by Michael Nallinger | Jan 13, 2025 | Market, Networks, News
“Hydrogen can come, the gas distribution network is ready”
There is extensive demand for hydrogen in both municipalities and industry. In this environment, plans for implementing these market requirements are now becoming more concrete. The recent decision to set up an H2 core network (see p. 18) is seen as the initial spark for this. In view of the supply situation, however, it is clear that the focus must increasingly be on the distribution network, which was also made clear at the DVGW Congress.
“The pace of transformation with the aim of accelerating the hydrogen ramp-up must be maintained, if not increased,” emphasized Prof. Dr. Gerald Linke at the DVGW Congress in Berlin in mid-September 2024. The Chairman of the Board of the German Technical and Scientific Association for Gas and Water also called for further regulatory measures that go beyond the political decisions that have already been made, such as the Hydrogen Acceleration Act, the import strategy and the hydrogen core network.
Stefan Dohler takes a similar view. The President of the German Association of Energy and Water Industries (BDEW) and Chairman of the Board of Management of EWE AG in Oldenburg emphasized the spirit of optimism with regard to the expansion of electrolysis capacities that has begun and the climate protection agreements for industry that were launched last summer: “We have to keep at it and must not lose momentum.” Dohler has observed a very high demand for hydrogen in EWE’s supply area.
Prof. Linke, DVGW: “In order to accelerate the hydrogen ramp-up in Germany, the focus in the expansion of hydrogen infrastructures must be placed more on the distribution networks.”
Source: Bildschön GmbH/Vollmeyer
Jörg Höhler, DVGW President and CEO of ESWE Versorgung in Wiesbaden, shares this view: “We have to keep the pressure on.” Höhler favors the broadest possible approach. It is not a question of deciding on electricity or hydrogen in the energy supply; no, you need both. Together with the energy supply companies Mainova and Entega, ESWE is working on a feasibility study for the development of a hydrogen infrastructure in the Rhine-Main region – a project that has since been awarded the New Gases Innovation Prize. However, Höhler is also calling for clear guidelines and support for the distribution network operators in converting the gas networks to hydrogen.
Portfolio of CO2-free energy sources needed
This appeal appears to have found a sympathetic ear at the Federal Network Agency (BNetzA). “The all-electric world is an economically inefficient path. We therefore need a portfolio of CO2-free energy sources,” stated Dr. Markus Doll at the event. For the Head of Systems and Grid Operation at the BNetzA, it is clear that a common target picture is required for consistent planning of the respective infrastructures. The goal must be integrated grid development across all energy sources, emphasized Doll in Berlin.
He sees the decision to build the approximately 9,000 km long H2 core network as the initial spark to solve the hydrogen sector’s chicken-and-egg problem. This project, which has now been approved by the BNetzA, is seen by the Bonn-based authority as the “basis and transition to the cyclical process of network development planning for hydrogen/natural gas.” For BNetzA expert Doll, the next steps are clear: appropriate infrastructure is needed for CO2-free energy sources. According to Doll, there are two prerequisites for feeding hydrogen into the grids. On the one hand, its use makes sense where it is economically efficient and, on the other, where no other decarbonization alternatives are available. In Doll’s opinion, biomethane plays a role in the concert of climate-neutral gases, especially at regional level.
With regard to the required storage facilities, in particular the cavern storage facilities suitable for hydrogen, he hopes that these will develop “from the market”. However, he promised that the regulatory authority would take this into account in the network development plan (NDP).
Bringing hydrogen to the surface
Dr. Thomas Gößmann describes it as a mammoth project to maintain the gas infrastructure and develop the hydrogen infrastructure at the same time. At the event in Berlin, the head of Thyssengas used the example of North Rhine-Westphalia to explain how hydrogen can be rolled out across the country. To this end, a total of six regional clusters are to be developed as potential regions along the main lines of the core network: Cologne, Ruhr region, Middle Lower Rhine, Lower Rhine, Bentheim-Westmünsterland and Münster-Hamm. Thyssengas believes that these key regions are particularly suitable as nuclei for the development of an integrated H2 infrastructure. According to Gößmann, great attention should also be paid to the development of cross-border capacities. This would enable a broad diversification of supply sources.
Schwaben Netz is also already in the middle of developing a changeover strategy. Specifically, the activities are divided into three major projects. Project 1 deals with the gas grid transformation plan. Where are the connection points to the H2 core network? Where and when will the switch to hydrogen take place? These are the questions that are being investigated. Another project is target grid planning: the H2 requirements of large anchor customers in the grid area and grid areas that can be transformed cost-effectively are the challenges that the grid operator is addressing there. And the third project is a pilot project for the supply of hydrogen. Specifically, it involves an area with several residential units that is to be supplied with hydrogen from a chlor-alkali electrolysis plant in an industrial park.
These activities are already attracting serious interest. The Technical Managing Director of Schwaben Netz, René Schoof, reports “significant” hydrogen demand from industry and municipalities in Bavarian Swabia with a view to achieving the 2030 climate targets. A joint web query by Bayernets, Schwaben Netz and the Swabian Chamber of Industry and Commerce (IHK Schwaben) produced concrete figures. A total H2 demand with a capacity of 1,903 MW was reported for the year 2030. The Managing Director is certain that pure electrification of the energy supply would be too much for many. “We must also give small and medium-sized companies the chance to find the right solution for them,” emphasized Schoof in Berlin.
