Germany steps up hydrogen production infrastructure

Spanish Market: Electricity, Hydrogen
15/04/21

Germany is stepping up its hydrogen production infrastructure, as the economy and energy ministry this week announced a second round of calls for hydrogen test fields

The economy and energy ministry's head of energy policy Thorsten Herdan said that the second call for projects to qualify as test fields will be issued before parliament dissolves in the summer, ahead of federal elections in September.

Test fields will become a "fixed part of the energy transition, and of [the government's] energy research policy", Herdan said at the inauguration of the hydrogen "northern field test" (NRL) covering the states of Hamburg, Schleswig-Holstein and Mecklenburg Western Pomerania.

The NRL project is one of 20 field tests that qualified in the first round of calls.

"Green hydrogen will be needed in quantities impossible to conceive," federal economy and energy minister Peter Altmaier said at the NRL inauguration. Altmaier added that it is not about whether hydrogen will be produced in Brazil or in Morocco or in other countries, "but it is about [hydrogen] being produced all over the world".

The NRL field test, made up of 25 individual projects, was awarded €52mn ($62mn), of total investment costs of €300mn borne by the partners, which include utilities and industry companies. NRL will make an "important contribution to the roll-out of Germany's hydrogen infrastructure", Altmaier said.

NRL includes plans for eight electrolysers with a total electrolysis capacity of 42MW. This will make it possible for the north's strong winds to be used by industry, including Europe's largest copper producer Aurubis, based in Hamburg, and for heating and transport uses, the city state of Hamburg's prime minister Peter Tschentscher said. Tschentscher pointed out that Germany's north must curtail around 3TWh of renewable power every year due to grid bottlenecks.

Junior energy minister at the economy and energy ministry Andreas Feicht said that projects such as NRL will "lead to the development of processes, products and models", which will make it possible "for us not just to have and to use hydrogen, but also to have low-cost hydrogen".

Herdan said the needs of the hydrogen customer, "the customer's point of view", will now increasingly be at the centre.

Disagreement persists in Germany over the extent to which hydrogen consumption should be rolled out, over the role that should be given to other types of hydrogen — such as "blue" hydrogen — or to imported hydrogen, and whether to locate electrolysers close to renewables generation sites, or close to off-takers.

NRL manager Werner Beba said that Germany should first build up its hydrogen industry "on a large scale", and "then think about imports".

Olaf Lies, the energy and climate minister of Lower Saxony, also a northern state, this week said that the "correct order" should not be to first extend green hydrogen production, and to decarbonise only once there is enough green hydrogen in the system. Rather, blue hydrogen — produced from natural gas, of which the carbon is sequestered and stored — will be necessary for an interim period, Lies said.

The federal government so far supports green hydrogen only, including imports of green hydrogen.

Research institute Fraunhofer IEG acting director Mario Ragwitz this week at an event of the opposition Green Party suggested that Germany, or Europe, take up a "pioneering role" in developing guarantees of origin for green hydrogen.

Ragwitz cautioned that the domestic uptake of hydrogen remains unclear in some sectors, for instance the heating sector.

Germany's competitiveness is also viewed as an increasingly pressing issue. Tschentscher voiced his fears of Germany being left behind by Japan and China regarding hydrogen technology. "But when I look at the test field, then I feel that maybe we won't be left behind," he said at the inauguration.

By Chloe Jardine

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

20/12/24

Brazil Bndes invests more in Sao Paulo EV fleet

Sao Paulo, 20 December (Argus) — Brazil's Bndes development bank approved R94.8mn ($15.6mn) in financing for transport company MobiBrasil to buy 87 electric buses in Sao Paulo city. The environment ministry's climate fund — created to finance climate change mitigation projects and Bndes — will be responsible for R45mn. A federal fund to provide financial security to the unemployed, dubbed FGTS, will be responsible for the remaining R49.8mn. This is Bndes' first operation using FGTS resources. Earlier this month, Bndes said it will invest R2.5bn to buy 1,300 EV-buses in Sao Paulo city . On 9 December, the city's council postponed the bus fleet transition from diesel-powered to EVs to 2054 from the previous 2038 deadline. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: EU at crossroad on H2 rules, competitiveness

