Starting signal for the hydrogen economy.

"Siemens Energy is starting mass production of electrolyzers needed for the production of climate-neutral fuel. Negotiations on state guarantees are likely to be nearing completion.

 

The energy technology group Siemens Energy opened its first production line for the series production of hydrogen electrolyzers on Wednesday in the presence of Chancellor Olaf Scholz (SPD) and Federal Economics Minister Robert Habeck (Greens). "With today's opening and the start of production of gigawatt-scale electrolyzers, we are taking the next step in the commercialization of this important technology," said CEO Christian Bruch. Incentives must now be created to increase the demand for green hydrogen, he said to politicians.

 

Bruch is currently dealing with politicians often, even without official appointments, as the company is negotiating with the federal government about state guarantees worth billions.

 

The federal government is in very constructive and very goal-oriented discussions about what a necessary security package for the impressive volume of orders could look like, said Scholz at the opening ceremony. A banking consortium and Siemens AG are involved in the talks. “I am confident that we will come to a good solution very soon if everyone now lives up to their responsibilities.”

 

Siemens Energy had asked the federal government for guarantees for future projects because the banks no longer wanted to handle these alone due to the group's deteriorated credit rating and the full order book of more than 100 billion euros. We are talking about 15 billion euros. According to those in the know, the state will guarantee 8 billion euros of this, the rest will come from banks and the former parent company Siemens, which still holds 25.1 percent of the shares in Siemens Energy.

 

On the way to green hydrogen

 

The investments in Siemens Energy's new electrolyzer production amount to 30 million euros, of which the cooperation partner Air Liquide is covering a quarter. In a joint venture, the two companies want to push forward the production of electrolysis modules on an industrial scale. The production capacity of the new production line is an electrolysis output of one gigawatt per year and is expected to increase to up to three gigawatts by 2025.

 

The European Commission is targeting a production capacity of 17.5 gigawatts by 2025 in order to make progress in decarbonizing the industry in line with its own climate goals.

 

Green hydrogen, for the production of which the electrolysers are fed with renewable energy, is considered a central building block of a climate-neutral industry.

 

Production in the EU should therefore be increased to ten million tons per year by 2030. According to the European Commission, this requires an installed electrolysis capacity of more than 100 gigawatts. With its hydrogen strategy, the federal government is targeting an installed capacity of 10 gigawatts for the production of green hydrogen by 2030. At Siemens, the hydrogen electrolyzer business is expected to reach a volume of 1 billion euros in the medium term.

 

Great demand expected

 

The need for green hydrogen will increase to up to 130 terawatt hours or almost four million tons in Germany alone by 2030, according to the federal government's recently revised strategy. On a global scale, that's little. In a study published in the summer, the management consultancy Deloitte expects a global demand of 172 million tons, which is expected to more than double in the following ten years.

 

In order to produce such large quantities of hydrogen using solar and wind energy, only technologies that can react flexibly to fluctuating electricity supplies can be considered. Electrolysis using proton exchange membranes (PEM) [1] is generally considered to be the technology with the highest efficiency. In a PEM electrolyzer, such as those now being mass-produced by Siemens Energy, water is split into oxygen and hydrogen using a catalyst material and electricity. The structure is similar to a fuel cell system used in vehicle technology, but the cells are significantly larger, which makes precise production more difficult.

 

The performance of the system is determined by the number of cells connected in series, the so-called stack. For very large systems with outputs in the megawatt range, dozens of stacks are connected in parallel. In order to achieve high levels of efficiency, numerous support systems are necessary, for example to prevent residual water from collecting in the system.

 

Scarcity warnings

 

Only a few providers in the world are even able to do this,  to build complete turnkey PEM systems in the mega or even gigawatt range. Siemens Energy had already won a number of large orders in the past and therefore announced in spring 2022 that it would locate production in a former gas turbine factory in Berlin and gradually expand it.

 

No other German company currently offers comparable production capacity. Thyssenkrupp Nucera continues to focus on alkaline electrolysis, a technically proven process that offers the highest levels of efficiency with a constant supply of electricity. Bosch, on the other hand, produces small electrolyzers in small quantities and is thinking about expanding the business, but a concrete investment decision has not yet been made.

 

Green hydrogen will also be used to produce climate-neutral fuels for aviation and shipping.

 

Companies that invest in this sector have recently warned several times about a shortage of electrolysers. Thorsten Herdan, European Managing Director of HIF, said in an interview with the F.A.Z.: "The availability of electrolyzers is a key deciding factor in the success of large-scale projects." HIF, in which Porsche is involved, uses not only an electrolysis system in a pilot plant in Chile, but also a wind turbine from Siemens. Technically it is also possible to use system components from different manufacturers.

 

Green hydrogen is still too expensive for most industrial applications to be part of a profitable business model.

 

Siemens Energy board member Anne-Laure de Chammard therefore called for more support from politicians. "The next three years will be crucial."" [2]

1. "What is the proton exchange membrane?

A proton-exchange membrane, or polymer-electrolyte membrane (PEM), is a semipermeable membrane generally made from ionomers and designed to conduct protons while acting as an electronic insulator and reactant barrier, e.g. to oxygen and hydrogen gas.”

2. Startschuss für die Wasserstoffwirtschaft. Frankfurter Allgemeine Zeitung (online) Frankfurter Allgemeine Zeitung GmbH. Nov 8, 2023. Von Stefan Paravicini und Johannes Winterhagen