Great support for conversion to hydrogen
This year’s Gas Network Transformation Plan (GTP) also shows that gas network operators are working on implementation scenarios on a broad scale. This is the central planning instrument for the transformation of gas distribution grids towards climate neutrality. Following its launch in 2022, the number of participating gas distribution system operators rose to 252 in the third planning year. The GTP now covers gas pipelines with a total length of 450,000 km and reaches 381 out of 401 German districts.
As part of the gas grid transformation plan (GTP), the grid operators analyze their customers’ requirements up to the year 2045
Source: GTP 2024, DVGW/VKU)
The trend is clear: the majority of the approximately 1,100 municipalities supplied by the GTP participants plan to use climate-neutral gases in both industry and private households in the long term. (Only two percent of the municipalities were against the use in industry, seven percent rejected such use for private households). And two thirds of the more than 3,500 industrial and commercial customers surveyed also see a future need for hydrogen, with over 80 percent of large customers even expecting 10 million kWh or more each by 2030.
“Extensive studies by the DVGW and its institutes show that the German gas distribution networks can be technically upgraded for the safe distribution of hydrogen at comparatively low economic cost. This must be tackled now,” demands DVGW head Linke. For the technical conversion, the DVGW offers VerifHy, the central platform for quickly and conveniently checking the hydrogen suitability of gas networks and the products, components and materials used. Reliable information on H2 readiness can be called up at the touch of a button. VerifHy supports gas network operators in checking the suitability of their infrastructures for hydrogen. The database is thus set to become the central accelerator for the H2 network conversion.
Unproblematic changeover at Avacon
Avacon Netz has proven that a changeover is also possible in practice (see H2-international, Oct. 2022). Torsten Lotze from Asset Management Gas/Hydrogen refers to eight successful pilot projects with PE and steel networks as part of the DVGW project group “Hydrogen in gas distribution.” The network operators did not replace any components based on the analyses carried out in advance. “The above-ground inspection of underground pipelines before and after the conversion confirmed the technical tightness in each case,” reports Lotze. No technical anomalies occurred during operation.
An integrity assessment was carried out in advance in accordance with DVGW data sheets G407 (conversion of steel pipes up to 16 bar operating pressure) and G408 (for PE pipes up to 16 bar operating pressure). The materials are “safe.” Nothing was found in the networks that was actually critical, emphasizes Manager Lotze.
With this knowledge, they are already in a position to take the next steps. “We can already evaluate grids and draw up a conversion roadmap,” summarizes the Avacon employee. This plan envisages five concrete steps:
– Inventory and documentation of the current network structure, materials and operating conditions
– Mesh analysis, material analysis and evaluation of hydrogen resistance
– Replacement measures for incomplete documentation
– Technical adaptations
– Conversion
On this basis, the grid operator has developed the Avacon gas grid transformation factor (GTF). Specifically, this assesses how well a gas network or individual components can be transferred to a future decarbonized energy system. In the integrity assessment, an H2 assessment as well as an assessment of safety, condition and data inventory are each presented as a key figure. Lotze explains that the GTF can be used to immediately determine where the overall grid stands and where individual local sections stand. In view of these findings and the progress made, the Avacon expert’s conclusion is not surprising: “Hydrogen can come, the gas distribution network is ready.”
It is clear that the H2 core network does not reach all industrial and commercial gas consumers with process heat requirements.
Source: Study Process heat – where does the energy come from? DVGW, DBI, DMT
Distribution grid of particular importance
Industrial customers are obviously also ready: According to the H2 market index (see info box), 76% of market players rate the importance of climate-neutral hydrogen for the future energy supply in Germany as high or very high. An important area of application there is process heat with temperatures between 100 and 1,500 degrees Celsius. This demand has amounted to around 200 TWh in recent years. This corresponds to almost a tenth of the final energy demand (reference year: 2020) of 2,318 TWh and a fifth of the gas demand in Germany.
A study commissioned by the DVGW (German Technical and Scientific Association for Gas and Water) analyzed the supply situation at over 5,600 industrial sites. The result shows the importance of the distribution network: 27 percent of the sites surveyed are less than one kilometer away from the planned H2 core network and could be supplied directly via it. However, 78 percent of the gas demand for process heat will arise at a distance of more than one kilometer from this network. A hydrogen-capable distribution network is therefore required to supply these locations. “In order to accelerate the hydrogen ramp-up in Germany, the expansion of hydrogen infrastructures must focus more on the distribution grids. They are of particular importance,” says DVGW head Linke, summing up the situation.
The H2 market index – barometer for the market ramp-up
The H2 market index serves to determine the perception of market players regarding the development of a hydrogen market in Germany. The objectives are to map the perceptions of various stakeholders, to identify challenges and potential problem areas and to record relevant indicators for measuring the progress of the hydrogen market ramp-up. The H2 market index covers the four areas of innovation environment, political and regulatory framework, infrastructure expansion and market development. The index results are mapped on a scale from 0 (negative) to 100 (positive).
An online survey of stakeholders in the hydrogen economy was conducted to determine the H2 Market Index 2024. A total of 311 index-relevant responses were included in the evaluation. The survey was conducted by the Institute of Energy Economics at the University of Cologne gGmbH (EWI) on behalf of the DVGW, the German Chemical Industry Association (VCI), the German Engineering Federation (VDMA) and the German Steel Federation (WV Stahl).
by Jörg Weber | Jan 13, 2025 | Germany, Market, News, Stock market
Share analysis by Jörg Weber, ECOreporter
The great excitement surrounding hydrogen seems to be over for the time being: Most H2 shares have been on a downward trend for some time. This seems paradoxical, as climate change is accelerating and time is running out to slow it down. This makes a consistent energy transition all the more necessary, and that includes the hydrogen sector. However, energy policy is currently running with the handbrake on when it comes to renewable energies. Meanwhile, the companies that earn their money with fossil fuels are securing their sinecures.
