Germany needs concrete steps to overcome hydrogen's chicken-and-egg problem – engineering association
Clean Energy Wire / Tagesspiegel Background
Germany should act quickly to kickstart the hydrogen economy with concrete steps as not enough has been done in practice so far, said the Association of German Engineers (VDI). “This is primarily due to a lack of pragmatism and overregulation in the use of hydrogen,” said VDI director Adrian Willig. "Although the coalition agreement contains some positive signals – including faster approval procedures – many things are still too vague.”
VDI hydrogen expert Michael Sterner said that the hydrogen economy has not taken off due to a chicken-and-egg problem. “Both potential producers and users of green hydrogen and its derivatives are confronted with substantial purchase and supply risks as well as high revenue risks,” he said.
In a paper on the hydrogen rollout authored by Sterner, the engineering association outlined 28 measures to initiate the expansion. A first set of steps aims to make hydrogen more competitive with fossil fuels, with the second set focused on strengthening industrial demand. Recommended measures range from tax concessions and targeted funding mechanisms, through to quotas for the green gas.
In its national hydrogen strategy, Germany aims for a green hydrogen production capacity of 10,000 megawatts (MW) by 2030. Sterner told newsletter Tagesspiegel Background, however, that this target is now out of reach and the country “would be lucky” to hit 5,000 MW on the current trajectory. Germany's current green hydrogen production capacity adds up to a mere 150 MW, though there are plans for projects with a combined 13,000 MW.
According to its recent coalition agreement, the aspiring government no longer plans to focus exclusively on green hydrogen during the ramp-up of the hydrogen economy. A recent analysis by energy company EnBW found that initially using blue hydrogen made from fossil fuels could help reduce the cost of the energy transition.
