2023 it also applies to fundamental roof renovations.
Significant expansion of electrolyzers necessary
In the foreseeable future, there will be little potential for producing green hydrogen. The electrolysis capacity planned and available until 2035 is “far from sufficient to cover the forecast demand”. The operation of electrolysers in turn tends to increase the necessary electricity import into the state, but this may be “limited by network capacities”. Although a significant amount of electricity could be imported with the planned network reinforcement measures, “this is significantly more cost-intensive than repurposing existing gas pipelines for hydrogen transport.”
Current plans by the transmission system operators would provide for the delivery of hydrogen via pipelines in Baden-Württemberg from 2035. The northwest could probably be supplied in this way. “Then natural gas power plants should also be converted to hydrogen.”
On-site generation using electrolysis could make sense where certain industries cannot be decarbonized without the use of hydrogen and a supply of hydrogen via pipeline is not possible. If a significant proportion of demand is to be covered by local production, significant expansion will also be necessary here.
Funding recommended for industry
The authors recommend that the country support the framework conditions for the material use of green hydrogen and its use in power plants. “There is no alternative to hydrogen for these two applications. They must therefore be addressed as a priority.” Funding should also be examined in order to offset the additional costs compared to conventional systems at the state level.
At the same time, the industry must explain its hydrogen needs and the timeline for implementing the projects so that it becomes possible to organize the ramp-up of hydrogen supplies and realistically estimate possible funding opportunities.
The study was commissioned by the State Agency for New Mobility Solutions and Automotive Baden-Württemberg, E-Mobil BW GmbH. The investigation was published as a result of 2020 Hydrogen roadmap Baden-Württemberg commissioned. For this purpose, the “H2BW” platform was initiated, which is intended to support the implementation of the measures mentioned therein, develop them further and plan, coordinate and implement programs and projects.
The study "Analysis of the current situation of H2 demand and generation potential in Baden-Württemberg” is available free of charge as a PDF (114 pages).
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© Baden-Württemberg Ministry of the Environment
Illustrations
Cover images of the “Hydrogen Roadmap Baden-Württemberg” (December 2020) and the “Analysis of the current situation of H2 demand and generation potential in Baden-Württemberg” (May 2022) © Ministry for the Environment, Climate and Energy Sector Baden-Württemberg / E- Mobile BW GmbH
