According to concerted opinion, hydrogen is now considered the new universal energy carrier that is set to take the place of fossil energy sources in gas heating systems, cogeneration plants, cars, steel works and the chemicals industry. This is also recognized by Scientists for Future. In a recently published policy paper they describe hydrogen’s essential place in the energy transition yet also point out that its use is inadvisable in many areas on technical, economic and environmental grounds. The key sections of this paper are set out here:
In principle, hydrogen can be transported in the same way as natural gas via pipelines or tanker vessels and stored in tanks or caverns. This suggests that green hydrogen, in other words decarbonized hydrogen that is produced electrolytically with renewable power, could act as a replacement in all situations where we currently use fossil-based raw materials such as crude oil and – above all – natural gas. This belief is deceptive since for many purposes the deployment of green hydrogen is much too expensive and is an inefficient use of energy. Ultimately we will only use green hydrogen in cases where natural gas and crude oil cannot be replaced by the direct application of electricity or where hydrogen is the base material, for instance in the chemicals industry or in the carbon-free manufacturing of steel.
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A calculated optimism is clearly evident in some studies by natural gas network operators: The German gas and water industries association DVGW, whose membership includes over 2,000 utility companies, does not work on the basis that there will be a shortage of hydrogen. A study published by the DVGW calculates that high demand will be accompanied by an equally high degree of availability of more or less sustainable hydrogen (Gatzen & Reger, 2022). Underpinning this is the unsupported assumption that there will be an import rate of 90 percent, in other words the same level as today’s oil and gas imports.
“Just supplanting one fuel with another will not suffice for the energy transition. The energy transition inevitably requires a shift away from traditional technologies and habits.”
These optimistic assumptions on the availability primarily of imports are at the center of the argument that hydrogen would be available even for heat provision: “In contrast to the frequent assumption, hydrogen does not have to remain a scarce good. The demand for hydrogen can be more than covered from 2030 onward. The quantity exceeds all current demand forecasts many times over” (DVGW, 2022, p. 5). This strikingly optimistic supposition can be confirmed neither technically nor scientifically.
At least 10 years will pass before larger quantities can be imported. And what often goes unsaid in relation to desired hydrogen imports is that the transportation is so expensive that imported hydrogen will cost many times more than today’s natural gas or crude oil. On this point it makes no difference whether the hydrogen is transported in a compressed, liquefied or chemically bonded form.
The use of hydrogen is only wise if it is produced with renewable electricity (green hydrogen). In future this will also be the cheapest production method. Hydrogen manufactured from natural gas (gray or blue hydrogen) and hydrogen from methane pyrolysis (turquoise) are not carbon neutral due to the use of natural gas and the upstream emissions from methane; and excessive risks and long-term consequences are associated with the use of nuclear energy for electrolysis as an ecofriendly method of producing hydrogen (pink).
Analysis of individual application areas
The need to use hydrogen is already on the horizon in certain sectors. This affects, for example, iron and steel production as well as the chemical raw materials industry and hydrogen as an energy storage medium. At present, refineries require hydrogen for several processes, including the cracking of crude oil when manufacturing fossil fuels. This area of current hydrogen demand will disappear in the future. In other applications, hydrogen competes with other good solutions:
In vehicles, e.g., automobiles, electric propulsion is the most efficient and most practical solution. It is for this reason that manufacturers have practically given up on hydrogen propulsion for the future (Clausen, 2022). The situation for delivery vehicles, city buses and railroads can be said to be similar. Even when it comes to long-distance trucks, the Fraunhofer Institute for Systems and Innovation Research points out that, should the first hydrogen trucks be available in 2027, the second generation of battery-electric trucks will already be on the road (Plötz, 2022). The window of opportunity for successfully launching fuel cell trucks onto the market would therefore be essentially closed and all that would be left for hydrogen trucks would be a small niche, namely the transportation of heavy loads to very remote locations (Plötz, 2022).
Which country will be the first to establish a hydrogen economy? It’s not just the German energy sector that has been plagued by this question. Following the introduction of new legislation in the United States – the Inflation Reduction Act – which sets out highly attractive conditions for creating a hydrogen industry, Germany once again risks being left on the sidelines. That’s why representatives from German businesses and associations have joined forces to argue the case for swift political action.
