Germany is a country with a great appetite for energy. The fourth largest economy in the world devours vast amounts of it. To move away from fossil fuels and seal independence from Russia, other resource-rich countries are looking to the fore. They could be the key to a new energy strategy.
Whether gas, hydrogen, ammonia – Germany will always be an energy importing country. The quantities required in this country cannot be produced in-house. If Germany wants to move away from fossil fuels and remain secure in the future, energy has to be purchased.
Green hydrogen is considered a climate-friendly alternative to fossil fuels and is in great demand. The gas is intended to cover the growing energy demand in Germany. However, the best conditions for production can be found elsewhere.
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An equally important substance for the future is green ammonia. While conventional ammonia is responsible for three percent of global CO2 emissions and is used as a raw material for fertilisers, the green version is climate-neutral. Hydrogen can also be refined into ammonia, making it easier to transport the raw material. Ammonia is considered to be particularly effective here and can be split back into hydrogen at the destination. In addition to the chemical industry, green ammonia can also be used as a substitute for fossil fuels in transport.
In many places, however, the production of climate-friendly hydrogen or ammonia is still in its infancy. The war in Ukraine and the associated energy crisis, on the other hand, call for quick solutions. Liquefied Natural Gas (LNG) should provide Germany with energy security for the future and keep the economy running. The extraction process (fracking) is controversial, but in order to transform the German energy system towards renewable energies, gas must first serve as an alternative source of supply.
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With all alternatives to fossil fuels, Germany is dependent on cooperation and trade. Without international partnerships, the energy supply will be on the brink in the coming years. A look at other continents shows what possibilities there are and where Germany already has a foot in the door. Who produces our energy of the future? An overview.
On the other side of the Mediterranean, the conditions for hydrogen production are almost perfect: there are enough open spaces, as well as sun, wind and hydropower. Egypt, Kenya, Mauritania, Morocco, Namibia and South Africa founded a United Nations-backed alliance in May and set themselves the goal of producing 500 kilotons of green electricity annually.
In Mauritania, for example, the largest hydrogen project is being developed together with the British Chariot Energy Group and the Dutch port of Rotterdam. “Project Nour”, as the initiative is called, is to deliver 600,000 tons of green hydrogen to Europe every year from 2030. The project is to cover an area of around 14,440 square kilometers onshore and offshore and produce electricity from solar and wind power for hydrogen electrolysis.
There are also nine further hydrogen projects in Africa. According to the financial analysis group S
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The country with the largest area in Africa could one day play a key role in Germany’s energy strategy. Algeria is the tenth largest gas producer in the world. The treasure slumbers in its desert. Experts estimate the deposits at more than four trillion cubic meters. And that’s not all: in Algeria, the sun shines an average of around eight hours a day – a paradise for the generation of solar energy.
Around 13 percent of European gas imports already come from Algeria. Southern European countries such as Italy, Spain and Portugal are primarily supplied. Although the gas could also reduce Germany’s dependence on Russia, it does not contribute to the climate goals. The hope, however, is that the gas will eventually be replaced with green hydrogen generated from massively available solar energy. But Algeria hasn’t gotten that far yet. The country could be a partner for the future.
The situation in Angola is similar. The country is to become Germany’s first supplier of green hydrogen from renewable energies. There is already an energy partnership between the two countries. A letter of intent to build a factory has already been signed. The plan: From 2024, green ammonia is to be exported to Germany as a carrier for green hydrogen. The export volume: 280,000 tons.
However, Morocco is regarded as a pioneer for renewable energies in the regions of North Africa and the Middle East. As early as 2018, Germany agreed on a hydrogen alliance with the Kingdom. But the possible cooperation is controversial in public. Diplomatic disagreements regarding Morocco’s sovereignty over Western Sahara must first be settled here. And despite the good locational conditions for solar and wind energy, Morocco’s future export volume is difficult to estimate. Experts disagree. The issue of water scarcity in particular plays a key role when considering the country as a hydrogen partner. The possible pipeline transport, on the other hand, is considered an advantage, since transport ships are rare.
Federal Economics Minister Robert Habeck recently visited the Arabian Peninsula in search of alternatives to Russian gas. There is no shortage of fossil fuels such as crude oil or natural gas, particularly in the United Arab Emirates. They are the reason for the wealth of the Persian Gulf. But the Emirates are also striving to become a “global player” when it comes to green hydrogen. Sun and space are widely available. Thanks to solar energy and plenty of space in the desert, this is realistic.
