Feasibility of large-scale hydrogen production from renewable energy in Germany

In Germany, hydrogen production from renewable energy power has been regarded as one of the important ways to achieve decarbonization by many people in the industry. The process of producing hydrogen and methane through two steps of electrolytic water and methanation is also known as PtG/P2G by utilizing renewable energy such as photovoltaic and wind power. The first step in the production of natural gas from electricity is to synthesize hydrogen by electrolyzing water with renewable energy. The hydrogen produced can be used directly or can react with carbon dioxide to produce methane. In fact, the hydrogen industry has been very mature in the industrial sector for a long time, and more than 95% of hydrogen production comes mainly from fossil fuels. Steam-methane reforming (SMR) is a common method of hydrogen production, and petroleum and coal gasification are also widely used.

Since the past decade, Germany has been experimenting with PtG technology, and has listed PtG technology as an important energy storage technology for the use of renewable energy and included it in the energy transformation plan. Although PtG technology is favored by the industry, up to now only 35 PtG factories in Germany are operating, with a total capacity of about 30 MW and the largest installed capacity of only 6 MW. Most of them are small-scale pilot or demonstration projects and are used for research purposes.

There is no doubt that hydrogen and methane production from renewable electricity can solve the most difficult challenges in the energy sector. As carriers of energy, hydrogen and electricity complement each other in energy transformation. Producing hydrogen from renewable energy is technically possible to transfer a large amount of renewable energy power to sectors that are difficult to achieve decarbonization, such as industry, transport and construction and power sectors. Methane is a key component of natural gas. Carbon dioxide used in methanation is captured from the air or from biomass and biogas to ensure a closed carbon cycle. If carbon dioxide comes from fossil fuels, as in the current industrial process, this process will not be considered a decarbonization process. Is PtG cost-effective? The energy produced by PtG is of great value. The synthetic gas can be stored for a long time and transported well, and the high temperature required by industry can be produced in production. Based on existing technologies, energy storage batteries cannot store enough energy or balance seasonal fluctuations at affordable costs. Therefore, Germany currently uses traditional coal-fired gas power plants for peak load regulation, and will continue to do so in the next few years. Therefore, PtG may also be the key to long-term decarbonization in the industrial sector. In the process of electrolysis, the high temperature required for iron and steel production is produced. The German Federation of Industries (BDI) released its Climate Path Study in early 2018, and concluded that Germany needs to replace its entire natural gas supply with methane and synthetic gases to reduce emissions from industrial combustion processes in order to achieve its goal of reducing greenhouse gas emissions by 95% by 2050. It is noteworthy that synthetic fuels have obvious disadvantages.

A large amount of energy will be lost in the process of electrolysis, methanation and storage, which means that the production process needs to consume a large amount of renewable energy power. After electrolysis, only about 67-81% of the energy is left, and after the methanation step, only about 54-65% of the energy is left. The production of synthetic fuels is laborious, and they are always more expensive and less efficient than direct electricity use. An analysis conducted in 2018 by Enervis, a consultancy, compared 10 different studies on the future role of electricity-to-natural gas conversion. The results show that Germany is more ambitious in reducing carbon dioxide emissions and will have greater demand for PtG. In the medium and long term, hydrogen can become a way to transport and distribute renewable energy over long distances, especially when the capacity of power grid is insufficient or the cost of power grid construction is high. In Germany, due to the lag of high-voltage transmission line construction, it is impossible to transport wind power from the north to the high-demand areas of southern power. Many people have regarded PtG as a way to utilize surplus wind power in northern Germany. However, this technology has only been started and operated in about 30 research and pilot projects in Germany, and these technologies are still in operation. Technology is still far from profitable. Without government support and supervision, PtG's high cost means that it can't compete with traditional processes. The state needs to introduce policies to support large-scale promotion, such as setting a quota for syngas in the energy structure or raising the price of carbon dioxide emissions. For industrial countries like Germany, PtG's large-scale test will also bring additional economic benefits. The world is under pressure to cut fossil fuel use, and Germany can benefit from exporting the technology. However, the possibility of large-scale production of syngas in China is limited. PtG investment is capital intensive. Even though PtG facilities already have the necessary scale, Agora, a consultancy, says there is not enough renewable electricity for them to make a profit in northern Germany. Because of the high fixed cost, they need to run as full as possible.

Some researchers say that Germany may have to import large quantities of syngas in the future. Germany may not have enough space to produce enough syngas in the amount of wind turbines and solar panels it needs.

According to a study by Nature Energy, hydrogen production from renewable energy has become cost competitive in the niche market.