7 minute read
'LNG central bridge to climate-neutral future'
Liquefied natural gas (LNG) remains the central bridge to Germany’s climate-neutral future even if the country has to resort to coal in the short term, Olaf Scholz, Chancellor of Germany, pointed out during his speech at the BDEW Congress in Berlin early June.
The speech was delivered amid Russia’s invasion of Ukraine which has prompted Germany to reassess the energy and security policy situation and make itself independent of Russian energy imports. Consequently, the country has started to rapidly create conditions for developing alternatives to Russian imports. Scholz also reiterated that Germany’s first floating liquefied natural gas terminals will be there soon.
Earlier this year, the country’s government entered into charter agreements to secure four floating LNG terminals, also known as floating storage and regasification units (FSRUs). Around €2.94 billion is made available to put the terminals in operation. They will offer a rapid interim solution for landing LNG until the first stationary LNG terminals are completed. Meanwhile, Germany also introduced the socalled LNG Acceleration Act to swiftly expand infrastructure for the import of LNG.
The act, which came into force in June, proposes new regulations to allow for land-based and floating LNG terminals and the necessary connections to be constructed more quickly. This will involve swifter approval, tendering and review procedures. “Security of supply is the top priority. We need a permanently reliable energy supply. For us as an industrialized country, there is no alternative,” Scholz stressed.
“We have made significant progress in this regard: floating liquid gas terminals will be available in the short term. With the LNG Acceleration Act, we are activating the construction of the necessary port infrastructure and connection lines. At the same time, stationary LNG terminals are being worked on in order to diversify our gas imports.” LNG sites in Brunsbüttel, Wilhelmshaven, Stade/Bützfleth, Hamburg/
The Höegh Grace. Through development, ownership, and operation of modern, floating LNG import terminals, . Höegh LNG is well placed at the leading edge of the rapid expansion of LNG transforming energy markets globally. Photo by Höegh LNG
Moorburg, Rostock/Hafen and Lubmin are planned. However, their realisation depends on a number of technical and economic factors.
Fossil gas is expected to be relevant only for a transitional period. For this reason, the new gas power stations and infrastructure have been planned in such a way that they can be successively switched over to carbon-neutral products such as hydrogen. Therefore, building LNG infrastructure is a shortterm solution to facilitate alternative ways of importing gas. From the very outset, the German government has planned for this infrastructure to be suitable for use with hydrogen in the long-term future.
That’s why the country is currently on a mission to build new supply chains and energy partnerships that can also be used for green hydrogen in the future. Last week, for example, the German Chancellor was visiting Africa where he held talks with partners about how the development of LNG can be supported and, in the future, a hydrogen infrastructure, too.
Accordingly, the aforementioned LNG Acceleration Act includes provisions that ensure that the planned landbased terminals and the gas pipelines will be suitable for switching to hydrogen at a later stage. Importantly, this plan is said to be in line with Germany’s climate ambitions.
“Completing the energy transition, strengthening our industrial sector and decarbonising it, improving mobility and making it climate-neutral at the same time have been priorities for the federal government from the start,” Scholz said.
“We want to be the first major industrialized country to become carbon neutral by 2045, in ways that make our lives better and our economies more efficient. We want to obtain 80 percent of gross electricity consumption from renewable energies by 2030. And we want to generate 50 percent of the heat in a climate-neutral manner by 2030,” he added.
Decarbonisation puzzle
As disclosed by Scholz, Germany’s government is now setting the framework to accelerate the market rampup for hydrogen. In this context, the government is further developing the national hydrogen strategy calling for 10 gigawatts of electrolysis capacity in Germany for the production of green hydrogen by 2030. Germany also set its sights on expanding energy partnerships and making them a priority.
“We will develop markets for hydrogen and green products, and that includes a sensible regulatory framework. We will see to that, and we will do it as unbureaucratically as possible, also in view of some of the considerations at European and national level,” Scholz continued. “To this end, we will provide financial support for hydrogen technologies where necessary. But we are primarily focusing on market-driven expansion and want to create incentives for private investment.” Not only Germany but also the European gas industry is working hard to rapidly develop hydrogen solutions.
“To produce hydrogen in a climate-friendly way, we must make use of all technologies – be it steam reforming, electrolysis or pyrolysis. In other words, hydrogen from renewable energies and from natural gas,” Margarethe Kleczar, Vice President Carbon Management and Hydrogen at Germany’s oil and gas company Wintershall Dea emphasised at the BDEW Congress. “We will need this technological diversity to make the energy transition a success and to maintain energy security,” Kleczar added. According to the coalition agreement of Germany’s federal government, Germany alone will need up to 110 TWh of hydrogen in 2030 – an amount that will not be possible to achieve solely from renewable sources. For this reason, gas producers, municipal utilities, grid operators and heating manufacturers are all confronting the transition to higher use of H2 in equal measure.
According to Wintershall Dea, hydrogen as an energy carrier and the underground storage of CO2 will represent important building blocks for the decarbonisation of industry and thereby for achieving the climate targets of both Germany and the European Union. “The gas industry has the ideas, the know-how and the will to change and evolve. Without a future-proof gas grid infrastructure, natural gas, carbon capture and storage (CCS), and hydrogen, the energy transition and a more secure energy supply will not be possible,” Hugo Dijkgraaf, Chief Technology Officer at Wintershall Dea. In early May, Wintershall Dea took action to decarbonise the country’s industry with the help of hydrogen and CCS thanks to its latest project that will enable these two methods to work in tandem to shape the future of the Wilhelmshaven Energy Hub.
In light of the hydrogen story, eight associations and networks in Germany, through a joint initiative called Offshore-Wind-H2-Eight (OffshoreWind-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.
The initiative 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 help increase the diversity of sources for domestically produced green hydrogen. In his speech, Scholz also mentioned that Germany’s actions in terms of its energy policy are part of a wider initiative supported and led by the EU. In mid-May, the European Commission released the REPowerEU Plan – a plan on how the EU can rapidly reduce its dependence on Russian fossil fuels and fast forward the green transition. It represents the EU’s response to the hardships and global energy market disruption caused by Russia’s invasion of Ukraine.
The EC emphasised that there is a double urgency to transform Europe’s energy system: ending the EU’s dependence on Russian fossil fuels and tackling the climate crisis. “In midMay, the EU Commission presented a comprehensive package of initiatives and proposals designed to make us less dependent on Russian imports. Our strength as the European Union is the internal market and the solidarity between the member states,” Scholz continued. “The transformation of our energy supply is not a national project, but is embedded in a European energy transition,” the Chancellor concluded.
By Naida Hakirevic Prevljak
Tree Energy Solutions’ (TES) import terminal in Wilhelmshaven has been included in the list of priority projects supported by the German government’ Photo by TES
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