A vision for hydrogen: Interview with Dr. Tassilo Schuster and Karlheinz Ronge

Hydrogen is one of the beacons of hope in the fight against climate change, and it is also a promising business model for companies. Fraunhofer IIS has thorough methodological expertise in various application areas of the hydrogen economy. Now the city of Nuremberg, in collaboration with Fraunhofer IIS, is publishing a study on the prospects for the hydrogen economy in the region. To mark the occasion, we interviewed Dr. Tassilo Schuster, Senior Scientist Innovation and Transformation, and Karlheinz Ronge, who heads the Distributed Systems and Security department, about what the future holds for this energy source.

Green hydrogen is currently the subject of much discussion. The political, business and research communities already have high hopes for it as we transition to a net-zero world. What role will this energy source play in our energy system in the future?

Dr. Tassilo Schuster: The Intergovernmental Panel on Climate Change’s Sixth Assessment Report of 2022 makes it clear that much needs to be done. The only way we can keep the rise in global temperature to 1.5 degrees Celsius is if we reduce global emissions by 45 percent by 2030 and cut greenhouse gas emissions to net zero by 2050. This requires a massive rethinking of our current economic and energy system in order to avert irreversible damage to the ecological balance of our planet. Achieving that calls for a double paradigm shift: first, by moving away from our current linear economy to a circular system, and second, by largely replacing the fossil fuels in our energy system with renewable alternatives.

Karlheinz Ronge: Alongside electricity generated from renewable energy, the most important building block of our energy supply will be green hydrogen, which is itself produced mostly using precisely that kind of electricity. Green hydrogen will be used as a fuel in its own right, and it will also serve as a feedstock for synthetic fuels and gases as well as a component in process engineering operations such as steel production or fertilizer manufacture. 

What are the prospects for using hydrogen as an energy source? 

Dr. Schuster: Hydrogen is versatile. Its areas of application fall into four categories: power generation, the heating market, industry and the mobility sector. The German government’s National Hydrogen Strategy of 2020 points out that there are economic reasons why the hydrogen ramp-up must proceed in a targeted way and incrementally. Priority will be given to fields in which the use of hydrogen is close to being economically viable in the short or medium term, in which no major path dependency is being created, or in which there are no alternative options for decarbonization.

Karlheinz Ronge: In addition to replacing other energy sources, hydrogen is also to be used as a storage medium. Even though the storage of large quantities of hydrogen is challenging and involves non-negligible conversion losses, intensive research is being conducted on solutions that employ hydrogen as seasonal storage for electrical energy or as a buffer for heat supply. The aim is to minimize the resulting losses by tying in other suitable processes.

What expertise and technologies does Fraunhofer IIS bring to the table to help shape the hydrogen economy and develop a sustainable energy system?

Dr. Schuster: At Fraunhofer IIS, we have certain skills that we apply to specific application areas of the hydrogen economy. 

To start with, we have expertise in cognitive sensor systems, which support the monitoring and operation of production facilities, transport systems and hydrogen applications. The data acquired can be used either on-site or in the cloud together with AI methods in order to optimize operations and processes.

In addition, we develop nondestructive testing methods for the hydrogen industry at our Development Center X-ray Technology. These methods can be used to test fuel-cell and electrolyzer components after various manufacturing steps.

We also have experience in the optimization of networks and pipeline management, including in the gas supply sector. This know-how can be transferred to the supply infrastructure for hydrogen and to sector coupling, where it can help make supply planning and management more efficient.

And finally, we have comprehensive expertise in developing data-based business models for new markets: the experts in our Center for Applied Research on Supply Chain Services SCS are specialized in this domain. In particular, our expertise can help shape the digital transformation of the hydrogen value chain for the long term.

What will the key challenges be for you as researchers? How can cognitive sensor technology and AI, as focus areas at Fraunhofer IIS, help with this?

Dr. Schuster: As we’ve already mentioned, economic hurdles still loom large in many application areas. That makes operational and process optimization an important building block for designing and operating these systems efficiently. In many cases, there’s still no suitable database available to perform optimizations using AI methods. We also need to continue to work intensively on data collection and processing.

