Market is developing really well

by Hydrogeit | Nov 14, 2022 | Germany

Dr. Werner Tillmetz has not only promoted the advancement of hydrogen and fuel cell technology for many years, he has also at various points played a decisive role in shaping it – be it as a board member of the PV and fuel cell research institute of the state of Baden-Württemberg (Zentrum für Solar- und Wasserstoffforschung, ZSW) or in the formulation of the national support program for hydrogen and fuel cell innovation (Nationales Innovationsprogramm Wasserstoff- und Brennstoffzellentechnologie, NIP). Sven Jösting, on behalf of H2-interntional, spoke with Tillmetz, who after retiring founded an H₂ business network for the Lake Constance Region called h2connect.eco, and asked him for an assessment of the current developments.

H2-international: Dr. Tillmetz, you have dedicated your life to fuel cells, as people can tell from reading your wonderfully written book “Wasserstoff auf dem Weg zur Elektromobilität” (hydrogen on the way to e-mobility). Where are we today regarding fuel cells in mobility?

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Interestingly, I’ve dealt with all these topics – electrolysis, fuel cells, batteries – somewhat equally, having worked in a wide variety of companies as well as in research. Quite an exciting wealth of experience. In the case of the fuel cell in mobility, it is fascinating to follow the now very broad and worldwide industrialization. Asian companies have started series production, but also German and European companies are now very successful in this. Technologically, fuel cells are ready for the market.

You are closely connected to development at Canadian company Ballard Power – including via cooperations with Ford, Daimler, and so on. Can you briefly describe for our readers how you’d valuate Ballard today?

In the 1990s, I was one of the pioneers in actively shaping the activities at these companies. Since 2003, I’ve been following the activities very intently from the outside and still have good contacts in the scene that I stay in touch with. When judging companies such as Ballard, on the one hand there is the technological point of view. In this respect, Ballard belongs, like previously, to the leading players. However, crucial is always economic developments. Here, the quarterly reports of the various publicly listed hydrogen startups give me pause, since with very few exceptions, losses have been similar to sales in value for the last twenty years. However, the market has only really recently started to develop well, primarily driven by legislation around the world towards climate protection. The number of acquisitions and the associated valuations are also impressive.

How would you appraise battery development? Why is especially the automotive industry set on battery-electric mobility and attempting to copy Tesla?

This is quite an exciting phenomenon. In recent years, the vehicle industry has failed to continue curbing global emissions legislation. At the same time, Tesla, an initially ridiculed competitor, came to the market and increasingly took sales away from the established companies in the high-margin segments. Quick action was called for, and the strategists reflexively said to themselves, “What Tesla can do, we can do too.” In this, they overestimated themselves and underestimated Tesla.

With e-vehicles, energy consumption and charging infrastructure are decisive. Tesla has excellently mastered both, while the big car companies, for example, are trying to delegate the issue of charging infrastructure to the state and to energy suppliers. With their billions in annual profit, they could make it themselves too – but profit takes precedence.

Two other major hurdles for the battery are becoming increasingly visible: where all the raw materials are going to come from and how enough green electricity for (fast) charging can be provided to meet demand.

There are various models of how hydrogen will be brought to use in motor vehicles. For example, there are models put forth in which ammonia, methanol or hydrogen (liquid or gaseous) are directly used in the engine – without the detour via a fuel cell. How do you assess this development? Is there a winner?

In general, we should be open to technology and let the engineers develop the best solutions. The legislators should only define the guard rails such as emissions. In my view, there are two crucial issues: the efficiency of the drive system and the availability of green fuel at the “gas station.”

For the dynamic operation of vehicles, electric motors with a battery have enormous advantages – a mechanical drive cannot achieve this efficiency. The (small) battery, however, can be charged by an engine or a fuel cell during the trip (serial hybrid) and then be run at the best time.

With regard to the supplying of the fuel: Hydrogen can, ideally, be directly generated in the region or transported by pipeline from sun- and wind-rich regions to filling stations throughout Europe. For the cost-effective overseas transport of energy from the world’s many sun belts, ideal is a fuel that is liquid at ambient temperature and easy to produce: methanol. At electricity prices of less than one euro cent per kilowatt-hour, the costs for generation play a very minor role. We are still at the very beginning of a marathon run – only at the finish will the wheat be separated from the chaff.

