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  • STEAG invests in the energy source of the future

    The EU and the German government want to promote hydrogen as the energy medium of the future. STEAG is supporting this development with an innovative project in Saarland. For this climate-friendly energy to become established, however, the economic conditions also have to be right.

    With the ‘Fenne HydroHub’, STEAG successfully took part in the ‘Living labs for the energy transition’ ideas competition launched by the Federal Ministry of Economic Affairs and Energy in 2019. The competition was intended to identify projects which provide impetus to innovative processes for the decarbonization of industry and the transport sector using CO2-free hydrogen. The core of the ‘HydroHub’ is an electrolyzer with a capacity of 20 megawatts (MW), which breaks water down into its chemical components hydrogen and oxygen by means of electrolysis. “The electrolysis technology with proton exchange membranes used here is the first choice technology for the production of ‘green’ hydrogen,” explains Philipp Brammen, who is coordinating the project, planned jointly with Siemens, the Institute for Future Energy and Material Flow Systems and the German Research Center for Artificial Intelligence, for STEAG.

    The energy company chose Völklingen-Fenne in Saarland as the location for the ‘HydroHub’ because several plants for the generation of electricity, district heating and process steam are operated in close proximity there. These already form an energy hub where the power grid, district heating network and a gas pipeline converge.

    Although the planning stage of the project is already well advanced, the STEAG management has not yet given the go-ahead for its implementation. One reason for this is that the investment support currently expected from government is still insufficient. After all, despite all the enthusiasm for the new technology that led the Vice President of the European Commission, Frans Timmermanns, to call hydrogen the ‘rock star’ of clean energy, production of this climate-friendly energy medium is not an ecological end in itself. A market has to develop in which customers are prepared to order green hydrogen in such large quantities that companies like STEAG can operate the production with a prospect of commercial success.

    The German government has made this so-called market ramp-up an important part of its National Hydrogen Strategy. By 2030, green hydrogen production plants with a total capacity of up to five gigawatts (GW) are to be built (in the EU, hydrogen production is to be up to 6 GW by 2024). Another 5 GW is to follow by 2035 or 2040 at the latest (in the EU at least 40 GW by 2030). In concrete terms, the National Hydrogen Strategy states: “Availability, supply and demand are always considered in conjunction with each other.” The German government intends to invest a total of nine billion euros in and for Germany to promote hydrogen production.

    A lot is happening at the Völklingen-Fenne site. Among other things, the electrode boiler is in use there for testing of innovative application potential and remote-controlled, power grid responsive operation. Thanks to the newly created flexibility for the electricity system, the electrode boiler is making an intelligent contribution to the energy transition in Germany.

    “The market ramp-up of the hydrogen industry has to be seen as a concerted action so that the hopes placed in this energy source can be fulfilled,” says Joachim Rumstadt, Chairman of STEAG’s Board of Management. “For the time being, however, the aim must be to successfully establish a hydrogen industry. That requires electrolyzers on an industrial scale and industrial customers.”

    The recently appointed Innovation Officer of the Federal Government for Green Hydrogen, Dr. Stefan Kaufmann, also wants to make this aspect a priority. “There is still a lot to be done here, for example in terms of economic efficiency, service life and series production,” says the conservative politician, whose new office is located in the Ministry of Education and Research (see also interview on pages 18 to 21). “With all this, it will be important to create planning security against the background of impending investment cycles. It is all about decarbonizing the economy, transport and heat generation in order to achieve the climate targets.”

    These objectives read like a specification for the ‘Fenne HydroHub’, because this energy hub can produce hydrogen for several applications at the same time: On the one hand, the energy medium could be added to the natural gas network from there. On the other hand, it could be fed into currently unused pipelines suitable for pure hydrogen operation and conveyed to potential consumers. A filling station for on-site acceptance by fuel cell trains, buses and trucks as well as for trailers for hydrogen transport is also part of the plant concept. Finally, the hydrogen could also be released from the buffer storage facilities into the engines in place at the power plant site, or burned in a new gas-fired power plant to generate electrical and thermal energy, for example for district heating.

    Industrial consumers for this climate-friendly energy source are also located virtually on the doorstep. These include steel manufacturers such as the Saarstahl Group. In the view of Federal Research Minister Anja Karliczek, future steel production in Germany depends heavily on energy from renewables. “The key to keeping the steel industry in Germany is the use of green hydrogen,” says the conservative politician. The state government is also aware of the importance of hydrogen for the Saar as a business location.

    “Saarland is a steel state, and even before the coronavirus it was right to promote steel that is produced ecologically, for example using hydrogen technology. Now it is essential for survival,” emphasizes Saarland’s Minister President Tobias Hans (CDU).

    “The key to keeping the steel industry in Germany is the use of green hydrogen.”

    Anja Karliczek, Federal Research Minister, CDU

    In their hydrogen strategies, the German government and the EU have set the course for the marketability of green hydrogen by considering a far-reaching exemption of hydrogen production from taxes and duties and a Europe-wide harmonization of taxation. Specifically, the production of green hydrogen is to be exempted from the levy imposed by the German Renewable Energy Act. In addition, it is to be examined whether part of the additional costs of this comparatively expensive energy source can be covered – provided that this prevents CO2 emissions in industry. In contrast to the 1990s, when there was already a hydrogen hype, this time the German government wants to provide incentives for investments in green hydrogen.

    “The National Hydrogen Strategy includes a mandate to investigate whether the electricity required for electrolysis plants can be exempted from taxes and levies,” explains Philipp Brammen. “This is a decisive lever to promote the marketability of technical innovations and to assist in the implementation of concepts like STEAG’s. With the ‘Fenne HydroHub’ we can show that integrated energy can become reality by means of hydrogen electrolysis.”

    ‘Green’ hydrogen is produced from renewable energy sources such as wind turbines by means of water electrolysis. In this process, water is split into its components hydrogen and oxygen using electricity in an electrolyzer. Green hydrogen has the advantage that it is produced without CO2 emissions and is also virtually emission-free when it is used to generate power.

    ‘Grey’ hydrogen is hydrogen that is not produced in a CO2-neutral way, for example because it is obtained from natural gas. This form of hydrogen is a by-product of production processes in the chemical industry, for example.

    ‘Blue’ hydrogen is grey hydrogen, from which the CO2 created during production is separated and stored. In this process, called ‘Carbon Capture and Storage’ (CCS), the CO2 is stored in underground storage facilities, for example, so that no CO2 emissions are released into the atmosphere. This form of hydrogen production is therefore CO2-neutral, at least in terms of carbon footprint. However, this process is controversial in Germany in the light of possible safety deficiencies.

    ‘Turquoise’ hydrogen is produced from natural gas by methane pyrolysis. The natural gas is broken down thermally into its hydrogen and carbon components in a high-temperature reactor. The carbon produced in this process is not released, however, but is solid and can for example be used in the basic chemicals industry. This ‘Carbon Capture and Usage’ (CCU) is therefore considered to be climate-neutral.