There is already cooperation between the UAE and German companies such as Siemens Energy on hydrogen projects. The first hydrogen deliveries to Germany are to be made possible this year. However, it will take time before the VEA are ready to produce quantities on a commercial scale. A large part of the hydrogen is currently still produced “blue”, i.e. from natural gas. The development of value chains in the country and the production of hydrogen with solar energy are expensive. Also to consider are issues related to democratic values in the country that can hinder an energy partnership. In addition, the UAE is governed authoritarian and is involved in various conflicts in Yemen and Libya. Not the best conditions for a reliable partnership.
Renewable energies are also to be expanded in Qatar, albeit to a lesser extent than in other Gulf States. The goal of increasing the share of solar energy from 0 to 20 percent by 2030 is anchored in the state’s new climate protection strategy. So the will is there, which probably also led to His Highness Sheikh Tamim Al Thani, Emir of Qatar, and Federal Economics Minister Robert Habeck signing a declaration of intent to strengthen bilateral cooperation in the field of energy. Recorded therein: the development of trading relationships in the field of liquefied natural gas. The still young energy partnership should also inspire cooperation in the field of green hydrogen.
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In addition, the emirate is planning a giant project to trump its neighbors in the burgeoning low-carbon fuel industry. For 2026 “the largest blue ammonia plant in the world is planned”. Producing blue ammonia is becoming increasingly popular in the Middle East. Qatar’s planned plant will have a capacity of 1.2 million tons per year and will be built in the industrial city of Mesaieed. This would make the plant larger than the 1 million tonne per year project planned in the neighboring industrial town of Ruwais in Abu Dhabi.
Germany should be CO2-neutral by 2045. To achieve this, production processes, for example in the steel and chemical industries, have to be completely reorganized. In addition, the EU has set itself the goal of having 20 million tons of green hydrogen available by 2030. A look into the distance is not only worthwhile from a German point of view.
In Australia, around 21,000 kilometers away, green electricity is produced more cheaply than almost anywhere else in the world. The country’s deserts cover an area of more than 1.3 million square kilometers and make up 18 percent of the continent. Sun and wind are also available in abundance. In addition, as one of the largest energy exporters, Australia already has the necessary experience and infrastructure when it comes to the export of raw materials.
Although cargo ships need almost two months to reach European ports, studies have now calculated that the costs of transport are hardly a relevant factor. They only account for up to seven percent of the total costs. Despite the distance, Germany and Australia maintain lively trade relations. In 2020, the trading volume was more than eleven billion euros. Distance has long ceased to play a role, not even when transporting hydrogen.
As early as December 2020, scientists from the German Academy of Science and Engineering (Acatech), the industry association BDI and Australian partners launched the HySupply project. The goal is to realize a German-Australian supply chain for renewable hydrogen by 2030.
Canada is also currently in focus as a supplier of hydrogen for the German energy and industrial landscape. A long-term cooperation for the production and transport of hydrogen was recently agreed. According to the agreement signed by Federal Economics Minister Robert Habeck and Canadian Energy Minister Jonathan Wilkinson, hydrogen is to be exported to Germany from 2025.
In concrete terms, this means that the Canadian development company Everwind Fuels plans to deliver 500,000 tons of green ammonia by sea to the energy companies Uniper and Eon in Germany from 2025.
But Canada’s hydrogen plans go further. The company Green Hydrogen International is planning a hydrogen production plant that should have a capacity of 500 gigawatts when completed. This should make it possible to produce 43 billion kilograms of hydrogen per year. This amount of energy could cover 73 percent of Germany’s electricity needs.
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When it comes to hydrogen know-how, the Canadians are second to none. Worldwide, they are among the pioneers in terms of technology and among the ten largest producers. With over 100 hydrogen companies in the country, the further development of the coveted gas is constantly being worked on. And in North America, too, there is no lack of good conditions for the production of green electricity. The Canadian wind power fleet is the eighth largest in the world. In addition, Canada and Germany share the same democratic values. All in all, the country offers very good conditions for a successful energy partnership.
