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Picea 2 relies on lithium instead of lead

Picea 2 relies on lithium instead of lead

HPS presents new product generation

The company HPS Home Power Solutions has unveiled a new generation of its seasonal energy storage system. The Picea 2 now uses lithium batteries, which makes installation in the home easier due to the lower weight. With twice the power, the appliance is also equipped for e-mobility and heat pumps.

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The new research and development site is located almost directly next to the youth center of FC Union Berlin in an industrial area in Berlin-Niederschöneweide. In the future, not only kickers but also installers and partners will be trained there. But not only that; the new version of the seasonal storage unit is also to be manufactured there. “On-site installation is even more cost-effective for us, as the transport costs come out lower,” stated company founder and CEO Zeyad Abul-Ella – left in December 2023 and since then only still a shareholder – at the first presentation of the new device to an exclusive circle of visitors.

Nine years after its founding and a good five years after the first presentation of a Picea model at the trade fair Energy Storage in Düsseldorf 2018, there is a whole series of further developments of the product. The device has needed to change with the times. With Picea 2, the output power has therefore doubled to 15 kilowatts, which makes it possible to cover higher energy requirements, for example for an e-car or a heat pump. In the event of a power failure, the backup power supply ensures that important installations in the household are supplied with a stable power supply. “For each of the three phases of the three-phase current, the device now delivers five kilowatts of power,” explained Abul-Ella.

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The new generation of the storage system also offers an increased connected load for photovoltaic systems – picking up on the trend in the market. Through new power electronics, according to HPS, efficiency was able to be increased, which means that higher levels of self-sufficiency are now possible. The energy utilization efficiency (Nutzungsgrad) including heat utilization is 90 percent. The electrical efficiency is between 35 and 40 percent.

Cooperation with competent partners

The device now uses an external inverter from SofarSolar, in which the software for the storage system has accordingly been adapted. “We do what we are really good at. For all other components, we rely on cooperation with partners,” said trained civil engineer Abul-Ella. The latter applies to both the inverter and the lithium batteries.

The AEM electrolyzer comes from the German-Italian company Enapter. The abbreviation AEM stands for anion exchange membrane. The technology uses more cost-effective materials such as steel instead of titanium and combines the advantages of alkaline electrolysis with the flexibility and compactness of PEM electrolysis. Enapter co-founder Vaitea Cowan was also present at the product launch, and Hans-Peter Villis, former EnBW (Energie Baden-Württemberg AG) director as well as partner from the very beginning and today chairman of the supervisory board at HPS.

Specifications for developers

“A tough requirement for the technical developers was to retain the dimensions for the slide-in boxes for the electrolyzer and the fuel cell in the energy center of the original Picea,” stressed Abul-Ella. The first Picea customers are pioneers. They should therefore also benefit from the innovations and be able to switch to them easily at a later date. A further development in the electrolysis module cools the hydrogen to 5 °C. This makes it possible to take in four to five times the amount of gas, because the moisture is now removed before storage.

New are also status displays that, at the touch of a button on the device or via the app, provide information about important system and storage statuses. The system always consists of an energy center and a hydrogen storage tank with a compressor that is installed outside the house on a concrete foundation. This foundation is absolutely essential.

The energy center unit has slimmed down considerably and now weighs 70 percent less: instead of 2.2 metric tons, now only 700 kilograms (1540 lbs). Reason is the switch from lead-acid to lithium batteries from the company Pylontech. The overall height has also reduced by 15 centimeters compared to its predecessor to 1.85 meters (6.07 ft). Doesn’t sound like much, but can be decisive for installation in a basement.

The Picea 2 costs at minimum 99,900 euros

The Picea module converts the surplus solar power in summer into hydrogen. In this way, large amounts of energy can be stored efficiently and over long periods of time. In winter, the gas, via a fuel cell, can be converted back into electricity and heat. The long-term storage capacity is up to 1,500 kilowatt-hours of electricity. In the smallest version with 16 gas cylinders, it is 300 kilowatt-hours.