20/12/24

Viewpoint: EU at crossroad on H2 rules, competitiveness

London, 20 December (Argus) — The new team of EU commissioners will enter 2025 bent on reversing the bloc's economic stagnation and the flight of industry to cheaper parts of the globe, which have been salient themes in 2024. Hydrogen industry participants will keenly monitor Brussels' choice of interventions, which promise to restart the sector's engine, but must avoid undermining faith in rules. Pledges from re-elected president Ursula von der Leyen to tackle overcomplexity and "structurally high energy prices" both concern hydrogen, and her notion of a pivotal moment for the EU rings true for the hydrogen market because of its connection to industry and because stubborn costs and underwhelming growth in 2024 undermined confidence. Frequent vows for urgency, simplicity and speed have worn thin, and the European Commission's latest reformist push could flatter to deceive. But multiple warning shots fired last year — including from the European Court of Auditors and respected former Italian prime minister and president of the European Central Bank Mario Draghi — pile on pressure to tweak hydrogen policy in 2025. The auditors' report urged a "reality check" and strategy review, cautioning Europe could spectacularly miss its targets, while Draghi stressed cost-efficient decarbonisation to protect European industry — a view shared by member states and energy-intensive companies. Von der Leyen's "Clean Industrial Deal", promised inside 100 days of her new term, could set the tone. But some, like chemicals firm BASF, have already voted with their feet by relocating jobs outside Europe. For hydrogen, the commission's easiest reform might be setting realistic 2030 targets to replace the 20mn t/yr renewable hydrogen supply, since industry deems it impossible and the commission's own notes predict a 3mn-6mn t/yr market. But this is hardly the most pressing change and would not help morale. A more radical move would be to somehow relax the renewable hydrogen definition, which many market participants consider overly burdensome. The bloc's biggest economy, Germany, put its weight behind changes in September, saying "reality has now shown these requirements were still too high". Berlin's volte-face could hand Brussels an easier climb down. But reopening that can of worms would dent the investment climate and distract from the low carbon hydrogen rules coming in 2025. All this makes radical change risky, but postponing certain aspects might be slightly more palatable. Brussels must also decide to maintain or soften its 2030 mandates for renewable hydrogen. Several countries and companies want openness to hydrogen from other low-carbon production pathways, which are backed in the US, Canada, the UK and others. Some have more fundamentally urged freedom to find the cheapest route towards cutting CO2. The first interpretation of the industry mandates from the Netherlands highlights the difficulty balancing mandates with fair competition versus competitors inside and outside the bloc. But loosening rules would frustrate first movers that took pains to comply. Moreover, some firms champion the EU's forte of creating demand via rules over subsidies that cannot last forever nor compete with the US. "Don't blink, because people will invest money against 2030 mandates," Spanish integrated Moeve's director and chief executive Maarten Wetselaar urged Brussels recently. EU policymakers accept they must cut hydrogen costs and are weighing options with member states. "The market has changed, and we are probably more technology neutral and more colour friendly than we used to be... this is realism," commission deputy director general for energy Mechthild Worsdorfer said in November. But Worsdorfer opposed "changing anything right now" after the "intense" debates to settle definitions. Commission and members will "find the right balance", Worsdorfer said, but hydrogen participants need clarity sooner rather than later. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s Cleanaway, LMS to produce landfill gas

