More than half of the German consumption of final energy – i.e. the energy that reaches the consumer in the form of combustibles, motor fuels or electrical energy – is accounted for by the heating market. With high seasonal fluctuations, this demand in residential and commercial spaces is particularly concentrated in winter.
But the basic materials, paper and food industries also need a lot of heat for their processes, and they need it reliably, at different degrees of heat and in exact doses. These diverse requirements make the heating market a kind of Achilles’ heel of the energy transition.
Since 1990, a reduction of around 90 million tons of CO2 has been achieved in the heating sector. To achieve the 2030 sector target, the rate of reduction must more than double in the remaining eight years.
Instead of falling, CO2 emissions are currently rising in Germany. Because time is the scarcest commodity in the fight against climate change, we have to cut emissions in the short term. The following applies by 2045: become climate-neutral.
Achieving both goals in the heating sector is only possible with all currently available technologies. There is therefore a lot to be said for a mix of electrification, the use of biomass and the use of climate-friendly and later climate-neutral hydrogen.
In new buildings that are already designed to save energy, heat pumps can hardly be topped in terms of efficiency and are therefore increasingly the method of choice. But more than 90 percent of the buildings belong to the existing stock, 87 percent of which are partially or not renovated.
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Fossil gas is a temporary solution
Natural gas dominates here as an energy source, which supplies 31 million people and 1.8 million industrial and commercial companies via the gas distribution network. A further three million households are indirectly heated with natural gas via district heating. The transformation towards climate neutrality for a relevant part of the existing buildings can only mean replacing fossil gas as a transitional technology with first climate-friendly and then climate-neutral hydrogen as quickly as possible. Otherwise the climate protection goals can neither be achieved nor the necessary investments made.
Gunda Röstel is managing director of Stadtentwasserung Dresden GmbH, authorized signatory of Gelsenwasser AG and a member of the National Hydrogen Council.
Your contribution marks the start of the guest commentary series “Future Hydrogen”.
Heat pumps will undoubtedly play a very important role in the heating sector. In the short term until 2030, however, we will still lack climate-neutral electricity, and the ramp-up will not be problem-free in the long term either.
A further expansion of the power grid is needed at all voltage levels and an increase in the building renovation rate from currently less than one percent to more than two percent per year. The shortage of skilled workers is likely to prove to be a bottleneck in achieving these goals. A 40 percent decline in the number of young professionals for the construction and construction-related trades is symptomatic for numerous trades.
The measures must be socially acceptable
Another challenge in the heating market is the social acceptability of all measures. The housing market is already more than tight. In all cities in our country, the increase in rental costs has exceeded the rate of inflation in the last decade.
In addition, there are currently price jumps on the energy market. The compensation payments promised by the federal government may help individual families. They cannot solve the basic problem that rents and ancillary rental costs make up an ever-increasing part of household income.
On whose shoulders should the forthcoming investments be borne? It is still too early to give an exact answer to this question. However, two points are already clear:
There is no “one-size-fits-all” solution in the heating sector for the very different local conditions in Germany. And: The heating market needs more than one decarbonization option.
The National Hydrogen Council is therefore working together with the Fraunhofer Institute for Energy Economics and Energy System Technology (IEE) and the Fraunhofer Institute for Solar Energy Systems (ISE) as well as various professional associations on a so-called bottom-up study. Based on real data of typical heat supply structures, so-called heat avatars, different decarbonization options are evaluated under various criteria, from security of supply to affordability. Before the summer break, the Council intends to make a political recommendation for action on this.
A liquid hydrogen market must be created
The first thing that applies to the heating market is that we need the rapid ramp-up of renewables as much, as quickly and as cheaply as possible.
Secondly, in the interest of climate protection and in the interest of our technological and economic opportunities, we must do everything to establish a liquid hydrogen market.
If you want to produce and export as many of the new technologies as possible, from electrolysers and components to fuel cells, you have to use them yourself. In addition, it is no secret that we will import 70 to 80 percent of the climate-neutral hydrogen demand from the European and global market. Energy import is not a new situation for our country and it is a chance for old and new export partners to stay in the black with sustainability.
But establishing reliable partnerships and making the necessary investments takes time. Therefore, we will not be able to avoid using “blue” and “turquoise” hydrogen on a transitional basis using CCS and CCU technologies (separation and storage or use of CO2).
Thirdly, all of this presupposes a legal framework. The creation of the basis for the so-called color theory of hydrogen is not in sight.
European thinking is required
The resolution on the taxonomy, the classification of sustainable energy sources, planned for early February, places requirements on new gas-fired power plants that can hardly be met. In addition, unnecessary and very costly forms of unbundling are under discussion with the EU Commission’s gas market package.
This is likely to hinder both investments in grids and power plants and the ramp-up of hydrogen in general. We must therefore think and act in a European way in the heating sector more than ever before if we want to benefit the climate.
This applies to the ramp-up of renewables as well as to the ramp-up of hydrogen. This applies to the cross-border infrastructure development of the hydrogen networks, the storage and for a “promoting regulation”.
And this also applies to effective European hydrogen diplomacy, especially in times that are becoming more tense.
The author is managing director of Stadtentwasserung Dresden GmbH, authorized signatory of Gelsenwasser AG and member of the National Hydrogen Council.
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