Hydrogen Strategy: Hydrogen for Flexibility and Sector Coupling
The update of the German government’s hydrogen strategy takes an important step forward.
31.07.2023
Sector coupling is a central development on the path to the energy system of the future. This insight is now reflected in the update of the National Hydrogen Strategy (NWS). It focuses on all sectors: electricity, mobility, and heat.
In the paper published last week, there is mention of “system-friendly electrolysis.” This is intended to serve as an “important flexibility option for the energy transition.” It is also expected to reduce the need for expanding the electricity grid. This will be achieved through “smart integration of electrolysis with the electricity system and the transport and storage infrastructure for hydrogen.”

Compensation for system-service benefits – how can electrolysis be economically viable?
While these formulations leave many questions open, it is nevertheless positive that hydrogen production is considered systemically, as is already the case in the Network Development Plan (NEP) of the transmission system operators. The planned tenders are intended to provide more clarity on what the economic operation of electrolyzers will look like. This point should also be carefully discussed in other areas such as e‑mobility. It is crucial to create a regulatory framework that enables economically independent operation.
Waste Heat in Focus
Low energy efficiency has always been a point of criticism in hydrogen production. However, energy doesn’t simply disappear: during electrolysis, large amounts of waste heat are generated, which have not been utilized until now – this is where the focus on the heat transition (Wärmewende) comes into play. The Heat Planning Act (WPG), which is currently under consideration, places a strong emphasis on the use of waste heat. By connecting to district or long-distance heating networks, sector-coupled electrolysis can offer flexibility in various directions, making the overall efficiency attractive. The National Hydrogen Strategy (NWS) makes a clear reference to the WPG, laying the foundation for an efficient sectoral connection.
The systemic approach of the NWS positions hydrogen as a link between sectors in a strong position. Its potential to produce heat during electrolysis takes center stage. This offers numerous opportunities to integrate hydrogen as a flexible component of the future energy mix and create new value chains. The continuation of the hydrogen strategy is thus an exciting basis that can initiate positive developments. It remains to be seen how this will be implemented in practice.