Hydrogen produced in an environmentally friendly way still has enormous potential when it comes to making industrial processes climate-neutral. Low-emission steel cooking is just as possible with it as the production of fertilizers or the decarbonization of transport. Although the latter applies less to cars, it applies all the more to the heavy goods transport sector, i.e. trucks, trains and ships. But there are problems everywhere. Even at steel producer Thyssenkrupp, which advertises: “We also only cook with hydrogen.” However, less and less steel is currently being produced in the Ruhr region, and Thyssenkrupp is facing a huge wave of redundancies. This will also slow down efforts to produce green steel using hydrogen.
It remains exciting
The political hydrogen targets are – still – ambitious, and the corresponding budgets are large: The German government wants to invest 9 billion euros with its National Hydrogen Strategy, and Germany is set to become number one in the world hydrogen industry. The EU and the USA are also planning to invest billions in green hydrogen. However, it is uncertain whether the plans will be realized, as changes of government and changes in the entire political landscape can lead to a U-turn. Donald Trump is planning huge tax breaks for companies, while Germany has been discussing its budget for months – both of which could lead to start-up funding for green hydrogen industries being cut.
The excitement surrounding the potential energy source of the future has cooled considerably in recent years. Growth stocks, which include H2 shares, have a hard time in turbulent times like these anyway because they find it more difficult to obtain loans – and at worse conditions. Professional investors in particular often look for established and supposedly safer stocks. Especially as the real H2 revolution is still a long time coming; demand remains weak and most companies are presenting fluctuating figures. As a result, some shares have lost more than 90 percent of their value since the great hydrogen buzz in 2021.
Investors often think they can only make one mistake with a technology that seems to be on the verge of a breakthrough: not jumping on the bandwagon. In the past, however, it has often been shown that selecting the right securities is particularly important when it comes to future technologies. It is impossible to reliably predict which companies will ultimately be among the winners in the hydrogen market. Shares in companies that are exclusively active in the hydrogen economy are often more of a bet than a strategic investment. An exception in the sector are companies that also focus on hydrogen, but not exclusively. There are established and profitable examples of this. Two of them are presented here first: Linde and Air Liquide.
Linde
Linde, the world’s largest industrial gases group, also did good business in 2024. On the stock market, the international group has mostly been on the up for years. In the third quarter of 2024, Linde increased its turnover by two percent year-on-year to USD 8.4 billion. Net profit remained stable at just under 1.6 billion dollars. A higher profit was prevented by the Group’s current cost-cutting measures, which, together with other extraordinary expenses, resulted in one-off costs in the last quarter. “As expected, the weak economic development continued in the third quarter, especially in the industrial end markets,” said Linde CEO Sanjiv Lamba. “We do not currently expect the economic environment to improve in the short term. However, we have taken measures to mitigate the economic headwinds.”
Linde has slightly lowered its forecast for the full year 2024: Earnings per share adjusted for special items are now expected to be between USD 15.40 and USD 15.50, eight to nine percent higher than in the previous year. Linde shares can still be considered an attractive investment. The Group has an excellent market position, is very well financed and generates robust profits even in downturns. However, the expected price/earnings ratio of 32 for 2024 remains high, and is only slightly more moderate at 28 for 2025. Investors who are currently planning to enter the market may need a lot of patience. Defensive investors should wait for a price setback before buying.
Linde is an ECOreporter favorite share and, according to its own information, the world’s largest hydrogen producer. Linde is continuously expanding this segment. The Group has initiated sustainable hydrogen projects on several continents. At the beginning of 2024, Linde announced a project in Eemshaven, the Netherlands, in cooperation with the Norwegian natural gas group Equinor. Linde will increase the quarterly dividend by nine percent to USD 1.39 (EUR 1.29) per share. This will be the 31st consecutive year of dividend increases.
Air Liquide
French Linde competitor Air Liquide is also involved in numerous green hydrogen projects, for example in its home country and in Shanghai, China. At the beginning of 2024, Air Liquide announced a joint venture with the oil company Total to build more than 100 hydrogen refueling stations in Europe over the next ten years. Around 20 stations in France, the Netherlands, Belgium, Luxembourg and Germany are to be put into operation as early as 2024.
The Air Liquide share price has performed well over the last five years. The share reached a high of almost EUR 180 in May 2024, falling to below EUR 160 by the end of November. The expected price/earnings ratio for 2024 is 27. Air Liquide is in a robust position, but ECOreporter considers Linde’s sustainability targets to be more ambitious. According to an assessment by the renowned and independent Science Based Targets initiative (SBTi), the sustainability targets of both Linde and Air Liquide are compatible with the goal of global warming of no more than 1.5 degrees.
Bloom Energy – Interesting despite risks
From October to the end of November 2024, the shares of the US company Bloom Energy shot up from under EUR 10 to over EUR 26. The reason: the company was able to secure the world’s largest order for solid oxide fuel cells to date. The energy supplier American Electric Power (AEP) has ordered up to 1 gigawatt (GW) of fuel cells. They are intended to supply data centers for artificial intelligence (AI) with electricity. According to Bloom Energy, the agreement comprises an initial order of 100 megawatts (MW), with further deliveries planned starting 2025. The fuel cells are to be installed directly at the customers’ sites and supply electricity with one third lower CO2 emissions compared to the current supply.
