© AdobeStock/Peterschreiber.Media

With hydrogen into a new energy age

Hydrogen has the potential to replace oil as the most important energy source. Germany can play a pioneering role in innovative technologies and infrastructure projects on the path to a green hydrogen economy. To achieve this, the country must face a number of challenges.

More than 150 years ago, oil was extracted for the first time, triggering a global oil boom. What is now condemned as a cause of climate change first made industrialization possible and helped electricity to make its breakthrough. That was the prerequisite for prosperity for the population at large. Today we know the negative side effects of fossil fuels. Alternatives are therefore in demand. The increased research, promotion and use of renewable energies at the beginning of the 21st century has meanwhile initiated a global energy transition. Renewable electricity from wind, hydropower, biomass and sun are conquering the energy sector. But the triumphant advance of renewables is not even remotely comparable to the discovery of oil, because it is initially "only" an additional source of electrical power. This accounts for only about 20 per cent of total final energy consumption in Germany. 80 per cent of our final energy consumption, which we use for mobility, industrial production and heat, is today almost exclusively covered by oil and gas.

No real energy transition without hydrogen

It is not foreseeable that this ratio will completely reverse in the long term. We will not be able to directly electrify all areas of an economy with 100 per cent renewable electricity. There is simply not enough domestic and European generation capacity to do this. The next stage of the necessary energy revolution would, therefore, be to make the huge share of gases and fuels in the energy mix CO2-neutral. At present, only hydrogen and its many derivatives are suitable for this purpose. Hydrogen is the perfect partner for renewably produced electricity, making it storable, transportable and usable in all sectors. With this tandem approach, humanity can succeed in the second energy revolution.

The "green light" for hydrogen

As Jules Verne once said: "Water is the coal of the future". Today we are even able to formulate that hydrogen will be the oil and gas of the future. But will it once again remain just a hype about hydrogen? From the 1970s onwards, the fear of the next oil crisis, of "peak oil", drove the debate about hydrogen. But the global peak in oil production is still not in sight. However, the starting position for a successful new energy revolution has improved dramatically. Three things are fundamentally different today: society's awareness of climate change, the political goal of climate neutrality and the prospect of globally available renewable energies at attractive costs.

European society in 2020 was not shaped by fear of oil, but by concern about the climate. The risks of climate change are also felt in industry. And despite some setbacks in international climate diplomacy, the issue enjoys high political priority. Europe wants to become climate neutral by 2050. The dramatically reduced and further decreasing prime costs for renewable electricity in many regions of the world open up for the first time a tangible perspective on an economically viable global hydrogen economy.

Domestic industry faces major challenges

Industrial companies and the scientific community have taken up this challenge. Paths are emerging, but they will not be easy, and the forecasts for the hydrogen needed for the conversion go beyond any national or European framework imaginable. Therefore, Germany must take a driving role with Europe in the development of a global hydrogen economy. If Germany coordinates research, development and demonstration projects well in an industrial format, there are excellent opportunities to become a technology leader in the global hydrogen market.

Even though hydrogen is no stranger to German industry, the shift to a comprehensive hydrogen economy requires a significant learning curve. The operation of decentralised renewable generation plants, electrolysis as well as synthesis plants on a large scale must be coordinated with each other. Germany, with its unique competence in the development of systematic concepts, can set standards here. That is why the rapid development of a domestic market for green hydrogen is urgently needed. Because this technological lead will not be easy to emulate. But the competition is not sleeping: Japan and South Korea in particular recognised the advantages of hydrogen at a very early stage and are vigorously pushing ahead with their technology development.

Creating infrastructure and market impulses

For the development of a global hydrogen economy, the first international demonstration projects with German participation are needed in the short term. The formula for success is the combination of cheap electricity from renewable sources, technological know-how and internationally comparable certification standards. A rapid market ramp-up of hydrogen in all sectors to industrial-scale applications is a prerequisite for this. If we want to move faster towards a sustainable future, we will first have to accept alternative forms of generation such as hydrogen from natural gas for our energy supply, without giving up the perspective of exclusively "green" hydrogen. Especially in times of the Corona pandemic, this would send important market impulses for our ailing national economy.

A global approach instead of national solo efforts

In certain regions, for example in Australia and Chile, the production of renewable electricity is already possible at certain locations for two US cents per kWh. Germany and Europe can take advantage of this with new partnerships and lay an important foundation for the development of a "green" hydrogen market.

The development of such international hydrogen supply chains also has a foreign and geopolitical significance. Thus, the classic energy exporters worldwide are observing climate policy developments with interest and even concern and are increasingly looking more intensively at long-term alternatives to the creation of value from fossil resources. These countries also need a perspective in a climate-neutral world. Creating losers in the global "energy transition" would be fraught with major foreign policy risks. The availability of hydrogen at competitive prices, whether from domestic sources or as an import, will determine the future viability of our industrial position and the preservation of today's prosperity in Germany and Europe.