Whether hydrogen contributes to the clean heating transition will also depend on how easily existing natural gas networks can be converted. This is what Gasnetz Hamburg wants to find out in the project H2Switch100. For this, the company is looking at a very ordinary section of its existing network.
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There’s nothing special about the small grid section in the southern district of Hamburg – exactly why the grid operator Gasnetz Hamburg chose it. In total 16 connections, including 14 normal households, a business park and a sports club. In the residential buildings, natural gas heating systems are installed. The business park and sports club operate a combined heat and power plant with natural gas. There are in the partial network new PE (polyethylene) pipes as well as old steel pipes and house connections from various decades. “The network section is representative for Hamburg’s gas grid,” said Sebastian Esser, project leader at Gasnetz Hamburg.
The aim is to find out whether other ordinary network sections could also be converted to hydrogen. The mix of materials and designs distinguishes H₂-SWITCH100 from the longer-running project H2Direkt of the company Thüga in Hohenwart. There, already in winter 2023/24, ten households and one commercial customer are to be supplied with pure hydrogen. However, only PE pipes, known to be suitable for hydrogen, are installed there (see p. 30).
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Feasibility study with laboratory trials
In Hamburg, meanwhile, preliminary investigations are still pending. Together with the partners TÜV Süd and DBI Gas- und Umwelttechnik, Gasnetz Hamburg wants to demonstrate in a feasibility study within twelve months the integrity of the network for hydrogen. In the first step, samples from the original network will be sent to the lab. “For each component type that occurs in the network, we will examine at least one specimen,” said Esser.
In particular, these are individual gate valves and ball valves, but also entire service laterals and pieces of piping. In the laboratories of partner organizations, the components should then demonstrate that they are suitable for employment in a hydrogen network. Is there any embrittlement of the steel parts? Do the pressure regulators work? Are the shut-off devices tight? Answers to these questions are to be provided in the feasibility study running until August and funded by the investment bank IFB Hamburg (Hamburgische Investitions- und Förderbank).
“We’re very confident about the old components and the pipes themselves, as gas with about 50 percent hydrogen content was flowing through the pipes until the 1980s. Some components, however, were added later,” said Esser. The cost for this first project phase, according to Gasnetz Hamburg, lies “in the low six-figure range.”
Replace meter and burner
If the laboratory tests turn out positive, step 2 will follow: the actual conversion of the network. At issue will not be merely feasibility but also costs. Because even if the network is suitable for hydrogen, at the least the burner nozzles and the meters will probably have to be replaced. Lastly, the standard volume of gas must increase by a factor of three to compensate for the lower calorific value of hydrogen compared to natural gas.
“In the pipes themselves, this is no problem. Firstly, the hydrogen has a lower viscosity and therefore flows faster; secondly, we can slightly increase the pressure if necessary; and thirdly, the pipe diameters in the Hamburg gas grid are sufficiently dimensioned to accommodate the higher throughput,” erklärt Esser.
Many manufacturers already have up their sleeves heaters that can be operated with pure hydrogen, for the coming years. “As far as the combined heat and power plants are concerned, manufacturers have already announced their intention to make devices available for testing,” according to Esser. The additional costs incurred as a result of the pilot test will be borne by Gasnetz Hamburg. Thanks to this pledge, the supplier is being met with wide-open customer doors. “Even some neighbors who do not yet have a natural gas connection have now expressed an interest in hydrogen,” Esser recounted.
Hydrogen from planned industrial network
While the pipes and other components are very normal, the location of the network section is very special. It lies almost directly along the route for the already planned hydrogen network for the Hamburg industry with project name HH-WIN. Already in 2024, Gasnetz Hamburg wants to have built large parts of HH-WIN. In year 2027, the company intends to be able to supply the first hydrogen volumes. The confirmation that this will be an IPCEI (Important Project of Common European Interest), which is eligible for a particularly high level of funding, was still pending at the time of going to press.
