Russia and Germany Need a Strategic Compact on Global Energy Cooperation

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A regular meeting of the Organising Committee of the Russian-German Raw Materials Dialogue, which was held this time online, was dedicated to the use of hydrogen as an energy source. The event was attended by representatives of the Presidential Administration and Ministry of Energy of Russia, as well as of the German Energy Agency DENA, and world’s largest energy and steel enterprises, such as Uniper, Siemens, Verbundnetz Gas, ThyssenKrupp, NOW, Stahl-Holding-Saar, Salzgitter, Energie-Agentur, Gazprom, and other companies. Among the participants were also spokespersons of the Karlsruhe Institute of Technology, German Aerospace Center, and other organisations. What did they talk about at such a highly representative assembly?

Hydrogen has become one of the year's most discussed topics among German scientific and political communities.The need to reduce carbon dioxide emissions coupled with a decision on the closure of all nuclear power plants operating within Germany before 2022 is forcing the country's authorities and scientists to look into how to eliminate CO2 emissions without affecting the energy security.

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Thorsten Herdan, Head of Department "Energy Policy – Heat and Efficiency" at the Federal Ministry for Economic Affairs and Energy, believes it is the lightest existing gas that can be a solution to this issue. However, to unlock the potential of this element, cooperation with foreign partners should be further intensified. Germany is characterised by very high energy consumption despite being a country relatively small in size. Since the state will never be able to satisfy energy needs by itself, the only option is to import energy – both now and in the future.

Торстен Хердан
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As Mr Herdan noted, "We set aside 2 billion euros in our hydrogen strategy for international activities, and this amount has been already allocated from the country's budget. The Federal Ministry for Economic Affairs and Energy keeps the money in its possession and has a right to invest it in joint projects. From our part, I may assure that of all partners with whom we are aiming to collaborate Russia is a partner number one."

There is no doubt that Russia, which is a country that has long established itself as a reliable energy supplier to Europe, could become a significant partner of Germany in this area. A long history and the present-day situation favour it. For example, a first-ever hydrogen vehicle was driven on roads of the USSR back in the middle of the last century, while the word's first hydrogen-fueled plane – Tu-155 – was successfully piloted in the late 80s.

According to the Russian Energy Strategy defined for the period up to 2035, hydrogen will play a notable role in achieving its targets. Russia should, in particular, become one of the global leaders in terms of its production and exports; it should learn as well how to handle transportation of methane-hydrogen mixtures and manufacture highly-efficient electrolysers for extracting the gas.

Then there is a more important question – is hydrogen capable of becoming a significant part of the future energy system? Although technologies of generating and using this gas were developed a long time ago, so far only prototypes have been delivered at most. Mass introduction, let alone a shift in the technological paradigm, was until now entirely out of the question.

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"Gazprom each year produces over 250 thousand tonnes of hydrogen – mostly for technical purposes and oil refining. They do not use it as an energy source in the company, for several unresolved challenges are preventing it. For instance, there are difficulties with transporting gas in large volumes: it is highly active, and when it comes into interaction with metals, it causes defects or even pipe breakage. Some technologies that help to avoid those difficulties exist but they are economically unviable. Finally, there is another relevant question: if hydrogen is introduced on a massive scale, will its leaks, which will certainly happen, negatively impact the climate? If the answer is 'yes', what would be the point of abandoning natural gas in favour of a more harmful energy resource?", noted Alexander Ishkov, Head of the Energy Saving and Ecology Department of Gazprom, in his speech to the German side.

Mr Ishkov also reminded that political decision-making should be based on results of in-depth and objective studies, without which the potential of the lightest element cannot be adequately assessed. The German side agreed with his opinion. Yet unlike Russian experts, many of whom are sceptical about the outlook for industrial utilisation of hydrogen in energy and transportation, their German colleagues believe the opposite, thinking science being the primary driver for hydrogen adoption.

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"We know that numerous issues are arising when transporting hydrogen. It cannot be pumped via an already existing pipeline system because it will lead to the inevitable destruction of welded joints. Therefore we need to understand how our two countries are going to overcome these challenges and become leaders in the adoption of new technologies. For instance, we need to learn more about the materials that will be demanded by the industry. There are plenty of open questions we have yet to address, plenty of research yet to conduct. Nonetheless, if there is a clear goal ahead of us, we can focus our efforts on it and thus reach it," said Klaus Töpfer, Co-Chairman of the Russian-German Raw Materials Dialogue on the German side, former Federal Minister of the Federal Republic of Germany.

Pavel Sorokin, Deputy Minister of Energy of the Russian Federation, admits that Russia sees Germany as one of its major partners too, plans to continue working together, and intends to promote results of joint work internationally. A clear plan allowing for increasing competitiveness of both sides is needed though.

