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Energy sources of the future: Scholz is courting green hydrogen in the Gulf

energy sources of the future
Scholz is courting green hydrogen in the Gulf

In the medium term, the federal government is opting for a switch to energy from hydrogen. But the future technology will only be implemented if enough countries around the world are convinced of it and participate, so the calculation goes. That’s exactly why Scholz am Golf isn’t just on a liquefied gas shopping spree.

When Olaf Scholz and Robert Habeck are currently traveling around the world, the suspicion arises that they primarily want to collect commitments for liquid gas (LNG) that is available at short notice. The disappointment is all the greater that Habeck’s visit to Qatar has not yet resulted in a major deal. Now the chancellor is on a different mission in the Gulf States: he is above all a traveling salesman for another gas – hydrogen.

Chancellor’s golf trip

Scholz continues his visit to the high-energy monarchies on the Arabian Peninsula today. After his visit to Saudi Arabia he will meet the heads of state of the United Arab Emirates and Qatar. The three countries are major exporters of oil and gas. The Federal Government is hoping for concrete contracts to be signed during the two-day Chancellor’s trip. Scholz will be accompanied by a high-ranking business delegation. But there are big differences when it comes to human rights.

“The task is nothing more and nothing less than convincing governments around the world to get into this technology,” according to government circles. The short-term solution to the LNG problem is also important. But the future is being worked on in the Gulf. That’s not easy: On the one hand, there are doubts as to whether billions in investments in hydrogen are really worthwhile. In some countries, the idea persists that in the future it will be possible to operate in a CO2-neutral manner with a massive expansion of nuclear power.

On the other hand, there is enormous time pressure. In the view of the federal government, Germany’s goal of climate neutrality by 2045 can only be achieved if the widespread switch to a hydrogen economy is successful. However, a German and even a European isolated solution is impossible. “Experts estimate that we will have to import 40 to 60 percent of our future hydrogen requirements,” the government says.

Saudi Arabia plans green hydrogen city

This means: You need countries that produce green hydrogen on a large scale and as cheaply as possible. For this they need green electricity in huge quantities. And you need a lot of countries that go this way: Because according to Scholz, the federal government does not want to make itself dependent on a few producers again, as is the case with fossil energies.

That’s why the chancellor is already arguing with France about building a pipeline that could also connect Spain’s and Portugal’s gas terminals to the Central European grid. However, the federal government is also campaigning in Australia, Senegal, South Africa, Egypt and Canada so that these countries invest and become potential suppliers.

In Saudi Arabia, at least the previously necessary massive expansion of green electricity production is planned with the construction of large solar fields in the desert – with the prospect of electricity production for one cent per kilowatt hour. In the oil-rich country, however, there are also gigantic plans for new cities like Neom, whose mobility is then to be secured with green hydrogen. Only the export had not yet been taken into account.

“The countries will only switch if they also receive a clear message from Europe’s largest economy that hydrogen really is the substance of the future,” said a German government representative. Scholz wants to make exactly this promise: Because governments and companies will only invest billions in the expansion of hydrogen production and the necessary green electricity production if they have confidence in reliable purchase.

A win-win-win situation

The bet on the hydrogen future should work for both of them – in the long term. A first bilateral hydrogen cooperation between Germany and Saudi Arabia was agreed in March 2021 by the previous government in Berlin. On the golf trip, Scholz has the heads of companies on board who are driving the transformation to the new billion-dollar business in various places – such as Siemens Energy, the Port of Hamburg or Thyssenkrupp AG. German industry wants to become a global pioneer in this area. The construction of the necessary electrolysis facilities for the production of hydrogen is to become a billion-dollar business, as is the first completely CO2-free steelworks, which is to be built at Salzgitter AG in Lower Saxony.

The chancellor advertises a win-win-win situation: Especially countries from which Germany would like to obtain LNG gas temporarily could use their export terminals to build an infrastructure that they can also sell after the end of the fossil-fuel era of hydrogen – and Germany would also benefit from it. The terminals on the German North Sea and Baltic Sea coasts are being built for the same dual use of LNG and hydrogen – even if landing terminals are technologically much easier and cheaper to build than export facilities for hydrogen, because it has to be extremely cooled down for transport or exported as ammonia.

The highlight: With the reference to hydrogen, it is easier to explain in Europe why investments in the use of fossil energy still have to be made. And the Gulf states, so the argument goes, offer a perspective for the post-fossil age, when their gas and oil will no longer be needed.

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