20/12/24

Australia’s Cleanaway, LMS to produce landfill gas

Sydney, 20 December (Argus) — Australian waste management operator Cleanaway and bioenergy firm LMS Energy will partner on a 22MW landfill gas-fired power station at Cleanaway's Lucas Heights facility near the city of Sydney. Cleanaway, Australia's largest publicly listed waste management firm, will receive exclusive rights to landfill gas produced at Lucas Heights for 20 years, the company said on 20 December. LMS will invest A$46mn ($29mn) in new bioelectricity assets, including a 22MW generator. Tightening gas markets owing to underinvestment in new supply has led to speculation that more waste-to-energy plants could be brought on line in coming years, especially in the southern regions. Landfill gas projects receive Australian Carbon Credit Units (ACCUs) by avoiding methane releases, with the total ACCU quantity calculated after a default baseline of 30pc is deducted for projects beginning after 2015. A total of 42.6mn ACCUs were issued to landfill gas projects since the start of the ACCU scheme in 2011, 27pc of the total 155.7mn and the second-largest volume after human-induced regeneration (HIR) methods at 46.68mn. Canberra is reviewing ACCU issuance for these projects, and wants most projects to directly measure methane levels in captured landfill gas to avoid overestimation. Landfill gas operations which generate electricity from the captured gases can also receive large-scale generation certificates (LGCs). LMS has 70 projects currently registered at the Clean Energy Regulator (CER) and has received 24.57mn ACCUs since the start of the scheme. This is the largest volume for any single project proponent, just ahead of Australian environmental market investor GreenCollar's subsidiary Terra Carbon with 23.57mn units. Cleanaway received almost 1mn ACCUs from two projects and has four other projects that have yet to earn ACCUs. By Tom Major and Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Reliability drives New Zealand power mix: Minister

19/12/24

Reliability drives New Zealand power mix: Minister

Sydney, 19 December (Argus) — New Zealand's conservative coalition government wants to ensure reliable generation, whether that is from coal, oil, gas, or geothermal resources, the country's resources minister Shane Jones told Argus this week. Jones was also clear about the need to draw a distinction between "the expectations on [a] small, open trading nation like [New Zealand] not to use coal and the major hope[s] and needs of the average New Zealander for affordable power, reliable power." "If [reliable power] comes from coal, that's the mix and the menu for the future," he added. Jones argued that existing renewable power sources cannot exclusively provide for New Zealand's energy needs. He instead suggested that his government is interested in promoting alternative power sources such as oil, gas and geothermal, through investments and policy changes. New Zealand's coal-fired power generation surged between July-September, according to the New Zealand's Ministry of Business Innovation and Employment (MBIE). Coal rose to 8pc of total generation from 3pc a year earlier, following a drop in hydroelectric power production. The country burned 363,513t of coal over those months, more than tripling its use for power generation purposes compared to the same period last year. Oil, gas Jones has taken steps to boost the country's oil sector since taking office in late 2023, following the coalition's victory over the centre-left Labour party. The minister introduced the Crown Minerals Amendment Bill in June, a piece of legislation that he described as being "aimed at increasing investor confidence in petroleum exploration and development." Jones told Argus that under the previous government, "people who may have been willing to [make] investment[s] and bring patient capital concluded that New Zealand was no longer available as a destination for oil and gas and this has resulted in a diminution in [oil] investment." The Crown Minerals Amendment Bill will overturn a 2018 ban on offshore oil exploration, which was introduced while Jones was serving in an earlier Labour-led coalition government. New Zealand's oil sector increased its annual well spending from NZ$110mn ($63.2mn) in 2018 to NZ$403mn, in the years following the ban in 2018. The total number of active oil permits in the country has plunged from 56 to 37 over the same period, MBIE data show. New Zealand likely houses at least 223.5bn m³ of undiscovered, offshore gas reserves; 249mn bl of undiscovered, offshore oil reserves; and 177mn bl of undiscovered, offshore NGL reserves, mostly scattered around the North Island, according to US Geological Survey (USGS) estimates in 2022. The country's discovered, recoverable reserves are at between 38.3mn-52.7mn bl of oil; 29.4bn-39.8bn m³ of gas; and between 1.2mn–1.4mn t of LPG as of 1 January 2024, according to the MBIE. Besides restarting oil exploration, the Crown Minerals Amendment Bill also seeks to change permitting processes to drive capital into the sector. Permits are currently allocated through a competitive tender process, Jones told Argus this week. The government wants "the flexibility to use alternative processes to match investor interest in the most efficient and effective way by allowing the option of using non-tender methods." MBIE has indicated that the government may start using ‘priority in time' tenders, which allocates permits to the first eligible projects that apply for them, once the bill passes. But the Crown Minerals Amendment Bill does not specify how the government will manage non-competitive tenders. The government is also not using the Crown Minerals Amendment Bill to "specifically intervene in coal mining operations" in New Zealand, Jones said. But coal demand will fall "in the event that [the government is] able to expand the supply of indigenous gas," he noted. Geothermal The government's energy strategy also appears to involve doubling down on domestic geothermal generation, which is New Zealand's second most common source of power. Geothermal generators produced 2,363GWh of power between July-September, accounting for 20.5pc of total generation, in line with historical averages, according to MBIE data. New Zealand's government seems to be trying to push that share up. The government in early December decided to allocate up to NZ$60mn of public infrastructure funding to research for deep, geothermal energy production. The work will focus on drilling geothermal wells up to 6km deep, nearly twice the depth of standard wells. Jones told Argus that New Zealand officials are currently in Japan, discussing supercritical geothermal generation opportunities with engineers and scientists. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Western Australia's near-term gas supply rises: Aemo