According to the company, Bloom Energy’s solid oxide fuel cells can run on 100 percent hydrogen or any mixture of hydrogen and natural gas. Connected together to form power plants, the technology can supply entire building complexes with electricity. Solid oxide fuel cells are therefore not necessarily a clean solution – they are only clean when they are fueled with green hydrogen. Bloom Energy itself emphasizes that the carbon footprint is already significantly better when operating with natural gas than with conventional fossil fuel power plants.
Analysts reacted enthusiastically to the news. Experts from the US investment bank Piper Sandler described the deal as “groundbreaking” for Bloom Energy. The contract could generate sales of up to USD 3 billion for the Group and at the same time open the door to further cooperation with other energy suppliers. Above all, however, the order proves that Bloom Energy is indeed capable of supplying large data centers with its technology.
Bloom Energy is one of the more interesting companies in the H2 sector. While companies such as Ballard Power, Plug Power and Nel have not yet been able to keep their full-bodied promises, are incurring ever greater losses and are often left out of major contracts, Bloom is growing and is apparently also being considered for large projects. This year, the Group wants to be in the black operationally. In 2025, a net profit is to be achieved for the first time.
However, cautious investors should wait and see how Bloom’s business develops and whether it will actually be in the black in the foreseeable future. The rise in Bloom Energy’s share price is probably also related to the fact that the order touches on the topic of artificial intelligence.
Bloom Energy has also been building hydrogen generators (electrolyzers) since 2022. The Group generated revenue of more than USD 1 billion for the first time in 2022 and USD 1.3 billion in 2023. Bloom could reach the profit zone for the first time in the 2024 financial year.
Enapter – Risky
Things are looking worse for the Hamburg-based hydrogen company Enapter: It expects less turnover for 2024 than initially hoped. Significant revenue is expected to be postponed until next year. However, Enapter is optimistic about its medium-term prospects. Enapter is small: Turnover for the current financial year is expected to be between EUR 22 and 24 million. The company had previously expected sales of EUR 34 million. The management’s forecast for earnings before interest, taxes, depreciation and amortization (EBITDA) remains unchanged at EUR 7 to 8 million. According to Enapter, the forecast is based on a current order backlog of around EUR 50 million. Due to delays in the production of 1‑MW electrolyzers and postponements of customer projects, Enapter expects that “significant parts of sales” will not be realized until 2025.
Fig. 2: The hall in Saerbeck stands, but was never occupied by Enapter (photo from Nov. 2022)
Enapter changed its strategy in 2024. Originally, the company wanted to set up mass production in Saerbeck near Münster in Nordrhein-Westfalen. However, the plans for the Enapter Campus research and production center were abandoned at the beginning of June 2024. In future, the Group will focus on the production of stacks – the core components of an electrolyzer. The complete electrolyzers with the Enapter brand name will now be built by Wolong in China as part of a joint venture.
Enapter also wants to offer its stacks to other customers. At the end of October 2024, the company received its first order from the Dutch energy group Adsensys, which wants to build electrolyzers with Enapter technology. Adsensys is also acquiring a software license from Enapter. According to Enapter CEO Dr Jürgen Laakmann, the successor to company founder Sebastian-Justus Schmidt, the company is “very confident that further core partnerships can be concluded in 2025 and that extensive major orders in Asia, Europe and the USA can be realized.”
The prospects for Enapter shares are difficult to assess. The share has always been a bet – but according to ECOreporter, it has become much less attractive since the campus project was canceled. Enapter admits that there is currently not enough demand to set up mass production for its electrolyzers. In addition, the company is still deep in the red. It is therefore not advisable to get aboard for the time being.
SFC Energy – Small and quite solid
Fuel cell manufacturer SFC Energy from Brunnthal near Munich has increased its sales and margins in the first three quarters of 2024. The company considers itself strategically very well positioned and is raising its earnings forecast slightly. From January to September, SFC Energy generated sales of EUR 105 million, an increase of around 20 percent compared to the previous year. According to the company, it benefited in particular from the strong demand for fuel cells for industrial applications and a significant expansion of the project business.
Business grew most strongly in Asia, where turnover increased by almost 70%. Earnings before interest and taxes (EBIT) climbed by 60% year-on-year to EUR 7.2 million. Net profit increased by almost 35% to EUR 8.7 million in the first three quarters. In the third quarter, however, profit fell by 27% to EUR 2.3 million.
SFC Energy has opened its largest factory to date in Romania and acquired businesses from Ballard Power, setting the stage for further growth.
Nevertheless, the poor earnings performance in the third quarter is cause for concern. Nevertheless, SFC Energy has successfully occupied a niche with its technology. The fuel cells are primarily used for stationary power supply – either when there is no access to the power grid or as a replacement for diesel emergency generators. SFC has achieved what many other hydrogen companies are far from: The company is making a profit.
The expected price/earnings ratio of the SFC Energy share remains high at 27 for 2024 and could be a moderate 18 in 2025 thanks to the prospect of further increases in profits. And that would be an astonishingly low value for a growth sector. Despite the business successes, however, the SFC Energy share has also suffered from the correction on the hydrogen market in the last three years, and the price has fluctuated strongly since 2021. The share is only an option for investors with a heightened risk awareness. It is not suitable for defensive investors.
