Hydrogen Regions series: HydroHub Fenne living lab
The power plant site in Fenne, Völklingen, a long-standing power generation facility which celebrates its centenary this year, is now the focus of Iqony’s plans to meet the future energy needs of the industrial region of Saarland. Owned by the STEAG Group, Iqony specializes in renewable energy, hydrogen projects, energy storage, district heating and decarbonization solutions.
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The site is already a major energy intersection for the state of Saarland in southwestern Germany and is at the crux of the area’s district heating supply. Along with the present facility, the site will in future be home to HydroHub Fenne, an addition that will ensure it remains an essential part of Saarland’s energy system in the years ahead.
“Due to its existing infrastructure, we see the site as ideally suited to the building of a hydrogen production facility at this location. The existing grid connection allows us to draw sufficiently large amounts of renewably generated power to produce renewable hydrogen here, close to the point of use,” explains Patrick Staudt who is in charge of hydrogen at Iqony Energies, a Saarland-based subsidiary of Iqony.
The project will need to comply with the provisions of the European Union’s Renewable Energy Directive (RED) and its associated German legislation so that the hydrogen produced in Fenne can also be classified as climate neutral according to the strict criteria set out in EU law. Iqony’s own trading division will provide support to make sure this happens.
IPCEI notification is vital
Depending on the number of operating hours, HydroHub Fenne will produce approximately 8,200 metric tons of green hydrogen a year. “The current plan is to commission the plant in 2027 – assuming that the latest statements on the completion of the IPCEI notification by the European Union are correct,” says Patrick Staudt.
IPCEI stands for Important Project of Common European Interest. Iqony applied to have its Saarland hydrogen project recognized as an IPCEI back in spring 2021. Dominik Waller, who is responsible for project development alongside Patrick Staudt, explains the significance of the decision: “Our project needs to gain recognition as an IPCEI to allow the German government to support us financially with the investment. It’s impossible without IPCEI notification due to European law on competition and state aid.”
The prospects are looking good for the project in Fenne. A final decision is expected in Brussels by the end of 2023 – more than two years after the original announcement was due. “Once we have the funding authorization from the EU, it will then be a matter of the government putting specific funding in place. That should happen in the first quarter of 2024 which will mean we are on track in terms of the project schedule,” elucidates Patrick Staudt.
Public funding of the project is necessary because there is not yet a functioning market for hydrogen in general or for green, i.e., renewable, hydrogen in particular. Hydrogen can help industry or, for example, local public transport avoid carbon dioxide emissions. However, hydrogen finds itself in financial competition with other energy sources such as natural gas. In economic terms, hydrogen is no match for other energy forms at present, precisely because a competitive marketplace has still to develop.
“We see this as a classic chicken-and-the-egg problem: Potential hydrogen producers are holding back on their investment decisions, waiting for definitive signs of future off-takers. On the other hand, potential off-takers are not investing in converting their processes and plant technology while there is no guarantee that the required hydrogen will be available in sufficient quantities in the future. The only way of getting out of this dilemma is if public authorities provide investment security for both sides in the form of funding,” acknowledges Dominik Waller.
As for the level of funding for HydroHub in Fenne and the overall capital outlay, Iqony is not at liberty to divulge specific figures for competitive reasons. However, a few hundred million euros are expected to be invested in the project. “We won’t be able to give a more exact figure until the tender for the plant technology has been concluded,” says Patrick Staudt. Though this will only be when the funding letter has been received. According to Staudt, this once again shows how fundamentally important the conclusion of the IPCEI process is in order to progress the project further.
Fig. 2: Site development
Tenders on the market
Another stipulation resulting from the funding conditions for an IPCEI-designated project is that the hydrogen produced can’t simply be sold in the usual way. “We’re obliged to use tenders to bring our product to market so that all potentially interested parties have a chance to participate,” states Dominik Waller. This is where the Fenne location is said to be to the company’s advantage, since it already has a disused gas pipeline connection that could be employed in future to link HydroHub Fenne to the hydrogen supply network being created. Waller continues: “It’s also why we are paying close attention to the current discussion on the government’s plans for a core hydrogen network – and here we see the need for further improvement, especially for Saarland.”
