Germany is preparing a 20-year incentives program for the operation of a 9,700-kilometer hydrogen transmission grid. The pipelines and interconnections with neighboring countries are scheduled to be completed in phases, between 2025 and 2032.
Two weeks after the Netherlands began the construction of a hydrogen transmission network, Germany presented a plan for 9,700 kilometers of pipelines. The government is preparing a 20-year incentives scheme, set to last until 2055, to spur supply and demand.
Green hydrogen, produced from water in electrolyzers powered by renewable sources, has a long way to go before it can compete with gray hydrogen. Produced directly from natural gas and much cheaper, the latter is still the only conventional technology. But it is inappropriate for decarbonization because of high emissions.
The European Union has huge subsidies underway for green hydrogen, but other cleaner versions may also take significant market shares – especially blue and pink hydrogen. The blue tag means that emissions from producing hydrogen from fossil gas were captured and utilized or stored. Pink hydrogen is from electrolyzers, but the electricity is from nuclear power plants.
Habeck: Hydrogen will be cheaper than fossil fuels
German Vice Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck (pictured left) is confident that hydrogen would be cheaper than fossil fuels. With the new nationwide transmission grid project, the government intends to help decarbonize the industry, with a particular focus on steel, cement and chemicals, including fertilizers.
Core hydrogen network valued at EUR 19.8 billion
At the presentation, Chairman of FNB Gas Thomas Gössmann (right) valued the proposed hydrogen grid at EUR 19.8 billion. The process must be sped up, he said and added that the construction is expected to begin next year to have the first flows in 2025. FNB Gas is the association of supraregional gas transmission system operators.
Habeck compared the lines in the so-called core hydrogen network with federal highways. They would enable the establishment of state, regional and distribution systems.
Retrofitting existing gas pipelines is much cheaper than building new ones
The transmission grid is scheduled to be built by 2032. Retrofitted fossil gas pipelines are planned to make up 60%, which considerably lowers costs. The cabinet is preparing a law to accelerate the process, similar to the construction of liquefied gas terminals after Russia invaded Ukraine.
Germany counts on demand tripling from the level projected for 2030
Demand for hydrogen in Germany is seen at between 95 TWh and 130 TWh in 2030, but the transmission network is envisaged to have an exit capacity of 270 TWh per year. Habeck said the country would cover 30% to 50% of demand with domestic production in the long run.
Additionally, Germany and the Netherlands signed declarations of intent to install four hydrogen interconnectors on their border by 2032, launch a framework for private cross-border projects in the segment, and purchase green hydrogen jointly from abroad through the platform operated by Germany’s H2Global Foundation. The two governments said they would spend EUR 300 million each on ten-year contracts from 2027.
Siemens Energy, Air Liquide launched their massive electrolyzer stack production line
Last week, Siemens Energy and France-based Air Liquide inaugurated their electrolyzer stack factory in Berlin. They vowed to boost the annual capacity to at least 3 GW by 2025 from the current 1 GW. With 3 GW, the companies explained, 300,000 metric tons of green hydrogen can be produced per year.
“Now we need to agree on a viable business model with a balanced risk and reward profile to turn the smallest molecule into a big success story,” said Siemens Energy’s Chief Executive Officer Christian Bruch. The facility is worth EUR 30 million.
In other news, Siemens Energy has just got EUR 7.5 billion in state guarantees from Germany to remain afloat as it posted a loss of EUR 4.6 billion for the previous fiscal year. It was driven by the troubled Siemens Gamesa wind turbine subsidiary.