Fig. 3: At the new headquarters of the international supplier of electrolysis technology Thyssenkrupp Nucera in Dortmund, 560 new jobs will be created
Thyssenkrupp Nucera on the decline
The Dortmund-based hydrogen company Thyssenkrupp Nucera is a giant compared to SFC Energy: In the third quarter of its 2023/2024 financial year alone (April to June), it generated sales of over a quarter of a billion euros – more than expected. However, earnings before interest and taxes (EBIT) fell from EUR 7 million in the previous year to just EUR 1 million. Overall, annual turnover is likely to be between 800 and 900 million euros. Alkaline water electrolysis (AWE) is expected to generate EUR 500 to 550 million of this. According to the Group, EBIT is expected to be “in the negative mid double-digit million euro range.”
The company is suffering from delays to new projects on the customer side. Since its IPO in July 2023, the share price has fallen significantly, with the average share price falling sharply. Nucera therefore remains a high-risk investment. Sustainable investors may also be concerned about the Group’s participation in the NEOM project in Saudi Arabia. This is a futuristic city that is being built in the desert in north-western Saudi Arabia and is often criticized internationally.
Conclusion
H2 shares remain speculative investments. The gas companies Linde and Air Liquide in particular, whose businesses are not dependent on hydrogen, offer reliable entry opportunities. Among the speculative stocks, Bloom Energy and SFC Energy are making significant progress – SFC is already in the black and Bloom Energy could achieve this in the current financial year. Nevertheless, the risks here remain high.
You should keep an eye on the shares of Thyssenkrupp Nucera and Enapter. However, these shares are currently still more of a bet than an investment. Former industry favorites such as Plug Power, Ballard Power and Nel have failed to live up to expectations, resulting in significant price falls. Here too, a bet seems less attractive at present.
Even very risk-averse investors should consider a hydrogen fund or ETF if they want to make a bet on hydrogen in order to at least diversify their investment somewhat. And the following applies to all H2 stocks except Linde and Air Liquide: Only invest money in the H2 market that you can fully afford to lose. The unexpected can happen at any time – and you have to be able to cope with losses if you invest here.
The author of this article is Jörg Weber, founder and editor-in-chief of ECOreporter.de. The internet publication has been reporting exclusively on sustainable investments for 25 years. ECOreporter is financed by subscriptions from readers and is therefore independent of advertising revenue and the like. ECOreporter tests sustainable funds, ETFs, banks, bonds, participation rights and others and analyzes sustainable shares. Specific advice and warnings show readers where they can invest their money wisely.
When investing in shares, every investor should always be aware of their own risk assessment and think about spreading the risk sensibly. This analysis does not constitute a recommendation to buy.
by eaugsten | Jan 13, 2025 | Germany, Market, News
The MAN subsidiary Quest One, formerly H-Tec Systems, celebrated the opening of its “Gigahub” in the north of Hamburg at the end of September 2024. It wants to produce flexible PEM electrolyzers with meter-high stacks on a large scale.
It was one of those success moments of the energy transition where everyone gladly stood on stage and whose importance can be easily recognized by the number of celebrities. First and foremost, of course, was German chancellor Olaf Scholz. It was a long time since Scholz was in Hamburg-Rahlstedt, he said. As a young kid, he had gone to school there. “But back then, we didn’t yet learn that hydrogen could be used to power airplanes. This was at most a topic for researchers,” recounted Scholz in the brand new factory hall of Quest One.
From Hamburg politics, the first Bürgermeister Peter Tschentscher as well as the economy senator Melanie Leonhard made an appearance – usually no more than one of them comes to such celebrations. From Berlin came the parliamentary secretary Michael Kellner from the federal economy and climate protection ministry and Till Mansmann, green hydrogen officer of the federal ministry for education and research. From Quest One’s parent company MAN Energy Solutions and its parent company Volkswagen, the heads of the supervisory board arrived respectively, Gunnar Kilian und Hans Dieter Pötsch.
The reason for all the fuss: The company Quest One, who the day before was called H-Tec Systems, wants to start electrolyzer production on a gigawatt scale in the northeast of Hamburg.
PEM electrolysis getting big
The company story of Quest One is a story of the scaling of PEM electrolyzers. PEM electrolysis runs at moderate pressure and medium temperatures, so it offers a good compromise between efficiency and flexibility. This makes it the technology of choice when it comes to producing hydrogen using the unsteady energy sources of wind and sun. But compared to alkaline electrolysis, it has decades of industrial scaling to catch up on.
H-Tec Wasserstoff-Energie-Systeme, as Quest One was called until the end of September, began producing mini PEM electrolyzers in 1997. They were primarily intended to introduce schoolchildren to the physical principle of electrolysis. With alkaline electrolyzers powered by hydropower, at this point in time ten thousand cubic meters of hydrogen hourly was being generated in Norway and Egypt for fertilizer production. That hydrogen could seriously become a storage technology for solar and wind power was believed at the time by at most a handful of visionaries.
Since then, not only renewable energies have become significantly cheaper. PEM technology has also caught up significantly. In 2010, the northern German energy transition company GP Joule bought H-Tec. The electrolyzers grew to a few hundred kilowatts, at least suitable for small applications. In 2019, MAN Energy Solutions got aboard and H-Tec brought the first megawatt electrolyzer onto the market: nine stacks of 110 kW each, each the size of a beer crate, together with the associated peripheral systems, mounted ready for connection in a 40-foot container – a practical solution for small wind farms and individual hydrogen refueling stations.
