German Industry Calls for 10 GW, EUR 10 Billion Push for Offshore Green Hydrogen Production

Eight associations and networks in Germany, through a joint initiative called Offshore-Wind-H2-Eight (Offshore-Wind-H2-Achter), have called for bigger and concrete steps in bringing hydrogen production at sea, powered by offshore wind, to a more significant spot in German plans for producing hydrogen from renewable sources.

“Hydrogen production at sea in the German exclusive economic zone offers great opportunities for the expansion of electrolysis capacity for the goals of the national and European hydrogen strategy, and for offshore wind energy development in Germany, if it is made possible under economic conditions. We now need a sprinter programme so as not to miss the international connection”, the joint initiative said.

Offshore-Wind-H2-Eight has published a joint agenda paper with six measures that would enable offshore hydrogen production in Germany, strengthen the contribution of this technology in industrial decarbonisation, and increase the diversity of sources for domestically produced green hydrogen.

The first measure is the adoption of a mandatory target for green hydrogen and providing the corresponding areas to fulfil this target.

The expansion target for offshore hydrogen production should be set at 10 GW by 2035 in both the National Hydrogen Strategy and in the Offshore Wind Act (WindSeeG) to facilitate a stable development path, according to the agenda paper.

“The only planned area in the North Sea to date, with its potential of 300 megawatts, is far too small. In order to enable a market ramp-up and the testing of various concepts on an industrial scale, further areas are necessary”, Offshore-Wind-H2-Eight states.

For this purpose, areas that are suitable for offshore wind energy but for which a power connection would be too costly to be built by 2035 are ideal, the joint initiative said and added that this is how the offshore wind energy potential could be realised.

In this regard, the organisations welcomed the review of a draft law for a WindSeeG amendment for the development of an additional 4 to 6 GW of offshore wind energy in the German Exclusive Economic Zone (EEZ) and proposed tenders to open for 3 GW of green hydrogen production capacity (2 GW offshore plus 1 GW onshore) in the first quarter of 2023 as part of a “sprinter programme” for green hydrogen production in Germany.

Offshore-Wind-H2-Eight also called for making the production of green hydrogen economical by enabling market ramp-up.

Green hydrogen is not yet competitive with hydrogen produced from fossil fuels, so the development of a competitive market for offshore wind-powered hydrogen production is a necessary step toward compensating for cost differences, according to the paper.

“A programme to support the market ramp-up of a German hydrogen industry and green hydrogen production should include a sustainable funding volume of at least 10 billion euros. This programme underpins the climate targets and the energy supply in equal measure”, the initiative said.

The funding concept would build on H2Global’s EU-compliant, market-oriented system and initially support at least 2 GW of electrolysis capacity. Analogous to the previously import-oriented H2Global program for domestic production, Carbon Contracts for Difference should offer the opportunity to stimulate the willingness to purchase green hydrogen, according to the Eight.

Furthermore, the joint initiative said the requirements for the purchase of electricity for electrolysis must be defined as broadly as possible, as the requirements of the EU’s Renewable Energy Directive (RED II) “do not do justice to this”.

“The limitation to new plants leads to a significant increase in the cost of electrolysis and to being able to produce significantly less green hydrogen with the same electrolyser performance. When implementing the EU rules, the Federal Government should therefore also consider subsidised and older renewable energy plants as additional”, the paper reads.

The offshore wind and hydrogen organisations have also called for enabling hydrogen pipelines in the German North Sea, which can offer advantageous conditions for the transport of green hydrogen on land with larger quantities of offshore-produced green hydrogen.

“According to a recent study, a pipeline offers considerable advantages over submarine and land cable laying, especially at longer distances, with regard to time savings and environmental compatibility. With an installed generation capacity of 10 gigawatts, 5 cable systems would be required for a comparable electrical output”, the organisations said.

“Spatial planning for an efficient route must be adapted for this. In this respect, we welcome the approach in the draft WindSeeG amendment, according to which collection pipelines from other energy generation areas are equated with previously planned direct current lines”.

Finally, Offshore-Wind-H2-Eight has recommended that policymakers and industry groups form an offshore wind hydrogen partnership, and that work on skilled workforce starts as soon as possible.

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