This expressly applies not only to the delivery of the future electrolyzer in Fenne through the core network draft, which was presented by FNB Gas to Germany’s Federal Network Agency in November 2023, but also to the present STEAG and Iqony power plants in Bexbach and Quierschied (Weiher power plant). “At both sites we want to build new, hydrogen-compatible gas power plants – just like the government itself has set out in its 2030 target, so we can switch off old coal-fired units, meet our national climate goals while at the same time ensuring the security of supply if wind and solar power aren’t available in sufficient quantities,” says Andreas Reichel, CEO of STEAG and Iqony.
Reichel adds: “Current government plans do not yet envisage bringing the core hydrogen network to these two locations, which will be necessary to make this happen. That said, we’re grateful to the Saarland regional government for its reassurance that this is precisely what it will be campaigning for in Berlin.” If such efforts are successful, it would enable Iqony to build new power plant capacity in Saarland by 2030 which is urgently needed to guarantee security of supply as well as ensure the green transformation of power generation in Saarland.
In the medium and long term, it is then hoped that these and other new gas power plants will be run on hydrogen to provide a reliable, carbon-neutral supply of energy. If the core hydrogen network planned by the German government is not immediately routed to within close proximity of the sites, this will be completely impossible. Despite the unresolved issues, Iqony is optimistic about the realization of its hydrogen and power plant projects on the River Saar:
“We have the technical and commercial expertise from more than 85 years in the global energy industry, we have the right locations and we have proven through the construction and commissioning of one of the world’s most advanced combined-cycle power plants in Herne, Nordrhein-Westfalen, at the end of 2022 under difficult COVID-19 conditions, that we can carry out challenging large-scale engineering projects on time and on budget – if the regulatory environment allows us to do so,” concludes Andreas Reichel.
Author: Dr. Patrick Staudt, Dominik Waller, both from Iqony
The company HPS Home Power Solutions has unveiled a new generation of its seasonal energy storage system. The Picea 2 now uses lithium batteries, which makes installation in the home easier due to the lower weight. With twice the power, the appliance is also equipped for e-mobility and heat pumps.
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The new research and development site is located almost directly next to the youth center of FC Union Berlin in an industrial area in Berlin-Niederschöneweide. In the future, not only kickers but also installers and partners will be trained there. But not only that; the new version of the seasonal storage unit is also to be manufactured there. “On-site installation is even more cost-effective for us, as the transport costs come out lower,” stated company founder and CEO Zeyad Abul-Ella – left in December 2023 and since then only still a shareholder – at the first presentation of the new device to an exclusive circle of visitors.
Nine years after its founding and a good five years after the first presentation of a Picea model at the trade fair Energy Storage in Düsseldorf 2018, there is a whole series of further developments of the product. The device has needed to change with the times. With Picea 2, the output power has therefore doubled to 15 kilowatts, which makes it possible to cover higher energy requirements, for example for an e-car or a heat pump. In the event of a power failure, the backup power supply ensures that important installations in the household are supplied with a stable power supply. “For each of the three phases of the three-phase current, the device now delivers five kilowatts of power,” explained Abul-Ella.
The new generation of the storage system also offers an increased connected load for photovoltaic systems – picking up on the trend in the market. Through new power electronics, according to HPS, efficiency was able to be increased, which means that higher levels of self-sufficiency are now possible. The energy utilization efficiency (Nutzungsgrad) including heat utilization is 90 percent. The electrical efficiency is between 35 and 40 percent.
Cooperation with competent partners
The device now uses an external inverter from SofarSolar, in which the software for the storage system has accordingly been adapted. “We do what we are really good at. For all other components, we rely on cooperation with partners,” said trained civil engineer Abul-Ella. The latter applies to both the inverter and the lithium batteries.
The AEM electrolyzer comes from the German-Italian company Enapter. The abbreviation AEM stands for anion exchange membrane. The technology uses more cost-effective materials such as steel instead of titanium and combines the advantages of alkaline electrolysis with the flexibility and compactness of PEM electrolysis. Enapter co-founder Vaitea Cowan was also present at the product launch, and Hans-Peter Villis, former EnBW (Energie Baden-Württemberg AG) director as well as partner from the very beginning and today chairman of the supervisory board at HPS.
