(Montel) Germany needed until the mid-2030s to create a functioning hydrogen market as it must ensure investment and create import infrastructure, said consulting firm Aurora Energy Research.
“So, from then on there will be much more liquid trading and actually a pricing mechanism for hydrogen.”
Germany sees hydrogen as one element to meet the target of decarbonising its economy by 2045. In its coalition agreement last year, the German government set a target of 10 GW of electrolysis capacity to produce green hydrogen from renewable energies by 2030. There is virtually none in operation currently.
The biggest challenge to reaching a liquid market was guaranteeing demand in advance, said von Bulow. “Investors need to secure demand in order to have a stable business case as pipelines are long-term investments.”
Once the infrastructure was established, von Bulow expected imports from destinations such as Australia and Canada.
Germany would need to import two thirds of its hydrogen by 2050 as it would not be able to produce enough to cover demand, von Bulow said.
Based on the government’s targets, Germany would produce 28 TWh of hydrogen by 2030, while yearly demand would be at 69 TWh by then, said von Bulow. By 2050, demand should rise to 156 TWh.
The estimate was based on Aurora’s central market scenario, which was a “best guess” on how markets would develop in years to come, she said.
Based on Aurora’s net zero scenario, which models what needs to happen for Germany to become carbon neutral by 2045, the demand for green hydrogen would be 127 TWh in 2030 and 490 TWh in 2050.