German energy company slows investments due to lack of green hydrogen demand
FAZ
German energy company Uniper has postponed its target to invest eight billion euros in growth and the green transformation by 2030 also due to a lack of demand for green hydrogen, CEO Michael Lewis told Frankfurter Allgemeine Zeitung (FAZ). “As things stand today, there are hardly any major customers who buy green hydrogen,” he said. “That's why we have to step on the brakes a little.” Low energy prices and slower-than-expected regulatory reforms were other reasons for the decision, Lewis added.
The company would now aim for reaching the investment volume “by the early 2030s” and concentrate on projects “that make the greatest contribution from a strategic and financial perspective.” Uniper still aims to exit coal by 2029, but reaching its target of 80 percent renewables would become “very difficult,” said Lewis.
The manager called for a long-term system of incentives for a certain volume of green hydrogen akin to the renewables support system. “There is a large gap between the price of natural gas and that of blue or even green hydrogen,” Lewis said. “The state would have to agree to close this gap.”
Government plans for green hydrogen, which is made from renewable electricity through electrolysis, see the synthetic gas playing a crucial role in the decarbonisation of many hard-to-abate sectors, such as steelmaking or the chemical industry. However, hurdles for the market ramp-up are high from a technological and cost perspective. Researchers from Harvard University recently said that the cost for storage and distribution will likely make green hydrogen a “prohibitively expensive abatement strategy across many major sectors.”
