Why did the German government spend money to demolish a brand-new, state-of-the-art coal-fired power plant?

The energy crisis triggered by the Russia-Ukraine conflict in 2022 impacted Germany’s coal-power policy. Germany had previously relied heavily on Russian natural gas as a transitional energy source during its energy transition, but the war caused an abrupt tightening of gas supply and a sharp price surge, forcing the government to reassess the role of coal-fired units. To ensure electricity supply and conserve natural gas, the federal government urgently passed the ‘Amendment to the Power Plant Reserve Act’ (colloquially known as the ‘Backup Power Plant Activation Act’) in summer 2022, permitting formerly decommissioned or reserve coal-fired units to resume operation. Additionally, some coal plants originally scheduled for phase-out in 2022 had their operational lifetimes temporarily extended—to March 2023 or even March 2024. However, the Moorburg power plant was not included in this round of reactivation, as it had already received compensation and undergone physical decommissioning. In fact, Moorburg ceased to be retained as grid-reserve capacity after July 2021. In response to the Russia-Ukraine conflict, the government emphasized that coal power serves only as an ‘emergency valve’, while reaffirming its long-term commitment to phasing out coal. In 2022, Germany launched its ‘Renewable Energy Revival’ package, raising its 2030 target for renewable electricity share to 80% and significantly expanding wind and solar installations. It also proposed building strategic natural gas reserves and accelerating hydrogen development to reduce dependence on imported fossil fuels. With several liquefied natural gas (LNG) import terminals rapidly commissioned, Germany’s natural gas supply improved in 2023; these emergency coal measures are expected to conclude after the winter of 2023–2024. Future prospects for repurposing the Moorburg site into a large-scale green hydrogen production and hub center: Green hydrogen is termed ‘green’ because 100% of the electricity used for hydrogen production comes from renewable sources. For the Moorburg Hydrogen Center, four major partners—Shell, Mitsubishi Heavy Industries (MHI), Vattenfall, and Hamburg Energie—have signed a memorandum of understanding to install a 100 MW-class electrolyzer at the Moorburg site, using wind and solar power to produce hydrogen. The project intends to fully leverage Moorburg’s existing grid connections, utilizing the plant’s original 380 kV and 110 kV high-voltage grid interfaces to transmit green electricity from surrounding areas—including North Sea offshore wind farms and onshore wind farms—to the electrolyzers. Located in northern Germany’s wind-energy heartland, Hamburg is surrounded by Schleswig-Holstein and coastal regions boasting substantial installed wind capacity. During periods of strong winds, surplus electricity is often generated; thus, Moorburg—as a grid hub—can locally absorb this excess green power for hydrogen production (a more economical option than long-distance transmission or curtailment). Meanwhile, the partners are also exploring direct deployment of new renewable generation facilities on-site and nearby. For instance, Moorburg’s expansive land area and proximity to port-side vacant plots offer potential for installing solar panels or small-to-medium wind turbines. The plan explicitly states the need to study “the feasibility of generating renewable energy using Moorburg’s existing infrastructure.” At present, green hydrogen’s direct energy supply cost is approximately two to three times that of fossil fuels. A McKinsey analysis estimates that by 2030, domestically produced green hydrogen in Germany will cost roughly €6.5–€8.5 per kilogram, whereas imported blue hydrogen—produced from natural gas with carbon capture and storage (CCS)—could cost as little as €3–€4 per kilogram.

How popular is green hydrogen? Major players like Shell, LONGi, and China Huaneng have all entered the field!

In terms of project progress, most green hydrogen initiatives in China remain in the construction or early preparatory stages. Only a few projects—such as Baofeng Energy’s national-level solar-powered water-electrolysis hydrogen production demonstration project—are already built and operational. However, Ningdong Base’s renewable-energy-based hydrogen production has achieved global leadership, fostered by local government support and participation from numerous central SOEs and state-owned enterprises. Sinopec’s Kuqa Green Hydrogen Demonstration Project in Xinjiang is currently the world’s largest photovoltaic-powered green hydrogen production project under construction. Given Sinopec’s strategic partnership with LONGi—the leading PV manufacturer—China possesses strong capabilities for scaling up PV-based hydrogen production. Upon completion, this project will also serve as a valuable reference for future large-scale green hydrogen initiatives. China’s green hydrogen industry remains in its initial project-construction phase and has yet to achieve large-scale commercial application, primarily due to the relatively high current cost of water electrolysis for hydrogen production. As procurement costs for core equipment such as electrolyzers continue to decline—and as the cost advantage of photovoltaic electricity gradually becomes more pronounced—large-scale green hydrogen applications in China are expected to mature steadily. Abroad: High investment and development enthusiasm for green hydrogen projects Benoît Potier, Co-Chair of the Hydrogen Council, stated that hydrogen has become a core component of decarbonization investment plans across many economies. A large number of hydrogen projects are currently underway globally. Europe: A vast green hydrogen market with numerous projects in preparation. According to incomplete statistics by Hydrogen News (h2-2005), 43 overseas green hydrogen projects are either completed or under construction. By 2030, Europe’s annual green hydrogen production is projected to reach 10 million tonnes. The EU has signed four hydrogen projects each valued at over €1 billion—from green steel production in Sweden to carbon capture technologies in France. The ‘Hydrogen Valley’ initiative, referenced in the NextGenerationEU recovery plan, exemplifies a flagship effort to build a hydrogen economy. Germany has placed the highest bets on green hydrogen development. In June this year, Germany’s Federal Ministry for Economic Affairs and Climate Action and Federal Ministry for Digital and Transport announced €8 billion in funding for 62 major hydrogen projects. INEOS has also announced investments exceeding €2 billion in electrolytic hydrogen projects across Europe, aiming to manufacture zero-carbon green hydrogen. Its first factories will be established in Norway, Germany, and Belgium, with further planned investments in the UK and France. Dutch energy giant Shell, while advancing its global network of hydrogen refueling stations, has also accelerated its deployment of water-electrolysis hydrogen projects in recent years—with ambitions for green hydrogen production no less ambitious than those for its refueling infrastructure. Currently, Shell’s water-electrolysis hydrogen projects are concentrated in the Netherlands, Germany, and China—specifically REFHYNE in Germany, NorthH2 and Green Hydrogen Hub and Emmen GZI Next in the Netherlands, and the Zhangjiakou Hydrogen Project in China. Among these, the installed electrolyzer capacity totals 10 MW, producing approximately 1,300 tonnes of green hydrogen annually. Unlike most domestic Chinese projects—which predominantly use photovoltaic power for hydrogen production—European green hydrogen initiatives place greater emphasis on offshore wind-powered hydrogen production. In recent years, countries worldwide—especially in Europe—have begun researching technologies to directly convert surplus electricity from offshore wind turbines into hydrogen (green hydrogen). Norway is developing a system named ‘Deep Purple’, designed to produce hydrogen from seawater near offshore wind farms whenever turbine-generated electricity exceeds demand.

Shell Receives First Electrolyzer Stacks for 100-MW German Green Hydrogen Plant

2 days ago

Shell has received the first electrolyzer stacks for its 100-MW Refhyne II green hydrogen plant in Germany, supplied by ITM Power. The facility aims to produce 16,000 metric tons of renewable hydrogen annually for refinery processes starting in 2027.

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