Study: Green Hydrogen From Germany Is Competitive

by | 6. Oct 2022 - 15:26 | Economy

Import from wind- and sun-rich countries will still be necessary.

The German steel group Salzgitter AG is converting its crude steel production to a hydrogen-based process – as we reported, the EU Commission has now approved funding for the project. At the same time, a study shows that green hydrogen can be produced at competitive prices in northern Germany. Hydrogen Campus Salzgitter had commissioned this study from MAN Energy Solutions and the Fraunhofer Institute for Surface Engineering and Thin Films (IST) to investigate the future hydrogen supply for its industrial site.

To compare the economic viability of locally produced green hydrogen with imports, the authors modeled various supply chains and possible routes, for example from Portugal, Canada, Tunisia and Scotland. The conclusion: although H2 could be produced much cheaper in sun- and wind-rich countries with the help of renewable energies – hydrogen produced in Germany and used directly would nevertheless have an economic advantage from 2030 onwards because the transport and conversion costs would be eliminated. For transport over longer distances, it has so far been necessary to convert pure hydrogen into suitable transport media such as ammonia. According to the calculations, costs of around four euros per kilogram are possible in northern Germany, while imported hydrogen from Tunisia, for example, would cost at least 4.70 euros – plus margin in each case.

Hydrogen imports remain necessary – for two reasons

“Good news for Germany as a business location,” says Marc Grünewald, Head of Business Development, Power and New Energies at MAN Energy Solutions, but adds that large quantities of imported hydrogen will still be necessary. This is because Germany’s limited wind energy potential means that it can only meet a fraction of its needs from domestic sources. Secondly, the local cost advantage dwindles as soon as the hydrogen is not to be used directly but as a raw material for synthetic fuels such as ammonia, methanol or methane. The Federal Republic therefore also needs strong international partners, for example from North Africa, Patagonia, Scotland and Canada, Grünewald said. A memorandum of understanding on supply has already been signed with Angola, among others.

Photo: iStock/Petmal

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