The smallest version of the Picea 2 costs 99,900 euros. The gross price is the same as the net price, as the sales tax for the device, including storage units, is zero percent. With more storage capacity, the cost rises to up to 140,000 euros. This applies to a new construction where the installation can also be planned. In existing buildings, it can be a bit more complicated, so the amount may increase to up to 160,000 euros.

The demand seems to be there. Because over 500 devices of the first generation have been sold to date. More than 100 are installed at customers’ spaces.

Author: Niels Hendrik Petersen

Weichai Power: Strong share price increase

Weichai Power: Strong share price increase

The share price of Weichai Power has risen by almost 50 percent in the last few weeks. The reason is the partnership with BYD in the electrification of large vehicle fleets. A perfect joint venture, it seems. Weichai Power with BYD could – my guess – be pushing the door open to fuel cells, since alongside battery-electric trucks and other commercial vehicles, the fuel cell is perfect for long-haul journeys.

Weichai has a joint venture with Ballard Power in China (51:49), with a capacity of already 20,000 FC modules per year. And Weichai will be one of the main beneficiaries when in China a large subsidy program for fuel cells and hydrogen comes – maybe 2024 or 2025. Weichai is China’s largest diesel engine manufacturer, which is now moving towards e-mobility – comparable with Cummins Engine in the USA. Weichai is also cooperating with Bosch.

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Disclaimer

Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.

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Plug Power: Facts offer little hope

Plug Power: Facts offer little hope

The turnover in the amount of 198.7 million USD in the third quarter lay considerably below expectations, the loss per share amounts to a minus of 0.47 USD per share with the expected minus of 0.30 USD per share – in the negative sense. The loss for the first nine months of the financial year lies over 725 million USD. But the cash on hand at the quarter end of still only 567 million USD is rather irritating, as the board always spoke of sufficient liquidity.

It is now certain that at least 500 million USD in new liquidity – in the short term – must be obtained in order to be able to adequately finance all projects, is the opinion of the specialist analyst from Morgan Stanley, Andrew Percoco. This then puts further pressure on the share price – if it happens, – since institutional investors want a discount on the entry price.

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Has the Plug Power management overestimated themselves and started too many projects at the same time? There’s talk of seven to nine giga-projects (production facilities for FC stacks, electrolyzers, hydrogen, cryogenic technologies, etc.) in the USA and four others around the world. For this, the capital drain is very high. At the same time, certain regulations are not yet in place. And the credit expected from the Department of Energy (DOE) as part of the Inflation Reduction Act in the amount of 1 to 1.5 billion USD not be ready until 2024 at the earliest, as there are extensive tests and conditions involved.

Plug itself does not yet produce liquid hydrogen, but buys it on the market. This has led to further problems, as it is associated with high costs and losses. Parallel is the frozen cash of over one billion USD (restricted cash), which in turn, in my estimation, could be connected with the major customers mentioned here.

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Tight liquidity situation

Still only 567 million USD was the amount of cash in the bank for Plug Power at the end of the third quarter. The many parallel projects, however, require further financial support before sales and the associated profits can be generated. That will take some time. The hyperboles uttered under CEO Andy Marsh to influence the stock exchange via investor relations are backfiring.

It is now to be expected that Plug will attempt to raise new equity by issuing shares and/or convertible bonds, which in view of the figures will no longer be so easy. Based on current share prices, any major capital increase (share issue) will only be possible at low prices. The board has stated a number of internal problems, from the situation with the purchase of hydrogen to delays in the start-up of production facilities as well as problems with supply chains.

The strong order intake in the electrolyzers segment may be reassuring, but it should be feared that competition will increase sharply, causing profit margins to shrink. Direct quote from the company: “Unprecedented challenges in the supply of hydrogen in North America.”

