DIW study on the impact of water demand in green hydrogen production published

Despite a projected increase in water demand due to the expansion of green hydrogen production, there is no risk of widespread water shortages in Germany. This is the conclusion of a study conducted by the German Institute for Economic Research (DIW Berlin). Model results for the year 2030 were said to show that, in almost all scenarios and federal states, the water demand from electrolysis would remain low compared to total water consumption in Germany and would not constitute an obstacle to the planned ramp-up. However, regional water stress could influence the choice of locations for electrolysis plants. The availability of renewable energy and the expansion of the hydrogen pipeline network were considered more decisive factors.

At present, total hydrogen demand in Germany was said to amount to around 46 terawatt-hours. The majority of this was reported to be so-called grey hydrogen, produced using natural gas. The total hydrogen volume in Germany was expected to at least double by 2030, with a significant expansion in green hydrogen production. An important factor in this would to be the planned expansion of the hydrogen core network, which had been initiated under the current coalition government and would in future supply almost all federal states with hydrogen.

If the network was established, green hydrogen production could primarily take place in locations where the necessary electricity from renewable sources and the required water were available in sufficient quantities—above all in federal states in northern Germany. If the network were not to materialize as planned, decentralized production sites near consumers, especially in industry, would be necessary. Even then, the freshwater demand for electrolysis would, in most instances, amount to less than 0.5 percent of today’s water withdrawals in the federal states.

According to the DIW study, water costs were said to have little influence on location choice—they would account for only about 0.6 percent of electrolysis costs on average, provided the hydrogen pipeline network were built as planned. The study’s authors attached great importance to this. “The expansion of the hydrogen core network should be advanced swiftly so that electrolysis sites can be located mainly in regions not affected by water stress,” was the recommendation of Franziska Holz, one of the four authors of the study. It was considered important to take risks from water stress more into account in future permitting and funding procedures. Moreover, greater transparency about the actual water prices paid would enable a better assessment of their role in investment decisions for electrolysis capacities.