Two-pronged approach causes controvers

Draft legislation on the regulation of hydrogen networks, which was recently unveiled by the German government, has been met with little enthusiasm by the gas industry. In particular, criticism has focused on the distinction drawn between gas and hydrogen infrastructure. This two-pronged approach will prevent coordinated development, it has been claimed. However, there are also those who take a more favorable view and cite the positive effects the legislation will have in terms of clear cost allocation. Further questions remain over hydrogen blending and the kind of possibilities that will be opened up by truly comprehensive cross-sector regulation that also incorporates electricity.

At network operator Open Grid Europe, OGE, hydrogen which has been preferably produced from renewable sources is seen as a cornerstone of a successful energy transition alongside renewable electricity. Indeed the company has clearly signaled its intention to play a part in ensuring a “comprehensive and efficient” transformation of the energy system. To this end, OGE has been involving itself in a variety of projects, such as GET H2 Nukleus (see H2-international August 2020), Westküste100 (see H2-international October 2020) and H2morrow. The GET H2 Nukleus, for example, aims to create the building block for a nationwide publicly accessible hydrogen infrastructure. The plan envisages a network covering an approximately 81-mile (130-kilometer) stretch from Lingen to Gelsenkirchen that will connect the production of green hydrogen to industrial users in Lower Saxony and North Rhine-Westphalia.

“It’s important to create build-out in the market. This will allow competitive, large-scale hydrogen production in the 2030s, without the need for subsidies, both within Europe and beyond,” said Daniel Muthmann. The head of corporate development, communication and policy at OGE went on to outline three crucial areas that need to be addressed. Firstly, the entire value chain, including transport infrastructure, would need to be regarded as forming a link between production and deployment in order to get hydrogen off the ground.

The second issue mentioned by Muthmann in relation to the run-up phase is the need for quick political decision-making within the current legislative period – specifically on the regulation of publicly accessible hydrogen networks. In his opinion, the existing framework governing natural gas has proved itself to be a suitable starting point. Hence he believes that “This kind of framework provides a solid foundation from which to make appropriate decisions relating to investment in hydrogen production and deployment.” Muthmann sees further advantages in this approach since, to his mind, such a framework can be dynamically adjusted to the needs of the hydrogen market through the means of adaptable legislation, taking into account all market participants.

Thirdly, Muthmann is calling for a clear statement on policy with regard to the commercial target model for hydrogen. He sees this as including liquid international trading markets, options for customers, security of supply – including over imports – and publicly accessible hydrogen grids.

Criticism from fossil fuel industry

So how does policy set about tackling these demands? The first tangible signs became apparent at the beginning of February when the German cabinet presented draft legislation on the implementation of European Union provisions and on the regulation of pure hydrogen grids in the Energy Industry Act – EnWG. The response from many of the associations affected within the energy sector has been far from glowing. Nevertheless, the energy and water industries association BDEW has welcomed the fact that the government is still pushing ahead with plans to enact legislation on hydrogen networks during the current parliamentary term i.e., before the next election in September.

… Read more in the latest H2-International e-Journal, May 2021

Author: Michael Nallinger