German utilities call for hydrogen law as grid cost estimates rise
Clean Energy Wire / Tagesspiegel Background
Germany’s utilities have proposed a dedicated hydrogen law to boost the country’s sluggish ramp-up. Industry association BDEW said in a position paper that numerous projects are currently facing significant uncertainty, and that improving individual framework conditions will be insufficient to trigger the necessary investments.
“The rollout of hydrogen in Germany is progressing slowly. The government's 2020 hydrogen strategy has not yet had the desired effect,” said the lobby group’s head Kerstin Andreae, who added that many of its measures are being implemented too hesitantly. “For the development of a hydrogen economy to succeed, Germany now needs stronger commitment in the form of a law that bundles measures and creates planning security across the entire value chain.”
The law would define the objectives and targets, and create clear incentive instruments, said the BDEW. It should ultimately become the central place for regulations for the hydrogen market.
Hydrogen made with renewable electricity is seen as a crucial tool for reducing emissions in hard-to-abate sectors, such as heavy industry and aviation. But Germany is failing to meet its targets to expand the hydrogen economy, with both supply and demand remaining well below expectations.
Despite billions in subsidies, the government has not yet achieved the goals set out in its hydrogen strategy – and is unlikely to do so in the near future, the country’s Federal Court of Auditors warned at the end of last year.
“The ramp-up can only be successful if all relevant stages of the hydrogen value chain develop in parallel and interlock. The government and parliament must now set the course to ensure planning and investment security,” BDEW said.
In a further setback to the country’s hydrogen plans, gas grid operators said that building the country’s planned core grid, the backbone of the long-distance transmission network, will be around 30 percent more expensive than original estimates, according to energy and climate newsletter Tagesspiegel Background.
Germany’s grid agency had approved plans for a grid measuring just above 9,000 kilometres at a cost of 18.9 billion euros, but the operators said in an update that the grid is set to cost 24.2 billion euros, mainly due to higher procurement costs.