The same applies to the LNG big player USA. According to the Energy Information Administration (EIA), the United States will become the world’s largest exporter of liquefied gas by 2022. According to this, American LNG exports rose by twelve percent in the first half of the year to an average of 11.2 billion cubic feet per day compared to the second half of 2021. About 71 percent of exports went to the EU and Great Britain.
This development is very convenient for the Germans and also the Europeans. Economic relations between the USA and Germany are close. As early as 2021, the USA was the most important trading partner for Germany and also for the EU. This is also reflected in the additional 15 billion cubic meters of liquid gas that US President Joe Biden has promised to the Europeans.
The fact that the Americans are now planning to further expand their LNG production is in line with European efforts towards energy independence. The EU countries are working to reduce or completely stop their gas and oil purchases from Russia. LNG is therefore urgently needed. Germany, for example, intends not only to further increase imports, but also to build several terminals.
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The crux of the matter: The increased demand leads to skyrocketing export prices for LNG. In April 2022, a thousand cubic feet cost $10.33. And one more thing to consider: The price of natural gas has more than doubled in the US since the beginning of the year. As a result, electricity prices are rising there. Employees are laid off and productions throttled. Worries that are also known in Germany. The United States is experiencing its own energy crisis — and may soon need its own gas. A solid partner or a new dependency?
For years, Chile has been striving for a pioneering role in terms of the expansion of renewable energies and climate protection. The country’s geographical advantages are obvious: The longest national mountain ridge in the world stretches along the coastline and in the north of the country is the Atacama Desert, which stretches over nine degrees of latitude. Wind, water and solar power can thus be used to a large extent.
There is also a broad consensus in the government that the issue of hydrogen should also play a leading role worldwide. In 2021, Germany signed a declaration of intent with Chile to set up a joint hydrogen task force. According to a study by the Federal Institute for Vocational Training (BIBB), the state offers very good conditions for a partnership. According to this, Chile is among the top 20 countries for the import of green hydrogen to Germany, and in the long term even among the top 10 countries.
A lot of money can be made with ammonia, liquid gas or hydrogen in the future. And Europe will spend a lot on it. The continent’s infrastructure is predestined for the import of clean energies and is constantly being expanded. There are 41 LNG terminals (as of May 2022) on the coasts of Europe, 26 of them in the EU. Liquid gas from Europe for Europe has so far only come in large quantities from Norway. According to the International Group of Liquefied Natural Gas Importers, the Norwegians exported around 200,000 tons to other European countries in 2021.
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In perspective, however, Portugal and Spain are also among the countries with the greatest potential for being able to supply green hydrogen to Germany in the short to medium term, as the BIBB study shows. France, Ireland, Finland and the Baltic States are also potential hydrogen exporters in the longer term due to their natural resources.
The Netherlands and Belgium with the ports of Rotterdam and Antwerp are currently developing into the most important transhipment points for the import of green hydrogen by ship. In Rotterdam, the energy hub for Western Europe is being continuously expanded. About one eighth of Europe’s total energy requirements already pass through the port, also known as the “energy hub”. In the future, tons of clean energy sources will also land here. Seven more hydrogen terminals are planned for this. Ships from all over the world, loaded with green hydrogen or green ammonia, are to call at the “hub” and their coveted goods are to be converted again directly on site before they are sent through Europe via pipelines – also to Germany.
According to the study, Italy could also play an important role in merchanting. A pipeline corridor is being considered that will transport cheap green hydrogen from Algeria and Tunisia to Central Europe via Italy. In addition to Italy, the United Kingdom could also play a key role as a hydrogen partner in the future. The British operate what is currently the largest offshore wind farm in the world, generating 40.7 TWh of electricity in 2020. Good conditions for the production of green hydrogen.
According to the National Hydrogen Strategy, Germany is currently ready to spend two billion euros. Most of this will go towards expanding cooperation with countries in North Africa and the Middle East. A total of 85 percent of the hydrogen requirement is to be imported. But can’t Germany also produce green hydrogen itself?
In principle yes. All it takes is green electricity. And it can’t only be produced in deserts. In the district of Nordfriesland, Schleswig-Holstein, green electricity is produced using wind turbines and solar panels on the German coast and converted into green hydrogen on site. The “eFarm” project is small, but serves as a kind of blueprint for the national hydrogen strategy.
However, in order to secure an energy supply in the future and to be able to complete the energy transition, Germany must rely on imports. This is not possible on your own. Finding the right partner is likely to remain the major challenge.
