Uniper says Germany's emerging hydrogen market needs demand boost

FRANKFURT (Reuters) - Utility Uniper <UN01.DE> on Tuesday said the emerging market for hydrogen in Germany, which the government is funding with billions of euros, will need to secure demand from industry, transport and also from households for heating.

If these industries joined the market, prices could fall and Uniper could use its gas infrastructure assets and trading expertise for hydrogen, Chief Executive Andreas Schierenbeck told reporters during an earnings call.

"That's an area we are on top of," he said, adding the technology was moving ahead fast, and scalable projects could be built up within a few years.

The government in the summer earmarked 7 billion euros (6.24 billion pounds) for the build-up of green hydrogen in Germany, plus a further 2 billion euros to set up partnerships with other countries.

The aim is to end Germany's reliance on coal and nuclear power and to harness renewable power production for hydrogen to help eventually to decarbonise energy used in industry.

So-called green hydrogen can be used instead of gasoline in transport industries and can replace gas or heating oil for heating homes.

Schierenbeck cited analyst estimates that Germany's targeted 5 gigawatts (GW) of electrolysis capacity by 2030 - needed to transform green power into hydrogen - could produce 15 terawatt hours (TWh) of hydrogen a year while Germany would need 100 TWh at that stage.

"There will be a huge import gap," he said.

Schierenbeck said Uniper's trading department could handle the commercial hydrogen flows and a recently shelved plan for a liquefied natural gas (LNG) terminal in Wilhelmshaven could be potentially adjusted for the up-and-coming hydrogen economy.

Uniper said last Friday there was not enough interest in shipping LNG to the Wilhelmshaven site.

Uniper also said the initial results from ongoing discussions with majority owner Fortum <FORTUM.HE> over the alignment of both companies' strategies would be presented during the Finnish group's capital markets day on Dec. 3.

(Reporting by Vera Eckert, editing by Christoph Steitz and Jane Merriman)