Hydrogen gives industry an opportunity to partner energy transition
Environment-friendly hydrogen may hold the key to the energy transition. However, this hinges largely on whether industrially-consumed energy goes green. Hamburg News spoke to Matthias Boxberger, Chairman of the Board of Hansewerk AG and the Hamburg Industry Association (IVH) about the framework conditions, opportunities and challenges of such a course.
Hamburg News: Mr. Boxberger, the Hamburg Metropolitan Region has set itself the goal of becoming the centre of hydrogen and a trailblazer of the energy transition. Is this too ambitious a goal?
Matthias Boxberger: Northern Germany’s geographical location and its closely interwoven economic and energy supply structure holds unique opportunities to meet the challenges of the energy transition. Renewable energies, especially wind power, are available on a large scale. The neighbouring state of Schleswig-Holstein is pioneering the use of renewable energies with wind power. In the northernmost state, renewable energies accounted for 69 per cent of the electricity supply in 2019 making it one of the most important energy sources. Meanwhile, wind power generation has surpassed the total gross electricity consumption in Schleswig-Holstein and will exceed that of Hamburg in a few months.
This is exactly where hydrogen comes in as a CO2-free, versatile, domestically-produced energy carrier and as a storage medium for environment-friendly electricity. The energy supply must be reliable even when the wind is not blowing and the sun is not shining. It may sound simple, but a successful energy transition in one of the world's leading economies poses a huge challenge. The key lies in the smart generation, use and storage of environment-friendly electricity.
Hamburg News: What role does industry play?
Matthias Boxberger: Industry accounts for more than 90 per cent of the present demand for hydrogen. And industry in Hamburg is a partner to the energy transition. Thus, industry has a pivotal role to play and is committed to doing so. Around 60 industrial companies in Hamburg and Schleswig-Holstein are involved in major development projects focusing on large power storage systems and smart grids to regulate volatile energy flows. The initiatives are known as NEW 4.0 and as the "North German Reallaboratory". The German government has already agreed to initial funding and the projects are now underway.
Hamburg News: Which industries could become pioneers?
Matthias Boxberger: Companies in the energy sector and basic industries, especially in chemical and metal production, are predestined. Concrete projects have already been implemented in the north and the first electrolysers for producing environment-friendly hydrogen are in operation. This involves the use of material in industrial processes as a substitute for conventionally-produced hydrogen, which also offers huge potential for saving CO2 emissions, and supplying electricity.
Hamburg News: The German cabinet adopted a national hydrogen strategy in June. But north German coastal states agreed on their own hydrogen strategy in late 2019. What do you think of this initiative?
Matthias Boxberger: The initiative is very welcome and it is important that the political goals are now being followed up by concrete undertakings. I can give examples from my own company Hanswerk AG. Our plans and projects are all in keeping with the north German hydrogen strategy. We took part in the "Reallabore der Energiewende" competition and secured a contract from the German Ministry of Economics and Technology to produce hydrogen from environment electricity for an industrial partner in Hamburg. Our plans also foresaw an electrolysis plant to stabilise the grid.
The plant will be designed to meet the growing industrial demand in the Port of Hamburg as well as the rising demand for transport applications. We will also examine the feasibility of converting our own large natural gas storage facility to hydrogen as part of the "North German Real Laboratory".
Hanswerk exemplifies the use of hydrogen as a substitute for natural gas. The company is taking part in a field test by its affiliate, Avacon, in Saxony-Anhalt, where a 20 per cent hydrogen admixture to the natural gas network is being tested. This should indicate the feasibility of feeding hydrogen into an existing gas network at a significantly higher percentage than under the present regulations. We expect this to work. If this were adapted to Hamburg’s large, efficient gas network, there would be huge potential for replacing natural gas with environment-friendly hydrogen. This would in turn boost climate protection efforts considerably. Gasnetz Hamburg plays an important role therein.
Hamburg News: Can you outline the current development status of the infrastructure needed for environment-friendly hydrogen?
Matthias Boxberger: Sufficient capacities for electrolysis and storage media are vital for the success of the north German hydrogen strategy. Provided prerequisites including energy legislation are in place, an environment-friendly hydrogen sector will become the main pillar of the energy transition and that of transport. The technical processes are available, efficient and applicable. What used to be a disadvantage of hydrogen technology is now becoming its strength. The energy required for producing hydrogen with electrolysis has been significantly reduced. Ten years ago, efficiency only came to 40 per cent compared to 70 per cent at present. Researchers are looking at raising efficiency even further. However, other infrastructural aspects in our densely-used premises in Hamburg should not be overlooked. Sites for electrolysis plants are needed and local power grids should be expanded to provide the required electricity connections.
Hamburg News: What steps are needed to achieve hydrogen technology faster and effectively?
Matthias Boxberger: Hydrogen from domestically-produced, environment-friendly electricity is far more expensive than conventionally-produced hydrogen. State-induced electricity price components i.e. taxes and duties make electricity too expensive and that has been well known for years. Although the German government must alter the situation, it is still at pains to do so. This issue has topped the agenda of the recently launched National Hydrogen Strategy. Now is up to the government to act.
Industry in Hamburg has shown keen interest in using regenerative energies, if they are available at reasonable, competitive conditions. We are therefore pressing for a change to the regulatory framework soon to advance competitiveness and climate protection simultaneously. Our industry has traditionally been a driver of innovation and part of the solution to climate protection. Industry in Hamburg already plays a disproportionately large role in reducing CO2 emissions, among others, through its IVH energy efficient networks, which save 500,000 tonnes of CO2 annually. The Alliance for the Industry of the Future, which we adopted with the senate on November 18, 2019, will take up this issue and facilitate climate-protecting investments in Hamburg as an industrial location.
Hamburg News: Lastly, what significance does driving the hydrogen sector have for the industrial labour market in Hamburg?
Matthias Boxberger: The most important employers in the region are in industry. We wish to reconcile competitiveness and climate protection to maintain and grow these jobs. Then, Hamburg will have really good prospects for the future. Hydrogen plays an important role as an energy carrier and storage medium, but also as a field of expertise for research and development. Plant engineering, designing, constructing and managing complex energy production systems are also important. In view of existing, excellent competence centres such as the Hydrogen Society Hamburg, the city has an opportuntity to become a major, national and international centre of hydrogen expertise which would create more qualified jobs in the city.
Interview by Yvonne Scheller
The Industrieverband Hamburg (IVH) represents the interests of manufacturing companies and their partners in Hamburg and beyond. Founded in 1963, the IVH is the legally independent state representation of the Federation of German Industry (BDI) with 270 members.