One demand put forward by the German hydrogen and fuel cell association DWV, which is now being reiterated by its chairman Werner Diwald at every event, calls for the rapid implementation of the 37th BImSchV (37th Ordinance on the Implementation of the Federal Immission Control Act). For months, the DWV has been pointing out that industries act on a global scale and primarily invest where the best conditions can be found. So long as an absence of clarity prevails in Germany (with regard to the EU’s revised Renewable Energy Directive RED II and the 37th BImSchV), industry does not have the necessary planning certainty to make investment decisions, explained Diwald.
Andreas Rimkus, hydrogen representative from the SPD parliamentary group, has also repeatedly made the following appeal to German environment minister Steffi Lemke in unison with the DWV: “Please release the 37th BImSchV!”
“Everything speaks in favor of quickly creating the legal framework for the use of green hydrogen in refineries. Yet the German environment ministry has been avoiding taking the decisive step for years.”
Werner Diwald, DWV chairman
Meanwhile the US has acquired a far greater level of planning certainty following the Biden administration’s announcement of the Inflation Reduction Act. Since then, an increasing number of European electrolyzer manufacturers are openly considering expanding their production capacity there rather than investing in Germany. Against this backdrop, Diwald warns that in just a few weeks circumstances could arise that mean Europe would lack the capacity to establish a hydrogen economy because the order books of manufacturers may potentially be already filled with US commissions.
The US Inflation Reduction Act, according to the DWV head, is based on Germany’s renewable energy law EEG. According to his remarks, those responsible in the US looked extremely closely at the EEG and adapted its principle for hydrogen. What the German response to it could look like is still undecided. Ingrid Nestle, head of the climate protection and energy working group of the Greens parliamentary faction, declared that now isn’t the time to provoke a one-upmanship battle.
Hydrogen strategy overhaul
German industry, however, is hoping for a revision of the country’s national hydrogen strategy. Various ministers have, time and again, stated that a new draft is in the pipeline. The original aim was to present the second version before the winter break, though at the time of writing that seems unlikely since the German economy ministry especially is busy tackling issues on several fronts.
To underline the urgency of the current situation, a total of 30 companies and associations from the energy sector sent an open letter to German economy minister Robert Habeck on Nov. 10, 2022. In this communication, a copy of which has been seen by H2-international, the DWV asks on behalf of all signatories not only for a rapid enactment of the 37th BImSchV but also for more planning certainty in general. Diwald stated: “Germany needs an immediate response to the USA’s Inflation Reduction Act which is supporting the scale-up of the hydrogen economy by providing over USD 50 billion in secure resource funding. Unless the German government takes immediate action there is a risk that […] the hydrogen industry will relocate to the USA.”
The market ramp-up of electrolysis is a significant constraining factor for the mass production of green hydrogen. In an article that appeared recently in Nature Energy we analyzed possible pathways for expanding electrolyzer capacity in the European Union and around the world (Odenweller et al., 2022). Using a technology diffusion model we showed that the market ramp-up needs time in spite of initial exponential growth. Even if electrolysis expands as rapidly as photovoltaics and wind energy – the reigning growth champions – there will still be a short-term lack of green hydrogen and its availability in the long run remains uncertain. Nevertheless, it is important to accelerate the ramp-up now in order to ensure ambitious 2030 expansion targets can be reached and to guarantee long-term availability.
Because electrolysis is a key technology for the production of green hydrogen, the market ramp-up of electrolyzer capacity represents a critical area of constraint (IRENA, 2020). The magnitude of the scaling required is enormous, since at the end of 2021 only around 600 megawatts of electrolyzer capacity were in operation worldwide. To meet the 3,670-gigawatt figure in 2050 that the International Energy Agency (IEA) says is needed to achieve net-zero, capacity must be increased 6,000-fold (IEA, 2022b), thereby dwarfing the tenfold expansion in renewable energy capacity that will likewise be required.
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Furthermore, electrolysis expansion poses a coordination challenge in terms of ensuring that not just the hydrogen supply but also the demand and infrastructure for hydrogen are driven up simultaneously. This is the proverbial “three-sided chicken-and-egg problem” of ramping up the hydrogen market (Schulte et al., 2021).
