Germany Will Need Green Hydrogen to Keep Global Warming Below 1.5°C
The Buzz
In the Paris Agreement, countries have agreed to keep the increase in global average temperature well below 2 degrees Celsius. Due to these worldwide efforts to drastically reduce greenhouse gas emissions and strengthen the global response to climate change, alternative energy carriers’ importance is steadily increasing.
If you haven’t been living under a rock, you will have heard that industries and governments worldwide consider green hydrogen (produced via water electrolysis) to be the energy carrier of the future.
It was the hot topic in 2020.
If you are like me, you probably forgot how water electrolysis works. To put it simply, it uses electricity to split water into its compounds; hydrogen and oxygen. If renewable electricity is used, the end product is widely known as green hydrogen.
I’m not here to preach to you about how great green hydrogen is and that it can be used for multiple end-use applications in various energy sectors. No, this has already been covered by mainstream media over and over again this year.
Instead, we will take a look at green hydrogen’s role and what it really takes to achieve our climate targets.
Green Hydrogen as the Messiah
It is funny that most people have no idea that green hydrogen produced via electrolysis with electricity from renewable sources only makes up about 0.1% of the production today. Yet, they talk about hydrogen as if it is the messiah that will inevitably solve the climate crisis.
The facts are so different. Today, most of the global hydrogen production is still based on fossil energy carriers that generate significant CO2 emissions — rather counterproductive in achieving our climate targets.
I don’t want to crush your optimism, but we are far from where we need to be. If anything, we have crossed the starting line — It is time to get started.
How much green hydrogen do we need to achieve climate targets?
There is a growing body of literature that recognises the importance of green hydrogen as an energy carrier. In fact, many studies agree that it will play a considerable role in achieving climate targets. The question remains to what extent? Let’s consider one of the frontrunners of the energy transition in Europe.
Germany Will Need Green Hydrogen
Germany is pushing towards a sustainable energy system by rapidly expanding its installed capacities for renewable energies like wind and solar. In this context, many studies identify the potential of decarbonising the german energy system by producing green hydrogen with renewable electricity.
I sat my lazy ass down to read a ton of these studies. Here is what three of them say about how much green hydrogen Germany will need:
Hecking et al. (2018) assume that 10% of Germany's total energy demand would be supplied by hydrogen in 2050. That would account for a hydrogen demand of 129 TWh to 156 TWh. To realise these figures, the study suggests the deployment of an electrolysis capacity of about 60 GW.
Furthermore, Brinner et al. (2017) see future hydrogen demand at around 217 TWh in 2050. The study suggests an electrolysis capacity of 85 GW to 100 GW to produce green hydrogen and supply for this demand.
In a similar range, Prognos, Öko-Institut, Wuppertal-Institut (2020) forecast the hydrogen demand in Germany to be 268 TWh in 2050.
These studies present a clear picture: Green hydrogen will be essential. If Germany wants to achieve climate targets, green hydrogen will need to cover around 10 % of the total energy demand in 2050. The electrolysis capacity to supply for this demand would need to be around 60 GW to 100 GW.
Governments Fail Once Again
If we now return to the fact that green hydrogen makes up only a tiny share today, we need to ask ourselves what is planned for the future.
Despite winning the award for being the weirdest year ever, 2020 has also been the year of governments publishing their hydrogen strategies.
Of course, Germany has proposed its hydrogen strategies as an essential part of developing a sustainable energy system based on renewables. In their strategy, Germany foresees the timely deployment of 5 GW electrolysis capacity by 2030 with another 5 GW by 2035, at the latest 2040.
Wait what? Didn’t the studies say Germany would need to install at least 60 GW by 2050 to reach the climate targets? Yes, you’re right, they did.
It is quite apparent: The figures in the national hydrogen strategy are far below the proposed figures in the studies. In this context, there is no way that Germany will install the amount of electrolysis capacity suggested by the studies. This leaves us with a wide gap between supply and demand.
Does that mean Germany will fail its climate targets? Not necessarily.
Prisoners of Geography
Even though I would have loved to see a more aggressive strategy, I cannot blame the German government alone.
Green hydrogen production via electrolysis requires renewable electricity. However, the potential of renewable energies in Germany is limited. There’s only so much free land where you can build wind or solar plants.
Germany is a prisoner of geography — Without renewable electricity, there’s no green hydrogen production!
Green Hydrogen Import
Luckily, other countries have far better renewable energy potential. One notable example is countries in North Africa.
The idea: Countries with access to cheap renewable electricity can produce and then export large quantities of green hydrogen via pipelines or ships to Europe. This way, Germany would have the chance to import additional green hydrogen to narrow down the gap between supply and demand. Furthermore, the global hydrogen market would also be beneficial for all exporting countries. Synergies for all.
It is essential to consider that future cost developments in Europe will eventually determine how hydrogen will establish itself as a chemical energy carrier of the future. Also, ensuring appropriate incentives for the deployment of hydrogen-based applications by reducing fossil fuels’ support through carbon taxes should be a priority for developing a global hydrogen market.
As a final note, Germany heavily relies on green hydrogen imports from countries with low-cost renewable electricity to achieve the respective climate targets of the Paris Agreement.
Thank you for reading!
Tim