Short Interest

This figure – in December 158 million Plug Power shares – I always look at very closely, because it shows in which form speculation against a company and its share price is taking place. If the news is good, a price turbo (squeeze) could come about, but in Plug’s case it shows that the short sellers are correct in their assessment. I assume, though, it’s exactly big customers such as Amazon and Walmart who may have hedged their option rights via short selling. Both together have received over 100 million of these rights as a gift and can change them with very low conversion rates into shares. Theoretically, both have several billion USD (book) profit in their books if they go short at 70, 60, 50, 40, 30 USD per share – their purchase prices were are about 1.29 to 13 USD per share via exercise of the warrants. But that’s just a guess on my part – no guarantee.

I have always been critical of this deal because Plug has “baited” customers with it. And restricted cash of one billion USD is directly related to these major customers. The reason: This involves guarantees, warranties, security for technical support, spare parts and much more. Plug Power must provide such guarantees to customers such as Walmart and Amazon so that it can soundly implement orders, meaning operates H2 refueling stations for forklift trucks and ensures that there is always enough hydrogen available. The result is around one billion USD in restricted cash, frozen financial resources that cannot be used in any other way. Will companies like Amazon remain forever exclusive customers Plug Power regarding forklifts and their H2 refueling stations? The question arises because there are fewer orders from Amazon for the retrofitting of forklift trucks. Why?

Plug loses power-to-X project in Denmark

Via the consortium partner Plug Power Idomlund Denmark, Plug had actually been awarded the contract for the first power-to-X project in Denmark with a total of 280 MW of electrolysis capacity over six projects in its pocket. Then came the setback on November 20, 2023: Plug did not manage to provide a bank guarantie within the specified timeframe. It is probably about 28.3 million euros – no guarantees.

Summary: I had advised restraint until the figures for the third quarter were on the table. They are now here, but a buy still does not present itself, because it will still take time until the company creates clarity. On the contrary: Wait and see. Traders, however, can become active, since price fluctuations driven by the news will remain very high (high volatility), because the stock market has already severely punished the company (minus 40 percent alone on Nov. 10, 2023).

The question also arises as to whether Plug Power cannot avoid including partners in some projects, as it has already done with Fortescue. But that would come at the wrong time, because the possible conditions would be determined by the partner and investor rather than Plug Power itself. Will assets now possibly even have to be squandered?

In short: There is currently no need for action, because the expected figures for the current fourth quarter could again be disappointing. In 2024 and in the following years, however, the positive turnaround may come, when Plug has realized the in-house production of hydrogen on a large scale and benefited here from the Inflation Reduction Act, among other things, and also made good money with it. A DOE loan can be a game changer, but it takes time. There is no guarantee of this, even if it can be assumed that the Biden administration will not abandon prestige projects and players like Plug.

Further issues of shares are now even considered necessary and will not be implementable at ideal conditions. Six analysts have already radically changed their assessment – in a negative sense. I didn’t think my forecast would come true so quickly that the value of Bloom Energy would exceed that of Plug Power. Unfortunately, buy on bad-news is not yet suitable here. A buy limit for buying the share at three euros would be a first step. This stock is contemplatable if Plug offers institutional investors a discount on the purchase of new shares as a concession – as a risk discount.

Disclaimer

Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.

Nikola Motors: Capital increase at the right time

Nikola Motors: Capital increase at the right time

Short sellers are working massively against the company at the stock exchange. There were shortly even nearly 200 million shares sold short (on Nov. 16 still 193 million). But now, a price change upwards seems very likely. The reason could lie in the comments made at the press conference on the third quarter results, which Nikola – in my words – sees as being on the right track. The company amassed about 250 million USD in liquidity in the third quarter, and now has available 705 million USD in capital access.

The damage due to recalled battery-electric trucks was reported as 61.8 million USD (warranty reserve), where Nikola not only resolved this problem, but employed batteries from a still unnamed supplier that possessed advantages over the previous model, was the comment from the company. Additionally, the truck will be equipped with more features that will give the driver more options during use, for example from a distance using a smartphone app, the truck could be already prepared with heating in the winter and air conditioning in the summer, before the driver gets in. The battery-electric truck will, after the retrofitting in the first quarter, again find its way to customers.

