Germany - Germany's
solution to a large part of its energy dilemma may lie in a muddy field
in desolate, windswept flatlands in the northeast.
In an area 75 miles north of
Berlin that until now has attracted more birdwatchers than cutting-edge
industries, start-up Enertrag AG, with the help of partners Vattenfall,
Total and Deutsche Bahn, is operating one of the first plants to
generate wind power and convert it into hydrogen.
Politicians
and utilities are looking to the new technology's potential as Germany
withdraws from nuclear power and turns to green power to reach 35
percent of its electricity mix by 2020 and 80 percent by 2050, from 20
percent today.
"My personal wish is
that we help create the energy turning point and that wind
power-to-hydrogen will take on a leading role. The politicians are very
interested in what we are doing here," Werner Diwald, 46, an Enertrag
board member, said.
Following the Fukushima nuclear disaster in
Japan
last March, Germany closed eight nuclear reactor blocks in one fell
swoop, leaving power grids vulnerable to any gaps in output from less
predictable power from wind and sunshine.
Hydrogen,
among its many advantages, is predictable. It can be contained and
transported without any carbon emissions. It can be used to generate
power and heat, fuel cars or go into natural gas pipelines as an extra
ingredient.
"Hydrogen is the only energy source that can safeguard energy supply over long periods," Diwald said.
The
Enertrag plant has been online since October after two years of
construction at a cost of 21 million euros ($27.9 million). When the
wind blows, its three turbines can generate up to 6 megawatts of power.
The
power is passed through water and split into oxygen and hydrogen via an
electrolyser, which is housed in a supersized garage and then stored in
five tanks. The plant can convert up to 0.5 MW into hydrogen, producing
12 kg per hour or enough to power a hydrogen car for 1,200 km.
This technology turns wind into a source of baseload power, the industry's word for 24-hour supply.
The
hydrogen can be mixed with biogas made from local corn waste and fed
into cogeneration plants, which produce electricity and heat. The power
can be fed back into the grid at times when little or no wind is
available, and the heat can be fed into a district heating network.
During periods of low wind, the biogas plant can run on biomass alone.
"We
believe that power-to-gas is one of the most promising technologies for
pushing forward Germany's energy strategy shift," said Kurt Oswald, a
partner at global consultancy A.T. Kearney, based in the Vienna office.
"It could provide the link between volatile power like wind and solar and the established power and gas systems."
COST QUESTION
The biggest question will be how to make wind-to-hydrogen profitable.
A.T.
Kearney figures show that producing hydrogen or methane, a gas derived
from it in another conversion process, costs two to four times the
amount Germany pays for imported gas. Mechanization would unlock the
entire gas grid as methane acts and behaves just like imported gas.
"Incentives will be necessary to help the technology reach market maturity," Oswald said.
Enertrag
says the answer may lie in feed-in tariffs, or subsidies, for hydrogen.
Germany used this strategy to turn itself a world leader in wind and
solar power.
Diwald said that
Germany would need investment of 700 million to 1 billion euros to
create a hydrogen market big enough to incentivize companies and
investors.
Other alternatives could be tax waivers or the passing on of additional costs down to consumers via network transmission fees.
Oswald
said conversion to hydrogen or methane could help save on the expected
cost of 10 billion euros to build transmission lines to connect new
offshore wind power centers in the north to cities and industries
further south.
Utilities are
looking to hydrogen as a possible savior as they adjust to the
government's new renewable targets and focus more on wind. If they
intend to stay in business when the country goes fully green, they must
act now.
Vattenfall has 850 MW of
offshore wind around European coasts, making it the number two offshore
operator worldwide. It wants to spend 4.2 billion euros on expansion
between 2012 and 2016.
Oil
companies such as Total have come to see hydrogen as a form of hedge
against longer-term oil market risks from diminishing supplies and
demand-suppressing price rises.
Hydrogen
can fuel noise-free and emission-free cars. Tanker lorries already take
hydrogen from the Prenzlau plant to Berlin, where Total and others
already operate a few hydrogen pumps at regular filling stations.
The
car industry wants to develop cars powered by hydrogen because these
vehicles can travel 100 km on one kg of hydrogen and distances of 400 to
500 km in total. By comparison, electric cars that run on batteries can
only reach up to 200 km.
"If a
weak euro and all-time high petrol prices become a problem for
consumers, alternative technologies such as power-to-gas could quite
quickly become interesting," said Josef Auer, an analyst at Deutsche
Bank Research.
A number of car
companies including Daimler and Toyota have said they will start
high-volume production of hydrogen-run cars in the middle of this
decade.
Railway operator Deutsche Bahn is also looking to use power from hydrogen to offset carbon emissions from its rail network.
THE GRID
Enertrag
will feed hydrogen gas into the natural gas grid from the summer.
Greenpeace Energy, a subsidiary of the environmental organization, is
already buying some of this "windgas" and selling it to households.
If
done on a mass scale, the use of hydrogen or methane could help reduce
reliance on gas imports. This is an important political factor for
Germany, which gets 40 percent of its gas from
Russia.
Hydrogen
could also be stored in Germany's underground gas caverns without major
problems, which in total offer space for a fifth of annual consumption.
"The
gas industry is battling with sales problems of its own because heating
demand is falling," Diwald said. "It has a big chance to present itself
as a solution - to absorb hydrogen and raise its sales and profits in
the process."
Enertrag plans to build 10 MW of additional hydrogen conversion capacity from 2015 onwards.
But there remain many unanswered questions for the hydrogen start-ups, said Vattenfall spokesman Lutz Wiese.
"Who
can fund large-scale electrolysers, what sites are suitable
geologically, where is there a lot of wind power and no grid
infrastructure, and how will competition between hydrogen for cars and
for electricity and heat pan out?" he said.
Berlin is already putting funds into developing this nascent technology to help it become financially viable.
Ministries
have offered 200 million euros between 2011 and 2014 for research into
energy storage, generating strong competition for the funds.
"Germany
may be in a unique position (to transform its energy system) because
not only is there a consensus in society but also the technological
competency," Stephan Reimelt, head of GE Energy Germany told an energy
conference in Berlin in January.
Germany's strong economy also gives it an edge, he said.
Back
in Prenzlau, Enertrag executive Sven Pyka, who buys corn for the biogas
plant, dusts off his work jacket as he walks back to the car.
Some
locals were worried at first about the safety of the hydrogen plant but
a recent visitors day attracted 300 people from surrounding
communities, he says.
"Now they are increasingly curious about it," he said.