The gas and hydrogen industry published the "Gas Balance" 2024 on February 11. The current gas balance shows a stabilization of the gas market. The industry is recording a significant increase in hydrogen projects. For the first time, planned capacity exceeds the goals of the National Hydrogen Strategy.
At the press conference marking the start of "E-world," Dr. Timm Kehler, CEO of the gas and hydrogen industry, presented the current gas balance in Essen. Gas remained Germany's second most important energy source in 2024. This has further solidified the role of gaseous energy carriers. According to the industry association, these will continue to play a significant role in a future climate-neutral energy system. "The interplay of electrons and molecules allows us to reconcile climate neutrality, security of supply, and economic strength," states the published press release.
Quickly implementable measures are essential for this: "The tendering of new power plants, enabling CCS, and political support for long-term import contracts are crucial to unite climate protection and competitiveness," Timm Kehler emphasized at a press conference.
Northern Germany Leads in Hydrogen Projects
The implementation of the hydrogen strategy is showing effects, according to the industry association: In 2024, the capacity of planned electrolysis projects at 11.3 GW exceeded the 10 GW threshold of the National Hydrogen Strategy for the first time. The already installed electrolysis capacity increased by 83.3 percent compared to the previous year to 110 MW.
Kehler emphasized that further political support is needed to advance the hydrogen ramp-up: "The trend in the hydrogen sector is very encouraging, however, there is still a very large gap between realized and planned projects. Accelerated, unbureaucratic approval procedures and stable hydrogen demand through climate protection contracts and lead markets are necessary to turn planned projects into actual electrolysis capacity."
High electricity prices and lacking mechanisms to reduce production costs make the economic operation of electrolyzers difficult. At the same time, unclear regulations create uncertainty for investors. Additionally, many companies hesitate to enter into long-term purchase agreements for hydrogen since fossil fuels remain significantly cheaper. This results in a lack of reliable business models, which further complicates the financing of new projects and slows down expansion.
The comparison of planned electrolyzers across federal states shows a clear north-south divide. 85 percent of planned capacities are currently located in the five northern states of Schleswig-Holstein, Lower Saxony, Mecklenburg-Western Pomerania, Brandenburg, and North Rhine-Westphalia – mainly due to their proximity to major renewable energy generation regions.
Dark Doldrums Show Need for Gas Power Plants
According to the industry association, biogas and biomethane are essential components of a climate-neutral energy system. As a renewable and storable energy source, biogas can be flexibly used for electricity and heat generation and help balance fluctuations from wind and solar power. This is particularly crucial during dark doldrums. In 2024, around 45 percent of German electricity was generated from wind and solar energy. However, during calendar week 45, a dark doldrums period, the share of wind and solar power was only about 14 percent.
Despite these advantages, the development of the biogas industry in Germany largely stagnated in 2024. The number of biogas plants declined significantly according to initial forecasts. Economic uncertainties and rising costs are putting considerable strain on operators. Furthermore, many of the subsidies for these plants will expire in the foreseeable future.
More detailed insights about developments in the natural gas and electricity sector can be found in the Gas Balance.
