Out-Law Analysis 3 min. read

Germany prepares for offshore hydrogen production


The German federal government wants to take the lead in the development and use of hydrogen technology. Areas for wind energy plants in the North Sea and the Baltic Sea could be set out exclusively for hydrogen production. There are also plans to change the tendering procedure.

In the course of the reform of the German offshore wind energy law (Wind-Energie-auf-See Gesetzes/WindSeeG) the draft of an updated zoning plan was published by the Federal Maritime and Hydrographic Agency. It introduces the planned areas for offshore wind energy plants and for other kinds of energy plants from 2026 onwards. For the first time there are also two areas available for offshore hydrogen production with the use of offshore wind energy.  

The planned area in the North Sea is 7,116 acres. It will not be connected to land via pipelines to transport the hydrogen, instead the hydrogen will be transported in pressure tanks on ships. The planned area in the Baltic Sea is much smaller, 1,927 acres, and could be connected by pipelines. First an environmental analysis must be undertaken, focusing amongst other things on on birds of passage in the Baltic Sea.  Authorities and the public can comment on the draft until November.

With the revision of the WindSeeG, the legal framework for offshore hydrogen production will soon be changed. Until now energy production at sea fell under the German sea plant law (See-Anlagen-Gesetz/SeeAnlG) which said that areas without connection to the network must be called for tenders on the principle of first come first served.  This will change with the revision of the WindSeeG, which will integrate energy production at sea without connection to the network into the WindSeeG. Afterwards these areas could be awarded and approved by a competitive tender procedure. This could push the economical expansion of hydrogen production and thus strengthen innovation and accelerate the development of new technologies.

Hydrogen production at sea is an important part of managing the transition to low carbon energy. Hydrogen is produced in big saltwater electrolysers. They require energy, which can be produced by the surrounding offshore wind plants. Where it is is produced only with renewable energy it is called 'green hydrogen'.

Hydrogen provides an alternative to battery storage: energy generated by the constant wind at sea can be stored in hydrogen and consumed whenever needed. Also, hydrogen is easy to transport so can be useful as an energy carrier, helping to solve one of the challenges of offshore wind – how to deliver the energy to the power network.

Ships can carry the hydrogen to shore or directly to the customer. If there are gas pipelines already, they can also be used to transport hydrogen to shore, which gives the new technology additional importance with regard to the shutdown of offshore gas fields. Electrolysers can be installed on old platforms and run with wind from surrounding offshore wind farms. Transport by ship and by old pipeline are both cheaper than a submarine cable network.  

In the German national hydrogen strategy published by the German federal government in June, offshore hydrogen production is introduced as one way to strengthen the general production of hydrogen. On the whole, the strategy comprises 38 measures, all set out to achieve two goals: to raise the demand on hydrogen in the industry, the private sector and with individual consumers and also to raise the hydrogen production. The government thus gives hydrogen a central role in the context of energy system transformation and achieving CO2 neutrality by 2050.

Apart from the special use of offshore wind and hydrogen production at sea, the strategy paper also provides for:

  • inclusion of hydrogen in national emission trading
  • hydrogen rates for energy intensive industries such as steel or chemistry
  • inclusion of green hydrogen in the transport sector's greenhouse gas quota, on the long run also the introduction of a hydrogen quota for the aviation sector
  • support of green hydrogen generation capacities by "carbon contracts for difference" steered by co2-pricing
  • lower costs for green hydrogen production in the renewable energy levy

It remains to be seen how the industry will react to these changes. Pilot projects are already in development across Europe: next year a plant for offshore hydrogen production shall be put in operation at the Dutch North Sea coast. It would be the first offshore hydrogen factory in the world.

In Germany there are also plans for hydrogen facilities with offshore wind energy: In the real-world laboratory Westküste 100 at the west coast of Schleswig-Holstein, green hydrogen will be produced by offshore wind energy and then fed into the local gas network. It will even be used as a climate-friendly fuel for airplanes. Waste heat and oxygen created in the production of hydrogen will also be used.  Thus, a holistic hydrogen economy could be established and researched. But the electrolyser itself will be located on the coast, not offshore. Nevertheless, with the new legal framework, Germany will soon be able to provide adequate conditions for real hydrogen production at sea.

Co-written by Franziska Graf of Pinsent Masons.

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