Green hydrogen production in action

On Wednesday 8th March 2023, a particularly cold and snowy day, Tamarindo’s power-to-X research team visited WUN H2, a green hydrogen production facility in Wunsiedel, a small town in northeast Bavaria. 

Commissioned by Siemens the facility has been in operation since September 2022 and is one of the few operational green hydrogen sites in Europe, giving Tamarindo unprecedented and rare access to a fully functional facility. 

The purpose of our visit was to uncover key insights from a working site to support the learning and development of Power-to-X Leadership Council members who are in the early stages of project development. 

We were honoured to be invited by and given a tour from Dr Philipp Matthes, Senior Investment Manager at Siemens Project Ventures GmbH and delighted to have Thomas Zirngibl from Prime Capital, one of our founding members, in attendance. 

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Here are some of the key takeaways from our research team. 

Construction is relatively straightforward

As we have heard consistently from developers, the construction of the physical infrastructure is not a significant project challenge. Equipment currently used in the grey hydrogen market is available for deployment and, arguably, physical development is the easy part unless there are specific site challenges, for example around water access.

Supply chain delays persist

Bottlenecks in supply chains are delaying project development and completion. To avoid such delays, developers are wise to use materials already available off the shelf and procure from different suppliers. The latter is not always possible when it comes to specialist hydrogen equipment. 

Electricity costs are a constant challenge

Securing low levelised cost of energy (LCOE) for the electricity supply is paramount. The higher the price of electricity, the higher the price of the green hydrogen produced. Regulations governing power purchasing are making it hard for some developers to procure cheap green electricity, leaving them reliant on power from the grid and volatile market prices. 

Substitute grey hydrogen and natural gas 

Early developers are wise to identify current off-takers of grey hydrogen and companies who can use gas blended with hydrogen, as they don’t have to carry out expensive retrofitting of their systems and won’t be reliant on a single source of green hydrogen.