19/12/24

Western Australia's near-term gas supply rises: Aemo

Sydney, 19 December (Argus) — The short term supply outlook for Western Australia's (WA) gas market has improved, but gaps in the next decade need to be addressed, according to an Aemo annual report. The near-term gas supply is stronger than last year's outlook, with supply now forecast to exceed consumption through to 2027 on increased flows from LNG projects and declining near-term consumption, according to the 2024 Western Australia Gas Statement of Opportunities (GSOO) paper from the Australian Energy Market Operator (Aemo). Ample gas supply is expected because of increased flows from Wheatstone and Pluto LNG projects and new supply including forecast volumes from 2026 onwards from Woodside's Scarborough project and Strike's 87 TJ/d (2.3mn m³/d) West Erregulla plant . But demand is weak on the back of the shutdown of several nickel mines for maintenance in 2024 and the closure of the 2.2mn t/yr Kwinana alumina refinery announced in January. Aemo's 10-year outlook to 2035 now forecasts surplus gas until 2028, when some gas users will reopen projects. It also forecasts a less steep shortfall in the 2030s, with 2033 supply now 13pc below demand, down from the 27pc decrease in the 2023 GSOO. New gas supply will still be needed as WA plans to close its state-owned fleet of coal-fired power stations, but increasing renewable generation will shift gas usage in the power grid to a firming capacity, with gas-fired power demand tipped to increase in the early 2030s but stabilise at present levels of about 190 TJ/d by 2040. But uncertainty remains about the future of coal in the WA grid. The 416MW Bluewaters coal-fired plant, owned by Japanese firms Kansai Electric and Sumitomo, is expected to retire by 2030-31 but may be forced to close earlier because its supplier, the 2mn t/yr Griffin coal mine , cannot guarantee deliveries beyond October 2026. This will increase gas demand. The WA state government reversed a blanket ban on exporting onshore gas as LNG in September after a parliamentary inquiry into the state's domestic gas policy prompted by concerns from major gas users such as fertilizer manufacturers and metals refiners. Developers are now permitted to export 20pc of production as LNG until 2031 to boost upstream investment in the prospective Perth basin. By Tom Major WA gas supply and demand 2024-34 (TJ/d) 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Potential gas supply 1,143 1,190 1,121 1,207 1,192 1,412 1,335 1,301 1,214 1,173 1,144 Gas demand 1,119 1,069 1,082 1,154 1,354 1,342 1,357 1,378 1,371 1,343 1,336 Difference (% ± of demand) 2 11 4 5 -12 5 -2 -6 -12 -13 -14 Source: Aemo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more