Hydrogen reshapes energy industry


May 17, 2021

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Hydrogen reshapes energy industry

The reshaping of the energy landscape is well under way. And as the energy industry begins its transformation, it’s become apparent that hydrogen has a major role to play in the new world order – albeit not straightaway, but in the near future. Hence we see every imaginable organization jostling for position to take advantage of this restructuring and perhaps also to shape its direction.

2022 is the year in which Germany’s last atomic power plants are to go offline and the number of coal-fired power plants is also set to fall. As traditional power generation declines, the renewable energy sector takes on a greater significance. Nevertheless, the figures for new and existing renewable generating capacity are yet to reach the desired level. As such, the gas sector remains an important industry pillar.

While gas power plants may not be as environmentally damaging as their coal-fired counterparts, they are a hangover from a fossil fuel era which, in order to meet the Paris climate targets, must ultimately come to an end no later than 2050. What the transitional period will look like as we move to that point is currently the subject of much debate among stakeholders.

For the time being, the gas grid – with its ability to act as an energy store and distribution mechanism – remains the cornerstone of the energy supply system, despite the onward march of electrification. Yet for the gas network to clean up in the medium term requires more than the odd bit of biogas or hydrogen blending here and there. Instead, new pathways must be found to store and convey sustainably produced methane or, better still, hydrogen gas.

Where these pathways lead and which route they take is something that’s splitting opinion wide open. Should synthetic gas be mixed with its fossil fuel equivalent, or is building new infrastructure or repurposing existing pipelines the better choice?

The question is: Who is going to stump up the cash to finance the restructuring? The German government’s view is that the costs should not be borne universally by all gas users, rather only by those who are set to benefit from hydrogen. The blending of hydrogen in the natural gas grid is not envisaged before 2030, at least that’s the takeaway from the present amendment to Germany’s Energy Industry Act. In the meantime, gas network operators are busy pursuing their own interests which don’t necessarily fit with what the government has in mind, especially since there’s money and power at stake.

The heating sector, too, is also on the cusp of change. Oil-fired heating systems are out, but the days are numbered for gas boilers too. While condensing boilers may be relatively efficient and affordable to buy, any appliances that are installed now are likely to be in operation for a good 20 years, so they’ll be consuming gas and emitting carbon dioxide for some time to come. The same can be said for fuel cells.

Electrification in this sector i.e., a switchover to heat pumps, brings with it a multitude of changes – not just for manufacturers and installers but also for the gas and power industry since there’ll be less demand for gas and more demand for green electricity.

The strength of the gas industry’s attachment to fossil fuels shows itself in the almost beseeching tone of Andreas Lücke, general manager of Germany’s heating industry federation and chief spokesman for the IBZ fuel cell initiative, when he said: “We absolutely need blue hydrogen.”

… Read more in the latest H2-International e-Journal, May 2021

Kategorien: Germany

Here are interesting and current articles on the topic of hydrogen – stocks and the stock market!

Economic prospects for companies in the hydrogen sector | Future, stocks & hydrogen companies on the stock exchange and more…

Which hydrogen companies will prevail in the competitive market in the long term? Get tips and cartwheels and learn more about risks or opportunities. Our stock market specialist and expert author Sven Jösting reports critically, independently and competently.

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