Competition has flared worldwide. What countries do you think have the better approaches?

German and EU policy is not very well thought-out strategically and is influenced by ideology in many places. On top of that is the very discussion-happy society and grassroots democratic structures that make much very slow. On the other hand, there are excellent, creative engineers and skilled workers and a solid industrial infrastructure, especially with the many family businesses that think long-term. Asian countries often have a better thought-out strategy and are much faster to implement. Last but not least comes California, with its extreme capital and readiness to take risks – the latter seems to be lost in Germany.

Now we come to charging infrastructure: electric charging stations versus hydrogen refueling stations. What should it be, do you think? Are there any critical views or visions about this that you have?

Battery-electric vehicles are best charged when and where there is direct green electricity and the fully charged battery is sufficient for a few days of driving – even when the sun is not shining or the wind is not blowing. This can also be the case at the employer’s, for example, if they equip the parking spaces with photovoltaics or install small windmills on the roof. For all frequent drivers, city buses and transport companies, fast, flexible refueling is critical: you can fill up with green hydrogen or green methanol anytime, anywhere.

Where do you see the fuel cell going in the passenger car market? In the commercial vehicle, they’re indeed convinced that a fuel cell is advantageous over a battery for long journeys. What is the situation with passenger cars? Note there are rumors Apple could be entering the market with an iCar in 2024 that would make use of a small battery for short hauls and a fuel cell (H₂) for long hauls. Do you think that’s realistic?

Modern fuel cell drives, including the tanks, are significantly lighter and smaller than a battery, for the ranges often required. The difference to the classic combustion engine is barely there. Whereas installing a battery of over 600 kilograms in a car or of up to five tonnes in a truck really makes no sense. Apple’s concept is good and is already commercially offered for the delivery vans and trucks of Renault and the Stellantis brands.

Which countries are ahead regarding fuel cells, and why?

It’s more about the companies than the countries. Both Toyota and Hyundai are taking their respective products (fuel cell system) into many applications and markets. That achieves quantity and thus reduces costs. Bosch has a powerful strategy and will supply its partners around the world very quickly. The French car companies have positioned themselves well with strategic partners. And of course so have the many Chinese companies, who will reach really large quantities the fastest.

Could you please develop a future scenario for the fuel cell and hydrogen? Where, in your opinion, do we stand today, in five years, in ten years and in 2040 in terms of hydrogen and fuel cells, but also batteries?

We are standing at the very start of a marathon. The changes will be as dramatic as they were more than a hundred years ago, when Henry Ford’s gasoline-powered carriage replaced horse-drawn carriages and the internal combustion engine completely changed the world for the next hundred years. With disruptive innovations, the changes are extremely rapid and hardly predictable, as the example of Kodak and digital photography has also shown us. The battery alone will not be the magical solution for everything, as Bosch chairman Stefan Hartung recently made very clear. To be able to get a handle on climate change at all, we need all options and, above all, more action than discussion.

What would policymakers (Germany, EU) have to do to give fuel cells and hydrogen in mobility a boost?

Be open to technology and have a holistically thought-out strategy. For this, it helps to look out of the window from time to time to see whether there is enough sun or wind to ensure the energy supply for all consumers.

Interviewer: Sven Jösting

Contribution to the efficiency debate

With reference to the guest opinions on e-fuels from the May 2022 issue of H2-international

“Efficiency first” or “Efficiency is key” – is what countless headlines read. This is then backed up with graphs that all suggest that battery-electric e-vehicles are dramatically better than fuel cell and hydrogen e-vehicles. And e-fuels rank far behind in last place. Often the efficiency (fuel or energy consumption) of the vehicle is then lumped together with that of the upstream chain (fuel production). A comparison with reality almost always leaves something to be desired.

Comparing the energy consumption between vehicles should actually be quite easy, if you also compare vehicles that are similar to each other. The consumption (or fuel economy) is stated in the sales prospectuses and is determined in accordance with criteria prescribed by law – unfortunately in varying units: electricity in kilowatt-hours, hydrogen in kilograms and liquid fuels in liters (or gallons), without taking calorific value into account.

The real world of consumption can be found in a thorough examination of the test reviews. There, one quickly discovers that the 20 to 30 percent advantage of battery-powered vehicles practically disappears in winter, when both the passenger compartment and the battery (for fast charging) have to be heated.