“Compared to the needs of industry, the hydrogen requirement for the pilot project is minimal,” said Esser. The hydrogen for the industrial network is to come from three sources, which according to current announcements should all stand ready to be put into operation. On the one hand, there is the 100-megawatt electrolyzer that should appear directly in the industrial area at the site of the former coal-fired plant Kohlekraftwerk Moorburg. After some unrest within the project consortium, Hamburger Energiewerke wants to implement the project now together with asset manager Luxcara as majority shareholder. Commissioning is still targeted for 2026.
Secondly, hydrogen is to come to Hamburg via an ammonia terminal that Mabanft and Air Products announced at the start of 2022. By now, the project has undergone a nautical risk analysis, and the companies are in the process of compiling the documents for the approval procedure. As target year for commissioning Mabanaft still named 2026.
And thirdly, there is the European hydrogen core network of the grid operators. Both with the Netherlands and with Wilhelmshaven, Hamburg is connected by existing long-distance lines that are to be converted to hydrogen in the first project phase (see p. 30).
How low-CO2 the production of hydrogen will be in each case is difficult to say, as the regulations as well as the energy production and conversion are massively in motion.
Role of hydrogen in the heating transition unclear
If it turns out that the pipeline network could be easily repurposed, this does not make hydrogen the first choice for Hamburg’s heating transition. After all, in contrast to industry, there are many other options for heating buildings with significantly lower conversion losses. This consideration was once also the basis of the Wasserstoff-Roadmap (hydrogen roadmap), which prioritized – initially still scarce – green hydrogen for sectors that are difficult to decarbonize, including first and foremost industry. The environmental and energy office of Hamburg (BUKEA) also is following this strategy.
The Hanseatic city started collecting data for a heating register much earlier than most other large cities, and intends to present a complete heating plan already by 2024. In the city center, this will probably mainly be district heating, while heat pumps are popular in the peripheral areas.
“Certainly, converting the natural gas pipelines to pure hydrogen operation is not a solution for the whole of Hamburg,” acknowledged Michael Dammann, the technical managing director of Gasnetz Hamburg. “However, the further use of an already existing infrastructure with the green gas can be a sensible supplement to options like expansion of district heating and heat pumps in certain building structures and locations. With H₂-SWITCH100, we want to find out specifically what effort and costs are associated with such a changeover and whether there are technical hurdles.”
At Fraunhofer FEP (Fraunhofer-Institut für Organische Elektronik, Elektronenstrahl- und Plasmatechnik), a pilot plant for the coating of metal sheets and strips is being used for the efficient coating of bipolar plates for electrolyzers and fuel cells. The institute, according to its own statements, is a leader in the development of electron beam and plasma technologies. This expertise could also advance hydrogen technology in the future.
One example of this would be plasma-activated electron beam evaporation. This is a vacuum coating process that enables both high throughput and high coating quality. Exactly this combination is crucial for the coating of bipolar plates for electrolyzers and fuel cells. Because these have to function for a long time, stably, in a chemically aggressive environment. For this, they must receive coatings that reliably protect the plates and at the same time guarantee electrical conductivity.
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Using electron beam evaporation, coatings to form a certain shape can be applied to the metal strip before these are stamped into bipolar plates, stated Burkhard Zimmermann, division manager for electron beam technologies at Fraunhofer FEP. The coating of the material is a crucial step for scaling the production with a roll-to-roll process. The challenge here is the formability of the coating. To ensure this, a dense macrostructure of the coating with the largest possible crystallites is required. Exactly these layer properties can be realized by the developed processes.
Hydrogen Regions series: HydroHub Fenne living lab
The power plant site in Fenne, Völklingen, a long-standing power generation facility which celebrates its centenary this year, is now the focus of Iqony’s plans to meet the future energy needs of the industrial region of Saarland. Owned by the STEAG Group, Iqony specializes in renewable energy, hydrogen projects, energy storage, district heating and decarbonization solutions.
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The site is already a major energy intersection for the state of Saarland in southwestern Germany and is at the crux of the area’s district heating supply. Along with the present facility, the site will in future be home to HydroHub Fenne, an addition that will ensure it remains an essential part of Saarland’s energy system in the years ahead.
“Due to its existing infrastructure, we see the site as ideally suited to the building of a hydrogen production facility at this location. The existing grid connection allows us to draw sufficiently large amounts of renewably generated power to produce renewable hydrogen here, close to the point of use,” explains Patrick Staudt who is in charge of hydrogen at Iqony Energies, a Saarland-based subsidiary of Iqony.