Specifications for developers
“A tough requirement for the technical developers was to retain the dimensions for the slide-in boxes for the electrolyzer and the fuel cell in the energy center of the original Picea,” stressed Abul-Ella. The first Picea customers are pioneers. They should therefore also benefit from the innovations and be able to switch to them easily at a later date. A further development in the electrolysis module cools the hydrogen to 5 °C. This makes it possible to take in four to five times the amount of gas, because the moisture is now removed before storage.
New are also status displays that, at the touch of a button on the device or via the app, provide information about important system and storage statuses. The system always consists of an energy center and a hydrogen storage tank with a compressor that is installed outside the house on a concrete foundation. This foundation is absolutely essential.
The energy center unit has slimmed down considerably and now weighs 70 percent less: instead of 2.2 metric tons, now only 700 kilograms (1540 lbs). Reason is the switch from lead-acid to lithium batteries from the company Pylontech. The overall height has also reduced by 15 centimeters compared to its predecessor to 1.85 meters (6.07 ft). Doesn’t sound like much, but can be decisive for installation in a basement.
The Picea 2 costs at minimum 99,900 euros
The Picea module converts the surplus solar power in summer into hydrogen. In this way, large amounts of energy can be stored efficiently and over long periods of time. In winter, the gas, via a fuel cell, can be converted back into electricity and heat. The long-term storage capacity is up to 1,500 kilowatt-hours of electricity. In the smallest version with 16 gas cylinders, it is 300 kilowatt-hours.
The smallest version of the Picea 2 costs 99,900 euros. The gross price is the same as the net price, as the sales tax for the device, including storage units, is zero percent. With more storage capacity, the cost rises to up to 140,000 euros. This applies to a new construction where the installation can also be planned. In existing buildings, it can be a bit more complicated, so the amount may increase to up to 160,000 euros.
The demand seems to be there. Because over 500 devices of the first generation have been sold to date. More than 100 are installed at customers’ spaces.
The Apex Group is expanding its management team from five to six people. Starting the new year, Axel Funke will be chief technology officer, and will be responsible for the division project handling and engineering. The 58-year-old mechanical engineer has been active in plant engineering for 30 years, and previously worked for companies such as Bilfinger, Thyssenkrupp Industrial Solutions and Linde. He directed, among other things, large international projects in the energy sector and, for example, while at Thyssenkrupp Industrial Solutions participated in the planning and design of the project HyLIOS, which included the delivery of a 2.2‑GW electrolyzer to Neom, Saudi Arabia.
Apex has belonged for one year to the Exceet Group. Roland Lienau, chairman of Exceet, said: “Following the recent appointment of Bert Althaus as CFO, the management is now staffed across all areas with top personnel. Also on the operational side, Apex has hired more than 20 engineers since the acquisition by Exceet in January 2023. We are therefore equipped to realize our growth strategy.”
The share price of Weichai Power has risen by almost 50 percent in the last few weeks. The reason is the partnership with BYD in the electrification of large vehicle fleets. A perfect joint venture, it seems. Weichai Power with BYD could – my guess – be pushing the door open to fuel cells, since alongside battery-electric trucks and other commercial vehicles, the fuel cell is perfect for long-haul journeys.
Weichai has a joint venture with Ballard Power in China (51:49), with a capacity of already 20,000 FC modules per year. And Weichai will be one of the main beneficiaries when in China a large subsidy program for fuel cells and hydrogen comes – maybe 2024 or 2025. Weichai is China’s largest diesel engine manufacturer, which is now moving towards e-mobility – comparable with Cummins Engine in the USA. Weichai is also cooperating with Bosch.
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Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
About 20 years ago, solar power and Passivhaus design captured the imagination of one Polish couple. At the time, Dorota and Piotr Napierała regularly traveled to Freiburg in Germany where they got to know the pioneers of photovoltaic technology. “I got loads of ideas there. It was a time of awakening. We converged at trade fairs and exchanged our visions and ideas. There was a fantastic atmosphere,” enthuses Piotr Napierała. The Passivhaus concept in particular made a lasting impression on him. Today he continues to focus on the advantages of efficient microgrids and energy island solutions. “Put simply, it’s what excites me. On my Freiburg visits I enjoyed looking at the solutions from Hydrogenics and discussing them with the people there. I like small closed structures that I can optimize,” explains the physicist.
