The discussion on climate change has turned the spotlight to the subject of sustainability. Hydrogen delivers a powerful answer to many of the questions raised by this debate. For this reason, it looks set to become a key molecule for the transition to a sustainable energy economy and the transition from fossil-based to renewable resources.
There is an evident need for hydrogen technology. In the power sector, for example, we require flexible ways of storing surplus electricity, so that this can then be fed back into the grid at times when solar or wind energy are unavailable. If climate targets are to be met, we must continue to expand the renewable generation of electricity. Yet this expansion only makes sense in conjunction with the development of hydrogen-based technologies. Ten-megawatt electrolyzers can rapidly correct an imbalance between supply and demand in the grid. In the future, they will perform an important function in ensuring grid stability. However, a shift to renewable energy alone will not be enough to achieve a 95 percent reduction in CO2 emissions. In addition, industrial processes will have to be defossilized, combined with a shift towards renewable resources in the raw-materials base. For this reason, hydrogen solutions will rapidly become the sensible option both ecologically and economically in other areas as well. From 2021, for example, the steel industry will be using hydrogen to reduce its CO2 footprint. By 2050, it should be possible to produce steel on a CO2-neutral basis. Moreover, if CO2 is removed from highly concentrated waste gases and converted into basic chemicals such as methanol by means of hydrogen, it will not only improve the climate impact of industrial processes but also mark the beginning of a new form of production that is no longer dependent on fossil-based resources. In the long term, it should also be possible to remove CO2 from the atmosphere, combine it with hydrogen and thereby create a source of raw materials that fills the gap in the global carbon cycle. Hydrogen will also help achieve climate neutrality in the transport sector, especially in areas where directly electrified propulsion is not an option.
How do experts assess the future development of hydrogen technology? This is the purpose of the Hydrogen Council, which was created in 2017 and involves 53 companies from around the world, including Linde, Daimler, Audi, Bosch and BMW. This body forecasts that by 2050 as much as 18 percent of the world’s energy needs could be covered by hydrogen, which would mean an annual reduction in CO2 emissions of six billion metric tons. A 2019 study conducted by the Fraunhofer Institute for Solar Energy Systems ISE concluded that Germany could need as much as 800 terawatt-hours of hydrogen by 2050, if this technology is fully exploited by then and, for example, shipping and aviation are based on hydrogen and hydrogen-based synthetic fuels. It would appear feasible for Germany to create an electrolysis capacity of 80 gigawatts, but even that would only cover part of this demand.
It is therefore clear from the very outset that the hydrogen economy will have an international dimension. Many regions around the world are now preparing for future trading in sustainably produced energy carriers and basic chemicals. This will enable Germany to forge new trading relationships beyond its former partners for the import of fossil fuels. Saudi Arabia, for example, is now beginning to plan and build large photovoltaic parks to produce hydrogen for export. And countries such as Norway, Australia, Chile, the United Arab Emirates and Morocco are also turning to hydrogen. Japan, meanwhile, launched a national hydrogen strategy back in 2017, with an annual budget of 300 million euros, and is now playing a leading role in the establishment of a hydrogen economy. For German companies, this means that attractive markets for hydrogen technology are now beginning to emerge worldwide.
It is vital that we start preparing for this at once. Although demand for hydrogen will only increase gradually over the coming years, it is now time to begin enhancing this technology, establishing standards and building the requisite infrastructure. By the end of the 2020s, Germany needs to be increasing its capacity for water electrolysis by around one gigawatt a year. This is the only way to halt climate change and, at the same time, maintain Germany’s economic performance and secure new opportunities for the export of technology. Fraunhofer Institutes are on hand to provide expert support here, both to industry and government. We not only develop the technology required to meet such challenges but also produce studies on market development and on sustainability. With numerous countries now poised to ramp up the hydrogen economy, it is time for Germany to start bringing this technology to market.