Now to the upstream chain of electricity or fuel production. Here, it is almost always assumed that the electricity to charge the battery comes directly from the photovoltaic or wind power plant. The fact that no sun shines at night, nor through rain, snow or fog, is interestingly omitted. The wind also does not always blow, especially in the South of Germany. If the electricity for charging the battery is generated via a gas turbine (efficiency: 40%) powered by natural gas, or in the future hydrogen, then hopes of first place in efficiency are quickly deflated. The direct use of hydrogen in a fuel cell vehicle makes more sense here.

This is true even if the electricity is 100 percent green. On many days in Germany, there is much more electricity from wind or sun than we need. Yet especially in the winter months, there may be no wind or sun for days. So the electricity needs to come from the wind- and sun-rich times of the year. The storage of such large amounts of energy, however, is only economically feasible with hydrogen.

Today, two-thirds of our energy supply is imported (oil, gas and coal). Although 100 percent self-sufficiency is theoretically possible in Germany, in reality it’s rather unlikely. Importing green energy from very sunny and windy regions makes a lot of sense economically. Transport via power lines will, however, be limited to certain regions such as the North Sea. Using the existing European gas grid for the transport of green energy in the form of hydrogen is more than logical. For overseas transport, liquid energy sources such as methanol or kerosene (e-fuels) are becoming unbeatably attractive. It is furthermore much more efficient to use this in the drive system than to remake electricity from it.

The green energy supply of the future, thought through to the end, is very different from what most headlines today suggest: electricity, hydrogen and e-fuels are all sensible green energy sources.

Author: Werner Tillmetz

South Korea on a hydrogen mission

by Hydrogeit | Nov 14, 2022 | Germany

The idea that a crisis can be seen as an opportunity ripe for exploitation is one that is extremely widespread in South Korea. The country is investing massively in both hydrogen technology and the hydrogen economy with the aim of minimizing the environmental impact of its industrial and energy sectors. Having previously built up a successful semiconductor industry from scratch, South Korea plans to leverage its experience of adapting and developing disruptive technologies. And it’s a pragmatic route that the nation has chosen to get there, placing an emphasis on the creation of positive market dynamics over and above the ultimate goal of achieving net-zero.

This pragmatism is combined with the structural tendency (path dependence) to find the lowest common denominator that can achieve cross-party agreement when it comes to long-term strategy. Even though the fundamental elements of energy policy are known, it remains to be seen how the newly elected conservative government will fill out the policy framework.

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Here, just as in Europe, the taxonomy of clean hydrogen is a weighty issue. Similar to the situation in other European countries, it’s not just technical path dependences but also political ones that are dictating the future hydrogen color spectrum and the classification of clean hydrogen. Current political events, such as the recent election of the conservative government, are having a specific effect on how this is playing out.

“Korea New Deal” creates framework

The COVID-19 outbreak put the brakes on global economic activities to such a degree that a significant decrease in pollution levels could be measured in some locations. However, the economic impact of the pandemic was felt much more severely by many people, especially in the United States. In order to quickly tackle the country’s financial and social problems as well as ultimately address the environmental crisis, the US launched its “Green New Deal” in 2019 with the aim of bringing about the long-term decarbonization of its economy. There was no mistaking here that the financial and environmental crises were being viewed as an opportunity for more sustainable development.

The idea fell on fertile ground in South Korea which by comparison fared well through the pandemic, having avoided full lockdowns and high excess mortality figures and only experiencing a slight economic downturn. On July 14, 2020, President Moon, from the liberal government at the time, presented the “Korea New Deal” which outlined an overall volume of investment that equates to EUR 117 billion by 2025, of which EUR 84 billion was expected to come from state coffers and the rest from private enterprise.

From the total, more than EUR 53 billion are planned to be used for the environmental restructuring of industry, energy generation and housing infrastructure. The remaining funds are earmarked for digitalization and education in the widest possible sense. The Korea New Deal, which also explicitly mentions hydrogen as an energy carrier and hydrogen technology as an instrument on multiple occasions, is the policy framework in which the state-inspired project to establish a hydrogen industry is lodged.