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Virtud owners Dorota and Piotr Napierała have a clear goal: The annual energy costs of the Virtud hydrogen house should not exceed PLN 500, which is roughly equivalent to EUR 123. Piotr doesn’t set much store by grandiose projects and is also not convinced by the pumped-up hydrogen plans put forward by many well-known corporations. He believes that a lot can be achieved, especially when it comes to hydrogen, by taking multiple small, precisely tailored actions at a local level.
Huge potential in Polish PV sector
The Napierałas welcome their visiting business partners and prospective clients to a smart, white new build constructed on the Virtud premises in a suburb of Poznań. Now proprietors of a photovoltaic installation business, the husband and wife team have previously owned several companies within the renewables sector. Their specialization in PV technology began in 2015. The pair see the development of the Virtud hydrogen system as a logical continuation that will help spread renewable energy across world – and especially in Poland where the PV industry is currently booming.
At the end of January this year, the total installed capacity for PV plants in Germany’s eastern neighbor was over 12.5 gigawatts. In the previous year the figure was just 7.6 gigawatts. In other words, the photovoltaic capacity in Poland has almost doubled within 12 months. Consequently, solar power accounts for a good 54 percent of overall renewable energy capacity in Poland.
Car batteries store solar power
However, the massive increase in electricity generation from photovoltaics also brings enormous challenges for the industry. The main hurdle is how to store energy overnight and during the less sunny seasons of fall and winter.
Virtud has managed to solve these problems by taking an unusual approach. Instead of spending exorbitant sums on energy storage, for a relatively small outlay at auction the company bought large numbers of secondhand batteries that were previously used in Nissan Leaf cars, a popular model in Poland. The batteries are combined into packs that store solar power produced during the day, allowing it to be released again at nighttime. Piotr Napierała reckons that the solution including the electric car batteries costs only a twelfth of the price of a new energy storage solution.
For those wanting to bridge the fluctuations between the summer and winter months, batteries alone will not suffice. This is where hydrogen comes in. “We use the sun and wind to produce green hydrogen which acts as the energy carrier at those times of year when demand is highest,” the entrepreneur says.
Evolution of the energy sector
The Napierałas are certain that the renewables sector will continue to evolve and that hydrogen is merely a logical step. As businesspeople, they have been involved in many stages of the renewable energy trend and have repeatedly noticed how dynamic the process is. This also applies to the bureaucratic and legal sides, as Dorota Napierała remarks. She is responsible for all approvals and application requests in the company. “We have a long learning journey ahead of us with regard to hydrogen,” she says.
Recent decades have seen the introduction of many highly complex renewables laws in Poland. Electricity feed-in to the grid was made possible in 2014. This was a completely new world in terms of accounting and administration. Dorota Napierała spent a great deal of time in meetings and on the phone to the relevant authorities until both sides fully took the new legislation on board. “It’s always a learning process. We learn from each other. It will be similar with hydrogen. The authorities have become much more open now. If there are any queries or uncertainty, they actually phone up and you go through the forms again. For years we’ve been part of a two-sided education and communication process. That makes everything easier,” Dorota Napierała explains.
A model for the future
Looking around the show house, an energy-efficient 200-square-meter (2,150-square-feet) building, it’s not just the use of solar power and a heat pump that is noticeable. The large area to the right of the entrance also catches the eye. This is where the 2.4-kilowatt electrolyzer is located. Supplied by German manufacturer Enapter, it’s the first electrolyzer installed by Piotr Napierała. “Many, many more are due to follow,” says the co-proprietor. Other technical kit is also housed in the modular cabinet, including water purification equipment. But there is still enough room for additional electrolyzers.
Access is currently being created from the demonstration area to the hydrogen tank, which is already on order. This will make it possible to refuel vehicles with hydrogen. That’s the next job on Piotr Napierała’s list.
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