Statement — Summary. Hydrogen generation at sea in the German Exclusive Economic Zone can contribute as an essential building block to achieving the offshore capacity expansion targets and to the efficient decarbonisation of industry. At the same time it makes an important contribution to diversifying supply sources in the procurement of green hydrogen.
The present draft amendment to the Offshore Wind Energy Act offers important points of connection here, but should — with a view to the necessary update of the national hydrogen strategy — give still greater weight to the outstanding importance of offshore hydrogen. This includes in particular the explicit and consistent enabling of hydrogen transport via a collector pipeline.
Specific observations on the present ministerial draft of the Offshore Wind Energy Act. By setting the adopted expansion targets for offshore wind energy in law in Section 1, the ministerial draft provides an important impetus for the wind energy sector and the basis for a rapid and at the same time cost-efficient expansion of renewable energies. By specifying the tender volumes for the years 2023 to 2027 and thereafter, the draft goes even beyond the capacities needed to reach the expansion targets by 2035 and thereby sets the direction: a reliable legal framework is intended to create the confidence needed for the necessary ramp-up of industrial manufacturing capacity and the provision of investment and resources.
At the same time, Section 12 establishes that the realisation of offshore wind turbines is necessary for reasons of overriding public interest and in the interest of public security. This is welcomed by the AquaVentus initiative and underlines the important contribution that offshore wind energy in Germany can and must make to the decarbonisation and transformation of all sectors. Anticipating the update of the national hydrogen strategy, the outstanding importance of offshore hydrogen should be taken into account here in equal measure.
The potential role of offshore hydrogen is, incidentally, rightly placed on a new footing by the ministerial draft of the Offshore Wind Energy Act now published, and the range of options is considerably widened:
On the one hand, the amendment to Section 4 explicitly makes it possible henceforth to make sectoral planning determinations that provide for the transport away of energy carriers from offshore wind turbines and other energy generation installations that are in each case not connected to the grid.
This amendment is an essential milestone for realising the overall concept of the AquaVentus family of projects, since it creates the basis for scaling offshore hydrogen production significantly and connecting it via a freely accessible collector pipeline as the central backbone of this vision. It thereby also makes possible in principle a particularly efficient and environmentally sound development of further sites, especially in the western outer region of the German Exclusive Economic Zone in the North Sea.
In this context, however, it is unclear to what extent a central hydrogen collector pipeline can also be translated into concrete implementation if the designation of lines or cables within the route corridors for offshore connection lines is expressly excluded. This provision should therefore be specified accordingly so that
hydrogen transport can be implemented efficiently and the central hydrogen collector pipeline can be connected to the emerging onshore hydrogen network. In addition, corridors for pipeline transport must be defined. Section 5(2a) sentence 2 must not have the effect of excluding pipelines for transporting hydrogen away, thereby hindering or precluding the use of the spatial planning reservation areas for lines.
On the other hand, and fittingly for precisely this concept, the removal of the site limitation of formerly 70 km² in the designation of other energy generation areas under Section 5 eliminates an important obstacle to ensuring the ramp-up of this technology and, in particular, to realising the efficiency advantages and associated cost reductions of the AquaVentus vision.
It must, however, be noted critically that further adjustments to the Offshore Wind Energy Act are required for the technological development towards market maturity and the scaling of offshore hydrogen this necessitates:
Two routes are currently provided for, within which the achievement of the expansion targets, particularly by 2035, is to be ensured. Sites already centrally pre-surveyed are to be tendered as 20-year contracts for difference (CfD); sites not fully centrally pre-surveyed are to be allocated on the basis of qualitative and quantitative award criteria (beauty contest). The third route now available is, however, disregarded entirely. While no concrete figure is yet given for the capacity split between these routes in the years 2023 to 2026, from 2027 at least the available site capacity is to be divided equally between CfD and beauty contest.
This would leave unused the opportunities for accelerating expansion and for the cost-efficient and particularly environmentally compatible development of site capacity far from the mainland through offshore hydrogen. It is therefore necessary to define, as quickly as possible, a concrete determination of auction volumes for the allocation of other energy generation areas still to be designated, within the existing award procedure of the Ordinance on Other Energy Generation Areas. The clusters N-17, N-18 and N-19 designated in the preliminary draft of the Site Development Plan are particularly suited to this purpose for the following reasons:
1. Relieving the bottleneck in the electricity grid. Electricity grid connections constitute a considerable bottleneck for achieving the expansion targets for offshore wind energy. The necessary expansion of onshore transmission grid capacity also makes achieving the targets more difficult. Current planning and approval processes of up to 11 years for direct-current lines, as well as potential bottlenecks in the supply chain, permit only limited acceleration of the expansion of electricity grid connections.
This is where the AquaVentus initiative comes in. The AquaDuctus pipeline concept reduces bottlenecks in the electricity grid both offshore and onshore. The planned generation of green hydrogen thereby diversifies and accelerates decarbonisation, since sites far from the mainland in particular, which will only later be connected to the electricity grid, can be developed considerably faster. The designation of further other energy generation areas should therefore expressly enable transport away by pipeline.
2. Advantage in connecting the distant clusters. The sites in the north-western part of the EEZ now awaiting designation (clusters N-14 to N-19) lie at distances of 300 to 400 km from possible connection points on land. Here pipeline-based energy transport via the AquaDuctus collector pipeline, with a transport capacity of 10 GW, can play to its full potential:
As also stated in the document accompanying the preliminary draft of the FEP, "First interim report on the further development of the framework conditions for planning offshore wind turbines and grid connection systems", an offshore pipeline for supplying energy for hydrogen consumption on land offers clear cost advantages over laying submarine and land cables, according to Falkenberg et al. These come to bear above all when scaling up to 10 GW, as envisaged by AquaVentus. This cost advantage grows the greater the distance to the mainland. It thus emerges that designating sites N-17 to N-19 to a considerable extent as other energy generation areas in particular offers clear cost advantages over designating these sites for electricity generation.
