Under the German "Renewable Energies Act" (EEG), renewable energy system operators are eligible for a 20-year state subsidy for the sale of their electricity via tenders. However, after 20 years of operating successfully with the aid of EEG tariffs, wind turbine operators are now facing the question of what to do with their old turbines. This affects wind turbines in Germany with a total generation capacity of more than 24 GW. Although the legislature is trying to improve the situation, repowering is not an option in many cases because the necessary legal preconditions are not in place. So what is a profitable alternative where repowering is not feasible? Many of the affected wind turbines are still operational and meet the necessary technical specifications to be certified for several more years of operation. Common alternatives include:
- Grid feed-in (full/surplus) with no fixed remuneration (feasible at current electricity market prices, but with no planning certainty)
- Direct marketing (in addition to Power Purchase Agreements (PPA))
But the last resort is often dismantling when such concepts are not financially viable for operators. This not only represents a setback for wind energy pioneers, but also for the energy transition as a whole.
The German government presented a national hydrogen strategy in June 2020 to coincide with the end of the first round of EEG subsidies. The goal is to install 5 GW of water electrolysis generation capacity to produce "green" hydrogen by 2030. The amount of "green" energy that will be necessary to achieve this is 20 TWh per annum, which is nearly the same as the output of all the wind turbines that cannot be repowered and will no longer be subsidised by 2030.
So, will hydrogen be able to breathe a "second life" into legacy wind turbines? And is hydrogen also capable of ensuring the long-term economic viability of new and existing wind farms?
To answer this, we first need to clarify certain questions:
Why even bother with hydrogen?
Hydrogen is an element that can be used either as a chemical energy source or as a raw material. It is highly time flexible, as it is easily stored. Water can be split into oxygen (O) and hydrogen (H2) by applying an electrical charge in an electrolyser; hydrogen can then be used for long-term energy storage. As its storage period ranges from hours to months, it can balance out the problematic seasonal differences between the availability of renewable energy and its demand in summer and winter. Hydrogen technology (i.e., electrolyser and fuel cells) can also relieve or stabilise the power grid by cushioning power fluctuations, thereby helping to secure the 100 % renewable power supply. These characteristics make hydrogen one of the key elements in the so-called "energy transition 2.0".
Yet where is hydrogen used and are there no alternatives that are more efficient?
One potential application would be in the mobility sector. Ever more fuel-cell-powered vehicles are being introduced both in the private sector and in municipal or public transport systems such as buses. However, hydrogen's greatest potential for de-carbonisation is in situations where there are no alternatives, i.e. where electrification is not an option, for example in the steel industry, the primary chemicals sector, cement works, and refineries. But battery-powered vehicles are also not viable for long-distance or heavy haulage in the logistics sector, so hydrogen could contribute towards the necessary de-carbonisation of transport, whether it is by water, land, or air.
Using "green" hydrogen throughout the entire industrial sector could reduce global CO2 emissions by almost 60 %, so the predicted demand for it is likely to increase exponentially and will have to be met in the coming years and decades.
Where is all this hydrogen going to come from?
German politicians envisage the large-scale production of "green" hydrogen in industrial electrolysers or importing it – which is still a pipe dream, because the necessary projects are still in the (early) planning stages. One alternative that could already be implemented is decentralised hydrogen production through small (< 1MW) to medium-sized (< 5MW) electrolysers next to where it is to be used. There are some specific benefits and marketing advantages for hydrogen produced in this way:
- The transport distances are shorter which reduces the associated costs.
- It minimises the CO2 footprint that transporting even "green" hydrogen inevitably leaves behind.
- It reduces the need for redispatch.
- It is cheaper to transport hydrogen than electricity.
But how can the hydrogen be transported to where it is needed and what are the storage options?
An interim storage solution is needed for the gas if it cannot be purchased directly or fed into a local hydrogen/gas grid. Compressed gas storage tanks have become the standard for small to mid-sized electrolysers. These are integrated in the transport vehicle in so-called tube trailers or gas tank trailers. Tube trailers are connected directly to the electrolyser via an intermediate compressor, filled and replaced by the next empty tube trailer. The full tubes are then transported to where the hydrogen is needed. Each trailer can easily transport 500 kg of H2 at 200 bar, which means that a hydrogen infrastructure is conceivable even in remote areas.
And this is where wind turbines come in!
One possible scenario would be to produce "green" hydrogen by electrolysis on-site in wind farms. The basic legal framework allows for various operating concepts for connecting wind turbines with electrolysers including:
Powering the electrolyser with in-house wind power for self-supply purposes
Using a local direct power supply to power the electrolyser backed by an on-site Power Purchase Agreement (PPA)
Powering the electrolyser via the electricity grid regardless of the location of the power plant in compliance with an off-site PPA.
The first of these options is the most cost effective because no grid charges or surcharges would be incurred for the electricity used to generate the H2. However, a PPA with an electrolysis company could also be more profitable than with other consumers, because "green" hydrogen producers are exempt from the EEG surcharge and other fees for drawing power from the grid, so they are usually willing to pay a higher price per kWh. Electrolysis system operators would be hard pushed to find more cost-effective power supplies than renewable energy plants no longer eligible for EEG funding.
But are the investment costs for hydrogen production not still prohibitively expensive? Is this a realistic long-term option for continuing operations? The answer is yes! This continuing operations option is potentially viable. And, whilst the investment costs are high, they have already come down in terms of the know-how gained and economies of scale, which is a development that will continue in the coming years.
The actual potential for specific wind farms would have to be assessed on a case-by-case basis, whereby the power generated (wind turbine), the hydrogen produced (electrolysis), and follow-on hydrogen value chain costs (storage, distribution, and usage) would have to be taken into account. This is the only way to create a business case that takes account of both the specific H2 production costs and the optimised system.
Therefore, regardless of the age of their plant (new, existing or post-EEG), wind turbine operators should not ignore the potential of hydrogen. What is required is some deep thought and a conscious, well-informed decision either in favour of or against the combined operational production of "green" hydrogen. This is how you could (once again) lead the way and actively shape the "energy transition 2.0".