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The project will need to comply with the provisions of the European Union’s Renewable Energy Directive (RED) and its associated German legislation so that the hydrogen produced in Fenne can also be classified as climate neutral according to the strict criteria set out in EU law. Iqony’s own trading division will provide support to make sure this happens.
IPCEI notification is vital
Depending on the number of operating hours, HydroHub Fenne will produce approximately 8,200 metric tons of green hydrogen a year. “The current plan is to commission the plant in 2027 – assuming that the latest statements on the completion of the IPCEI notification by the European Union are correct,” says Patrick Staudt.
IPCEI stands for Important Project of Common European Interest. Iqony applied to have its Saarland hydrogen project recognized as an IPCEI back in spring 2021. Dominik Waller, who is responsible for project development alongside Patrick Staudt, explains the significance of the decision: “Our project needs to gain recognition as an IPCEI to allow the German government to support us financially with the investment. It’s impossible without IPCEI notification due to European law on competition and state aid.”
The prospects are looking good for the project in Fenne. A final decision is expected in Brussels by the end of 2023 – more than two years after the original announcement was due. “Once we have the funding authorization from the EU, it will then be a matter of the government putting specific funding in place. That should happen in the first quarter of 2024 which will mean we are on track in terms of the project schedule,” elucidates Patrick Staudt.
Public funding of the project is necessary because there is not yet a functioning market for hydrogen in general or for green, i.e., renewable, hydrogen in particular. Hydrogen can help industry or, for example, local public transport avoid carbon dioxide emissions. However, hydrogen finds itself in financial competition with other energy sources such as natural gas. In economic terms, hydrogen is no match for other energy forms at present, precisely because a competitive marketplace has still to develop.
“We see this as a classic chicken-and-the-egg problem: Potential hydrogen producers are holding back on their investment decisions, waiting for definitive signs of future off-takers. On the other hand, potential off-takers are not investing in converting their processes and plant technology while there is no guarantee that the required hydrogen will be available in sufficient quantities in the future. The only way of getting out of this dilemma is if public authorities provide investment security for both sides in the form of funding,” acknowledges Dominik Waller.
As for the level of funding for HydroHub in Fenne and the overall capital outlay, Iqony is not at liberty to divulge specific figures for competitive reasons. However, a few hundred million euros are expected to be invested in the project. “We won’t be able to give a more exact figure until the tender for the plant technology has been concluded,” says Patrick Staudt. Though this will only be when the funding letter has been received. According to Staudt, this once again shows how fundamentally important the conclusion of the IPCEI process is in order to progress the project further.
Fig. 2: Site development
Tenders on the market
Another stipulation resulting from the funding conditions for an IPCEI-designated project is that the hydrogen produced can’t simply be sold in the usual way. “We’re obliged to use tenders to bring our product to market so that all potentially interested parties have a chance to participate,” states Dominik Waller. This is where the Fenne location is said to be to the company’s advantage, since it already has a disused gas pipeline connection that could be employed in future to link HydroHub Fenne to the hydrogen supply network being created. Waller continues: “It’s also why we are paying close attention to the current discussion on the government’s plans for a core hydrogen network – and here we see the need for further improvement, especially for Saarland.”
This expressly applies not only to the delivery of the future electrolyzer in Fenne through the core network draft, which was presented by FNB Gas to Germany’s Federal Network Agency in November 2023, but also to the present STEAG and Iqony power plants in Bexbach and Quierschied (Weiher power plant). “At both sites we want to build new, hydrogen-compatible gas power plants – just like the government itself has set out in its 2030 target, so we can switch off old coal-fired units, meet our national climate goals while at the same time ensuring the security of supply if wind and solar power aren’t available in sufficient quantities,” says Andreas Reichel, CEO of STEAG and Iqony.
Reichel adds: “Current government plans do not yet envisage bringing the core hydrogen network to these two locations, which will be necessary to make this happen. That said, we’re grateful to the Saarland regional government for its reassurance that this is precisely what it will be campaigning for in Berlin.” If such efforts are successful, it would enable Iqony to build new power plant capacity in Saarland by 2030 which is urgently needed to guarantee security of supply as well as ensure the green transformation of power generation in Saarland.