Road map to Korean hydrogen economy

The liberal government, which was voted out of office in May this year, had previously presented its road map to stimulate the hydrogen economy in January 2019. A McKinsey study on the market potential of the hydrogen economy to 2050 described the establishment of a hydrogen economy with its own technology as a huge opportunity. In addition to the desired economic growth fueled by market participation, the report expected that jobs would be created in midsize companies, technology leadership might be established – thus creating chances for further direct investment from abroad – and enormously high dependence on fossil fuel imports would gradually decline.

What’s more, the hope was also expressed that huge savings would be made in terms of greenhouse gas emissions and particle pollution. While South Korea doesn’t have a long tradition in hydrogen technology to look back on, it is familiar with the rapid adaptation and development of disruptive technologies and has the necessary motivation to achieve this. Indeed it has announced the following specific targets announced for 2040:

Hydrogen given legal weight

To Western observers, such targets will doubtless seem very ambitious or indeed unrealistic and only time will tell whether they can actually be achieved. Nevertheless, any assessment must take into consideration the fact that the Korean hydrogen industry is embedded in an entirely different legal and policy framework to the European model. For instance, the hydrogen law that was passed in February 2020, which currently comprises eight chapters and 62 articles and was the first law of its kind in the world, now governs key areas concerning the systematic development of the hydrogen economy. Furthermore, the then government, together with the national hydrogen council, set up an expert commission on the regulation and control of policy content and processes relating to hydrogen technology and the hydrogen economy.

The first major area of the hydrogen law can be said to be the legal framework surrounding state-supported “hydrogen-specialized enterprises.” These are defined as small- and medium-sized companies which, depending on their overall turnover, generate between 10 and 50 percent of their income from hydrogen technology and dedicate 3 to 15 percent of their investment to hydrogen-related R&D activities (cf. chapter 1, article 2, paragraph 3). The law sets out various incentives to attract companies for the newly created certification scheme as well as for the overall national hydrogen industry project. These inducements may include more than EUR 100,000 of funding per company which can take the form of technical support (e.g., development, certification and patent registration) or commercial support (e.g., advertising, trade fair participation, market research, design development and brand development) (cf. chapter 3, article 9).

Additionally, certified companies are able to receive help and advice from H2KOREA, a consultancy financed by the state and the private sector that is tasked with promoting the hydrogen economy and which also receives a mention in the hydrogen law (chapter 5, article 33). The law further sets out that the legislator can urge energy suppliers, which are generally state owned, to expand hydrogen production and utilization capacity (cf. chapter 4, articles 19 – 21).

To boost the build-out and development of infrastructure, including facilities for development and testing, the legislator also focuses on the designation of “hydrogen-specialized complexes” (chapter 4, article 22). This primarily involves the creation of industrial clusters that can accommodate companies as well as research facilities and educational institutions in order to generate synergies and spillover effects between the organizations involved. In this regard the law creates a framework that allows decisions to be made about where the specialized complex designation is used and what proportion of funding will be allocated. These special-purpose hydrogen zones are being planned primarily in the northeastern Gangwon Province, the southeastern Gyeongsang Province, the southwestern Jeolla Province and the northwestern industrial city of Incheon.

The same law also provides for the expansion of hydrogen demonstration projects (chapter 4, article 24). So as to ensure price stability on the supply side, the legislator obliges gas suppliers to trade natural gas for reforming purposes at a capped price (chapter 4, paragraph 25). However, specific rates have not yet been set. Other key areas are, for example, the training of specialist personnel (chapter 5, paragraph 26), the creation of applicable industry standards (chapter 5, paragraph 27) and the encouragement of acceptance among the general public (chapter 5, paragraph 31). As revealed by the law’s full title (the Hydrogen Economy Promotion and Hydrogen Safety Management Act), its main concern is to put in place rules that cover the safety management of this new technology.

Korea H₂ Business Summit

Evidence that the country’s hydrogen ambitions are also shared by industry, and are not just the subject of a government decree, can be found in the guise of the Korea H₂ Business Summit which was held for the first time in September 2021 in South Korea. Among the 17 founder members of this initiative are leading national groups and corporations that are keen to cooperate on hydrogen technology. Many of these groups have already pledged billions in financial support. According to media reports, total investment in the lead-up to 2030 runs to more than EUR 31 billion.

