Europe as an electricity-based industrial centre: potential and demand for renewables and hydrogen in Germany and the EU

The EU’s climate policy requirements and associated emission reduction targets are leading to a far-reaching transformation of the respective energy and electricity supply systems in almost all member states. In the coming years and decades, the member states will massively expand their facilities for generating renewable energy. At the same time, they are successively removing (reliable) fossil and nuclear energy sources from the system. Irrespective of this, the EU Commission is pushing for ever greater integration of the European electricity networks and markets.

Initial developmental approaches and testing of new, low-greenhouse gas technologies and processes can already be observed today in German and European industry – including in energy-intensive primary industries such as chemicals, steel and cement. Many of these technologies are based on either the direct use of electricity or the production and use of hydrogen generated from green electricity. These technologies entail significantly higher power consumption.

The success in decarbonising German and European industry is therefore essentially dependent on cheap and readily available renewable electricity and hydrogen. In addition, (possibly increasing) electricity and CO2 costs and carbon leakage protection must be considered together in order to stimulate industrial investment decisions or prevent carbon and investment leakage.

Together with enervis GmbH, the IG BCE Foundation for Labour and the Environment is investigating the potential and demand for renewable energy and hydrogen in Europe. The two key questions in the project are:

  1. Where can energy-intensive industries obtain the renewable power they need for their electricity- and hydrogen-based production processes at competitive prices?
  2. How are the decarbonisation efforts impacting on value chains within and outside Europe?

The initial results from the project are expected in winter 2020/21.