Fig. 2: Moment of success in the energy transition: Children symbolically pressed the start button for electrolyzer production from Quest One
Gigawatt plans for green hydrogen
To supply steel mills, fertilizer manufacturers and refineries with hydrogen, this is still far from enough, nor is it enough for the target of 10 GW of electrolysis output that the former Ampel Coalition leading the federal government set for 2030. That is the dimension in which Quest One also wants to get involved. The new name should make that clear. It should not only say that climate protection is the most important of all tasks, but also that the company wants to avoid one percent of global greenhouse gas emissions with green hydrogen from its electrolyzers, explained Robin von Plettenberg, CEO of Quest One at the opening ceremony.
The approximately 800 guests applauded loudly. In general, when the “Gigahub” was officially put into operation, there was no shortage of buzzwords and emotion. Across the screen flickered images of parched soils, raging floods, burning forests, followed by an hourglass – and the shiny, metallic, donut-shaped logo of Quest One. The project is “part of something really big,” said von Plettenberg.
From handcraft to series production
So far, the production hall has primarily provided space for large plans. On the opening day, the clean room with the actual production almost completely disappeared behind the huge video screen. But innovations are not always reflected in large machines. While today you can buy turnkey solar and battery factories with little out of pocket, Quest One with each production step that runs automated and reliably in Rahlstedt has conquered a piece of new technological territory.
The research and development center, which is also located at the gigahub, helps here. Until recently, for example, employees still assembled the electrolysis cells into stacks by hand, which took hours of work. This step requires absolute precision, because the tiny hydrogen molecules can escape through the smallest gap and thus make the entire stack unusable. As Quest One celebrated its opening at the end of September, it had already succeeded in delegating this task to robots. They get the job done in a quarter of the time. Less than an hour is what it now takes to produce a stack.
Now that the automated handling is running, Quest One is also daring to speak of a new generation of megawatt stacks. Three meters high and weighing three tonnes is what they will be, it was said. The hall should be largely full by the end of 2026; then production of the megawatt stacks should begin. Such stacks could also make it easier to implement projects beyond the 100‑MW mark with PEM electrolyzers. In the course of 2026, Quest One wants to move in the direction announced in the press release – a manufacturing capacity of 5 GW annually.
A few months after the opening, everyday life has returned to Quest One. For the offices, there is still some expansion work to be done. In the clean rooms, however, series production is taking place. In the huge hall, instead of bistro tables and chairs, there are now shelves to store the stacks. They will be sent to the company’s headquarters in Augsburg, where the production of the electrolyzers is located.
For these electrolyzers to be able to produce really clean hydrogen, a lot still has to happen outside the factory. Wind and solar parks must be built and financed, as well as networks and storage for the hydrogen.
Even at the opening, the panel discussion after the ceremonial push of a button showed that those present were very aware of the challenges. “The real work is just beginning now,” concluded Jürgen Klöpffer, chief financial officer of MAN Energy.
by Hydrogeit | Jan 7, 2025 | Germany, News
High-ranking visitors at the Brandenburg Hydrogen Day
The Telegrafenberg in Potsdam is usually about geology and climate. However, October 16, 2024 was all about hydrogen. Prof. Jörg Steinbach, then Minister of Economic Affairs of the State of Brandenburg, had invited guests to the third Brandenburg Hydrogen Day, which was also attended by visitors from Brussels.
Dr. Sopna Sury, Chair of the Board of Directors of the European hydrogen association Hydrogen Europe, presented her view of the current political situation in Potsdam and emphatically stated that now is the time to act. She said: “Please don’t let the next few months pass. […] The time for PowerPoint is over, now is the time for concrete action.”
She also called for an “end to the rainbow”, i.e. an end to the H2 color theory. Instead of arguing about the suitability of blue or red hydrogen, Hydrogen Europe advocates the introduction of a CO2 footprint for hydrogen so that it is clear how harmful the respective H2 atoms are to the climate.
“Collaboration is needed: with Europe, between politics and industry, between the federal and state governments. Hydrogen is team play.”
Former Brandenburg Economics Minister Jörg Steinbach also appealed to the industry to “invest in risk”. As some of the CO2 certificates will be withdrawn from the market in the future, it is foreseeable that the prices for fossil fuels will rise, said the minister, whose last official event for the time being was this Hydrogen Day, as the state parliament will be reconstituted after the elections.
Criticism of the H2 core network
Klaus Müller, President of the Federal Network Agency
Jörg Steinbach and Klaus Müller (see Fig. 2) had to put up with significant criticism for the planned hydrogen core network. Some stakeholders voiced their displeasure that the originally planned route of the doing-hydrogen pipeline between Rostock and Thuringia was not part of the “H2 highway network” from the outset (see p. 16).
Both Steinbach and Müller explained why this section was not considered, stating that the line “could not be presented economically”. This was countered by the fact that there would now be a huge blank spot on the map to the west of Berlin, cutting off an entire region from potential H2 projects – despite the abundance of renewable energy available.
by Hydrogeit | Jan 7, 2025 | Europe, Germany, News, Trade fairs and congresses
Four days of energy policy cooperation in Brussels – The European Hydrogen Week took place for the third time in Belgium from November 18 to 21, 2024. Organized by Hydrogen Europe, the European hydrogen association, a total of 220 exhibitors and, during the conference, numerous stakeholders presented their projects and concerns in the two exhibition halls.
