Germany, a pioneer in renewable energy, faces a pressing dilemma in its ambitious hydrogen plans. A recent study by influential think-tank Agora Energiewende highlights the nation’s challenge in meeting its hydrogen demand while managing costs and sustainability.
By 2030, Germany aims to import a staggering 45 Terawatt-hours (TWh) of hydrogen, equivalent to 1.3 million tonnes. To achieve this, the country must make critical decisions regarding the transportation of this green fuel.
Agora Energiewende’s study underscores that pipelines are the most cost-effective means to import renewable hydrogen to Germany, with estimated costs remaining below €1 per kilogram. If all 45 TWh of hydrogen imports follow this path, the total transportation cost by 2030 would amount to €1.2 billion.
However, the study unveils a stark reality: opting for longer-distance shipping, akin to liquefied natural gas (LNG), elevates costs substantially. Estimates range from €2 to €5 per kilogram of hydrogen due to the need for conversion back to hydrogen upon arrival. Consequently, Germany’s import bill could surge to a range between €2.5 billion and €7 billion by 2030 solely for transportation.
Agora Energiewende raises concerns about the immaturity of technologies for shipping hydrogen by sea, such as transforming it into synthetic natural gas. These methods are currently far from competitive in the short term.
The report highlights a more economical alternative: importing products derived from hydrogen, like green ammonia or briquetted sponge iron (HBI), which cost less than €1.5 per kilogram of hydrogen. However, their cost-effectiveness relies on the direct application without expensive conversion processes, such as for fertilizer or steel production.
Shift in Perspective
German government advisors and think tanks are increasingly emphasizing the need for flexibility in energy-intensive industrial production. They caution against the fixation on domestic production at any cost.
Germany envisions three hydrogen pipelines to supply its energy-intensive industries. These include a land-based pipeline from Denmark, a potential supply from Norway, and H2Med—a hydrogen pipeline connecting Spain and France, which could also serve Germany.
Germany faces a pivotal decision in balancing the cost-effectiveness of hydrogen imports with its commitment to sustainability and decarbonization. As the nation navigates this complex terrain, the world watches closely to see how one of Europe’s leading economies manages its green energy transition.