Groups invest billions

One company that particularly stands out is the conglomerate SK Group, which wants to become one of the top hydrogen producers over the coming decades. More than EUR 13.5 billion are set to be channeled into creating production capacities of more than 250,000 tons per year up until 2030. As a result, Boryeong, a city situated on the west coast which also has its own liquefied natural gas terminal, is expected to become the world’s largest hydrogen factory. At the moment SK is concentrating its efforts on manufacturing affordable blue hydrogen which should accelerate the build-out of the entire value chain from transportation through energy extraction. As a logical extension of this, SK is also investing in increasing the number of refueling stations and expanding fuel cell capacities. That said, the company has already signaled that it intends to invest in production capacity for green hydrogen as well.

Also automotive manufacturer Hyundai has restated its commitment to hydrogen mobility, claiming it will make a total investment of more than EUR 8 billion by 2030. Despite the continuing commercial success of its hydrogen-powered Nexo model, the corporation recently announced that it would be pausing the development of its successor, Genesis, in a surprise admission that affected the stock prices of many suppliers. However Hyundai has clarified that the deferment is only due to internal restructuring of development and that the company is still maintaining its hydrogen course.

The automaker is currently working on a compact 100-kilowatt fuel cell which it says will save a good 30 percent in space and around 50 percent in price compared with the 200-kilowatt fuel cell that was incorporated in the Nexo model. This, it explains, will not only greatly broaden its scope of application in the mobility sector but will also potentially widen its customer base. Besides further developing its hydrogen mobility portfolio, Hyundai is also involved in the serious task of expanding fuel station infrastructure.

Another important member of the Korea H₂ Business Summit is the steel giant POSCO which is planning to invest more than EUR 7 billion in hydrogen by 2030. On the one hand, POSCO is building industrial plants for extracting gray and blue hydrogen but it is also eager to create capacity for green hydrogen in the longer term. What’s more, the group intends to decarbonize its core steelmaking business and, to this end, is increasing its use of hydrogen direct reduction, a process which has been promoted since 2003 under the Finex brand. The company’s goal is to switch its manufacturing operations completely to hydrogen direct reduction by 2050.

Fig.: Hyundai Motor Group Chairman Eui-sun Chung, SK Group Chairman Tae-won Chey, POSCO CEO Jeong-woo Choi and Hyosung Group Chairman Hyun-joon Cho take photos in front of Hyundai Motor’s hydrogen fuel cell truck

One major corporation that is placing much greater emphasis on green hydrogen is the Hanwha Group. Its takeover of German photovoltaics company Q Cells back in 2012 enabled it to position itself within the renewables sector and subsequently become the market leader. As a means of complementing its PV portfolio, Hanwha now also plans to invest in electrolyzer technology, preferring to focus on innovative anion exchange membrane or AEM electrolyzers.

In a move that will take the company a step further in the value chain, the group’s chemicals division is busy developing a gas turbine that will use a blend of LNG and liquefied hydrogen to generate power. To drive forward this development, last year Hanwha took over the US turbine manufacturer Systems Mfg as well as Dutch energy technology company Thomassen Energy. By 2023 Hanwha hopes to start supplying the first turbines to Korean grid operators. As hydrogen is due to make up more than 50 percent of the gas mixture, the turbines will bring about a significant reduction in greenhouse gas emissions. With plans to invest almost EUR 1 billion by 2030, Hanwha is setting its sights on becoming one of the major players in the hydrogen economy. There are already signs that the company is well on its way: According to media reports, Hanwha has just recently been awarded a contract from German supplier Uniper.

Also the Hyosung Group, which made headlines through its cooperation with Linde, is continuing to pursue hydrogen. The company plans to invest EUR 800 million in the lead-up to 2030. Hyosung built its first hydrogen filling station in South Korea in 2008. Now, with over 20 refueling stations to its name, the company is the country’s market leader. Yet Hyosung wants to go even further. Through its partnership with Linde, the company is intending to make a large-scale move into the production of liquefied hydrogen, otherwise known as LH₂. By mid-2023, the factory is expected to have reached a production capacity of 13,000 tons a year. The collaboration also covers the development of cryopump technology which is needed for refueling when hydrogen is in its liquid state.