Unlike other H2 events in Hamburg, Rotterdam or Hanover, the focus in the European capital was on energy policy issues. There were relatively few exhibits on show at the trade fair, and hardly any components or products, but there were some comparatively large stands – at least by H2 industry standards – where there was plenty of space for networking and conceptual discussions.
The conference, which was integrated into the exhibition hall, focused on political demands, regional flagship projects and international cooperation, among other things. More than 200 speakers presented proposals and debated in 25 panel sessions on the need for H2 underground storage facilities, better links between the H2 sector and the energy sector, deregulation and better framework conditions for making final investment decisions.
Among other things, Hydrogen Europe signed cooperation agreements with both H2 Chile and the Green Hydrogen Association (GH2) from India to facilitate cross-industry and public-private exchange between the European Union and these two countries.
In 2025, this event will take place from September 29 to October 3.
by Ole Raubner-Wagner | Dec 13, 2024 | Development, hydrogen development, Hydrogen economy, Market, News
Recycling as a Key Factor for Resource Efficiency
The hydrogen economy as a crucial technology for replacing fossil resources is subject to high expectations in terms of sustainability. Hardly any other growth area is the subject of such controversial discussions about how ‘green’ it really is. In the context of resources, the hydrogen economy however is about more than just ideological considerations. Electrolysers and fuel cells contain rare and valuable raw materials, such as the precious metals iridium and platinum. From economic and strategic perspectives, they must be recovered after the end of their life. Recycling is a must—and should be considered from the outset, not only when the end of life of the plants and vehicles is reached. But where does the circular economy stand today in the context of hydrogen? We provide an overview using the example of PEM technology.
Many valuable raw materials go into the stacks of electrolysers and fuel cells. When considering the weight, one could almost overlook the value drivers. It is only when looking at the value of the raw material components of a PEM stack (Proton-Exchange-Membrane) that it becomes clear that the focus is primarily on the CCM (Catalyst Coated Membrane). It consists of an ionomer that is coated with precious metal.
Valuable and Rare: Raw Materials in the Hydrogen Economy
Even though the composition of the stacks is constantly being optimized and therefore these 2016 data no longer completely correspond to reality, the precious metals on the membrane remain the value driver.
Precious metals are not only valuable, some of them are also extremely rare. This is particularly true for iridium, which is indispensable in PEM electrolysis. In May 2022, the Hydrogen Council [1] spoke of announced 175 gigawatts of electrolyzer capacity by 2030. Since then, the goals have become even more ambitious. According to experts’ estimates, 40 percent of this is expected to be realized with PEM technology. Based on the average amounts of iridium currently used per gigawatt, this would require around 28 tons of iridium—more than will be available during the same period.
The experts at the precious metal specialist Heraeus Precious Metals in Hanau, whose core business includes trading, products, and recycling of precious metals, estimate that, out of the very low annual production quantities of iridium, a maximum of cumulative twelve tons can be used for the hydrogen economy by 2030.
Circular Economy as a Lever for Growth
The industry is primarily addressing this challenge with technological innovations. The experts at Heraeus are doing this with catalysts that require significantly less iridium, reducing the required amount to seven tons by 2030. This however clearly demonstrates how important the establishment of a circular economy for raw materials will be for further growth, as an increase in production quantities of iridium is not considered realistic from the experts’ perspective.
In addition to considerations regarding raw material supply, the value of precious metals naturally plays a significant role. Typically, the recovery of the installed precious metals is part of the plan from the outset because they represent a significant share of the investment costs (CapEx). Reuse reduces the total cost of ownership by supplying future systems. Furthermore, the CO2 footprint of recycled precious metals is up to 98 percent lower compared to primary materials [2].
Recycling of non-precious metal components, such as titanium, steel, or aluminum, also contributes to reducing the total cost of ownership, even if the material value is lower. A higher value is created when it is possible to reuse them, but many questions still remain unanswered.
Establishment of Structures and Processes
To establish a sustainable and efficient hydrogen economy, efficient and economically viable structures and processes are needed. In principle, the recycling value chain can be divided into four major areas: return structure, processing & pre-treatment, recycling & refining, reutilization. The benefits of the circular economy can only unfold when all four components of the value chain are effectively designed, organized, and implemented.
Various Steps of a Circular Economy
Step 1: Return Structure
The return structure includes the processes and infrastructure required to return electrolysers and fuel cells at the end of their life cycle. This involves collection, logistics, and also the tracking of materials. It is essential to develop a clear concept here before the materials enter circulation. Once they are lost sight of, it becomes difficult to ensure widespread return.
A central issue here is the uncertainty about how the recycling infrastructure will develop in the future. Who should be responsible and accountable for the return? The manufacturer? The operator? The recycler? To avoid missing the opportunity to regulate in a timely manner, close collaboration along the entire value chain and supporting regulatory requirements are needed.
Step 2: Processing and Pre-Treatment
Once the stacks have been successfully collected, the next step is to process and pre-treat them. This is essential because a good yield for the materials can only be achieved if they are as homogeneous as possible before recycling.
Science and industry are still searching for the best method for the efficient and scalable separation of materials. One option is disassembly. In this approach, the stack is dismantled and broken down into components, specifically those for which processes already exist. For instance, the MEA (Membrane Electrode Assembly) has been processed in existing recycling and refining processes at Heraeus Precious Metals for more than ten years.
However, this approach is associated with a high procedural effort and is limited in terms of scale effects. Therefore, methods for automated or semi-automated disassembly are being considered, similar to those already widely used in traction batteries from electric vehicles.
