Germany’s ambitious hydrogen plans have encountered a transportation dilemma, threatening to inflate the country’s hydrogen import costs.
According to a study by influential think-tank Agora Energiewende, Germany’s quest to import 45 Terawatt-hours (TWh) worth of hydrogen by 2030 will likely necessitate more expensive shipping options rather than the cost-effective pipeline route. This shift could substantially impact Germany’s hydrogen import bills, posing a challenge to the nation’s hydrogen strategy.
The Cost of Hydrogen Transportation
Pipelines are heralded as the most economical means of importing renewable hydrogen into Germany. Agora Energiewende estimates that the cost of transporting hydrogen via pipelines would remain comfortably below €1 per kilogram. If Germany were to transport its entire 45 TWh of hydrogen imports this way, it would incur a bill of approximately €1.2 billion by 2030, solely for transportation expenses.
In contrast, transporting hydrogen over longer distances by ship, akin to liquified natural gas (LNG), becomes significantly pricier, ranging from €2 to €5 per kilogram due to the need for conversion back to hydrogen upon arrival. This scenario could raise Germany’s import costs to anywhere between €2.5 billion and €7 billion by 2030.
Challenges with Ship-Based Hydrogen Transportation
Agora Energiewende also points out that technologies for shipping hydrogen, such as converting it into synthetic natural gas, are currently far from mature. This lack of maturity renders these methods uncompetitive in the short term. This is particularly significant because Germany plans to repurpose one of its LNG terminals into a synthetic hydrogen import terminal by 2027, according to an agreement with operator TES.
While the cost of shipping hydrogen directly poses challenges, importing hydrogen derivatives offers a more cost-effective solution. Products like green ammonia or briquetted sponge iron (HBI) could be transported at less than €1.5 per kilogram of hydrogen. However, this hinges on the ability to process these materials directly without costly conversion, for applications such as fertilizer or steel production.
Germany’s Hydrogen Pipeline Ambitions
Germany’s hydrogen strategy includes the development of three hydrogen pipelines to supply its energy-intensive industries. Firstly, a land-based pipeline aims to transport a portion of the targeted 20 TWh of hydrogen production from Denmark into Germany, though construction has yet to commence.
Secondly, Norway intends to become a hydrogen supplier to Germany. A feasibility study for a politically envisioned pipeline is underway, albeit with delays. This collaboration aims for a large-scale hydrogen supply from Norway to Germany starting in 2030.
Lastly, the H2Med project, arising from a multi-year dispute between Spain and France over a pipeline project, could potentially connect to Germany. This project envisions the construction of a hydrogen pipeline, which could significantly alter Germany’s hydrogen import landscape.
Germany’s grand hydrogen aspirations face a tough reality check regarding the costs of hydrogen importation. While pipelines are the most cost-effective means, logistical and technological challenges associated with ship-based transport loom large. Hydrogen derivatives may provide a middle ground, but their feasibility hinges on direct usability. Germany’s pursuit of hydrogen will require careful consideration of these transportation challenges to ensure the economic viability of its green energy goals.
