The transformational role of e-NG in Germany

In the dynamic landscape of renewable energy, Germany is taking significant strides towards a more sustainable future, with e-NG (electric natural gas) emerging as key building block of its energy transition. This blog post delves into the pivotal role of e-NG in accelerating the hydrogen economy, defossilization, and its potential to facilitate Germany’s industrial companies' adoption of green molecules.

e-NG offers strategic advantages to enable a fast and cost efficient defossilization for Germany’s industrial companies. e-NG can be used as a drop in fuel in electricity generation, heavy industries like steel, cement, or transportation and mobility by using existing infrastructure. This molecule's direct usability as a drop-in replacement for natural gas eliminates the need for costly and complex immediate reconversion processes. This approach ensures a secure supply of energy and enhances cost competitiveness in the short- and medium-term. e-NG seamlessly integrates into the German government's upcoming national hydrogen import strategy, carbon management strategy and power plant strategy setting out the path for the transformation of the energy system and providing a stepwise transition towards dedicated H2 and CO2 infrastructure.

The production costs of ammonia, e-methanol and e-NG are closely matched, driven predominantly by electrolyser capital expenditures (approximately 60-70%) and the operational costs of renewable electricity procurement.

e-NG stands out for its compatibility with existing infrastructure, eliminating the need for immediate asset retrofits by end-users, thereby avoiding additional costs. All hydrogen carriers will be needed to effectively decarbonize the global energy system and e-NG provides an immediate solution for reducing carbon emissions in sectors that are currently hard to abate and depend on fossil natural gas.

The country's existing gas grid and storage facilities, valued at €270 billion, span over 550,000 km¹, offer a robust foundation for the cost-efficient transportation of e-NG through the existing natural gas grid. This extensive network is complemented by ongoing investments in LNG (Liquefied Natural Gas) infrastructure across Wilhelmshaven, Stade, Brunsbüttel, and Mukran, enhancing Germany's capacity to balance seasonal energy demands effectively. While TES plans to leverage the systems already in place, TES is also building global green energy hubs to support import, storage, and distribution. From these hubs, TES will supply e-NG directly to gas pipelines or convert it back to green hydrogen for delivery to customers via the hydrogen pipeline. Hydrogen will be key to the green transition, and the versatility of e-NG is what gives complete flexibility to respond to current and future market shifts.

In Germany, the support from the Ministry of Economic Affairs and Climate Action (BMWK) for TES's e-NG-ready import terminal in Wilhelmshaven highlights its importance for the security of energy supply.

Moreover, the anticipated zero-rating of CCU (Carbon Capture and Utilisation) fuels and RFNBOs – such as e-NG – in the EU (European Union) Emissions Trading System (ETS), as indicated in the EU's Industrial Carbon Management strategy, addresses topics like emissions reduction crediting, and contributes to the diversification of options for decarbonisation of hard to abate sectors.

Security of supply: e-NG ensures German companies can secure a steady supply of green molecules, supporting the ramp up of the hydrogen economy and breaking the supply-demand-infrastructure cycle. This facilitates the gradual establishment of a hydrogen backbone as supply increases.

Industrial adoption and demand creation: end-users can use the e-NG delivered to them to install ATRs and fuel cells and gradually build pure green hydrogen demand in the parts of their industrial processes and plants that are easiest to switch to green hydrogen, therefore creating demand for the hydrogen backbone.

Support for German Manufacturing: the production of green hydrogen and e-NG presents opportunities for German industry players to contribute significantly to the scale up of the value chain, enhancing Germany's position in green technology manufacturing.

Policy and economic incentives: Gradually blending e-NG into the gas mix offers a practical approach to generating hydrogen supply without imposing additional costs on public resources.

CO2 recycling: e-NG enables the recycling of CO2 from industrial processes, presenting a more sustainable and cost-effective solution than CO2 storage, thereby avoiding the complexities and costs associated with negotiating storage solutions.

e-NG stands as a transformative force in Germany’s pursuit of a sustainable energy future. Its compatibility with existing infrastructure, coupled with enabling their timely conversion to H2 infrastructure, cost-effectiveness, and strategic support from both industry and government, positions e-NG as a key player in the nation's renewable energy strategy. At TES, we are favourable to the hydrogen backbone, to facilitate a seamless ramp-up of supply and demand, enabling the straightforward conversion of e-NG to green hydrogen wherever and whenever necessary. As Germany continues to navigate the complexities of energy transition, the strategic deployment of e-NG offers a promising pathway to achieving a sustainable, efficient, and economically viable energy ecosystem.

¹ Source: https://www.dvgw.de/medien/dvgw/leistungen/publikationen/transformation-gasnetze-dvgw-diskussionsbeitrag.pdf (https://www.dvgw.de/medien/dvgw/leistungen/publikationen/transformation-gasnetze-dvgw-diskussionsbeitrag.pdf)