In the following we summarize the key results of our recently published article on scaling up electrolysis (Odenweller et al., 2022). Our synopsis shows updated figures and results based on the most recent version of the IEA Hydrogen Projects Database as of October 2022 (IEA, 2022a).
Announced electrolyzer projects
The years ahead are due to see a pronounced upswing in project announcements (see fig. 1). If all the projects announced come to fruition, electrolyzer capacity in the European Union will increase by a factor of 28 by the year 2024 compared with the year 2021; globally it will grow by a factor of 23. However, this positive outlook comes with the caveat that final investment decisions have yet to be made for over 80 percent of these project announcements. Consequently there is a large degree of uncertainty about how many projects will be realized in the short term and therefore whether sufficient green hydrogen will be made available in time to reach net-zero.
We therefore asked the following question in the main scenario outlined in our article: “What would happen if electrolysis expands as quickly as photovoltaics or wind energy in its boom phase?” To cover unavoidable uncertainties we used a model to simulate and then aggregate the technology diffusion of electrolyzers in response to thousands of different parameter constellations (see box).
In the event that electrolyzer capacity expands just as rapidly as photovoltaics and wind energy once did – the two greatest success stories for the energy transition thus far – the primary outcome can be encapsulated as follows: short-term scarcity, long-term uncertainty.
Methodology: technology diffusion model
New technologies usually penetrate markets in the form of an S-curve. In this situation, there is an initial period of exponential growth which is followed by a virtually linear increase in the growth phase before growth diminishes in the saturation phase and approaches the peak. In our article we extended this standard model of technology diffusion by deploying a stochastic uncertainty analysis. We considered uncertain parameters to be (i) the electrolyzer capacity in the near future, specifically in the year 2024, (ii) the initial exponential growth rate and (iii) the demand for green hydrogen, for which we assumed a continuous increase based on policy targets and net-zero scenarios. The combined propagation of these independent uncertainties finally resulted in what we called the “probabilistic area of possibility”.
Be it fuel cells or hydrogen engines, (almost) all major commercial vehicle manufacturers are putting their efforts into hydrogen propulsion. A fact that has so far largely gone unnoticed by the average person. While the public debate still rages around the use of hydrogen in the automobile industry, it would seem the trucking sector made up its mind long ago: There’s no future without hydrogen. This was proved beyond doubt at Germany’s IAA international motor show for commercial vehicles which ran from Sept. 20 to 25, 2022, in Hannover, even if about 90 percent of the vehicles exhibited still had diesel engines.
The trend toward electrification was abundantly clear in every corner of IAA Transportation. While the roughly 1,400 exhibitors still earn their crust from diesel vehicles, the electromobility theme lends itself perfectly to marketing campaigns. Many booths took the opportunity to play around with the concept – as was the case at the IAA car show several years ago. When questioned, however, it immediately becomes apparent that electric vehicles are little more than a glint in the eye for the commercial vehicle sector. Significant volumes are still some way off – not just because of a shortage of staff and electronic chips, but also due to regulatory or technical hurdles.
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One exhibitor, for example, explained that trucks with hydrogen engines cannot be classified as zero-emission vehicles since the intake air ends up being measured alongside the exhaust during emissions testing, and this incoming air usually contains pollutants. Automotive supplier Mahle reports that popular electric engines often drop to 60 percent power output after one minute at maximum power. Unlike its own modules which can guarantee a continuous output of 92 percent (240 kilowatts).
An added issue is that fuel cell units experience cooling problems when, say, a 40-ton truck needs to travel over the Alps, therefore requiring a high level of power over a prolonged period. This is where hydrogen engines have the upper hand. On the downside, however, are the high temperatures that combustion entails as these create favorable conditions for the production of nitrogen oxides. While nitrogen oxide emissions can be significantly reduced using a catalytic converter, it doesn’t eliminate them completely – a contrast to a purely electric vehicle which has zero local emissions.
Comeback of the hydrogen ICE
The key topic of the moment for the hydrogen sector when it comes to commercial vehicles is the hydrogen internal combustion engine. Keyou, which currently employs 70 members of staff, has been working on it for years. Nothing new there. But now the likes of Cummins, Daimler, Iveco, MAN and even Unimog (to name but a few) are also busy exploring this area of technology. The question posed by Jürgen Nadler, chief marketing officer at Keyou, is telling: “Do you know anyone who’s not working on it?”
