Germany will be looking to Canada for green hydrogen exports, but not so much for natural gas, as the country continues its shift off fossil fuels, the country’s climate envoy told Canadian media late last week.
“All studies show that the market is going to shrink,” Jennifer Morgan, Germany’s first-ever state secretary and special envoy for international climate action, said Friday. “Germany will be driving forward on renewables, and gas demand will decline.”
Earlier this month, analysts at Oslo-based Rystad Energy reported that Germany is on track to exceed its target to produce 80% of its electricity from renewable sources by 2030. The country’s renewable capacity hit 170 gigawatts in 2023, up 12% in just a year, including 81.7 GW of solar and 60.9 GW of wind, says fossil industry newsletter Rigzone.
“The German power sector is a fascinating case study in the global decarbonization and electrification of the grid,” said Fabian Ronningen, Rystad’s vice president of renewables and power research. “Although there has been some short-term pain, the long-term gains appear all but secured. If policymakers stick to their current goals and strategies, Germany will likely continue dominating the European renewables landscape and shed its reliance on imports in the imminent future.”
On Friday Morgan, a former executive director of Greenpeace International and global climate director with the World Resources Institute, said Germany sees natural gas as “a part of the transition, but it is not the long term.” She cited projections that show Europe’s leading economy cutting its gas imports 30% by 2030 and 96% by 2050.
“When asked whether Germany needs Canadian natural gas to replenish its stockpiles, Morgan said her country increasingly relies on renewables,” CBC writes.
An earlier version of that same message was coming from the German embassy 2½ years ago, just months into Russia’s war in Ukraine, when the Trudeau government was talking up prospects for a gas export project from the Alberta foothills that had already been proposed and withdrawn, The Energy Mix reported exclusively at the time.
The company behind a proposed liquefied natural gas (LNG) terminal at Goldboro, Nova Scotia, Calgary-based Pieridae Energy Ltd., had already missed a June 30 deadline to decide whether the troubled project would go ahead, and nearly a year later, analysts were still questioning whether the plan made sense. Then in May, 2022, Natural Resources Minister Jonathan Wilkinson said the government was in discussions with two companies, Pieridae and Repsol S.A., “to see how it can speed up the projects and help boost supply to Europe.”
Even then, the German embassy wasn’t signalling great enthusiasm for LNG trading. Deputy Head of Mission Gerhard Schlaudraff said the process to get a new project approved “could go pretty quickly,” with the country planning to build new import terminals within a year. But meanwhile, following a landmark ruling by Germany’s Constitutional Court, the government announced a 65% emissions reduction target for 2030 and a 2045 deadline for net-zero.
“If the typical offtake agreement in the LNG business is 20 years, and we want to be out of gas in 2045, there is not so much time for any of these projects to come online unless you find some other creative solution,” Schlaudraff told The Mix. “So time is of the essence, and projects that will take a long time to come online are not high on our priority list.”
When Chancellor Olaf Scholz visited Canada three months later, the big announcements centred on green hydrogen, and neither the word “liquefied” nor the acronym “LNG” showed up in official pronouncements.
“One of the challenges around LNG is the amount of investment required to build infrastructure for that,” Prime Minister Justin Trudeau said at the time. “There has never been a strong business case because of the distance from the gas fields, because of the need to transport that gas over long distances before liquefaction.”
Morgan said Europe as a whole is expected to reduce its gas imports by about 25% this decade.
“Europe’s waning appetite for natural gas can be attributed in large part to Russia’s war on Ukraine,” CBC writes. “Russia was once a significant supplier of natural gas to Europe; it has been accused of throttling that supply in retaliation for crippling sanctions imposed by Germany and other Western allies.”
Abracadabra green hydrogen. Just like that. Problems solved.
That is until you try to produce it in bulk (best way is via hydrocarbons, maybe best way in future will be nuclear), transport it (compressing/active extreme cooling), or deal with what it does to its containers (can anyone say hydrogen embrittlement).