INTERVIEW - Flexibility is crucial for success of German offshore hydrogen auction

The German government should ensure flexible and not too rigid terms for the much-awaited tender that should award a site in the North Sea for the production of green hydrogen from wind energy at sea, the managing director of offshore wind-to-hydrogen initiative AquaVentus said in an interview.

Flexible conditions are crucial as offshore electrolysis is still in its infancy and requires more research and development, which must be reflected in the tendering process, Robert Seehawer told Renewables Now.

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Germany has designated a 100-sq-km area in the North Sea, known as the SEN-1 zone, for the production of hydrogen using offshore wind power. This site will be awarded in a tender for the development of Europe’s first offshore wind-to-hydrogen farm, featuring 1 GW of installed capacity. AquaVentus, comprising over 100 companies, organisations, and research institutes, is laying the groundwork through research, development, and testing to create favourable conditions for the realisation of this plan.

"Offshore electrolysis is primarily a research and development endeavour – a journey full of opportunities with an open ending. No one has operated an offshore electrolysis over a long period. This is why learning and flexibility are crucial," he said.

To provide flexibility and account for the varying stages of development between offshore wind and offshore electrolysis, the German government should refrain from imposing penalties for delays in implementing electrolysis projects. "We need more flexibility compared to offshore wind projects and ideally, no penalties at all as the concept is still evolving. We need to focus on the contribution of offshore electrolysis to the green energy transition - not on the risks. Some developers, particularly those from the oil and gas sector, might prefer a centralised platform with a large electrolyser, while others might favour a decentralised solution with small electrolysers at individual windmills. At the moment, nobody knows which approach is best. This uncertainty is why we have a one-gigawatt field divided into three sections, allowing for the testing of different concepts. This means three different consortia, each with its own concept, and a lot of flexibility with no penalties.

"If the process is too strict and rigid, it will not be beneficial. Companies and employees will not take the risk if there is no risk mitigation and no flexibility during construction. The plan is to be operational by 2030, and a lot will change in the next six years."

In addition, the tender regime should ensure that support and funding go to high-quality companies with experience in both gas and oil, as well as offshore operations.

"It is crucial not to focus solely on money; many other criteria must be factored in, as this is a research and development project. This is not an area where we can extract a lot of money. The decision should not be based solely on financials but also on which companies have the most knowledge. The government must understand that this sector is still in its infancy, much like offshore wind was when it faced many setbacks during its development," Seehawer stressed.