by Hydrogeit | Aug 16, 2024 | Germany, hydrogen development, Hydrogen economy, News, Policy
Market accessibility problems for German applicants
When the European Hydrogen Bank’s first pilot auction (Innovation Fund Auction IF23) was announced on Sept. 5, 2023, it drew much attention. April 30, 2024, then saw the publication of the results for the pilot auction, for which the European Union was making EUR 800 million of support available. Seven projects from northern and southern Europe were successful in obtaining funding. The aim of the hydrogen auction is to accelerate the rollout of green hydrogen and send price signals by narrowing the cost gap between green and fossil-based hydrogen.
The EU’s funding offer was met with particular interest by German hydrogen producers at a time when hydrogen funding in Germany has been greatly reduced due to the ruling by Germany’s constitutional court on the country’s climate and transformation fund. The average bid for German projects was around 108 percent above the average price bid for the seven successful European projects. As part of the pilot auction, Germany also provided an extra EUR 350 million to be channeled exclusively into German projects. German bidders are therefore eagerly awaiting the outcome of the auction for German funding. Another funding call is planned for the end of 2024.
Funding environment for electrolysis in Germany
Over the past few years, Germany has offered extensive funding programs for hydrogen projects, especially in the mobility area. The second phase of Germany’s national hydrogen and fuel cell innovation program (NIP 2) played a key role in supporting the research, development and rollout of hydrogen and fuel cell technologies. It focused particularly on raising technology readiness and competitiveness in the transportation sector. Major projects, such as those promoting fuel cell vehicles and hydrogen refueling stations, received financial support which was then significantly scaled back following the decision by the constitutional court on the climate and transformation fund.
Parallel to this, the HyLand scheme has provided funding for the development and implementation of hydrogen technologies in various regions of Germany. In its initial phase it helped 25 regions establish a hydrogen economy. These were then joined by 15 HyStarter and 15 HyExpert regions in the second phase.
Positive developments in the funding environment were also seen at a European level. The Clean Hydrogen Partnership, successor of the Fuel Cell and Hydrogen Joint Undertaking (FCH JU) under Horizon 2020, awarded nine Hydrogen Valleys with a total of EUR 105.4 million, thereby subsidizing the production of at least 13,500 metric tons of green hydrogen a year.
Another important mechanism has been the Important Projects of Common European Interest or IPCEIs in the area of hydrogen. This program backs innovative and strategically significant key technologies along the entire value chain, from production through application in industry and mobility. In Germany, 62 large-scale projects have been selected to receive over EUR 8 billion in funds from German central or regional government.
These developments illustrate a trend whereby Germany has drastically decreased its funding due to the budgetary crisis while the European Union has increased its financing of hydrogen technologies. This is why the Innovation Fund Auction 23 was greatly anticipated by many potential hydrogen producers in Germany.
The Innovation Fund Auction (IFA)
The Innovation Fund Auction (IF Auction) is a funding mechanism which is part of the European Innovation Fund. The Innovation Fund is the biggest funding pot for decarbonizing the EU and will supply a total of around EUR 40 billion in assistance between 2020 and 2030. The money is sourced from the revenue generated by the European Union Emissions Trading System or EU ETS. To stimulate hydrogen rollout in the European Union, the EU Commission launched the European Hydrogen Bank, known as the EHB, in 2022 as part of the Innovation Fund. This financing instrument is designed to target and support the establishment of hydrogen supply and demand. Dedicated funding for the production of renewable hydrogen within the EU is provided through the Innovation Fund Auction,
which works by subsidizing each kilogram of hydrogen produced (EUR/kgH2). This sets the funding mechanism apart from most other European and German funding arrangements which largely provide grants toward the capital outlay on electrolyzers, with operating costs ineligible for support (e.g., under NIP 2).
The cost subsidy equates to the bid price which potential funding recipients have to submit as part of the allocation procedure for their projects. So as to rank individual funding amounts, participants were made aware that the maximum possible bid price in the first funding call for the IF23 Auction (November 2023 to February 2024) would be capped at 4.50 EUR/kgH2 – any bids above this ceiling were to be excluded.
The funding amount sought by each bidder is calculated from the bid price per kilogram of hydrogen multiplied by the quantity of hydrogen that is planned to be produced over the project’s lifetime (usually 10 years). Funding is allocated via an auction in which the lowest bid prices – similar to the merit order principle – are awarded funding until the available budget for the particular funding calls has been exceeded (see fig. 1).
The available budget in the first round of the funding call was EUR 800 million. In addition, EU member states were free to introduce extra funds to support further projects in their own countries. For instance, Germany supplemented the initial funding call with an additional sum of EUR 350 million which could be awarded to the best-placed German projects that had been overlooked.
The terms of participation for bidders are complex and can vary from one funding call to another. One key condition is that only hydrogen manufactured according to European requirements for the production of renewable fuels of non-biological origin (RFNBOs) is eligible. An added condition for participation in the first tendering round was a minimum electrolyzer capacity for the bidder of 5 megawatts.