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Now orders can come

There are 277 letters of intent for the purchase of the hydrogen-powered truck. In the fourth quarter, 30 to 50 of them are to be delivered and between 11 and 19 million USD turnover generated. With the battery-electric truck, meanwhile – despite the recall – an individual order of 47 units will be gained. In the next two years, Nikola is determined to deliver on average 250 to 300 trucks of both types per quarter.

The cash burn is at 100 million USD in the quarter, where for the current quarter, the financial effects of the recall on the battery-electric truck are still to be felt (61.8 million USD, of which about 38 million USD is capital that will be used). And the better the scaling of the truck production goes, the more cost-effective they can be manufactured, in order to at the end of the day come out with a good profit margin. Consider this: Money is the future will be earned especially with electricity and hydrogen and not with e-trucks per se. Nikola is at the start of its (success) story.

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California setting the pace

Nikola is concentrating, for good reason, on the US state California. Firstly, the best subsidies (up to around 408,000 USD per truck) are there; secondly, the time pressure for shippers to replace diesel-powered by CO2-free trucks is very high. Already starting 2024, in California only the last-mentioned will be allowed at port facilities, so there will be new registrations only for battery-electric or hydrogen trucks. We’re talking about over 30,000 trucks alone in this market segment – a winning pass for Nikola Motors, since in the Inflation Reduction Act are provided also 2.6 billion USD in subsidies specially for port facilities and also drayage trucks as well as for the H2 infrastructure.

Additionally, the competition for Nikola in this truck segment will be sparse for years to come. The look at the already approved vouchers for e-trucks is cause to celebrate: 96 percent of the vouchers of the California’s HVIP program for hydrogen-powered trucks and 50 percent of the vouchers for battery-electric trucks are attributable to Nikola. After all, Nikola is to have received approval of already over 400 vouchers for the two truck variants. A respectable success.

Lawsuit against Milton won

The lengthy legal dispute with company founder Trevor Milton was won. On October 20 came the decision. Milton must now pay 165 million USD to Nikola, which includes procedural costs Nikola first had to pay and now receives back. It should be noted here that there is still no indication of when the money will flow. Nikola still has to pay a portion to the SEC itself, as they reached a settlement of 125 million USD and must itself fulfill it. If 165 million USD flows from Milton soon, Nikola’s liquidity will rise, as the SEC payments will be divided over the next years.

Goals ambitious but realistic

Currently, Nikola can produce 2,400 trucks of either variant per year. In order to be profitable, sales of 1,000 trucks in 2024 and 1,500 in 2025 are needed. These targets are considered realistic from the company’s perspective, if Nikola delivers 250 to 300 truck per quarter. In my view, there will also be some large orders. Beyond this, declarations like the letter of intent (LoI) with Anheuser-Busch (800 trucks) will also flow into the orders on hand, is my expectation.

Nikola Motors – The Tesla of trucks?

For this hypothesis, I earned a lot of criticism. One cannot compare a startup like Nikola, though, with the success story of Tesla. One can say: Tesla started small, then came Elon Musk. The company reported heavy losses for many years and was even on the verge of bankruptcy before the breakthrough came. In the first three years, Tesla earned money, but not with the e-cars but with  emission rights that could be sold to other car manufacturers. Tesla solved the chicken-and-egg problem by providing the electricity for the battery-electric vehicles itself by establishing a charging network made of its own Supercharger stations. Who would have bought a car from Tesla if there had been no charging option – as a package, even free of charge for years?

Nikola is doing the same – only for trucks with the help of electric charging stations and H2 refueling stations. Nikola wants to earn money with electricity and the self-produced or purchased hydrogen. In the USA are waving high subsidies of three USD per kg. Tesla continues to address the market for e-cars, but Nikola the segment for trucks. Both companies can be considered disruptive – they change markets and business models. Both are first movers.

Tesla and its CEO was met with much skepticism, but they proved that change is possible. Nikola is doing the same – only for commercial vehicles. Whether both can be compared with regard to the development of their valuation or share prices time will tell. For Nikola I am extremely optimistic.

