Germany’s updated hydrogen strategy aims to accelerate the production and use of green hydrogen, a key component in the country’s transition towards a climate-neutral future.
However, the strategy faces challenges in terms of import reliance and the need for a focused approach, according to an analysis by the German Institute for Economic Research (DIW Berlin).
The strategy highlights the importance of prioritizing green hydrogen for applications where direct electrification is not feasible, such as steel production, aviation, and shipping. In contrast, hydrogen is not considered suitable for road transport or the heating sector, where direct electrification is more efficient.
The strategy sets an ambitious target of reaching at least 10 gigawatts of domestic electrolysis capacity for green hydrogen production by 2030. However, uncertainties remain regarding the overall hydrogen demand and the availability of imports. The DIW analysis emphasizes the critical role of green hydrogen imports and calls for the government’s import strategy to address these uncertainties.
“The federal government must pick up the pace in order not to fall behind its targets,” says Claudia Kemfert, Head of the Transport, Energy and Environment Department at DIW Berlin. “The ramp-up of green hydrogen is essential to achieve climate neutrality in 2045. To do this, however, we need large quantities of green electricity; this should be readjusted by accelerating the expansion of renewable energies.”
Another DIW study examines the impact of green hydrogen production on Germany’s electricity sector. It highlights the need for a significant expansion of photovoltaics, as wind power expansion is likely to face continued limitations due to lengthy planning and approval processes. The study suggests an additional 48 to 53 gigawatts of photovoltaic capacity, representing a 25% increase compared to a scenario without domestic hydrogen production.
The study also emphasizes the importance of expanding hydrogen storage, with large and inexpensive caverns offering the most cost-effective solution. However, the location of electrolysis facilities, hydrogen consumption sites, and the availability of a high-performance hydrogen network play a crucial role in determining the most suitable storage approach.
Overall, the DIW analysis underscores the need for a rapid and focused implementation of Germany’s hydrogen strategy, with a clear emphasis on non-electrifiable applications, green hydrogen imports, and a significant expansion of renewable energy sources. The successful realization of this strategy will be instrumental in Germany’s journey toward a sustainable and climate-neutral future.tunesharemore_vert