German, Benelux hydrogen demand could rise five-fold to 2050: study

FRANKFURT (Reuters) - Demand for hydrogen fuel in Germany and the Benelux countries could increase five-fold by 2050 to 500 terawatt hours (TWh) a year, depending on future trends in the electrification of heat and transport, researchers said on Thursday.

The region currently uses 95 TWh of fossil fuels-based hydrogen, mainly from natural gas and for heavy industry, which green hydrogen could replace under European decarbonisation strategies, according to Aurora Energy Research.

It has released a study on the potential for hydrogen use in the energy systems of Germany, the Netherlands, Belgium and Luxembourg.

Green hydrogen is derived via electrolysis in a process that passes electricity from sources like wind and sunshine through water, but this is currently twice as expensive as conventional processes, Aurora figures showed.

Germany and the wider European Union are currently shaping policies to make the bloc carbon-neutral by the middle of the century, sticking with expanding renewable installations to replace thermal electricity, but must reconcile competing use of energy sources in other sectors.

Aurora said that if transport and heat opted to use electricity directly - by running cars on power and using electrified pumps for heating purposes - then future hydrogen output could mainly be used to replace fossil fuels in the manufacturing processes of steel, chemicals or cement.

In that case, hydrogen demand might only increase to 150 TWh by 2050.

“However, if transport and heat producers were to switch to large-scale hydrogen use, demand in 2050 would be 500 TWh,” said Alexander Esser, senior commercial manager at Aurora.

At the moment, the direction is unclear.

Battery-powered electric cars have a head start, being rolled out at mass scale, while hydrogen has been assigned the role of coming into play in long-distance and heavy goods vehicles.

As for heat, the gas industry is lobbying hard to fend off electrification and is maintaining pipelines and storage infrastructure, merely switching their content to hydrogen long term.

Aurora said outcomes hinge on subsidy and quota choices.

Reporting by Vera Eckert, editing by Susan Fenton