3. Use of existing route corridors. Under Section 4 of the Offshore Wind Energy Act, both the designation of sites for offshore electricity generation and that of sites for other energy generation are to be developed in a spatially ordered and space-saving manner. The same applies to the transport infrastructure.
The route of AquaDuctus remains essentially within the reservation areas for lines under the spatial development plan for the German EEZ. At a capacity of 10 GW, the pipeline replaces five HVDC cables and thereby even relieves the existing route corridors by keeping line capacity free.
4. National hydrogen production in cooperation with the North
Sea riparian states. Up to one million tonnes of green hydrogen per year can be produced by AquaVentus directly in the North Sea, thus reducing the need for energy imports through domestic value creation and significantly increasing security of supply. This becomes particularly important in light of increasingly uncertain international supply chains. At the same time, developing sites in the north-western outer regions of the EEZ (N-17 to N-19) opens up the long-term possibility of connecting sites outside the German EEZ as well, and thus of integrating even larger quantities of green hydrogen into the European market via the envisaged pipeline solution.
5. Reducing environmental impact. With regard to the necessary strategic environmental assessment, it should be emphasised that laying an offshore pipeline is a largely standardised procedure. The minimisation of environmental impact results in particular from the transport capacity of 10 GW, with which AquaDuctus can replace five HVDC cables. Accordingly, the length to be laid and the number of interventions in the especially protection-worthy territorial sea and in the Wadden Sea National Park are reduced.
Yet the actual production of hydrogen offshore also offers clear advantages over onshore electrolysis in terms of the environment and approval procedures. The withdrawal of larger quantities of water is unproblematic in the maritime environment, whereas on land a possible withdrawal of fresh water represents a sensitive intervention in the local biosystem. In the case of seawater desalination, the discharge of saline brine at sea is unproblematic given prior enrichment with seawater and maximum diffusion and dispersion, whereas the deposition of brine in the region of tidal flats, rivers and other ecosystems on land can have considerable negative long-term consequences. Finally, the permanent occupation and sealing of land, alongside negative environmental effects, is a reason for difficult and lengthy approval processes, while in the offshore sector the same resistance is not to be expected. Here lies a further factor for accelerated offshore capacity expansion.
Outlook on important follow-up processes. Besides the revision of the Offshore Wind Energy Act as swiftly as possible, as currently being advanced by the Federal Ministry, the AquaVentus initiative would also like to consider subsequent processes and amendments building upon it, in order to place the expansion of offshore wind energy in the German Exclusive Economic Zone in the North Sea on a solid and future-proof basis:
1. The National Hydrogen
Strategy should set 10 GW of green hydrogen generation capacity by 2030 as a clear target and, in order to achieve it, define a concrete role for the various forms and technologies of generation. As described above, hydrogen generation at sea offers convincing advantages for achieving the capacity and decarbonisation targets and should therefore, within the framework of a dedicated, integrated offshore hydrogen strategy, become an essential building block of the future hydrogen strategy and the targets described therein. In order to give domestic hydrogen in general, and offshore electrolysis in particular, a concrete perspective beyond 2030 as well, the national hydrogen strategy should also set a long-term target corridor for the period after 2030, in which offshore electrolysis should account for at least 10 GW by 2035.
2. The recognition of pipeline-based transport in the Federal
Government's offshore hydrogen strategy should likewise be anchored, by analogy with the transport model for hydrogen generated onshore. In this way, economies of scale and efficiency advantages can be realised through a broadly conceived hydrogen transport network on the one hand, while on the other a considerable contribution to system integration and security of supply can be made through the possible offshore extension towards European neighbouring states and the development of distant site capacity.
3. This, however, requires a significant increase in the site designations for other energy generation areas in line with the objectives of the offshore hydrogen strategy to be developed, within the framework of the update of the Site Development Plan (FEP). The possibilities created by the removal of the site limitation should therefore be taken up by the BSH in this process as quickly as possible. For such sites, sectoral planning determinations for pipeline-based energy transport to the mainland should be made at the same time. As already described above, the distant sites of clusters N-17 to N-19 are particularly suited to development via offshore electrolysis and pipeline for reasons of cost efficiency, substantially accelerated connection and considerably reduced environmental impact.
4. Finally, a suitable funding mechanism should be defined and implemented with sufficient lead time before the tendering of other energy generation areas, one that enables full cost recovery and appropriate protection against sales price risks, particularly for the pilot investments in the market ramp-up phase. For the first forthcoming tender, a variable market premium for a green product suggests itself (offsetting the cost difference between the production of green hydrogen offshore and green hydrogen onshore), which alongside capital expenditure also enables operating expenditure support (euros per kilogram of hydrogen). For this it would initially be expedient to link the applicable value for determining the market premium to the energy provision costs established in the course of the tender and feeding into the competitive award procedure. The duration of entitlement to the market premium should be oriented towards the amortisation period of the investment, e.g. the depreciation period, and should be at least 20 years. This funding approach would moreover be compatible with further support measures (e.g. demand-side incentives such as carbon contracts for difference). With a view to subsequent tendering rounds, an evaluation of the two procedures should be carried out. Integration into a single procedure and a review of the mechanisms should be sought. AquaVentus is glad to be available for further discussion on the concrete design of such a funding mechanism.