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As per Mr Sorokin, "We do not want to set our sights on impossible, and we cannot claim that we will have tomorrow the hydrogen-propelled subway, fly hydrogen planes, or implement some other project of similar scale. Quite the opposite, it might take decades before we manage to carry out such a huge project. But we know for sure that through our joint efforts we can secure positive results in some areas."

Pavel Sorokin suggests instead focusing on listing up viable hydrogen projects, commercialisation of which is realisable in the foreseeable future. It may include, for example, inventing a breakthrough technology in methane pyrolysis that would result in lower hydrogen production costs due to solving technical issues deriving from the use of this method.

This project's possible participants are among others Gazprom, Verbundnetz Gas, Freiberg University of Mining and Technology, and St. Petersburg Mining University, wherein several studies linked to alternative energy development are currently being conducted. Vladimir Litvinenko, Rector of the Mining University and Co-Chairman of the Russian-German Raw Materials Dialogue on the Russian side, thinks there are high chances that research findings will translate into a fact-based forecast of future long-term changes in the energy consumption structure.

Indeed, there is some probability that in the future hydrogen will fill a particular niche in the global energy mix. But with that said, the potential of this energy source is likely to stay limited. Its role is overestimated, and the sad part is that if politicians of Western countries remain overly supportive of the alternative energy sources, energy security might suffer not in the future but right here and right now.

An illustrative example of that is a series of rolling blackouts in California in mid-August this year, which were to attributable to a sharp increase in household electricity consumption. Solar panels that alongside with windmills produce 30% of the energy consumed by the state failed to cope with the peak load, which led to the collapse of the grid and consequent power cuts.

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According to Vladimir Litvinenko, Professor, Doctor of Engineering Science, "Both in Russia and Germany, there are lots of worthy renewable energy projects, and they become implemented. We need to work on those projects, and this is what we do. On the other hand, we cannot think of tomorrow only; we need to ensure the sustainability of global energy markets today. At the same time, traditional energy sources, which are the foundation for this sustainability, are often criticised nowadays. Here I mean initiatives aiming at freezing investment flows into exploration and development of hydrocarbon deposits. It is utopia! There is no way we can allow ourselves building such illusions, dreaming of beautiful tomorrow without realising that we are also living today. I am not a conservative person; I support progress, but I am firmly convinced that the primary goal of the Russian-German Raw Materials Dialogue should be to elaborate a strategic compact on global energy cooperation. This kind of agreement should incorporate the intentions of both parties towards studying future energy sources, includinghydrogen. Then we need to write into the contract about the efforts we must take to improve energy security in both our countries in the context of current realities."

Pavel Sorokin, who was appointed Head of Research Department of a Working Group for the Development of Hydrogen Energy in Russian Federation, follows the opinion of Professor Litvinenko. Mr Sorokin emphasised that such an agreement could establish a basis for interstate communication notwithstanding currently tricky political situation. It could also help to neutralise a potential threat of energy crisis that could not be otherwise ruled out in case of cancellation of efficient energy policies.

"If hewing to certain requests coming from society, it is essential to remember that it is not politics that is heating our houses, and we cannot pour slogans into petrol tanks but need an energy resource to do that. It is also important while thinking of the future to keep supporting the real sector and ensure vital public activities. If we do not do that, in 5 to 7 years from now, which will not be enough for hydrogen or renewable energy to become predominant, we encounter a problem stemming from the lack of investments in conventional energy sources, with a sum probably exceeding one trillion dollars. In the end, it will result in a shortage of oil and gas followed by the soaring prices on them – an outcome no country, even Russia, needs," underlined Pavel Sorokin.

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In the view of Kirill Molodtsov, Assistant to the Head of the Presidential Administration of the Russian Federation, the Russian-German Raw Materials Dialogue is a platform that has long been a driver of interstate cooperation in global energy. The event inspires confidence from both countries' representatives: none has doubts in the sincerity of other participants; hence a logical idea to form a strategic agreement was born here.

From the perspective of Andreas Kuhlmann, Chief Executive of the German Energy Agency (DENA), the time to start working on strategic compact has undoubtedly come. He assured Russian colleagues of the pragmatic nature of the German business community. Mr Kuhlmann also has a perfect understanding of the relevance of traditional energy sources. After all, even with an ambitious goal of becoming a carbon-neutral state, Germany intends to retain its status as one of the world's leading industrial nations.

Back to hydrogen, the event's participants agreed to make a list of 9 to 10 specific focus areas as part of the project roadmap. These areas will provide the basis for future joint research, and their discussion is planned for the next meeting of the Russian-German Raw Materials Dialogue, which is scheduled to take place this December. As usual, it will be visited by representatives of executive bodies, scientific and business communities of both countries, and those of the International Competence Centre for Mining-Engineering Education under the auspices of UNESCO.