In the medium and long term, it is then hoped that these and other new gas power plants will be run on hydrogen to provide a reliable, carbon-neutral supply of energy. If the core hydrogen network planned by the German government is not immediately routed to within close proximity of the sites, this will be completely impossible. Despite the unresolved issues, Iqony is optimistic about the realization of its hydrogen and power plant projects on the River Saar:
“We have the technical and commercial expertise from more than 85 years in the global energy industry, we have the right locations and we have proven through the construction and commissioning of one of the world’s most advanced combined-cycle power plants in Herne, Nordrhein-Westfalen, at the end of 2022 under difficult COVID-19 conditions, that we can carry out challenging large-scale engineering projects on time and on budget – if the regulatory environment allows us to do so,” concludes Andreas Reichel.
Author: Dr. Patrick Staudt, Dominik Waller, both from Iqony
Guest article by André Steinau, CEO of GP Joule Hydrogen
After all, the Ampel Coalition leading the German federal government did reach an agreement shortly before the end of the year. And the ramp-up of the hydrogen economy will – again after all – not be completely slowed down, but will continue. But: Among others, the subsidies for erecting refueling and charging infrastructure (“Zuschüsse zur Errichtung von Tank- und Ladeinfrastruktur”) will sink in the climate fund Klima- und Transformationsfonds 2024 by 290 million euros (from 2.21 to 1.92 billion euros), and – the second but – the framework until now was and is for the ramp-up of the hydrogen economy in Germany simply not sufficient.
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This is particularly incomprehensible in view of the enormous relevance that hydrogen production has for achieving the expansion targets for renewable energies and thus also for achieving the climate targets. The generation of electricity from wind and sun is in any case dependent on the weather. Accordingly, everything that helps to integrate renewables into our overall energy system, temporarily store their energy and transport it to consumers must be promoted. Electrolysis has a particularly high value here, as it makes the energy in the form of hydrogen usable independently of time and then enables the distribution of the energy through transport on the road, by rail or in pipelines.
A gigantic market is growing here. Sustainable and at the same time vital if we want to avert the worst consequences of the climate catastrophe. In the USA, this has been recognized. There, in the framework of the Inflation Reduction Act (IRA), many billions will be invested in the development of the green hydrogen economy and thus also in the transformation of the industrial sector.
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And here? Here, subsidies are still too often viewed as if they were gifts for risk-free entrepreneurship. The opposite is true. For the hydrogen projects alone that GP Joule is just implementing, a good 30 million euros in funding applied for or approved spurred nearly 60 million euros in private investments.
But uncertainty scares off investors, whether banks, entrepreneurs or other financiers. Financing green hydrogen projects is becoming increasingly difficult. Banks are demanding higher risk premiums. At the same time, subsidies are falling – see above – rather than attracting. The German government behaves hesitantly. Previously announced funding programs are a long time coming. All not good signals.
The promised calls of funding for electrolyzers, hydrogen refueling stations and, above all, fuel cell trucks should swiftly be put on the road, because the ramp-up of hydrogen production requires security of purchase. Hydrogen producers, infrastructure operators and truck manufacturers only have this security if vehicles are subsidized.
However, with a coherent policy, the state would need to be not only a giver of consumption security but also investment security as a guarantor. If the financing of hydrogen projects – also due to the international crises from Ukraine to the Middle East – becomes increasingly impossible, it will also become increasingly difficult to produce green hydrogen competitively and cheaply. Banks and companies from the world of capital and finance are indeed looking for ways to finance H2 projects. However, in the current market ramp-up phase, the state is also urgently required to provide financial impetus through industrial and economic policy.
There are plenty of suggestions as to what these impulses could look like, how the state can become a guarantor: instead of pure investment funding, a type of fixed remuneration on the basis of the capacity of the hydrogen refueling station that is payed out over a period of eight to ten years under the condition of a consistently high performance of the refueling station, which makes the now needed infrastructure establishment commercially possible.