Chief financial officer leaves the company

Stasy Pasterick was just six months in office as CFO. She is going over to Universal Hydrogen in the same capacity. It will be interesting to see who her successor will be.

Capital increase secures the company

On December 6, 2023, Nikola’s plan to raise fresh capital on the stock market became known. It entails a convertible bond of a nominal 175 million USD with 8.25-percent coupon (green bonds) with maturity December 2026 (0.90 USD conversion price per share) and 100 million USD in new shares at 0.75 USD per share. The share price fell from around 1 USD probably because – no guarantee – a hedging took place, so the price was depressed, as one can retain and stock up on the share after the capital raise. The share also fell because short sellers wanted to use the capital increase as a negative for themselves.

In accordance with experience, this measure will have already been successfully implemented by the time you read these lines. With it, Nikola is then thoroughly financed and will ultimately have 500 million USD in the bank. That the share price is rising above 1 USD again is also in the nature of things, because the financiers (investment banks such as Nomura) will most likely not accept a delisting of the share (it will come to this if the price sinks below 1 USD for a longer time).

Summary: Nikola is well on the way to positioning itself as a first mover in CO2-free trucks in the USA – first in California, later across the whole country and in parallel in Canada, where likewise large subsidy sums up to 380,000 CAD per truck are waving. Comprehensive funding programs are acting as a turbo, as the buyers of the trucks can comply with the regulatory pressure and are financially incentivized as well. The H2 infrastructure is being established by the company itself, but will be financially accompanied by business partners such as Voltera (EQT) and is receiving a boost by a 7-billion-USD program of the Biden administration, in which seven hydrogen hubs are to be established in the USA. The stock market will not be able to avoid newly valuing Nikola as a startup: In the right market at the right time. Maybe Nikola will even be the H2 share that develops the most price potential. What’s the phrase? No risk, no fun.

Nikola’s management team is considered excellent. CEO Stephen Girsky pointed out that this includes top managers who no longer actually have to work in a start-up, but who are happy to contribute their expertise to make the company’s vision a reality. This is the right approach – out of conviction and with experience.

Disclaimer

Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.

FuelCell Energy: A turnaround at last?

FuelCell Energy: A turnaround at last?

Here, I am cautious. The company, in my opinion, does not yet offer any convincing prospects, expressed in terms of expected growth, orders and sales through the use of its technology, which was also supported by the share price drop to 1 USD. From this very low level, the price has now turned around, driven by the news. It looks as if a gradual rise in the share price is now imminent. FuelCell Energy reports a number of projects in Africa, the USA and Canada. Nigeria for example, plans to generate at least 30 percent of its energy from renewable sources by 2030 (MoU with Oando Clean Energy).

FuelCell Energy speaks of projects, but so far without naming order values; however, it is clear that demand for FC technologies such as solid oxide fuel cells (SOFC) is increasing. In Canada, a project with FuelCell Energy as technology partner was nominated for the Innovation Fund Award. Together with the companies Kinetrics and Bruce Power, the energy production of Ontario Power is to be expanded by hydrogen. And FuelCell Energy is about CO2-free hydrogen in commercial vehicles and about using electricity from nuclear power plants for hydrogen production (surplus electricity). Although this is only a pilot project, orders for high-temperature electrolyzers from FuelCell Energy are expected in the future.

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Summary: The company has a healthy balance sheet structure and sufficient equity for financing. Unfortunately, FuelCell Energy does not yet have a long-term strategy that we can understand as to how FC technology and IP are to be used profitably. Cooperations such as that with ExxonMobil and IBM in the field of carbon capture sound very exciting, but how is money to be earned with such? The share will go its way, especially as support programs (Inflation Reduction Act) and the need for safe, clean energy form the basis for this. An own electricity portfolio (own plants, energy sales via PPA) will form the basis of the company’s earnings in the long term. A perfect FC/H2 share for traders.

Disclaimer

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Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.

Immense potential on the Bosporus

Immense potential on the Bosporus

How is Turkey’s energy industry developing?