Karlheinz Ronge: This is where our cognitive sensor systems come into play. These consist of smart sensors, communication links and data processing with advanced methods and algorithms such as machine learning. The data obtained can be used to control and monitor individual components such as fuel cells or electrolyzers, as well as plants, pipelines and grids across sectors. The only way to digitalize the production, distribution and use of hydrogen is by using cognitive sensors. 

And when it comes to operating and controlling infrastructure facilities, we can also bring special optimization methods to bear. Mathematical optimization enables us to verifiably find the best solution under given constraints and assumptions. That isn’t possible with conventional modeling and simulation. This is important in areas such as decision support systems.

How does Fraunhofer IIS collaborate with its other partners?

Dr. Schuster: In general, there are three ways we work with our partners in science, industry and the public sector.

First, our network extends across the whole Fraunhofer-Gesellschaft and we collaborate with different institutes on a project-specific basis. One of these was the now-completed EnDaSpace PLATON project, in which we developed a digital platform for the operating data from a wind turbine and a hydrogen electrolyzer and addressed platform-based business models. We are also in close exchange with other research institutions, for example from the Energie Campus Nürnberg, and work together with them on scientific issues.

Second, we collaborate on joint research projects, working with industry partners and other research partners on various issues arising from the individual aspects of hydrogen value chains. This brings us a bit closer to actual applications.

Third, there are collaborations as part of direct public or industrial commissions. One example is our work with local research partners on a study for the Nuremberg Metropolitan Region entitled “Hydrogen in the Nuremberg Metropolitan Region – Analysis of Competencies, Opportunities, and Challenges.”

Let’s take a brief look into the future: When do you think business models with hydrogen will emerge? 

Karlheinz Ronge: There are some conditions for the development of business models that won’t change in the foreseeable future. In the decades ahead, green hydrogen will be a scarce commodity. It’s highly unlikely that Europe will manage to be self-sufficient. And the losses that occur when converting hydrogen into electrical energy are in some cases high. This means that for many applications, the decision to use hydrogen competes with the option of using electrical energy directly. Hydrogen’s share in the overall energy mix will be larger or smaller depending on how prices develop and how the technology advances.

Dr. Schuster: There are already companies out there that have established profitable business models in the hydrogen economy, and many more that are in the process of planning or thinking about them. Some have conventional business models, close to their existing core business. Others are currently developing innovative business models that will break new ground. We’ve already conducted confidential studies and projects with some of these companies. What stands out in our research work on business models and projects with industry partners is that the focus is no longer on product sales alone. Rather, companies have to think much more in terms of ecosystems. The associated value-added network is becoming much more important for business model innovations.

Fraunhofer IIS collaborated on a study on the prospects for the hydrogen economy in the European Metropolitan Region of Nuremberg. What role will hydrogen and hydrogen technologies play for the region?

Dr. Schuster: Our benchmarking study with other metropolitan regions in Germany shows that the Nuremberg Metropolitan Region doesn’t have a particular location advantage in the energy value chain when it comes to establishing a regional hydrogen economy. For one thing, its potential for producing carbon-neutral hydrogen using renewable energy is limited compared to other metropolitan regions. For another, the region has hardly any major industrial consumers. 

Nevertheless, even here, hydrogen will have an important part to play. 

This applies in particular to the development, production, distribution and export of specific key hydrogen technologies. In this product-related hydrogen value chain, three clusters of expertise are emerging in the region:

1.     Overall systems and components for electrolysis plants

2.     Overall systems for hydrogen storage, esp. LOHC technology

3.     Overall systems, subsystems and components for stationary and mobile fuel cells

As to the potential for producing and applying hydrogen, however, our analyses show that, while there is potential for electrolysis in the European Metropolitan Region of Nuremberg, the region is very unlikely to become an export region or major consumer. In this regard, our scenario analyses show a roughly 75 percent share for product-related hydrogen value chains and only 25 percent for the energy-related hydrogen value chain. 

Interview by Lucas Westermann, Editorial Fraunhofer IIS Magazin