German gas network operators submit plans for national hydrogen network to regulator

Operators of Germany’s gas network have submitted plans for the planned national hydrogen network to the country’s energy regulator. Once completed, it is expected to stretch 9 700 kilometres. The international news outlet Montel reported.

Hydrogen produced using electricity from renewable sources is considered a key element in decarbonising the energy sector and industry. Germany is one of the countries betting heavily on the fuel. It plans to use hydrogen in industry and transport, for heat production and as a fuel for backup and peaking gas-fired power plants.

Following the European Commission’s approval of public support for the construction of a backbone hydrogen network in Germany, the country’s gas network operators have now submitted plans to build hydrogen infrastructure. According to the international news outlet Montel, the project’s investment costs are expected to amount to nearly 20 billion euros.

State guarantees are intended to ease the network’s early years of operation

The project is expected to be financed entirely from private sources, with the operators collecting the funds from customers. The German government has nevertheless approved a state guarantee scheme that will enable hydrogen network operators to secure more favourable financing terms to cover initial losses caused by the gradual increase in hydrogen withdrawals from the pipelines in operation.

The European Commission reviewed this guarantee scheme. The cost of the measure is estimated at three billion euros.

“Germany initially expects only a small number of customers to take hydrogen from the network under construction, while network charges are to be lower than would be needed to cover eligible costs, in order to support the use of the infrastructure and the gradual uptake of hydrogen,” the European Commission said of the approved guarantee scheme.

According to the European Commission, the first major section of the planned infrastructure should be operational as soon as next year. Full completion is planned for 2032.