Ukraine crisis: Green hydrogen cheaper than natural gas for the first time - is the breakthrough coming now?

Created: 04/19/2022, 14:29

By: Lisa Mayerhofer

Federal Minister of Economics Robert Habeck (Greens) wants to expand green hydrogen technology.

(Archive image) © Markus Scholz/dpa

Because of the sharp rise in gas prices due to the Ukraine war, green hydrogen pays off much faster than expected.

Is the technology now about to make a big breakthrough?

Berlin - After Vladimir Putin's army invaded Ukraine, the German government wants to overcome its dependence on Russian energy supplies.

An important building block is the expansion of renewable energies such as green hydrogen technology, which is intended to replace fossil fuels in steel production or aviation in the future.

Gas prices: Green hydrogen is becoming cheaper than gray hydrogen

So far, the major braking factor in the sustainable expansion of the technology has been the fact that green hydrogen from renewable energies is much more expensive than gray hydrogen from fossil natural gas.

Because of the Ukraine war*, gas prices have recently risen sharply.

This means that sustainable hydrogen is now paying off much faster than expected 

, analysts from Bloomberg New Energy Finance have

calculated that green hydrogen is already cheaper than fossil hydrogen from natural gas in parts of Europe, the Middle East and Africa.

For a kilogram of gray hydrogen, the price is currently 6.71 US dollars in these regions, compared to 4.84 to 6.68 dollars per kilogram for green hydrogen.

Only in Germany is green hydrogen more expensive

This makes hydrogen from renewable energies attractive for industry.

A development that, according to experts, would otherwise have taken years - and a milestone for the energy transition, for which green hydrogen plays a major role.

reports that large corporations such as Siemens Energy and Thyssen-Krupp have recognized the potential and are massively expanding their business with hydrogen

.

"Something's really happening right now.

Green hydrogen is only more expensive in Germany,” says hydrogen expert Michael Sterner from the TU Regensburg to the newspaper.

This is due to the fact that in Germany green hydrogen can only be obtained from wind and solar parks, which have to be built additionally.

"And here it depends again on the approval procedures of the municipalities, which often last for years," says Sterner.

This makes green hydrogen very expensive in this country and slows down the expansion.

Green hydrogen: Habeck's plans with the technology

Economics Minister Robert Habeck (Greens) set an ambitious goal for the expansion of hydrogen technology in the Easter package: 10,000 megawatts of projects are to be built by 2030.

Currently, the capacity is just 60 megawatts.

The federal government is therefore also planning to import additional hydrogen.

At the end of March, Habeck agreed on four hydrogen collaborations and one research collaboration with the United Arab Emirates in Abu Dhabi.

The Emirates had "very good conditions for the cost-effective production of hydrogen from renewable energies and want to enable the first hydrogen deliveries to Germany in 2022," emphasized the ministry.

Habeck explained that the accelerated expansion of hydrogen supply chains is "a very central key for the transition to sustainable energy".

The partnerships that have now been agreed make a “double contribution: They strengthen the achievement of our climate goals and at the same time our energy security”.

According to the Ministry of Economic Affairs, there are already advanced hydrogen projects in the United Arab Emirates with the participation of German companies.

Now, among other things, the establishment of a hydrogen supply chain to Germany and the first test deliveries are to be initiated.