Pilot auction results
The first auction for the EUR 800 million in EU funding concluded at the end of April 2024. In all, EUR 720 million was awarded to seven projects for the production of renewable hydrogen (see fig. 2). The winning bids ranged from EUR 0.37 to EUR 0.48 per kilogram of hydrogen. The weighted average bid was EUR 0.45 per kilogram of hydrogen.
Fig. 2: Overview of funded projects
What is notable is that all successful projects are situated on the Iberian Peninsula and in Scandinavian countries. One of the primary reasons for this is the availability of cheap renewable electricity in those locations (solar power in Spain and Portugal and hydropower in Scandinavia).
The bids put forward by German projects were priced much higher than the successful bids. A rough analysis of the bid summary produced a weighted average bid of around EUR 1.53 per kilogram of hydrogen for the German proposals. This is 108 percent higher than the weighted average of the successful bids. There were also German projects that submitted bids of around EUR 0.60 per kilogram of hydrogen. Perhaps an indication that in Germany, too, certain off-takers are prepared to pay a premium for green hydrogen. The majority of German applications, however, needed a subsidy of between EUR 1.20 and EUR 3.87 per kilogram of hydrogen.
The high bid prices from Germany can be largely explained by looking at example production costs (see fig. 3). With production costs of EUR 8.50 per kilogram of hydrogen, the average successful bid price would result in a cost reduction of only around 5 percent. An important factor in the cost of production is the proportional cost of electricity, accounting for approximately half the cost of producing 1 kilogram of hydrogen, which is due to the high energy prices in Germany.
Fig. 3: Example hydrogen production costs for electrolysis in Germany
Still outstanding are the results for the auction for the EUR 350 million that Germany is awarding to the best-placed, overlooked German projects. The results of this auction and details of which German proposals have been successful will likely yield further fascinating insights into the ramp-up of the hydrogen economy in Germany.
Outlook
The next tendering round (IF24 Auction) is expected to follow at the close of 2024. It is advisable for interested parties to prepare their application documents in good time since initial stakeholder talks between the EU and potential applicants began back in June 2024 and the complexity of the application process is not to be underestimated.
The EU has already published initial information on the configuration of the funding scheme, or rather the adjustments to it. A significant change is the lowering of the maximum acceptable bid price from 4.50 to 3.50 EUR/kgH2. For this second funding call, German projects will need to develop strategies that will enable them to enter the auction with lower bids. Should Germany again provide additional resources for homegrown projects for the next funding call, this would create further opportunities. Consequently, there is a great deal of intrigue surrounding the forthcoming announcement of which German projects will receive backing from the German funding pot.
Authors: Nikolas Beneke, Shaun Pick, both from BBH Consulting AG
by Lewitz | Aug 16, 2024 | Germany, News, Policy
Industry criticizes current H2 funding policies
“Two years ago, we were still discussing an ‘All Electric World’ in Berlin. Now it’s clear we need both – molecules and electrons.” With these words, the state of Niedersachen’s economy minister Olaf Lies summarized well at this year’s Hannover Messe where we stand today. At the political level, however, this seems to not have been reached by everyone. Otherwise, the quasi funding freeze for H2 activities at present can hardly be explained. Reason enough for the Clean Energy Partnership (CEP) to send a pleading letter to Berlin (see p. 33) – and trigger for a palpable dispute among economic experts.
The state of Brandenburg’s economy minister Prof. Jörg Steinbach put it in a nutshell in Neuruppin May 2024: “We are currently heading partly in the wrong direction.” For example, fewer and fewer electric cars are being sold, so the discussion of whether removal of the combustion engine is the right thing has gained in momentum. The installation of heat pumps is weakening, with more oil burners being installed instead. And the CO2 price, which was already over 90 euros per tonne in 2022, fell at the beginning of the year to around 55 euros (May 2024: about 70 EUR). So hydrogen would need a minimum price of around 100 euros to be profitable.
The hope of promise from year 2023 is gone. Instead, uncertainty reigns. One of the reasons for this is the 60 billion euro gap in the federal budget, which – as feared – has had impacts on various projects. On top of that was the Bonhoff scandal, which led to the German transport ministry putting a stop on subsidies, and since then only pure battery-electric vehicles have been on the road. And the overall economic situation with minimal growth does not exactly inspire confidence at the moment either.
Final investment decisions (FIDs) have therefore, especially in Germany, hardly landed (even if a number of framework conditions have improved significantly, see H2-international May 2024), which has consequences. Steinbach said on the matter, “Some of our companies have lost their market leadership.”
Appropriate funding instruments demanded
The German hydrogen association (DWV) therefore is demanding an “EEG for H2” – a funding framework comparable to that of the renewal energies law (Erneuerbare-Energien-Gesetz) and also based on the US Inflation Reduction Act. DWV chairman Werner Diwald would like to use it to “bring the 10 GW of electrolyzer capacities onto the market” that the federal government has targeted, even if it is already clear today that even these will not be enough.
