Energy Crisis: Are LNG Terminals Oversized?

Status: 12/08/2022 5:26 p.m

In order to replace Russian imports, eleven liquefied natural gas terminals are to be built in Germany. But a study criticizes the plans: The systems are too large – with fatal consequences for the energy transition.

By Frank Groteluschen, WDR

LNG terminals are considered the most important measure to compensate for the loss of gas imports from Russia. Eleven of these stations are to be built on the German coasts, where LNG tankers can unload the liquefied natural gas. Eight of these terminals are chartered special ships. The first, the “Höegh Esperanza”, is expected in Wilhelmshaven soon. The other floating terminals are to follow in the course of the coming year and will be stationed in Lubmin, Stade and Brunsbüttel.

In addition, the construction of three permanent terminals on land is planned. They should have significantly more capacity than the floating ones and should be ready by 2026. A total of eight of the LNG terminals are financially supported by the federal government.

Bad investments from tax money?

If all the plants are in operation in four years, their annual capacity will be 73 billion cubic meters of natural gas – that’s far too much, criticizes a recent study by the NewClimate Institute, an energy transition think tank based in Cologne. Before the crisis, Russia exported an average of 46 billion cubic meters per year, so the terminals are clearly oversized. As a result, there was a risk of significant bad investments that would have to be paid for in part from taxpayers’ money.

In addition, as part of the energy transition, Germany would have to steadily reduce its natural gas consumption in the future. In order to achieve the climate targets, domestic gas consumption would have to fall by a fifth by 2030 and by half by 2035. In 2045, Germany should hardly burn natural gas and instead rely on climate-neutral energy sources, such as green hydrogen.

Possible obstacle to energy transition

Against this background, critics consider the terminals to be oversized. “The construction and operation of all planned LNG terminals would be in conflict with the climate protection goals and would therefore be a breach of the climate protection law and the international obligations under the Paris climate protection agreement,” according to the study. Ultimately, the terminals even blocked the energy transition: the money that would have to be spent on them could not be found elsewhere, for example in the expansion of wind and solar energy.

According to the study, however, the liquefied natural gas unloading stations should not be completely dispensed with: three floating terminals would be sufficient to guarantee the supply for the coming years. Most of the natural gas is imported through existing pipelines, for example from Norway and the Netherlands. Only if some of the suppliers curb their exports, for example because they need the gas themselves, may further terminal ships be necessary. “The permanently installed terminals would only be a reserve in this case,” writes the NewClimate Institute – and should therefore not be built in the first place.

Future prospects for hydrogen?

Proponents point out, however, that these land terminals can be designed in such a way that they will one day accept “green” hydrogen instead of natural gas. But the study assumes that Germany will need much less hydrogen than natural gas today.

Another imponderability: There are several ways to transport hydrogen in tankers – liquefied in extreme cold or chemically bound, for example in the form of ammonia. So far it is unclear which transport variant will prevail. And that could mean that if you design a terminal for ammonia today, it could turn out to be a bad investment if transport as liquid hydrogen later prevails.

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