In particular, for fuel cells, there is also the option to crush them as a whole using industrial shredding facilities. However, the resulting material mixture must then be separated in downstream separation and sorting processes, requiring careful attention. The by far most valuable components are the fragments which are destined for precious metal recycling. When separating and sorting these, certain impurities that would lead to more complex treatment or poor yields should be removed.
Therefore, pre-treatment and subsequent recycling steps are ideally carried out by a single source.
Challenges for Pre-Treatment
Overall, many questions remain unanswered. A major challenge is posed by the different designs of the stacks, particularly with regard to the automation mentioned. Agreement on standards and consideration of the entire life cycle, including recycling, already in the design, would significantly contribute to the solution. For example, a screw connection is easier to detach than an adhesive surface or a weld seam. Manufacturers, policymakers, and associations should address this issue.
Furthermore, the different components enter very different post-processing streams with very different requirements. With precious metals and membranes, (raw) materials are recovered, while for other components such as bipolar plates, a possible reuse of the component itself is on the table. Such functional recycling goes far beyond material value. Currently, it is not yet clear what is possible and economically feasible. This also leads to a lack of requirements for reutilization, which could serve to adjust the disassembly processes so that the components are not damaged and reuse remains realistic.
Step 3: Recycling & Refining
For precious metals, well-established processes have existed for decades to recover the valuable material. Initially, the material is thermally treated to remove non-metallic residues and the water. Subsequently, the material is carefully homogenized, and a representative sample for material analysis is drawn before further processing. This so-called sample serves to analytically determine the precious metal content of the material and forms the basis for the calculation of the amount of precious metal that will be compensated. In hydrometallurgy and refining, the precious metal is then recovered and highly purified.
Materials from the hydrogen economy are some of the more demanding materials in precious metal recycling. Iridium is chemically challenging, and the thermal treatment of fluorinated membranes requires special care in the safe post-treatment of emissions. Precious metal specialist Heraeus Precious Metals is one of the few companies that can efficiently process these material streams for its customers. Iridium has been processed on a ton scale for years, and significant investments have been made in the necessary facilities for the hydrogen economy.
Platinum-containing material after incineration
Special Processes for Special Materials
For the ionomer membranes, there is another possibility. Ionomers are special fluoropolymers that, due to their unique properties, significantly contribute to the functionality of fuel cells and PEM electrolyzers. They are complex to manufacture and therefore expensive. In addition, their handling after end-of-life is currently the subject of controversial discussions in the EU due to a proposal to regulate PFAS (per- and polyfluoroalkyl substances). Therefore, increased efforts are being made to find solutions for their reutilization. Work is underway to chemically separate the ionomers from the precious metals and process them separately.
To develop cycles for such demanding materials as fluoropolymers, collaboration among manufacturers, users, and recyclers is necessary, as demonstrated in the H2Circ funding project of the US Department of Energy: In this consortium, companies along the entire value chain work on the recovery of materials, especially ionomers. [3]
Step 4: Reutilization
After the recovery process is completed, the material is ready to be reused. This is not a problem for precious metals, as recycling provides high-purity materials according to internationally certified standards, which do not differ in their properties from primary materials.
In contrast, for ionomers, there are neither established recycling processes nor defined requirements for the recyclate. Unlike with precious metals, the recycled material here differs from that produced in primary manufacturing. Therefore, it requires not only the development of recovery processes, but also applications and markets for consumption.
Similar to the functional reuse of components, the ecosystem faces a chicken-and-egg problem here: Before the requirements for the use of the recycled material are clarified, the recycling processes cannot be meaningfully developed, also with regard to a possible business model. This is because only when the value of the output is clear can the costs of the process be calculated to determine if they will be worthwhile.
Setting the Stage for the Future
The Hanau-based precious metal company, Heraeus Precious Metals, systematically employs collaboration. For example, the company works with manufacturers of fluoropolymers to establish closed cycles for ionomers. Heraeus begins considering the value chain, including recycling, in the early stages of development together with its customers. It is also working on developing holistic solutions in public projects such as the aforementioned Department of Energy research project.
Even though the recycling of fuel cells and electrolyzers is currently limited in volume, its importance for the development of the hydrogen economy and the promotion of a circular economy should not be underestimated. Experts anticipate significant amounts of precious metals from the hydrogen economy by the end of this decade. It is important to take advantage of this window of opportunity to develop efficient processes across all parts of the value chain and to build corresponding recycling capacities.
Autoren: Ole Raubner-Wagner, Gisela Mainberger, both Heraeus Precious Metals GmbH & Co. KG, Hanau
Sources:
- Hydrogen Council, Hydrogen Insights 2023 [L]
- International Platinum Group Metals Association e.V, 2022, The Life Cycle Assessment of Platinum Group Metals (PGMs), [L]
- American Institute of Chemical Engineers, 2024, AIChE Selected by DOE to Lead New Hydrogen Electrolyzer and Fuel Cell Recycling Consortium, [L]
- Stahl et al., Ableitung von Recycling- und Umweltanforderungen und Strategien zur Vermeidung von Versorgungsrisiken bei innovativen Energiespeichern, Umweltbundesamt, 2016 [L]
- Kalkulation durch Heraeus Precios Metals, basierend auf Materialanteilen basierend auf H. Stahl et al., Ableitung von Recycling- und Umweltanforderungen und Strategien zur Vermeidung von Versorgungsrisiken bei innovativen Energiespeichern, Umweltbundesamt, 2016