There are funding instruments, but they are either not enough or do not suit the industry. The IPCEI projects (Important Projects of Common European Interest) of the EU Commission have so far taken an extremely long time until approval, which is why some of the framework conditions at the time no longer apply and some projects no longer appear to be economically viable. Additionally, these are investment grants that are not considered sufficient for H2 production with high operating costs. In addition to CAPEX funding, OPEX funding is also required, the industry has been saying for months.
Funds from the carbon contracts for difference could also be used, but some companies also view these critically. Kilian Crone from Energy Hub Wilhelmshaven told the newspaper Handelsblatt: “They do give customers, so energy-intensive industrial companies, security for their investments, but as a basis for the hydrogen suppliers, so for an investment in an electrolyzer, they are not sufficient.” In Wilhelmshaven, where 5.5 of the planned 10 GW of electrolyzer capacity is to be built, are therefore calls for “additional start-up funding for the operation of electrolyzers” in the amount of 40 billion euros.
Economy minister of Niedersachsen Olaf Lies passed the ball back to industry, however, stating that it lacked a stronger commitment from the business community. There is “real substance there now,” but it needs “a stronger focus.”
The industrial sector naturally sees this quite differently and is trying to make itself heard. For example, the Clean Energy Partnership (CEP), an association of various stakeholders, particularly from the automotive and energy sectors, initiated a joint statement with the DWV and on April 27, 2024 turned to the federal government with urgent words (see next page).
It is “normal for some projects to be canceled,” stated Peter Michael Holzapfel from Siemens in view of the prevailing uncertainty, but at this time Germany is in danger of squandering its starting advantage in the H2 sector.
Economically grim against the council
The funding debate is also currently taking on a whole new dimension, as the German Council of Economic Experts (SVR) has publicly disagreed on this for the first time. Veronika Grimm recently cast a minority vote in favor of H2 commercial vehicles, while four Council members jointly spoke out in favor of purely battery-electric funding. According to the newspaper TAZ, Grimm fears that a focus on battery mobility would mean that Germany in the development of fuel cells for mobility applications “may be irretrievably thrown back behind international competitors in terms of technology.”
This vote has nothing to do with the fact that she has taken on a supervisory board position at Siemens Energy or on the board of the Zentrum Wasserstoff Bayern (hydrogen center of Bavaria, H2.B), according to the Prof. who studied at TU Nürnberg. There have been minority votes before, but not in connection with such compliance allegations. She is only interested in a less risky, multi-track positioning for Germany, according to Grimm. And the German government, which the expert council is supposed to advise, has assessed the mandate as unobjectionable.
To the economics newspaper WirtschaftsWoche she stated: “The expansion of a nationwide charging infrastructure for battery-powered cars and trucks on freeways places demands on the electricity grid and requires a huge amount of space…. Whether the realizable infrastructures can meet the requirements of the traffic is in the stars.”
Cabinet agrees on H2 acceleration law
Whether the hydrogen acceleration law (Wasserstoffbeschleunigungsgesetz) that was approved by the Bundeskabinett on May 29, 2024 can still help much remains to be seen. Because before this can actually come into force, the draft must be handled by the Bundesrat (federal council) and then also the Bundestag (federal parliament). The aim is to set the legal course for the accelerated development and expansion of the infrastructure for the production, storage and import of hydrogen.
Robert Habeck, federal minister for economy and climate protection, stated: “An effective hydrogen infrastructure is crucial for the decarbonization of industry; hydrogen pipelines will carry the lifeblood of industrial centers. Time is of the essence. In order for electrolyzers or import terminals to go into operation as quickly as possible, we need leaner and, above all, faster planning and approval procedures. With the Wasserstoffbeschleunigungsgesetz, the course is now set. The law removes obstacles to the approval of infrastructure projects that produce, store or import hydrogen. This is another milestone on the road to the hydrogen economy.”
The bill aims to make changes to environmental and public procurement law. Accompanying changes to the energy industry law, highway and regional development law and administrative court ordinance will come. For example, there are to be maximum deadlines for approval procedures under water laws, digital approval procedures, facilitation for the early start of measures, accelerated tender award procedures, shorter time to review court decisions and accelerated summary proceedings as well as reducing the amount of official testing required during the modernization of electrolyzers.
Very important: The infrastructure projects of the hydrogen acceleration law are then in the overriding public interest – similar to the acceleration of the expansion of renewable energies. Additionally, approval procedures for electrolyzers should be simplified by an amendment of the 4th ordinance for implementation of the emissions reduction law (BImSChV) and for some (< 5 MW) completely waived.