Since the group manufactures carbon-fiber mesh, it is also looking to participate indirectly in the market for hydrogen tanks, which are generally made from fiber composite material. Saving greenhouse gas emissions, for instance by producing green hydrogen through electrolysis or by storing and processing carbon dioxide, are Hyosung’s longer-term aims.

Achievements so far

Despite the voting out of the liberal government that was initially responsible for the national drive toward hydrogen, the subject of hydrogen seems to have gained cross-party support in South Korea, even if there is no consensus on the color of clean hydrogen. That there is unity at all on the matter of hydrogen technology is still a major coup.

The area in which this success is most apparent is transportation. More than 30 percent of hydrogen vehicles sold globally are now driving on Korean roads, and most of these are emblazoned with the Hyundai logo. Not only that, South Korea is also the place where infrastructure expansion is advancing most rapidly, with over 130 hydrogen refueling stations already in place.

Progress in the hydrogen technology sector is plain to see. By May this year, H2Korea was able to certify a total of 44 companies as hydrogen-specialized enterprises. It’s reasonable to assume that more than 90 percent of all key components for the hydrogen sector can now be supplied by domestic industry.

What South Korea is still lacking, however, is clean energy. At the moment more than 60 percent of energy is obtained from coal and gas, around 30 percent comes from nuclear power and only about 5 percent is generated from renewable sources such as wind, solar and hydropower. Consequently, South Korea’s annual hydrogen production of 200,000 tons is limited almost exclusively to the reforming and separation of hydrocarbons. As such, most hydrogen is either blue or gray.

It is therefore fair to say that South Korea, by taking a long-term policy decision and making generous investment and support measures available, has created a solid foundation for establishing a green hydrogen economy that is supplemented by imports. However, right now, this future green hydrogen economy can be likened to a large construction site in which thick dust clouds are obscuring the color and contours of the new building. Only when the dust finally settles will it reveal its shade and shape.

Outlook on the new government

Much of what is being done today harks back to President Moon’s liberal administration which governed from May 2017 until May this year. It was this previous government that initiated, among other things, a reform of the already adopted hydrogen law and this amendment was passed just as power changed hands. Paralleling the European debate, the main thrust of the reform was the stipulation of legally binding definitions of clean hydrogen which distinguish between hydrogen that is associated “with a small amount” of greenhouse gas emissions and hydrogen that produces none at all. In other words, it centers on how to deal with hydrogen that is not 100% green.

Furthermore, an agreement was reached on a legal price cap for gas that is intended for the production of hydrogen. The most important addition, however, was the provision relating to Clean Hydrogen Portfolio Standards or CHPS which gives suppliers and other market participants quotas for hydrogen production, takeoff and power conversion. This was well received by the stock market and the industry alike.

Nevertheless, the recently elected conservative government led by President Yoon has now brought the expansion of nuclear energy back into play, a development which has caused mixed reactions. While the new government has declared its intention to continue growing the hydrogen economy in its strategy paper, a question mark hangs over whether pragmatism will actually accelerate climate reversal or quite the opposite.

Author:
Moritz Haarstick
Seoul National University, KOTRA (Korea Trade-Investment Promotion Agency), Hamburg
moritz.haarstick@kotra.de

Millions being invested in H2

by Hydrogeit | Nov 14, 2022 | Germany

Gold fever has broken out. Numerous corporations are taking over medium-sized companies or establishing joint ventures (see p. 6) – many large companies are investing millions to secure themselves a piece of the H₂ pie. The world market for hydrogen is now being divided up, at least the portion that was not already snapped up in the past few months.

One example of this global competition can be found in Jänschwalde, a coal mining town in the state of Brandenburg. Mid-July, Wiesbaden-based company Hy2gen announced that is going to invest 500 million euros in production of green hydrogen and sustainable aviation fuel there. The plant is to be built by 2027 on the planned industrial park Green Areal Lausitz.

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Investments are similarly being made within the state of Mecklenburg-Vorpommern. HH2E AG and the Switzerland-based MET Group jointly founded a project partnership for the development of one of the largest green hydrogen production plants in Europe. In Lubmin, 100 MW of capacity for the production of 6,000 tonnes of H₂ per year is to be installed by 2025, which could be scaled up to 1 GW by 2030. Around 200 million euros is to be made available for this.

