(Wuppertal) – The production of green hydrogen in Germany and Europe “makes sense for economic reasons, is possible from an energy perspective and is necessary in terms of the climate and energy economy.” In addition, Germany has sufficient renewable energy potential “to produce significant parts of the hydrogen required”. This emerges from the update of a meta-study on the demand, costs and development paths of hydrogen in Germany, which the Wuppertal Institute prepared for the Regional Association of Renewable Energies NRW (LEE NRW).
Production costs usually below import costs
Accordingly, the expected local production costs for green hydrogen would be “usually below the import costs of hydrogen” by ship. In many cases they are also competitive with the import of hydrogen via pipeline. According to the study, the lowest cost estimates in the medium and long term are for pipeline imports from North Africa, Spain, Eastern and Northern Europe.
Merten, F., Scholz, A. (2023): “Meta-analysis of hydrogen costs and requirements for the CO2-neutral transformation”. Wuppertal Institute for Climate, Environment, Energy gGmbH, free as PDF (42).
“Strengthening a domestic, green hydrogen economy makes sense, not least because of the associated value creation in our own country. There are not necessarily cost advantages associated with importing hydrogen,” says Manfred Fishick, President and Scientific Director of the Wuppertal Institute. Blue hydrogen based on natural gas “does not represent the interim solution that was hoped for”. Larger quantities of blue hydrogen will not be available before 2030 “as the necessary production facilities and transport lines still have to be built”. In the long term, the problem is that “complete CO2 neutrality cannot be achieved due to the limited capture rate when producing from natural gas.”
“In order to efficiently use the hydrogen production that is possible by 2030, we advocate focusing the use of hydrogen on absolutely necessary applications,” says study author Frank Merten from the Wuppertal Institute. This helps to limit future demand – and thus also the required production and import quantities.
The steel or chemical industries, for example, could not become climate neutral without green hydrogen. However, from today's perspective, extensive use of hydrogen in the building and transport sectors is “not recommended”.
Demand will increase to 2030 to 130 TWh by 160
The update decided by the Federal Cabinet at the end of July National hydrogen strategy (NWS) assumes a new hydrogen demand in Germany of 2030 to 40 terawatt hours per year (TWh/a) by 75. In addition, there is the existing demand of around 55 TWh, which is currently covered by gray hydrogen. According to the NWS, the total requirement is 95 to 130 TWh.
In contrast, the Wuppertal study expects additional demand for climate-friendly hydrogen in a range between 29 and 101 TWh/a, which adds up to a total requirement of 84 to 156 TWh.
The study sees the use of hydrogen in the transport sector as more of a niche. However, there are currently a number of bus and truck manufacturers worldwide that rely on fuel cells and hydrogen. New infrastructure is also being built (photo: multi-energy filling station in La Roche-sur-Yon). © Lhyfe
The most important sectors in almost all scenarios examined are industry and the energy sector. For the transport sector, hydrogen plays at least a “certain role” in all scenarios with one exception in 2030 (up to 11 TWh), while in buildings it is only used in two scenarios, and there only with a maximum of six terawatt hours.
In the long term (until 2045/2050), the scenarios examined showed a wide range of hydrogen requirements of around 200 to 700 TWh annually. “Significant amounts of this would be used” for industry (75 to 360 TWh) and the energy industry (15 to 375 TWh). Widespread use in transport is only seen in those scenarios “which generally have a very strong focus on hydrogen”. In the building sector, six of the scenarios see little to no need, while three scenarios see the use of 80 to 180 TWh.
Costs just under 1,50 euros per kilogram
The expected production costs for green hydrogen in Germany have fallen compared to the previous study and are usually below the import costs by ship. The analysis estimates that the supply costs of green hydrogen will be between 2030 and 4,5 cents per kilowatt hour (Ct/kWh) in 20,5.
According to the studies evaluated, hydrogen could be produced in Germany in 2030 for around seven to thirteen cents. © Wuppertal Institute
If one uses conventional calculation models, according to which one kilogram has an energy content of 33 kilowatt hours, the production costs would be between 1,48 and 6,76 euros per kilogram. However, four of the studies examined come to production costs in Germany of 7,0 to 13,5 cents/kWh. This would be “in many cases competitive with imports by pipeline and ship”.
However, by 2050 the range of supply costs will decrease to 4,2 to 11,0 cents/kWh, with the most favorable estimates being for import via pipelines. For production in Germany, only three studies stated costs between 6,7 and 8,5 cents/kWh, “which is still competitive in many cases”. This applies in particular to ship imports from distant regions of the world.
In the current scenarios, the median costs for imports from the North African region would be 10,6 cents/kWh (2030) and 6,9 cents/kWh (2050). “The comparison with the assumed production costs in Germany shows once again that domestic production can achieve cost parity,” says the paper from the Wuppertal Institute.
Blue hydrogen is not a short-term solution
Incidentally, due to the time required to expand production facilities and especially pipelines, blue hydrogen will probably only be available in large quantities shortly before 2030 and does not represent a short-term interim solution. “It will not be available any faster than green hydrogen, but it can make an additional contribution to the hydrogen ramp-up and thereby help overcome shortages.”
The current plans in Norway, as a potentially very important supplier of blue hydrogen for Germany, suggest that the supply chain will not start until 2027 at the earliest and envisage production volumes of a maximum of 2030 TWh by 18. These quantities would be around the same order of magnitude as the targeted domestic green H2 production by 2030.
However, delivery also depends on the timely completion of the new H2 line. From other European countries such as Belgium, France and the Netherlands, among other things, due to the foreseeable, sometimes considerable domestic demand in these countries, significantly less blue hydrogen cannot be expected earlier and, if so, significantly less.
Photos
Hydrogen produced in Germany can certainly be competitive with imports. The photo shows the DLR hydrogen plant in Cologne. © German Aerospace Center