H2Regional concept of the BdWR
The Bund der Wasserstoffregionen (band of hydrogen regions, BdWR) called for special funding in mid-May 2024 to support the transformation process, particularly for small and medium-sized enterprises. This alliance of various political players who aim to implement regional hydrogen concepts see an imbalance in the current funding architecture. Because the few investment decisions made so far have primarily gone to big industry, so that they can decarbonize their energy supply. An “incorporation of hydrogen will not be possible for small and medium companies and the transport sector,” fear the mayors as well as district administrators of the now over 30 Hydrogen Regions as well as the German association for gas and water standards (DVGW).
Volker Wissing, Source: Nadja Wohlleben
The H2Regional concept submitted to federal transport minister Volker Wissing provides targeted incentives that enable regional economic players to make their own investments in the transformation. This impetus is intended to address both investment costs (CAPEX – primarily in the transport sector) and operating costs (OPEX – primarily H2 generation and process heat supply).
Dr. Stefan Kerth, Landrat (district head) of Landkreis Vorpommern-Rügen, stressed, “SMEs rooted in the regions are not only the much-cited ‘backbone of the German economy,’ but continue to be a key engine of growth. It is also up to the German government to enable these players to participate in the ramp-up of the hydrogen economy in an economically viable manner.” Prof. Gerald Linke, chairman of the DVGW and one of the speakers for the BdWR, supplemented, “The ramp-up of the hydrogen economy in Germany can only succeed if it takes place regionally…. These companies now urgently need a support framework tailored to their needs…. By the strengthening of the regional players, the whole country benefits.”
Author: Sven Geitmann
by Monika Roessiger | Jul 22, 2024 | Europe, Germany, international, News, Policy, worldwide
Chancellor Olaf Scholz visits Hydrogen + Fuel Cells Europe
The atmosphere was good. Not ecstatic, as was sometimes the case last year, but certainly lively. Especially in Hall 13, where the Hydrogen + Fuel Cells Europe event took place, where the aisles well filled and the babble of voices was much louder than in the other halls on the exhibition grounds. Nevertheless, the impression remains that also in the 30th year of this H2 fair, the market breakthrough is still a long time coming and will happen “in only five years,” as has been said for 20 years.
Hannover Messe still lays claim to being the world’s most important industrial trade fair – according to Dr. Jochen Köckler, the board chairman of Deutsche Messe AG, it is even the “mother of all trade fairs.” As in previous years, it also benefited from April 22 to 26, 2024 immensely from the current H2 boom. The great interest in hydrogen and fuel cell technology once again led to acceptable exhibitor and visitor numbers. New impetus as an indication of the direction in which the traditional trade fair business could develop there were however none.
It could be said that the H2 fair has once again rescued Deutsche Messe’s balance sheet.
Chancellor Scholz visits H2 businesses
Not without reason did German chancellor Olaf Scholz give Hydrogen + Fuel Cells Europe a visit. The focus of his opening tour lay in the energy halls, where he stopped at Salzgitter (“We’re proceeding together on the trip” – see Fig. 2) as well as by GP Joule. Ove Petersen, cofounder and one of the managing directors of GP Joule, stressed how important the improvement of political framework conditions are to actually be able to establish electrolyzer capacities (see also p. 18).
Chancellor O. Scholz with the Norwegian Minister-President J. G. Støre, Salzgitter head G. Groebler, Minister-President of Niedersachsen S. Weil, Norwegian economy minister C. Myrseth, German family minister L. Paus and German research minister B. Stark-Watzinger
Revealing word choice
Interesting to observe was how the word choice of some areas changed. For example, in numerous lectures were again and again talk of “Low-Carbon-Wasserstoff” (low-carbon hydrogen). With this crafted word, the speakers smoothly circumvent the classification of hydrogen into the, by some, really unpopular color scale. “Low-Carbon” implies that during the H2 production, little carbon dioxide is emitted, but avoids a stigmatization by the attribute “gray,” “blue” or “turquoise,” since even the smallest blending with green hydrogen is enough to be able to designate it as low-carbon.
Green or blue
For Olaf Lies, the state of Niedersachen’s economy minister, blue hydrogen is “a huge matter for achieving the climate targets.” In view of the tiresome discussion about color, he pointed out in Hannover that nobody asks about the color of electricity. “This must also be the case with hydrogen,” according to the minister.
Another innovation in the language style seems to concern the working principle in the hydrogen economy: Ever more frequently heard are sentences (in English), like “Partnership is the new leadership” or “Cooperation is key.” More and more players are realizing that the transformation process currently underway in the energy sector cannot be mastered alone, but only together.
What’s remained the same, in contrast, is the time horizon until the market ramp-up. Here we are still at five years. While in recent years it was still said that H2 trucks would be built in series starting 2025, representatives of the vehicle industry made it very clear that significant unit sales could not be expected in Germany until 2029 the earliest. Different is the situation in Asia: Refire advertised, for example, that it could already build 5,000 fuel cell systems per year.
