INTERVIEW: RWE calls for German electrolyzer target to be doubled to 10 GW

Germany's biggest power generator RWE is calling for Germany's 2030 electrolyzer capacity target to be doubled to 10 GW, chief operating officer for hydrogen Sopna Sury told S&P Global Platts.

Faster expansion of renewables would be essential to accelerate the ramp-up of the hydrogen market, Sury said in an interview.

"There is high demand for hydrogen. Without power from renewables the production of green hydrogen is impossible. For offshore wind power, Germany should therefore target at least 25 GW by 2030. At the same time, it makes sense to further increase Germany's targets to 10 GW of electrolysis capacity by 2030," she said.

RWE is Germany's only energy company involved in all stages of the hydrogen value chain, from green power generation to hydrogen production and storage and onto sales to industrial customers.

The company has almost 1 GW of electrolyzer projects in the pipeline in Germany, the Netherlands and the UK.

In Germany, RWE is involved in four projects shortlisted as Important Projects of Common European Interest (IPCEI).

The GETH2 project at its power plant at Lingen is the biggest single project, with 300 MW proposed by 2026.

"A positive and timely IPCEI confirmation is an important requirement for moving towards FID," Sury said.

A decision was expected in the first quarter 2022.

"RWE is in a perfect position to play a key role in generating green hydrogen on an industrial scale. Most of our 30 projects have the potential to be expanded to gigawatt size," Sury said.

Offshore plans

Offshore hydrogen production from wind would be a key focus for RWE although the hydrogen unit is part of RWE Generation. Some 250 employees are currently working on the portfolio.

"Our mission is building integrated hydrogen-based businesses starting from renewables, via hydrogen production, distribution and storage to the customer, later to be extended by trading," Sury said.

In the North Sea, RWE is involved in the AquaVentus initiative alongside Shell and gas grid operator Gasunie for large-scale offshore hydrogen production.

"We plan to test a prototype of a production-ready, decentralized monopile with integrated electrolyser unit at the port of Mukran, Sassnitz by 2023," Sury said.

If tests are successful, two 14 MW hybrid units would be installed offshore Heligoland by 2025.

The pilot was also shortlisted as IPCEI project alongside the AquaDuctus project for a pipeline connecting the turbines to a hydrogen hub on Heligoland.

The German government plans to tender a first off-grid zone to advance research projects for offshore hydrogen in 2022.

Regulatory hurdles

According to Sury, companies are ready to invest in hydrogen as soon as the framework fits, but some regulatory hurdles remain.

A concern is the current definition of green hydrogen by the EU Commission, she said.

"As things stand, existing renewable plants are to be excluded as electricity suppliers for electrolysers. Green electricity for electrolysis cannot only come from newly built renewable energy assets. Especially at the beginning, we need to use all existing assets. Unsubsidized existing plants would be an ideal way to bridge the gap," Sury said.

Regarding the strict temporal correlation of renewable energy and hydrogen production and the local coupling of renewables and electrolyzers, as discussed by the European Commission, Sury said this would mean "when the wind is not blowing, electrolysis would also have to be paused, destroying any business case."

A pragmatic way forward would be to allow the use of guarantees of origin to certify hydrogen as renewable on an annual basis, Sury said.

Further, a technology-agnostic approach would help build volumes in the early days.

"In my opinion, there's no issue with initially allowing blue, turquoise or in the beginning even grey hydrogen. The main thing is to get started on the demand side now. The industry cannot wait many years until sufficient green hydrogen is available. The investments are due now," Sury said.

In the long term only renewable hydrogen was truly sustainable, "that is why RWE's focus is on green hydrogen," she said.

S&P Global Platts assessed the cost of producing renewable hydrogen via PEM electrolysis in Europe at Eur9.02/kg ($10.68/kg) Sept. 9 (Netherlands, including capex), while so-called blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur3.95/kg. Platts assessed GOs for EU wind and EU solar have risen above Eur1/MWh from 2022 for wind and 2023 for solar.

SELECTED HYDROGEN ELECTROLYZER PROJECTS INVOLVING RWE

Source: S&P Global Platts Analytics Hydrogen Asset Database (*projects scalable)