The state could also really be a guarantor and provide cheap credits for hydrogen projects, for example through a loan program of the public fund KfW.
For the ramp-up of the hydrogen economy in Germany, strong incentives are urgently needed. The instruments are on the table. If they are not used, Germany could, after the relocation of the solar and wind turbine industries, be facing the collapse of the next crucial pillar of the energy transition. It would not only be bad news for the climate, but also for the country’s economic status.
Author: André Steinau, GP Joule Hydrogen, a.steinau@gp-joule.de
Progress is being made at EU level – albeit extremely slowly. This was the case with RED II (Renewable Energy Directive), this is the case with the IPCEI projects and even more so with the 37th BImSchV. RED III also took a long time, but now it’s here. On September 12, 2023, the European Parliament approved the amended Renewable Energy Directive (RED), and on October 31, it was published in the Official Journal of the European Union.
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What must now follow is the transposition into national law. The hope is that this will lead to a significant acceleration in the expansion of renewable energies – mandatory 42.5 percent by 2030 – and a faster reduction in greenhouse gas emissions.
“[…] reduction of net greenhouse gas emissions by at least 55 % compared to 1990 levels by 2030. […] Renewable energy plays a fundamental role in achieving those objectives, given that the energy sector currently contributes over 75 % of total greenhouse gas emissions in the Union.”
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The German government has shown that it is willing to pick up the pace. For example, federal economy minister Robert Habeck during the German worker’s day event called for acceleration of the expansion of the hydrogen economy. Stefan Wenzel, parliamentary secretary of the federal ministry for economy and climate protection (BMWK, see photo) stated in Berlin that the motto of the BMWK is “faster, more digital, simpler.”
Also Dr. Christine Falken-Großer, department head at the BMWK, explained at an EEX workshop in Berlin: “We have achieved an incredible amount in recent years. There may be little in the ground, but we have funding instruments, strategies, etc.” Furthermore, an H2 acceleration act (H2-Beschleunigungsgesetz) is on the way. This legislative package will “contain things that will bring about substantial acceleration.”
There has been a reform backlog in many areas for years, for example in the revision of the ordinance on the implementation of the emissions reduction law (37th BImSchV). Werner Diwald, chairman of the German hydrogen and fuel cell association DWV, has long pointed out the enormous importance of this ordinance. “We have been waiting twelve years for the 37th BImSchV,” said Diwald.
Commission adopts 6th PCI list
Not quite as long, but also too long, many companies have been waiting for notification of their funding applications for IPCEIs (Important Projects of Common European Interest). Only with this explicit “go” may the EU member states approve subsidies that go beyond what is normally permitted under competition laws. There are now individual cases of pre-approval for an early project start, but the risk then lies with the companies. Only a handful of companies have already received a funding decision; the majority of players are still waiting for positive feedback from the EU.
Alexander Peters, managing director of the Neuman & Esser Group, said recently in Berlin: “I know many companies that have since left the IPCEI procedure.” Similarly, it has been reported from other sources that a number of players would no longer submit their funding applications in the same form today in view of the higher prices. Stefan Wenzel holds the view, however, that at least for the infrastructure projects the commitments from the EU should turn up at the turn of the year.
Nevertheless, at the end of November 2023, the news came from Brussels that the European Commission had adopted the sixth PCI list (Projects of Common Interest). Among the total of 166 infrastructure projects it contains are 85 projects for an offshore and intelligent electricity network as well as 14 for a CO2 network – and 65 hydrogen-related projects, most of them in Western Europe.
A total of 179 applications for hydrogen were submitted. However, as activities such as the continued operation of natural gas projects are no longer supported, the overall success rate was “only” 37%.
Daniel Fraile, head of policy at the association Hydrogen Europe, said: “The adoption of hydrogen projects in a PCI list for the first time is a big step forward and shows the commitment of the EU to laying the foundations for a European hydrogen backbone. This first selection process is also a valuable lesson that we have learned. We will work with our members to ensure that the next list includes more diversified projects (both in terms of type and geographical distribution).”
Now, a corresponding delegated act with the 6th PCI list lies before the European Parliament as well as the European Council. The vote should then take place two, maximum four months from now.
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