BotH2nia went to Germany - what did we learn?
BotH2nia and some twenty hydrogen companies and other organisations from the Nordic countries visited central Germany in early September to explore the rapidly developing hydrogen market. It is now worthwhile for the Nordics to learn to operate in the large German market.
The German hydrogen industry is now being built quickly, as the German government is pushing ahead with building the hydrogen economy through a national hydrogen strategy. Several billion euros of federal and state funds are being allocated to promote hydrogen production, build the necessary infrastructure and enable its use.
Lessons from the trip:
- Without a sufficient customer base, it is not worth implementing production solutions of the scale that the Germans gave examples of the need for. Even the presence of a port is not as critical as customers if rail and road connections to them work.
- Customers in need of hydrogen and electric fuels and feedstocks are already on the move in Germany and elsewhere in central Europe. Their big production potential lies around the Baltic Sea. The BotH2nia network will do its best to bring users and suppliers together next at Kokkola Material Week in Finland from 20 - 21 November 2023.
- The Nordic hydrogen sector needs to become better known in Germany. This should be done on a joint Nordic basis.
- The time for alkaline electrolysers is now, high-temperature SOEC solutions will follow. For example, Professor Alexander Michaelis of Fraunhofer IKTS was already almost ready to bid farewell to PEM electrolysers.
- Cooperation between research institutes and universities as well as industry is a regional competitive advantage. New technological solutions need to be tested from the laboratory to pilot and industrial production scale. Growth can be expected in areas close to such research clusters.
Green transition turns open pits into lakes
The states of Saxony and Saxony-Anhalt in the former East Germany, which were visited by the delegation, are together slightly larger in population than Finland. The mission was organised by energiewaechter, German Trade and Invest, the German-Finnish Chamber of Commerce, Invest in Saxony-Anhalt and Saxony Trade and Invest, as part of the GTAI Programme for the Internationalisation of Regions in Structural Change (ISW).
The energy revolution is literally taking hold in the region. Lignite has been used extensively in the region, and lakes are now forming in place of closed opencast mines in more and more areas. However, in addition to substitute energy sources, the municipalities and towns in the region must also find alternative jobs.
Photo: Former open-cast mines are increasingly being converted into recreational areas in various parts of Germany. Credit: Minna Näsman
Hydrogen transfer is being studied
The Bitterfeld-Wolfen chemical industrial site is investigating how methanol and its derivatives can be produced from waste gases in the area using green hydrogen. A visit to the Bitterfeld-Wolfen hydrogen village and a tour of the HYPOS cluster's H2 Netz demonstration site raised many questions and discussions among the delegation about hydrogen transfer, one of the most critical issues in the hydrogen economy. Hydrogen distribution has been tested locally within an industrial site for four years, typically at pressures below 16 bar. Under these conditions, no brittleness or fatigue of the plastic or steal piping has been observed.
Longer transmission lines requiring higher pressures are a separate issue. Here too, the Germans have their own real-life laboratory for energy transfer. At the Bad Lauchstädt energy industrial site near Leipzig, electricity is converted into hydrogen in a 30 MW electrolysis plant and fed via a former natural gas pipeline to Germany’s largest chemical industrial site managed and developed by Infra-Leuna GmbH. The park is the same where the Finnish company UPM is currently building a biorefinery.
In Leuna, attention is drawn by the sheer scale of the projects
Martin Naundorf, head of site development at InfraLeuna, testified how the majority of companies in the region want to use hydrogen. He talked about the challenge of making the energy palette offered to businesses in the region emission-free. Natural gas is being replaced by emission-free electricity, which Linde, which operates on the site, converts into hydrogen. To this end, Linde is currently building the world's largest PEM electrolysis plant. Hydrogen is needed by other companies in the region, in particular as a raw material for production processes.
Fraunhofer IWES owns and operates a test laboratory on the site, where electrolyser manufacturers can bring their equipment below 5 MW for testing. The Hydrogen Lab in Leuna provides them with deionised water, steam, compressed air, nitrogen, hydrogen and, in the future, carbon dioxide. The hydrogen produced on site will be purified and fed into a 157 km long hydrogen pipeline, from where it will be distributed to industrial sites in the region for use in chemical processes. The construction of the test site, worth more than €10 million, has been financed by the state of Saxony-Anhalt and the EU.
Photo: Hydrogen transmission and distribution will be tested in the Bitterfeld-Wolfen hydrogen storage facility under the conditions in which it is planned to be carried out on a large scale. Credit: Minna Näsman.
Green transition turns open-cast mines into lakes
For Leipzig's city heaters, abandoning coal-fired power is a challenge similar to the one faced by Helsinki, for example. However, in addition to alternative energy sources, the municipalities and cities in the region will also have to find alternative jobs. In many cases, the coal used has come from nearby, and lakes are now forming on the sites of opencast mines in more and more regions.
Energy transit is also a process of social change. As an example of how the transition is changing the financial world, the delegation was presented with the support of the German Federal Ministry for Economic Affairs and Climate Change (BMWK) for the creation of a hydrogen market.
Long purchase contracts to create demand
The H2 Global Foundation has been set up to solve the egg-chicken problem of creating sufficient demand to dare to invest in production. H2Global's Hydrogen Intermediary Company (HINT.CO) signs 10-year hydrogen purchase contracts with competitive producers. Sales are made under short-term contracts at prices determined by demand. The difference between production and demand prices is compensated by a funding body and grant authorities.
Another instrument aimed at making the pricing of pure hydrogen more transparent is the hydrogen index. The index is backed by the European Energy Exchange (EEX), which produces calculated reference prices for different products from market data. The EEX now also calculates a weekly average between production and consumption prices for hydrogen, at this stage based on data for Germany. This is called HYDRIX.
"Everyone wants to be a hydrogen user"
The networking meeting at Leipzig/Halle Airport heard about the future goals of the airport and DHL, the major logistics company operating there, to achieve carbon neutrality. Sustainable aviation fuels (SAF) were seen as a key tool.
Here too, finding producers of zero-emission energy and fuels therefore seemed to be much more difficult from a German perspective than finding uses for them.
From a Finnish perspective, the message was both confusing and gratifying. The change of perspective helped to understand how much public debate in Finland still hesitates about whether there are customers for clean hydrogen or whether it is even worth selling hydrogen as such.
From BotH2nia's point of view, it was particularly gratifying to hear that people in Germany are reading the news about the Nordic countries. Xenon manufactures production lines for electrolysers, and their presentation had picked up on the news from P2X Solutions on the BotH2nia website about the arrival of an electrolyser at the P2X site in Harjavalta. The most interesting news from their point of view was, of course, the electrolyser manufacturer Sunfire, headquartered in Dresden. The delegation also had the opportunity to visit it.
Read more about Germany's hydrogen strategy on the German Federal Ministry of Economics and Technology (BMWK) website.
The article was first published on LinkedIn.