Sometimes a rooftop walk is all it takes to get an overview of the essential systems for the energy transition and climate protection: On the technology center of the Hamburg University of Applied Sciences, 26 men and women, mostly renewables professionals from the Turkish city of Izmir, stand between solar modules, red steel hydrogen bottles and a pilot plant for capturing carbon dioxide from the air. Everything they see provokes lively interest and copious photos, including the view across to the nearby research wind farm. Here, in the Bergedorf area of Hamburg, the delegation from the German-Turkish chamber of industry and commerce AHK Türkei is able to observe firsthand how the outdoor components work together with the equipment within the building – such as the electrolyzer and the methanation plant. In a way, it’s like the energy transition in miniature.

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Not that there won’t be such plants in Turkey, especially since the country published its own hydrogen strategy at the start of this year. Like Germany, Turkey intends to use hydrogen to defossilize its domestic industry. Yet the Izmir engineers are visibly impressed by the system integration and process optimization in Hamburg, resulting in detailed questioning of the scientists from the Hamburg University of Applied Sciences or HAW.

While, on the one hand, the trip is a technical information-gathering exercise, the visit by delegates from Turkey’s third largest city to key renewables projects and organizations in the Hamburg metropolitan region also acts a way to initiate joint energy transition projects. The area around Izmir has ambitions to become a center point for renewable energy and green hydrogen. Similar to Hamburg, the city on the Aegean Sea and its surrounding region is characterized by its port as well as its industrial and commercial activities. Other cities and regions in Turkey which want to position themselves for hydrogen include Istanbul, Antalya and the southern Marmara area.

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Fig. 2: Energiecampus Hamburg: Hydrogen. Photovoltaic system. Wind turbines (Curslack research wind farm)

In January 2023, Turkey’s ministry for energy and natural resources presented strategies for expanding hydrogen technologies – with a focus on green hydrogen. The intention is to reach a capacity of 2 gigawatts by the year 2030; this will then rise to 5 gigawatts by 2035 and 70 gigawatts by 2053. As a starting point, those targets seem rather low. It is likely, however, that these will be further increased. After all, Turkey does not only want to produce hydrogen locally to decarbonize its own industry but, as the AHK Türkei explained when asked: “Excess green hydrogen is to be exported.”

German-Turkish collaboration

In keeping with this aim, German economy minister Robert Habeck and Turkish energy minister Fatih Dönmez signed a letter of intent in October 2022 in Berlin “relating to closer collaboration on green hydrogen matters,” as a spokesman for the German economy ministry explained. “The conclusion of the agreement coincided with the fourth German-Turkish energy forum, an important platform for dialog between representatives from politics, business and civil society of both countries within the climate and energy field.”

To support Turkey in climate change mitigation, Germany is making EUR 200 million available through loans from the German state-owned investment and development bank KfW. According to the German economy ministry, the loans “are to be made available to the market via Turkish partner banks and are to be used in particular for funding renewable energy and energy efficiency in Turkey. The International Climate Initiative will make a further EUR 20 million available for improved financing terms, particularly for innovative climate protection measures.”


Fig. 3: View of the electrolyzer in the CC4E

Largest solar plant in Europe

And because renewable electricity is needed for the production of green hydrogen, Turkey is planning to expand its wind power capacity to almost 30 gigawatts by 2035. An even sharper increase is proposed for solar energy, which is envisaged to grow from the 9.4 gigawatts calculated in 2022 to around 53 gigawatts in 2035. In early May, operation began at the biggest solar power plant in Europe, including Asia Minor, an event that went mostly undetected by the German public. The plant, located in the Konya province of central Turkey, has a capacity of 1.35 gigawatts and is also one of the largest facilities of its kind in the world. About 3 billion kilowatt-hours of electricity is expected to be generated every year at the photovoltaic plant in Karapınar. That’s enough to meet the needs of 2 million people in Turkey, the company Kalyon PV has reported.

