Zukunftsmusik, by David Scrimgeour MBE, formerly the Scottish Government’s investment representative in Germany and Austria, now working as an energy consultant in Munich

After many years of strained relations between Germany and the UK it was reassuring to see that there still exists a mutual desire for cross-border cooperation, at least on energy topics. The occasion was the signing last month in London of a partnership agreement on energy and climate by senior representatives of the two governments. The aim is “to help secure safe, affordable and clean energy for consumers in both nations for the long term and bolster energy security”. 

This agreement also incorporates an earlier statement of intent on hydrogen initiatives signed in Berlin in September which included a focus on promoting hydrogen trade. This joint aim, to put it mildly, was surprising given that the UK Government, until very recently, had been publicly opposed to the Scottish Government’s strategy on hydrogen exports. It may be that the urgent demands of energy supply and security are now taking precedence over ideological hostility to “Europe”.

The Scottish Government has been actively engaging on hydrogen topics over the last four years with the German regions, particularly for future export of hydrogen. The Government also co-funded the “Scot2Ger” study which I led and which was published in Summer last year. The analysis considered the complex of elements which would be needed to create a green hydrogen supply chain to Germany. 

Scotland’s plans for exporting hydrogen are very ambitious but, with a fair wind, the good news is that these can be realised. The main customer in Europe for hydrogen and derivatives is German industry, especially the steel, refining and chemical sectors. Companies are under enormous cost pressures owing to increased gas prices and the legal obligations to decarbonise their operations. 

To date, analysis carried out by the Net Zero Technology Centre and others have focused on the many technical issues and has not considered the demand side of the equation. The forecast for supply by pipeline to be reaching German shores is estimated at 2035 or 2040 depending on who you ask. This is “Zukunftsmusik” for customers i.e. too far off in the future to allow for meaningful discussions between sellers and buyers. And the timing is a real problem because pipelines transporting hydrogen to Germany from Spain, Denmark, Norway and even North Africa are planned to be in place by 2030.

Germany plans to convert the entire 500,000 km gas grid to hydrogen and it is therefore likely that deliveries from the UKCS will still be needed by 2040 and thereafter. However, other countries in Africa and the Middle East are lining up to supply the world’s fourth largest economy with low carbon energy. It is not certain that Scotland’s offering in fifteen years will be competitive in terms of timing and price. We must, therefore, make sure the good work to date is not wasted and that Scotland stays on Germany’s radar as a future supplier of hydrogen. 

Now that the UK and Scottish Governments are on the same side there is a new opportunity for hydrogen business with Germany. Our strengths in renewable energy and the experience, skills and assets of the North Sea oil and gas industry create an ideal basis. The ultimate prize will be a successful energy transition for UK oil and gas companies and retaining the thousands of jobs that depend on that industry.