After all, Dr. Matthias Jurytko, CEO of Cellcentric committed himself both to H2 technology and to Germany as a business location by saying: “Many talk about factories – We’re building one.” He also clarified: “Hydrogen will be the driver for long-haul transport.” At the same time, however, he conceded: “An increase in unit sales will not come until 2029/30.”
Dr. Jurytko: “There will be no long-haul transport without hydrogen.”
At around the same time, gray hydrogen could be just as expensive as green hydrogen due to rising CO2 prices, anticipates Gilles Le Van from Air Liquide.
Lively exchange in the forums
In addition, in the Public Forum of Hydrogen + Fuel Cells Europe (see Fig. 3 and 4), exhibitors once again explained their new developments this year or discussed them with guests from industry and politics. For example, what framework conditions or incentives for sector coupling and flexibilization of energy consumption are still lacking, or where and how green hydrogen will be produced in sufficiently large quantities worldwide.
Also the question of how much hydrogen Germany will produce itself and how much will be imported from its European neighbors moderator Ulrich Walter discussed with various guests. Christian Maaß, head of the department for energy policy at the federal economy ministry (BMWK), cited estimates that Germany could produce just under half of its climate-neutral hydrogen requirements itself, with the remainder having to be imported.
When asked by the moderator why the electrolysis capacities would not be immediately increased to 20 GW by 2030, replied Maaß, “With higher targets I would be careful, as electrolyzers need a lot of electricity.” He therefore advocates aligning the production of green H2 with the expansion of renewable energy. Not least to avoid conflicting objectives, because the direct consumption of green electricity should have priority. In this respect, he assumes that large quantities of green hydrogen will probably be imported from overseas, in the form of ammonia, methane and SAF (sustainable aviation fuel). Overall, however, Germany will need around ten percent of the world’s H2 production, making it a global player.
A completely different view is held by Heinrich Gärtner, founder and CTO of the GP Joule Group. He was convinced “that we can produce much more green hydrogen domestically than we today think,” and explained: “We already have a large potential for renewable energies, and this is continuing to grow. This also increases the amount of surplus electricity that can be used to produce hydrogen using electrolysis.” This is not only sensible, but also necessary. This relieves the strain on the grids and enables local value creation. In his view, Germany only needs a tiny proportion of its land area to produce all the renewable energy it needs itself. “We have everything here: the technology and the infrastructure.”
Numerous political representatives were on hand to answer questions
Cooperation in the European Area
Werner Diwald, chairman of the German hydrogen association (DWV), said, “The EU member states should be our main importing countries, not least to strengthen mutual relations and support stability within the European Union.” He also expressed optimism that the hydrogen economy could be ramped up quickly once a market and corresponding business models were in place. Something similar has already been seen with renewable energies. It should not be forgotten: The whole world needs green hydrogen. Germany therefore has a lot of competition, as other countries are also pursuing their own H2 strategies, according to Diwald.
The politicians present proved that the envisaged transformation process has long been underway with some impressive figures: For example, Olaf Lies spoke about 30 large gas-fired power plants in Niedersachsen that are to be made H2-ready. And his colleague Mona Neubaur, economy minister of Nordrhein-Westfalen (NRW), announced 200 hydrogen refueling stations by 2030. “We’re placing the infrastructure in the region with precision.” She asserted that NRW is to become the first CO2-neutral industrial region.
Hermes Startup Award: And the winner is …
As every year, the trade fair awards a prize to a particularly innovative company that is no more than five years old. For 2024, the Hermes Startup Award went to Archigas from Rüsselsheim, Germany. The company received the award for a moisture-resistant sensor for measuring hydrogen. The principle, which was developed together with the university Hochschule RheinMain, is based, according to the manufacturer, on an improved measurement of thermal conductivity on a microchip. The innovative technology is characterized by “miniaturization, robust design, short measuring times and a wide range of applications,” praised Prof. Holger Hanselka, president of the Fraunhofer research institutes and chair of the jury for the Hermes Startup Awards. Archigas is an “excellent example for innovation-driven businesses,” which have created the basis for the hydrogen economy to form.
Norway as a pioneer for green industrial transformation
The partner country Norway was represented with its own pavilion on the topics of energy, process industry, battery and charging solutions, and digitalization in Hall 12 and also on the orange carpet of the H2 trade fair – with the (English) slogan “Pioneering the Green Industrial Transition.” As an energy producer and pioneer in e-mobility, the Scandinavian country sees itself as a kind of catalyst for accelerating the green transition to a low-carbon society. For example, in the development of renewable energies and the use of digital solutions to trim the industry to net zero, as the H2 expert and former LBST employee Ulrich Bünger explained, who in “retirement” advises Norwegian Energy Partners (Norwep). The aim is to produce around four percent of Europe’s estimated ten million tonnes of hydrogen imports by 2030.
“Norway and Germany are important trading partners, and we have entered into a strategic industrial partnership for renewable energy and green industry,” said the Norwegian trade and industry minister Jan Christian Vestre in the opening of the fair. “We hope that the Norwegian presence at Hannover Messe will further strengthen this close cooperation between our two countries,” he said.
