Hydrogen in the heating sector: a solution for Germany's carbon-neutral future?
- stauss5
- Mar 31
- 4 min read
Imagine the year 2045: Germany is climate neutral. Cities are cleaner, the air is fresher, and people live in balanced harmony with nature. To make this vision a reality, we need to manage a shift to switch to climate-friendly technologies in all sectors.
The heating sector in particular offers enormous potential here: around 70% of energy consumption in German households is for space heating (1). Fossil fuels, such as natural gas, still dominate here – renewable energies currently only cover around 15% of heating needs (2). Overall, the heating sector in Germany is responsible for around 14% of CO₂ emissions (3).
To reach the goal of climate-neutral future, we urgently need to change this.
The question, therefore, is: how can we achieve this goal?
One possible approach to achieving climate neutrality in the heating sector is to switch from fossil fuels to renewable gases, such as hydrogen.
What exactly is hydrogen?
In its purest form, hydrogen is colorless, easy to store and transport, and has an amazingly wide range of uses. From industry to transportation to heating buildings, this incredible substance is often referred to as a "savior" for good reason.
However, the way hydrogen is produced is crucial to our ability to truly utilize hydrogen for climate neutrality. There are two main production methods I’d like to distinguish here:
“Grey hydrogen” is produced from natural gas and causes high CO₂ emissions.
“Green hydrogen” is produced by electrolysis using renewable energy sources, resulting in a virtually emission-free product.
To make green hydrogen a viable option for the heating sector on a large scale, we need to adopt a systemic approach. This will require a significant expansion of renewable energies to enable the production of green hydrogen on a sufficient scale. Plus, the production of green hydrogen can offer another advantage: its ability to serve as a storage medium for surplus green electricity. This process could help us in the future to solve the storage problem that still challenges many renewable energy sources today: Renewable sources like solar and wind are weather-dependent, generating power only when the sun is shining or the wind is blowing. This creates fluctuations in green energy supply, with times of excess production and other times when there’s not enough. With the help of electrolysis, hydrogen can be easily produced from water and stored in tanks like natural gas. When it is burned, it turns back into water – and releases energy.
Sounds perfect, doesn't it?
Could hydrogen make our goal of climate neutrality in the heating sector achievable?
Unfortunately, it's not quite that simple:
Critics have doubts as to whether the ambitious plans to convert the energy infrastructure to hydrogen are realistic.
One key point is the high costs: the production of green hydrogen is currently still very expensive – one kilogram costs around ten US dollars. By way of comparison, grey hydrogen, which is obtained from natural gas, for example, costs on average only one to two US dollars per kilogram (4). Furthermore, the necessary infrastructure is still lacking: production capacities, storage and transport options for hydrogen are currently limited, which makes its use in the heating sector less attractive.
In my opinion, two key leverage points are crucial to unlocking the potential of hydrogen for heat generation:
Paradigm shift: A fundamental rethink towards renewable energies and integrated energy systems is necessary to successfully replace fossil fuels.
Reinforcing feedback loops: Market incentives can reduce the production costs for hydrogen, thereby increasing demand and promoting investment in efficiency improvements.
In Germany, we can already see how this paradigm shift is being promoted: 62 large-scale projects have been selected to receive a total of 8 billion euros in funding (5). Here, it is decisive to develop the technologies along an S-curve trajectory and to carefully plan the entire process. The larger the electrolysis, the more cost-effective hydrogen production will be in the future. Economies of scale could further reduce the price per kilo of green hydrogen (4).
Industry Example 2024 - The decarbonization Strategy of Berlin Energie und Wärme AG (BEW, formerly Vattenfall)
A prime example of this shift is the decarbonization strategy of BEW for Berlin's heating supply: BEW's objective is to make Berlin's heating supply climate-neutral by 2040. The decarbonization roadmap provides for a gradual phase-out of fossil fuels and increased integration of renewable energies. Hydrogen will play a key role, particularly in Berlin's integrated grid – the largest district heating network in Western Europe – where it will replace fossil natural gas.
The implementation of hydrogen poses significant challenges, particularly regarding the necessary infrastructure and the expansion of renewable energies. It is crucial to note that hydrogen can only be used sensibly if it is produced using renewable energies. BEW's approach therefore encompasses a diverse energy mix. This enables a gradual transformation, and hydrogen can serve as a strategic reserve – particularly for covering peak loads in winter.
Opportunities for a climate-neutral future
The BEW example shows that the systemic integration of hydrogen can significantly support the decarbonization of the heating supply. Targeted leverage points and feedback effects drive a transformation that goes beyond short-term reductions and aims for long-term sustainability.
However, hydrogen is not a cure-all for the heating sector. The most sensible way to generate heat must be decided on a case-by-case basis. But thanks to its versatility, I believe that green hydrogen plays an important role in the toolbox for achieving climate neutrality.
References / Used Sources
3) Frontier Economics Limited. (2021, September). Wasserstoff zur Dekarbonisierung des Wärmesektors. DVGW Deutscher Verein des Gas- und Wasserfaches e. V. https://www.dvgw.de/medien/dvgw/forschung/berichte/g202101-h2-waermemarkt-abschlussbericht.pdf
6) Ausfelder, K. (2023). Wasserstoff im Energiesystem der Zukunft. CITplus. https://www.chemanager-online.com/restricted-files/229745
8) Guidehouse. (2021, Juni). Analysing the future demand, supply, and transport of hydrogen (European Hydrogen Backbone). https://ehb.eu/files/downloads/EHB-Analysing-the-future-demand-supply-and-transport-of-hydrogen-June-2021-v3.pdf
9) Spitzner, E.-C., Bösche, E., Coskina, P., Cordeiro, S., & Kleemann, J. (2021). Wasserstoff – Rohstoff der Zukunft? Institute for Innovation and Technology. https://www.iit-berlin.de/iit-docs/44af0e277c7a4f54a622e2e57eb1c5d1_2019_07_15_iit-perspektive_Nr_52_Wasserstoff_V2.pdf
10) Adolf, J., Arnold, K., Balzer, C. H., & Louis, J. (2017). Wasserstoff – Energie der Zukunft? Energiewirtschaftliche Tagesfragen, 67(11), 74-77. https://epub.wupperinst.org/frontdoor/deliver/index/docId/6893/file/6893_Arnold.pdf
Author: Nadjeschda Ilmberger, Student of MBA Sustainability Management Class 2 (2024-2026)