German agency pushes for risk sharing to drive hydrogen grid expansion

German energy agency DENA is calling for a fair distribution of risks between the state, grid operators and users of the hydrogen network in order to ensure investment security and drive the build-up of a national hydrogen infrastructure.

The fast development of a hydrogen network is a key prerequisite for the urgently needed ramp-up of the hydrogen economy in Germany, DENA's head Andreas Kuhlmann said on Thursday.

Operators across Germany have already taken measures to prepare for the development of the necessary infrastructure but their plans are stalled because of the lack of sufficient investment security. On the other hand, project developers lack the necessary security as to whether the infrastructure will be available for the volume of hydrogen they plan to produce.

To avoid unnecessary delay and planning insecurity for hydrogen projects, DENA has come up with a proposal meant to speed up investment decisions for the development of a hydrogen grid.

Under the proposal, grid operators should finance the construction of infrastructure with their own capital and the state should provide security by assuring operators that the investment will be profitable in the long term through a so-called "amortisation account" in which the initial losses and revenues will be settled at some point, for example in 2035. DENA assumes that after 2035, there will be a large number of hydrogen grid users to support a regulated hydrogen system through network fees.

The proposal was published two days after the signing of the Canada-Germany Hydrogen Alliance aimed at building a transatlantic supply chain for green hydrogen with deliveries to Germany expected to begin as early as 2025.

The cooperation between the two countries was accompanied by two memoranda of understanding (MoUs) signed by German energy majors E.on SE (ETR:EOAN) and Uniper SE (ETR:UN01) for the import of up to one million tonnes of green ammonia per year from Canada.

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