Honda showed its new FC system
The EEA (European Economic Area) Agreement means that Norway is fully integrated into the European single market, so trade and investment should flow seamlessly between Norway, Germany and the other countries of the European Union. During the trade fair, Germany also concluded an agreement with its Scandinavian partner on the storage of carbon dioxide (carbon capture and storage, CCS).
A major order was able to be announced by Norwegian manufacturer of hydrogen storage systems Hexagon Purus. Starting the second quarter of 2024, it will supply H2 tanks to the Berlin-based company Home Power Solutions (HPS), which claims to have developed the world’s first year-round electricity storage system for buildings. The Picea system will be primarily used in single-family homes in combination with PV modules. Surplus solar power, which is mainly generated in summer, will be converted into green hydrogen using an electrolyzer, which will be stored in high-pressure tanks from Hexagon. In winter, this is then used for reconversion to electricity. According to information from HPS, this allows buildings to be supplied with solar energy all year round. “Our high-pressure hydrogen tanks are flexible and scalable, making them suitable for a wide range of applications,” such as with HPS, said Matthias Kötter, managing director of the location in Weeze.
Creativity and inventiveness in Hall 13
A product innovation was presented for example by SFC Energy with the EFOY H2PowerPack X50, a pilot series for the most powerful fuel cell system to date with up to 200 kW in cluster operation. According to the FC specialist from Bavaria, this latest development offers the user a continuous electrical output power of 50 kW. However, up to four of these H2PowerPacks can be connected together to reach an output of 200 kW. The environmentally and climate-friendly alternative to diesel generators is equipped with standard 400 V AC connections, an integrated lithium battery and a 300‑bar hydrogen interface.
The operation is, according to information from the manufacturer, emissions-free; no CO2, carbon monoxide, nitrogen oxides or fine particles are emitted. Likely applications include the emergency power supply of hospitals or communication and IT systems, mobile power supply for construction sites and events or a continuous power supply for self-sufficient companies. “With the push into higher performance classes, SFC Energy is responding to correspondingly high market demand,” announced the company founded in 2000 and headquartered in Brunnthal near Munich. The series production and market introduction are planned for the beginning of 2025.
This year’s H2 Eco Award went to the energy park Bad Lauchstädt
Lhyfe expands
What the hydrogen ramp-up looks like from the perspective of the Lhyfe Group, which now operates in eleven European countries, was reported by Luc Graré, who heads the Central and Eastern Europe division: “We are right now scaling up our production.” He describes the philosophy of the hydrogen pioneer, which was founded in 2017, as follows: “We start small, learn, grow, learn again, grow further and then scale up.” After the company started with an electrolysis capacity of one megawatt in France, it is now 10 MW.
Currently, six production plants for green hydrogen are planned or in the construction phase: Three in France, three in Germany. “And it will be increasingly more,” he said. A 10‑MW plant is currently under construction in the Niedersachen port town of Brake (on the Unterweser). Up to 1,150 tonnes of green H2 are to be produced there annually, which will go to regional customers from the industrial and transport sectors. The company has secured the purchase of green electricity through long-term electricity contracts (PPAs) with operators of wind farms and photovoltaic systems.
Another 10‑MW plant has been under construction in Schwäbisch Gmünd in Baden-Württemberg since autumn 2023, and is scheduled to go into operation in the second half of this year – with a production of up to four tonnes of green hydrogen per day. Still under development is the plan to commission an 800‑MW plant in Lubmin, Mecklenburg-Vorpommern by 2029, which is to be built on the site of the decommissioned nuclear power plant. According to information from Lhyfe, the hydrogen produced there in the future could be fed into the emerging hydrogen network.
Formic acid as H2 storage
Even outside Hall 13 was a lot about hydrogen. At some stands it looked like a chemistry lab, with bubbling water in glass vessels or a cloudy nutrient liquid in transparent bioreactors. With one, Festo, in Hall 7 showed its latest achievement in H2 storage: the so-called BionicHydrogenBattery (see Fig. 7). It contains bacteria from Lake Kivu in Central Africa that convert hydrogen into formic acid in a natural process. In this chemically bound form, hydrogen is comparatively easy to store and transport. It is also more climate-friendly, as there is no need for energy-intensive compression or cooling to ‑253 °C to liquefy hydrogen. The conditions under which the microorganisms do their work are moderate: They need a temperature of 65 °C and a pressure of 1.5 bar.
The cultivation reactor of the BionicHydrogenBattery from Festo
Normally, the bacteria called Thermoanaerobacter kivui live in sludge in the absence of oxygen (anaerobe). They have an enzyme with which they can convert hydrogen and carbon dioxide into formic acid (CH2O2). They can also reverse the process. The basic research in this area was carried out by the team around Volker Müller, Professor at the Goethe-Universität Frankfurt and head of the department of molecular microbiology and bioenergetics, with which the bionic project team of Festo, according to its information, is working closely.
