Green hydrogen in Germany’s energy transition –  a scenario-based energy system modelling

Christoph Kiefer

Fraunhofer ISI, Germany

Objectives

The decarbonization of economies and societies is operationalised i.e., through the energy transition. The Paris Agreement, EU and national targets establish a clear emission reduction pathway for most European countries towards climate neutrality. Technically, policy makers have several choices for how to operationalise such decarbonisation pathways, i.e., through massive electrification of demand sectors or heavy reliance on (green) hydrogen as an energy carrier, amongst others. Several factors might advocate in favour or against certain pathways, hence the policy makers choice is difficult.

A central issue for the energy transition and the future energy system is security of supply. Not only since the Russian war against Ukraine with corresponding interruptions of energy supplies towards Europe, the issue of intermittency of renewable energy technologies (RETs) such as wind or photovoltaic, that undoubtedly dominate in the future energy systems, poses a critical challenge. Hydrogen is often proposed to solve such problems, because in comparison i.e., with electricity, it is much easier and cost-efficient to store. Nevertheless, the exact role of hydrogen in future energy systems is heavily disputed.

This study systematically and comparatively analyses the role of green hydrogen in future integrated (sector-coupled) energy systems throughout selected decarbonisation pathways.

Methods

A scenario-based energy system modelling approach was chosen. A set of several scenarios was defined, including an electrification and a hydrogen scenario, with the purpose to provide the analytical foundation for the comparative assessment. Within each scenario, the usage of hydrogen as an energy carrier was optimized (i.e., the use of hydrogen is a model result) from an overall system cost perspective (that was minimized). For the energy supply side, the model Enertile was chosen, as it provides a high spatial (7.4*7.4km) and temporal resolution (hourly resolution) of integrated energy systems. The model optimises RET and electrolysis capacity expansion, corresponding electricity and hydrogen generation as well as the associated cost, quantifies European energy trade flows by balancing demand and supply under consideration of transport infrastructure, amongst many other things. For the purposes of this study, all European regions were modelled, yet the analytical focus is on Germany.

Results

The results show that green hydrogen has a very specific role in the future energy system. Hence, it is neither champagne nor tablewater. Hydrogen is used where its inherent features (i.e., storability) provide most system value. This is related mostly, but not exclusively, to backup, stabilising or flexibility-providing functions. For example, all scenarios require a certain amount of hydrogen for the provision of electricity (especially in winter or to cover peak demand situations) or heat in heatgrids (to provide flexibility under certain circumstances).

The results further show that parts of Germany’s hydrogen demand can be met by local production, but that the country will also be a massive importer. Furthermore, many European regions have the potential (renewable resources and technical) to become important exporters of green hydrogen.

Conclusions

Several policy implications can be derived from the results. First, Germany can produce large amounts of hydrogen domestically, when RETs provide cheap and abundant electricity (in the north of the country). Second, Germany needs large volumes of hydrogen storage, as hydrogen is used seasonally different in the supply sector. Therefore, natural storage options should be habilitated. Third, Germany will be a massive importer of hydrogen. Several European regions can supply this hydrogen, such as the Iberian Peninsula, northern European countries and the Balkan region. The United Kingdom could also be a large hydrogen exporter, if RET expansion is large and domestic demand for hydrogen is not very high. European hydrogen from above-mentioned sources is cost-competitive to the world market, making importing from outside of Europe optional.