The reason for the hydrogen ICE’s dramatic comeback is said to be the “extremely high number of requests.” This has led Keyou to adjust its strategy. From now on the Bavarian technology company is focusing on the conversion of existing vehicles based on the Mercedes Actros. “We are moving away from OEM and toward end customers,” said Nadler. Initial trials with its hydrogen truck are planned from summer 2023, with the expectation that a small fleet of eight vehicles will be ready for testing by the end of the year. In 2024 the number of shipments could increase to as many as 50. By then the retrofit time should be around the three-week mark. Keyou’s engine of choice for its refitting work is a Deutz. Its ability to power buses was demonstrated by Keyou using a Solaris model, also on display in Hannover, which was converted by the Paul Group.
Last fall heralded the start of a new era in Germany’s hydrogen events sector. The trade fair and conference once known as f-cell, organized by Peter Sauber Messen und Kongress for over two decades, took place in Stuttgart on October 4 and 5 – this time under the sole direction of exhibition center operator Messe Stuttgart. The venue, located right next to the city’s airport, welcomed 60 speakers presenting the latest developments as well as 126 exhibitors who displayed their products across 5,000 square meters (53,800 square feet) of floor space. Given the ever-increasing number of hydrogen events and destinations, however, the key question is whether the city of Stuttgart, and the state of Baden-Württemberg in general, can keep pace with the competition.
The opening address signaled the official start of the conference under its new name of hy-fcell, the “hy” prefix added to demonstrate the equal footing given to hydrogen and fuel cells at the event. In future this new title will be used for international expos and conferences in a variety of locations – for example in Saudi Arabia which will play host from March 6 to 8, 2023. This arrangement was put in place as part of the visit by German Chancellor Olaf Scholz to the Middle Eastern nation.
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As well as switching to a new venue in Stuttgart, the events program had also undergone a shake-up. Things kicked off the evening before the opening with a tour of local bars and eateries where participants who had arrived early could meet in a relaxed atmosphere. At the end of the first day of the conference, a dedicated Networking Night was held directly at the trade fair in the International Congress Center Stuttgart (ICS). The hy-fcell awards in three categories were presented during the opening ceremony.
Running in parallel to the conference was the new Speakers’ Corner stage. The main sponsor of hy-fcell, the US federal state of New Mexico, was one of the presenters that took to the podium and invited potentially interested parties to establish the region as a hydrogen hub in the United States. Mark Roper from the Economic Development Department had traveled to the event especially, bringing with him a delegation that included Cabinet Secretary Alicia Keyes and members of the management team from Pajarito Power and Universal Hydrogen.
For several years from 2008 onward, the f-cell was held at Stuttgart’s exhibition center under the umbrella of the Battery&Storage show – with Messe Stuttgart serving as co-organizer. Despite trying a range of different formats over a number of years, a critical mass of exhibitors failed to materialize at that location and Peter Sauber returned to the Haus der Wirtschaft building in the city center in 2018. Now Messe Stuttgart has started afresh, ensuring plenty of time for preparation, and has managed to achieve a breakthrough by attracting over 2,000 attendees to booked-out halls at the original exhibition center, as Stefan Lohnert, president of Messe Stuttgart, reported. He said: “I’m particularly delighted by the international reach of hy-fcell – with exhibitors and speakers from around the world and a notable 20 percent proportion of international visitors.”
Concern for Stuttgart as a trade fair destination
To date, Baden-Württemberg and the metropolitan region of Stuttgart has played a globally important role in the automotive sector – as well as in the expanding area of hydrogen and fuel cells. Yet Andre Baumann, state secretary of Baden-Württemberg’s environment ministry, sees this position under threat. As he remarked in his speech, he has watched the decline of the coal industry in Nordrhein-Westfalen with concern, saying: “If we don’t want to become the Ruhr region of the 21st century, we need to be linked up to the hydrogen infrastructure.”
He expressed his hope that the area would be connected to the European Hydrogen Backbone system. Nevertheless this is some way off, he continued, since Germany’s northern states openly admit they will make locally produced green hydrogen available to their own industries first before transporting it south. “Not that we’re being left behind.” However something needs to be done in the weeks and months ahead, urged Baumann.
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