From an economic point of view, the exciting thing about this biological process is not only the speed of the reaction, but also the fact that the bacteria act as catalysts: “They are not used up,” stated the globally active company specialized in automation technology and founded in Esslingen 1925. “The process can be repeated at will with sufficient regeneration phases – just like a cycle,” they stated. As the reaction can take place in both directions, bacteria of this type are able to break down formic acid back into hydrogen and carbon dioxide at the target site. The CO2 can then be used in the beverage industry, for example.
Positive conclusion
At the closing press conference, Jochen Köckler came to, as expected, a positive tally: More than 130,000 visitors from over 150 countries met 4,000 exhibitors from 60 countries. Of these, 40 percent of the visitors came from abroad: most of them from China and the neighboring Netherlands, followed by the USA, Korea and Japan. Gunnhild Brumm from the Norwegian business development organization Innovation Norway was pleased about the good business and contract conclusions: “In short: It was really worth it! It was a real boost for us. We would love to come back.” Not as a partner country again, of course, because next year that will be Canada.
“We are laying the foundations for the H2 economy of the future…. The speed of artificial intelligence (AI) is too high in some places, but we absolutely need more speed for hydrogen.”
Dr. Jochen Köckler, chairman of Deutsche Messe
Authors: Monika Rößiger & Sven Geitmann
by Niels Hendrik Petersen | Jun 13, 2024 | Development, Germany, News, Policy
The European Commission is allocating nearly 720 million euros to seven projects for renewable hydrogen in Europe. Together, the involved stakeholders aim to produce 1.58 million tons of renewable hydrogen over ten years, thereby avoiding more than 10 million tons of CO2 emissions. Of the selected projects, five are located in Spain and Portugal, with two more in Finland and Norway. The condition: they must begin producing renewable hydrogen within a maximum of five years after signing the grant agreement. They will then receive a fixed premium for up to ten years. This subsidy is intended to offset the price difference between their production costs and the market price for hydrogen. In total, there were 132 bids.
No project from Germany was selected. Therefore, the German government is now allocating 350 million euros from national funding in a new auction process for the highest-ranked projects in Germany that did not qualify for EU-level funding but still meet the funding criteria. The auctions are financed by revenues from emissions trading. Wopke Hoekstra, EU Commissioner for Climate Action, sees this as a crucial step towards the production of renewable hydrogen in Europe. “I encourage other member states to follow Germany’s lead to promote the production of renewable hydrogen at the national level through our European auction platform,” said Hoekstra.
by Hydrogeit | May 15, 2024 | Development, Germany, News, Policy
German government adopts power plant strategy
It took a long time, but now it’s here – the power plant strategy (Kraftwerkstrategie) for Germany. It should actually have been available at the beginning of 2023, but the political agreement process was difficult and correspondingly time-consuming. On February 5, 2024, the strategy was presented, but it still has to be coordinated with Brussels and publicized. It is to create the framework for new investments in modern, highly flexible and climate-friendly hydrogen-capable power plants. Details on the future electricity market design will then be available in the summer – if the Ampel coalition leading the government reaches an agreement on that.
The aim of the power plant strategy is to ensure that the supply of electricity is “guaranteed climate-friendly, even in times with little sun and wind,” so that it can “make an important contribution to system stability.” A basic prerequisite for this, however, is that the expansion of renewable energies and the power grid is promoted so that decarbonization can advance.
To achieve this, German chancellor Olaf Scholz, economy minister Robert Habeck and finance minister Christian Lindner agreed on some essential elements. For example, an early expansion of power plants is to be encouraged. The tenders as part of the power plant strategy will be designed in such a way that the new power plants are fully integrated into the future capacity mechanism.
“The power plant strategy describes how we will bring new types of power plants that are hydrogen-capable onto the market.”
Robert Habeck, German minister for economy and climate protection
For it, soon new capacities (natural gas-fired power plants that are H2-ready and are located at system-serving sites) of 10 GW total will be put out to tender. Habeck had previously targeted more than twice as much. By 2040 at the latest, these are to be completely converted from natural gas to hydrogen. Power plants that run exclusively on hydrogen will be funded up to 500 MW as part of energy research. The funding required for this is to come from the climate and transformation fund (Klima- und Transformationsfonds). In addition, work on a future electricity market design is to be further advanced.
Existing barriers to the construction and operation of electrolyzers are to be removed. In addition, every opportunity should be taken to accelerate especially the expansion of electrolyzers that serve the German energy system. In addition, double charges in the form of levies and fees that are currently incurred when operating electrolyzers are to be eliminated. Specifically, it says (translated): “The use of surplus electricity shall be made possible without restriction; all existing regulatory hurdles shall be removed as far as possible.”