Likewise, in June, Ceres Power and Shell let it be known that together they intend to build a demonstration plant in the megawatt range in Bangalore, India based on a solid oxide electrolyzer (SOEC). The aim is to provide low-cost green hydrogen for decarbonization of the industrial sector. Fuel cell manufacturer Ceres has set aside 100 million pounds for development of its SOEC technology – with the goal of achieving a market-leading levelized cost of hydrogen of 1.5 USD per kg by 2025.

At the beginning of the year, Voss Fluid acquired the Austrian company HypTec GmbH. Through this acquisition, the manufacturer of pipe connection systems has secured its access to high-pressure components for H₂ applications. HypTec, founded in 2010, has valve technology that is small and lightweight though resilient to high pressures – important prerequisites for the upscaling of H₂ components.

Already in January 2022, Fortescue Future Industries and Covestro had concluded a long-term supply agreement for green hydrogen. It involves up to 100,000 tonnes in green hydrogen equivalents per year, which could, for example, be transported as ammonia from Australia to Europe starting 2024. FFI wants the green hydrogen production to rise to 15 million tonnes annually by 2030.

With a mouse click into an H2 future

by Hydrogeit | Nov 14, 2022 | Germany

Participation in socio-political transformation processes by a wide range of actors is indispensable for success and acceptance of developed solutions. Depending on origin, qualifications and interests, however, many different views may exist as to how to formulate a problem and how to approach it with solutions. An incorporation of all perspectives at an early stage in the decision-making processes shaping the clean energy transition of a region requires the empowerment of regional actors that recognize and understand the technical and economic potential of hydrogen technologies in their respective regional context.

Not only since the current fuel gas crisis has it been clear that key assumptions and framework conditions of the energy transition can change rapidly and solutions that seem attractive today may turn out to be unreliable or economically unfeasible tomorrow. Decisions regarding investment in energy infrastructures with a planned operating period of 15 to 20 years must take into account these uncertainties – so it’s even more important to be able to assess the effects of changing framework conditions.

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From this line of thought came, during a cooperation between Spilett New Technologies and actors from the regional district Kreis Steinfurt in 2016, the idea of a scenario calculator tool for Hydrogen Regions. They formulated initial ideas of how regional decision-making processes under uncertain conditions could be better supported, and specified the content and concept requirements. It quickly became clear that a fully parameterizable optimization model would be required that reduces the complexity of the topic for the various target groups (energy industry experts, laypersons) and at the same time delivers sufficiently detailed and robust information for decision-making.

In 2019, the Toyota Mobility Foundation was able to be obtained as a sponsor for the development of the H₂ scenario calculator. Under the conceptual direction of Spilett new technologies GmbH, together with the modeling of BBH Consulting AG, software developers at ENDA GmbH & Co. KG and participants of energieland2050 in Kreis Steinfurt, the open-source online tool was developed and validated in the period from 2019 to 2022.

Function of scenario calculator

The hydrogen scenario calculator enables regional decision-makers to, in the first step, identify a cost-optimized H₂ infrastructure system through individual configurations (regional energy demand, available resources and government objectives). The aim is to ensure on an hourly basis for a defined target year the hydrogen demand of different sectors under the given regional framework conditions with the goal of security of supply (see Fig. 1).

Fig. 1: Overview of results – cost-optimized infrastructure system

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The economic, ecological and social costs, or alternatively benefits, associated with the construction as well as operation of the cost-optimized infrastructure system are broken down and presented in detail in a second step. A two-stage approach was chosen for this purpose:

• Ten key indicators give an overview of the most important economic and ecological performance parameters of the respective infrastructure system (key performance indicators, KPIs, see Fig. 2).
• Information and key indicators itemized by performance area (energy and material flow balances, economic efficiency, societal benefits) deepen the understanding

Fig. 2: The ten key performance indicators of the scenario calculator

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The results in the area of energy and material flow balances include annual and periodical overviews of hydrogen and electricity origination as well as their whereabouts at a given time. Here, the filling and withdrawal of hydrogen at regional storage facilities is displayed along with possible imports and exports of electrical power and hydrogen to cover temporary bottlenecks.

Furthermore, the quantities of water required for the production of hydrogen via electrolysis or steam gas reforming are shown, in order to avoid competing uses in times or regions where water resources are scarce. The waste heat generated during the H₂ production process is also broken down hourly and serves to support decisions on where to locate production facilities.

