Interview: Building an 1 GW green H2  power plant

in Germany – where Nordstream I & II once landed

CAMOPO developed a Commercial Optimization Software for Hybrid Power Plants with an integrated full-scope EMS to align asset operations with the requirements of the energy markets. As Interim Manager at SMA Solar Technology, Dominic Multerer is responsible for the go-to market process. In an interview with Konstantin Faller, CTO of PtX Development, the two talk about the challenges of producing green hydrogen and the need for intelligent solutions for optimizations.

Dominic Multerer: Mr Faller, first, who are you? What have you done in your professional past, and what responsibilities do you have in your current role?

Konstantin Faller: My name is Konstantin Faller and I have about 20 years of experience in an international energy company in various roles very close to the market. During that time, mostly I was involved in sales or trading. In addition, I was also active for 5 years in the business development of an international group and during that time I was Managing Director of the “Vattenfall Innovation GmbH”. The “Innovation GmbH” is a company that focused on future-proof projects and also managed venture capital activities.

Now, since 10 years, I have been working as a self-employed consultant and have done many international projects, like the development of the hydrogen business area at SMA. Currently, I’m involved in exactly this field again, more precisely as CTO for an electrolysis power plant in Germany. This power plant is to be built with an electrolysis capacity of one gigawatt.

Multerer: Thank you for the detailed insight! You definitely bring a lot of experience in the energy sector with you. And that’s exactly what we want to talk about: Renewable energies and the topic of green hydrogen are becoming increasingly important and present. Now, of course, you can discuss whether it makes more sense to produce the energy required for hydrogen production yourself using solar energy, for example, or whether it is better to feed it from the grid. But what I’m interested in is what basic adjustments do you see to make projects using green hydrogen more economical and optimize them in terms of profitability?

For some, it is still unclear how such a project will be profitable over its entire lifetime in view of the constantly changing market environment. How can you adapt to the changing market environment in the best possible way at all times, and what can really be improved to make a green hydrogen plant economically viable?

“This necessarily brings the question of how to actually optimize the production of green hydrogen into focus.”

Konstantin Faller

Faller: This is an interesting, but pretty wide-ranging question. First, I would like to divide it into multiple topics. One of these is the regulatory environment. At the moment, we still don’t know exactly how the hydrogen industry will develop. For example, in the case of natural gas, there is already a clear regulatory framework. With hydrogen, there is nothing yet. The German hydrogen network is currently being set up and regulations are being defined at the same time. That’s one reason why we don’t yet know what the future market price might be.

Second, according to the EU directive, green hydrogen is only green if the for production needed energy comes either directly from renewable power plants. Or if it comes from the grid, but in that case it has to come from renewable power plants with PPAs directly linked to them.

Currently, this still means a relatively simple regulation: there must be a match between generation and consumption on a monthly basis. From 2030, however, there has to be a match on an hourly basis. This necessarily brings the question of how to actually optimize the production of green hydrogen into focus.

Knowing the main challenges now, there are two ways to optimize this: On the one hand, we have to follow the production of green hydrogen exactly as renewable energy is generated. On the other hand, we have customers who purchase the hydrogen and who have a certain purchase profile. These two, production and consumption, will most likely not necessarily match. Although, there are many efforts on the customer side to make the actual process more flexible. This is where further flexibilisation elements come into the game, such as a gas storage facility. However, we should first assume that as much energy production and consumption as possible will be matched by intelligent control.

Multerer: Okay, that means you have to optimize schedules, and you have to keep an eye on supply and demand to make it the best possible and most profitable way for you. How are you planning to do this?

Faller: We will have to install a very intelligent operational management system that has an extraordinary amount of data on the generation side to control everything. And besides the actual hydrogen production, there are also a lot of side businesses. Just one example: we generate a large amount of heat, and if we manage not to waste it by blowing it into the air, but to transfer it economically, then there is another source of income for us.

“All of these possible revenue streams require a lot of optimisation on our side to realize additional money.”

Konstantin Faller

The much more crucial part is how we can contribute  to the grid stability. This can be monetised, for example, in a reactive power market, which is also being established in Germany this year. But we can also participate in balancing markets and the avoiding re-dispatch. However, what we do need for this are the right inverter solutions. We are currently discussing this with manufacturers, but if we could also use grid-forming inverters in practice, this would give economical headroom. But all of these possible revenue streams require a lot of optimisation on our side to realize additional money.

Multerer: Okay, you basically require a brain that thinks everything?

Faller: Yes, we urgently require it! A brain that can think in our power plant, that makes it smart. But we may also need 2-3 auxiliary brains to transfer our knowledge to the market.

Multerer: Of course, I always describe it like this: solutions like CAMOPO are the brain, the PV and wind system is the legs and the battery is the arms and in between you have the nervous systems. But the general thinking element is always CAMOPO. And the components are basically arms and legs and something happens in between. But one thinks overall and sends signals, and the other does it.

Faller: Yes! I would however like to expand the brain to include the possibility of initially collecting and collating an enormous amount of data. Like the weather conditions.

Multerer: Yes, that’s a very good point! Right now you’re in the planning phase, followed by construction. But what about running the power plant? I am pretty sure there will be some challenges as well. Can you already predict some of them? Or is it mainly the intelligent control with optimizing the schedules in terms of revenue streams?

Faller: No, not only. What we definitely need during production is very intelligent maintenance. So we require a modular structure, and it has to be divisible in some way so that we can continue to produce. And the second thing I think is that if we have so many revenue streams, then the “brain” must also be able to deliver what is the first thing we can no longer serve if something fails.

Multerer: I see! Earlier we talked about the unknown regulations and the developing market. 

This makes one question coming to my mind: Why are you building this gigantic 1 GW power plant with a huge investment volume if the issue is “What do we earn?” “How economical is it at all?” can’t even be estimated yet.

Faller: Our motivation is very clear: There is a political will to a renewable energy system to reduce dependence on natural gas or LNG in Europe. That is why a hydrogen economy is being established in Europe. These decisions have already been made, and we are now getting involved. 

Look: Our location is where Nordstream I & II land. But no more gas will arrive there, so we have ideal, existing conditions for this purpose: Enough water from the Baltic Sea, which is sometimes a major difficulty in terms of scale, a good energy supply thanks to the wind farms in the Baltic Sea and, above all, an existing pipeline system troughout Germany, which will be converted to hydrogen starting in 2025. That is our motivation for being there to do this business.

Actually, four years ago, things were a little different, and we still had the idea of installing PV and building a hydrogen filling station there.

Multerer: That would have been a big hydrogen filling station!

Faller: To be honest, it would have been mainly PV and plus a small filling station, just as much as you have buses and local truck traffic. We have now decided to change that, because in the meantime political decisions have shifted towards making German hydrogen production a fundamental element of our energy security.

Multerer: It’s definitely an interesting development that the whole project has taken on here! I am excited to see how hydrogen production and the entire market in Europe will develop over the next few years. However, I guess we both agree, it will be essential for operators to have access to solutions such as CAMOPO in order to be able to react flexible to changing market developments.

Thank you, Mr. Faller for sharing your experience and knowledge so far and, of course, good luck with the next phases and a successful launch at the end of 2027!