Two prominent power-to-gas proposals – Hybridge and Element Eins – have received a rejection from Germany’s Federal Network Agency. The network operators Amprion and TenneT had hoped for an easing of regulations as part of the national hydrogen strategy (see H2-international, August 2020). However, the companies have now suffered a setback in a tussle that has since begun over future market share and profitable business areas.

In their plans for the Hybridge project, Amprion and Open Grid Europe, OGE, had intended to set up a 100 MW plant near Lingen in the Emsland District of Lower Saxony by 2023. In the case of the Element Eins initiative, TenneT, Gasunie and Thyssengas had planned to install an equally sized facility at the Diele substation in the town of Weener, also in Lower Saxony. The operation of these electrolyzer facilities and the production of hydrogen would, nevertheless, mean that the two network operators would no longer be acting within their original field of activity. According to the Federal Network Agency, BNetzA, this would lead to a concentration of power that would be detrimental to other parties.

Parallel to this, another factor in the agency’s decision-making was the warning issued by the “Alliance for fair competition in the hydrogen market.” Established in late 2019 by Enertrag, Greenpeace Energy, Naturwind and Nordgröön, the campaign group had cautioned against a distortion of competition in the future hydrogen market. The alliance fears that Amprion and TenneT could potentially refinance the hydrogen price via the grid fees charged to customers, a move that would conflict with the European Union provision to unbundle electricity network operators.

“Rolling the electrolyzer set-up costs over to network charges would put a premature end to an economically sensible development in the hydrogen market,” explained Jörg Müller, chairman of Enertrag. Sönke Tangermann, chief executive of Greenpeace Energy, said: “The decision of the Federal Network Agency safeguards the opportunity for a fair and competitive ramp-up of green hydrogen.” Matthias Kaulmann from Naturwind added: “We expect there to be a major upturn in the market in the next few years which can also help to recoup the financial losses incurred due to the pandemic.”

Amprion stated: “The rejection of the investment applications by BNetzA was not unexpected. Amprion and OGE are still convinced of the rationale, feasibility and necessity of the project and the contribution it can make to an integrated energy transition. The company is therefore standing by Hybridge and remains at the ready to develop it further as soon as it is legally possible to do so.”