The results in the area of economic efficiency include information on key financial performance indicators (e.g. net present value, return on investment, amortization period and turnover), on the hydrogen production costs (broken down by investment costs, fixed and variable operating costs and CO₂ costs as well as taxes, fees and levies) and on the utilization rate of the installed plants (in full load hours for each plant).

The results in the area of societal benefits include information on the expected regional value added directly from operation of the infrastructure system (broken down into regional net income, regional profits and regional share of income tax and trade tax) and the amount of CO₂ emissions saved through the use of hydrogen as well as the avoided external costs as a result (CO₂ emissions, NO_x emissions of the transport sector).

Additional function: Stress test

Together with the actors from Steinfurt, a “stress test” function was defined, as a supplement to the main function, which allows quantification of the effects of changing framework conditions on the economic viability and societal benefits after the H₂ infrastructure has been put into operation. In a third step, the users of the scenario calculator can themselves identify which economic and ecological consequences there are as a result of changing the regional framework conditions during the up to twenty year operational phase of the H₂ infrastructure system. Additionally, this makes it possible to see how much room exists for improving the results of operation.

The changes to basic assumptions of the regional context can be chosen individually or in combination. Their respective impacts on the ten economic, environmental and social system indicators (KPIs) are indicated by the percentage changes to the ideal value, that is the initial value, for better comparability (see Fig. 3).

Fig. 3: Key performance indicators with adjustments in the stress test (external events)

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In order for the actors in politics as well as in society to develop an understanding of how the establishment of the regional hydrogen economy can also be actively supported, the stress test also includes the possibility of defining profit expectations and then of seeing based on selected adjusting screws where developments must be steered (target costs or willingness to pay). In Figure 4, as an example, the break-even case for two posed questions is shown.

Fig. 4: Break-even conditions in the willingness to pay of the markets or the reference diesel price

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Summary and outlook

The hydrogen scenario calculator has been utilized in the fifteen HyStarter Regions of the HyLand federal support program since the beginning of 2022 and assists the regional actors in their decision-making and in formulation of their respective target systems for year 2030. By informative exchange with the participating regions, the suitability and topicality of the tool was able to be verified. The questions formulated by the Steinfurt actors with respect to the hydrogen economy were confirmed by participating actors in the other regions as being complete and effective for their needs.

The chosen approach of complete parameterization of the input values makes it possible to comprehensively map the current energy crisis by, for example, limiting the availability of natural gas for hydrogen production and flexibly adjusting the energy prices. Also the heat waves and water scarcity experienced in summer 2022 were able to be modelled by a limiting of the water resources and showed the actors alternative paths for electrolytic hydrogen production.

The H₂ scenario calculator is to be made available to all interested regions by the end of the year. In the meantime, interested Hydrogen Regions can contact the project team and get a trial access (szenarienrechner@spilett.com).

Authors:

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Nadine Hölzinger

Spilett n/t GmbH

nadine.hoelzinger@spilett.com

Andy Fuchs

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Toyota Mobility Foundation Europe

Andy.Fuchs@toyota-europe.com

Swift establishment of an H2 grid

by Hydrogeit | Nov 14, 2022 | Germany

For green hydrogen, coming from Canada and Australia and being unloaded at the planned LNG terminals for example, to be able to be distributed throughout Germany, an H₂ grid is needed. To encourage a swift realization of this need, the German energy agency dena presented a green paper at the end of August 2022. In it, Andreas Kuhlmann, manager director of dena, stated, “The rapid and reliable development of a hydrogen network is an uncircumventable prerequisite for the urgently needed ramp-up of the hydrogen economy in Germany.”

The proposal is based on guaranteeing “a fair division of risk” between grid operators and future grid users. “Core of the proposal is a safeguard for investments in the initial phase through an ‘amortization account’ as well as a government-set level for network charges such that they are not prohibitive for the first users of the networks.” Further, Kuhlmann said that the first users should “not bear the full cost of the hydrogen network,” because this could result in such high network charges that the economic viability of these initial projects would hardly be feasible.

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The grid operators would be commissioned to construct this H₂ starter network by both building new pipelines and converting existing natural gas pipelines. The grid operators would use their own funds to pay for the construction ahead of time, while the state would secure the investment by guaranteeing the network operators a return on their investment in the long term.

www.dena.de