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Hydrogen molecules

Sustainability
Status quo: Hydrogen

When Bill Gates, the founder of Microsoft, supposedly ordered a yacht that runs on hydrogen, the excitement in 2020 was huge. The technology, it seemed, had made it out of its niche after failed experiments as a form of propulsion for cars. The shipyard ultimately denied an order from Gates, but the topic became virulent again after the Russian war of aggression on Ukraine, because even a country like Germany had to realise that it would now have to achieve its climate protection targets without Russian gas, which had been planned as a ‘bridging technology’. What is the current state of the debate on hydrogen?
by David Kasparek | 1/24/2025

Hydrogen is a gas that can be produced from water. To do this, the water must be broken down into hydrogen on one side and oxygen on the other - this process is called electrolysis. For some time now, this process can also be carried out without the costly use of rare precious metals such as platinum. Hydrogen as an energy source is therefore available anywhere in the world where societies have access to sufficient water, it is easy to store and also contains no carbon. However, for hydrogen to be truly CO2-free, it would also have to be produced in such a way that no carbon dioxide is released during electrolysis. So-called ‘green hydrogen’ is therefore produced in an electrolysis process that uses only renewable energies. Electricity that is not generated from burning gas, coal or oil, but from wind, sun or water.

In contrast to hydrogen, electricity generated in this way is more efficient. It is therefore not worth running trains on hydrogen wherever there are already overhead lines – the trains would be more environmentally friendly when travelling with electricity from renewable energy sources because the energy would not have to be converted into hydrogen with further losses. However, on routes that can currently only be travelled with diesel locomotives, hydrogen is a real alternative. As long as it is green. ‘Grey hydrogen’ produced by electrolysis using natural gas or crude oil is possible – and was planned with cheap Russian gas – but it is not CO2-free. Hydrogen is also an alternative where high weight is to be avoided, for example in aeroplanes, which would require huge batteries to run on electricity. But even in the case of lorries, hydrogen-powered fuel cells hardly seem economically viable. The former stock market darling Nikola, whose fuel cell electric lorries were worth more than Ford just a few years ago, is increasingly getting into financial difficulties, Mercedes is now also relying entirely on battery operation, and an international shipping giant has ordered more than 200 units of the Tuck eActros, which is looking surprisingly glum in the face of these figures.

Hydrogen supply line of an electrolyser

Good in principle, but...

At present, far more energy has to be used to produce hydrogen than is released when it is utilised. The efficiency of the conversion is currently between 20 and 30 per cent, so it is more effective to either temporarily store the electricity generated from the sun, wind and water in large-scale battery storage systems or to use it directly, for example to power houses, trains or even cars - even if they are stuck in the permanent traffic jams of large cities anyway. The construction of large storage systems is now much more profitable than it was a few years ago due to the low lithium and therefore battery prices, making it significantly more economical than hydrogen production, according to experts in the cautious industry. The production of such large storage systems has become significantly cheaper in recent years, partly due to the extraction of lithium in Europe. In the Upper Rhine Plain in Germany, for example, it is extracted from water stored in deep layers of rock using deep drilling and water pressure.

According to the current government's plan, CO2 emissions in Germany are to fall by 65 per cent by 2030 and Germany is to be CO2-neutral by 2045. Too late, as critics criticise. One of the problems that arises is the fact that Germany is far from being able to produce enough hydrogen to cover its own energy needs. Germany has therefore concluded so-called ‘energy partnerships’ with a number of countries that potentially have everything it needs to produce green hydrogen: Namibia, Chile, Canada and Australia, for example. Such partnerships also exist with autocratic states such as the United Arab Emirates or Saudi Arabia, which is dreaming of a hydrogen-producing city, not least in its questionable gigantomy project Neom: Oxagon is to be built on the Red Sea and on a polygonal ground plan, partly floating, designed by the Danish office BIG. Whether of autocratic or democratic origin, the hydrogen must be transported. By pipeline or ship. It then needs to be distributed in Germany. To some extent, existing infrastructures could be used for this, such as existing pipelines, which are still largely used for fossil fuels.

Hydrogen pipeline

Too little and too expensive

‘In the past three years, global project announcements for green hydrogen have almost tripled,’ says Adrian Odenweller, who led a study at the Potsdam Institute for Climate Impact Research that analysed 1,232 globally announced hydrogen projects. Odenweller explains in a press release from the institute: ‘However, only seven per cent of the production capacity originally announced for 2023 has been completed on time during this period.’ According to the study, the latest problems with the so-called ‘market ramp-up of green hydrogen’, i.e. its widespread use, can be attributed to ‘increased costs, a lack of willingness to pay on the demand side and uncertainties about future subsidies and regulation’.

The only thing that is clear at the moment is that Germany alone will not produce as much hydrogen as it will need to realise the planned and urgently needed energy transition and is therefore dependent on imports. A study by four Fraunhofer Institutes in Karlsruhe, Freiburg, Halle and Dresden suggests that the demand for hydrogen for steel production in Germany alone will increase to six terawatt hours per year by 2030 and to 38 to 56 terawatt hours (TWh) per year by 2050. According to the Federal Network Agency, in 2024, 254.9 TWh of total generation was generated by renewable energy sources, which corresponds to 59 per cent of the total amount of energy generated in Germany last year of 431.7 TWh of electricity.

One component of many

The fact that nuclear power cannot be a remedy is shown not only by the rising costs of the new Hinkley Point C power plant in the UK and the new reactor 3 in Flamanville in France, each of which is an economic disaster in itself, but also by the assessments of those who could theoretically earn money with nuclear power, such as Siemens, RWE, Preussen Elektra, which belongs to E.on, or EnBW. Joe Kaeser, Chairman of the Supervisory Board of Siemens Energy, stated on the German TV programme ‘Sandra Maischberger’: ‘There is not a single nuclear power plant in the world that is economically viable.’ Jörg Michel, head of EnBW's nuclear division, said elsewhere: ‘We don't believe that building new nuclear power plants in Germany would be a solution to today's energy supply problems.’ Nuclear power without massive state subsidies is therefore not possible, and the question of how to deal with the thousands of years of toxic waste is still unresolved.

What remains are renewable energies from deep underground, from wind, water and sun, and hydrogen. Like other technologies, it will not be the sole solution to the energy transition, but it will be one of many building blocks. Within this framework, the so-called ‘southern hydrogen corridor’ is to be created over the next few years, via which hydrogen from Tunisia and Algeria is to be transported to Italy, Austria and Germany through a 3,500 to 4,000 kilometre-long direct pipeline. Philipp Nimmermann, State Secretary at the Federal Ministry for Economic Affairs and Energy, emphasised in a statement from the ministry that the ‘immense potential of North Africa for renewable energies’ could be utilised in this way. In future, around 55 terawatt hours of green hydrogen are to be channelled to Germany every year.

Electrolysis plant of WUN H2 GmbH, Bavaria