With the help of sun, wind, hydropower, geothermal and biomass, the country could completely cover its own electricity demand in the future, according to an analysis by the Turkish hydrogen society NHA. Furthermore, it states that green hydrogen will first help decarbonize domestic industry, especially steel, cement and fertilizer production, so that the country is then ultimately in a position to export hydrogen, which is globally sought after as a base material and an energy storage medium.

German cooperation partners needed

“For Germany companies, there is potential in terms of know-how, project development and technological solutions,” explained the AHK Türkei. The actual size of the potential in the southeastern European nation, which, in any case, is more than twice the landmass of Germany, can already be seen in the current state of play for renewables: Despite its size and favorable wind conditions, the installed capacity of its wind plants, totaling 11.4 gigawatts in 2022, is still relatively modest. A chance, then, for the German wind industry to form business partnerships with Turkish companies? Yes, was the answer from the delegation in Hamburg, and by that the participants do not mean just large system manufacturers, but also small- and medium-size enterprises, suppliers and service providers.

“Following the announcement of expansion targets for offshore wind, the Turkish wind market is gaining new momentum and significance for the export of German technology and know-how,” confirms Jan Rispens, CEO of industry network Renewable Energy Hamburg, whose membership runs to around 240 organizations from the northern part of Germany. “For many years, Turkey has been a major wind market for German- and Hamburg-based companies.” For instance, Nordex, TÜV Nord and EnBW have operations in the country, be it through their own subsidiaries or by engaging in joint ventures with Turkish business partners.

But the changeover from traditional energy sources to renewable forms will take time. In the past, the country has spent vast sums of money on importing fossil fuels, primarily natural gas and oil. “Importing energy cost around USD 97 billion last year alone,” says Yıldız Onur, commercial attaché in the Turkish consulate general in Hamburg and who accompanied the Izmir delegation. As a result, costs compared with the previous year have risen by nearly 90 percent, she states, adding that it therefore makes financial sense to concentrate more on domestic energy production in order to lessen dependence on imports.


Fig. 4: Methanation plant in the CC4E

Closeness to Russia

Famously, one of the ways President Erdoğan’s government is seeking to produce more of its own energy is through the use of nuclear power. At the end of April, he inaugurated his country’s first atomic power plant, built by the Russian state enterprise Rosatom, which explains why Russia’s leader Vladimir Putin took part in the ceremony via video. As it happened, the event took place on the same day that polling stations opened in Germany as well as in other countries for Turkish expatriates to cast their vote in Turkey’s election. Erdoğan also took the opportunity of the nuclear power plant’s inauguration to announce the expansion of atomic power and the exploitation of new gas reserves.

Turkish opposition alliance CHP was, however, not opposed in principle to nuclear energy, and is also not against the exploration of new gas fields in the Black Sea. Nevertheless, the opposition did criticize the dependence on Russia and instead wanted to focus on “Turkish technology.” New coal-fired power plants, though, should not be built. According to its policy, the CHP is concentrating on pursuing a green energy transition in all sectors, including agriculture.

Although the May 2023 election mandated the old Turkish government – there is indeed no way of avoiding green hydrogen. At least that is the firm opinion of entrepreneur Ali Köse, not least because of the European Union’s Green Deal and the Carbon Border Adjustment Mechanism, a measure that would require companies in future to make equalization payments for carbon dioxide emissions. Köse is a founder and board member of the Turkish hydrogen association H2DER and CEO of the company H2Energy Solutions. His company’s goal is to make Turkey “fit” for green hydrogen and to export it to Germany. The company, for instance, is currently working on a hydrogen mobility project in Istanbul.

Köse has observed that other companies in this field are likewise sounding out the Turkish market. They are linking up and building partnerships. What is missing, however, is the framework that will provide planning certainty for investors. And, in his view, even the expansion of rooftop solar energy systems is still hampered by bureaucracy. “In Turkey, fewer roofs are fitted with PV than in Germany,” says Köse, who regularly travels between the two countries. “Due to the solar radiation level here, every megawatt of installed PV capacity generates roughly double the amount of electricity as in Germany.”

Author: Monika Rößiger