Criticism from the DWV
Initial reactions from the energy sector were generally positive. The DWV (German hydrogen and fuel cell association) expressly welcomed the fact that the German government has now agreed on key elements of a power plant strategy, as time is running out. At the same time, however, the chairman Werner Diwald criticized: “In the analysis of the BMWK (German economy ministry), it says that by 2030, over 23 GW of gas-fired power plants that can run on hydrogen are required to secure the electricity supply. The question therefore arises as to why in the key points agreement on the power plant strategy only a total of 10.5 GW of power plant capacity is to be put out to tender.” The DWV calls for the tendering of the long-announced 8.8 GW in the form of hybrid and “sprinter” power plants (generate electricity from renewable hydrogen as soon as the plant is in operation) as well as a further 15 GW of future-proof H2 power plant capacity to be put out to tender over the next three years. For the DVGW (German association for gas and water standards) as well, the capacity now targeted is “at best a first step.”
“By 2030, 80 percent of the electricity consumed in Germany is to come from renewable energies.”
BMWK
by Hydrogeit | May 15, 2024 | Europe, Germany, hydrogen development, international, News, Policy
3rd funding wave for H2 infrastructure measures
The decision has finally come. In mid-February 2024, the European Commission approved 24 German IPCEI projects aka Important Projects of Common European Interest. Within the framework of IPCEI Hydrogen, funding is granted to large-scale projects across the entire hydrogen value chain – from H2 production and transportation to storage infrastructure and industrial deployment.
These projects are approved by the European Commission in several “waves.” In the current third wave, attention was turned to infrastructure schemes involving a total of seven EU member states (Germany, France, Italy, the Netherlands, Poland, Portugal and Slovakia). Across all projects, the aim is to build almost 3,000 kilometers (1,900 miles) of H2 pipelines, more than 3.2 gigawatts of H2 production capacity in addition to approximately 370 gigawatt-hours of H2 storage capacity.
“While the renewable hydrogen supply chain in Europe is still in a nascent phase, Hy2Infra will deploy the initial building blocks of an integrated and open renewable hydrogen network. This IPCEI will establish the first regional infrastructure clusters in several Member States and prepare the ground for future interconnections across Europe, in line with the European Hydrogen Strategy. This will support the market ramp-up of renewable hydrogen supply and take us steps closer to making Europe the first climate-neutral continent by 2050.”
Vice President of the European Commission Margrethe Vestager, responsible for competition policy
“For a successful roll-out of renewable and low-carbon hydrogen, all pieces of the puzzle need to come together. With this new Important Project of Common European Interest, 32 companies, including 5 SMEs, will invest in hydrogen infrastructure, for a total of more than 12 billion euro of private and public investment, to match supply and demand of hydrogen. It provides industries with more options to decarbonise their activities while boosting their competitiveness and creating jobs.”
EU Commissioner Thierry Breton
“I’m pleased that the wait for European funding approval has come to an end. It means we have made an important step toward realizing our hydrogen project. I now hope that we will soon receive funding approval from the German government so that we have a good basis for making the final investment decision within our committees.”
EWE Chief Executive Officer Stefan Dohler
It is expected that member states will provide up to EUR 6.9 billion in public funding which will then unlock EUR 5.4 billion in private investment. Involved in the 33 projects is a total of 32 companies, with small- and medium-sized businesses among them. Thus the IPCEI Hy2Infra should go some way in “helping to achieve the objectives of the European Green Deal and the REPowerEU Plan,” according to Brussels.
Most of the participating companies have been waiting a long time for this go-ahead to be given, which will enable them to finally kick off their projects. It is anticipated that several large electrolyzers will be commissioned between 2026 and 2028 and a number of pipelines will be brought into service between 2027 and 2029.
Fig. 2: Hydrogenious LOHC Technologies plans, as part of its Green Hydrogen@Blue Danube project, to trial benzyltoluene as a hydrogen carrier for the purpose of ensuring safe and efficient transportation of green hydrogen for supplying industrial off-takers in the Danube region
Hydrogenious_LOHC_ReleasePLANT_Rendering, Source: Hydrogenious,
IPCEI
The IPCEI Hy2Tech, which focuses on the development of hydrogen technologies for end consumers, was approved on July 15, 2022. This was followed in the second wave on Sept. 21, 2022, by the IPCEI Hy2Use which targets hydrogen applications in the industrial sector.
“IPCEI Hy2Infra contributes to a common objective by supporting the deployment of hydrogen infrastructure important for achieving the objectives of key EU policy initiatives such as the European Green Deal, the REPowerEU Plan and the EU Hydrogen Strategy.
All 33 projects included in the IPCEI are highly ambitious, as they aim at developing infrastructure that go [sic] beyond what the market currently offers. They will lay the first building blocks for an integrated and open hydrogen network, accessible on non-discriminatory terms, and enable the market ramp-up of renewable hydrogen supply in Europe. This will allow for the decarbonisation of economic sectors that depend on hydrogen to reduce their carbon emissions.
Aid to individual companies is limited to what is necessary and proportionate, and does not unduly distort competition.”
European Commission
