Gas network operators continue to count on political support
In October 2024, the German Federal Network Agency approved the plans for the hydrogen core network. Hydrogen is expected to flow through some sections as early as 2025. Despite turbulent times, the network operators remain confident about the new infrastructure.
The approval of the H2 core network should create planning security for storage and network operators as well as hydrogen users. This was stated by the Federal Minister for Economic Affairs and Climate Protection Robert Habeck on October 22, 2024.
Just 15 days later, the Ampel Coalition leading the federal government collapsed. The word “planning security” seemed like a bad joke. In the meantime, some things are falling into place and even some important legislative amendments could still make it through the German Parliament.
No time for worries
The prospective operators of the H2 core network are largely unfazed by the fuss. They are optimistic that they will continue to receive political support. This is certainly partly due to the fact that the advanced status of the project leaves no time for doubt. The first hydrogen pipelines are due to go into operation as early as 2025. And conversely, every meter of hydrogen pipeline built increases the pressure on politicians to continue.
In addition, the hearing on the Hydrogen Acceleration Act showed that almost all parties support hydrogen as a raw material – with the exception of the AfD. “The current political situation has no influence on these decisions,” says Sebastian Luther from Corporate Communications at Ontras Gastransport, which is already working on the conversion of a pipeline route. “I don’t expect the situation for the hydrogen core network to deteriorate if there is a change of government. It might even get better with a CDU-led government,” says an employee of another grid company. He hopes that the pipeline negotiations with Norway might even be resumed.
And the German Association of Energy and Water Industries (BDEW) summarizes: “The implementation of the hydrogen core network is now underway. The application has been approved and the companies can start implementing it.”
Key data
The H2 core grid is to gradually go into operation by 2032 and have a feed-in capacity of 101 GW. The variant approved by the Federal Network Agency in October is slightly smaller than the application: 9,040 instead of 9,666 km of lines, 18.9 instead of 19.8 billion euros.
Hydrogen for refinery
Three network operators who want to complete the first sections as early as 2025 are Ontras Gastransport, Gascade and the consortium around the GET H2 Nukleus. Ontras plans to connect the Total Energies refinery in central Germany first. “We continue to assume that we will connect the customer in the real-world laboratory for the energy transition Energiepark Bad Lauchstädt to the emerging hydrogen core network as planned in 2025 – making it the first in the country,” says Ontras.
According to the press release, the entire supply chain has already been contractually agreed. The ground-breaking ceremony for the 25‑km section from Bad Lauchstädt to Leuna took place in summer 2023, followed by the installation of the pig lock a few months later (Fig. 1). The section is part of the Bad Lauchstädt Energy Park, which is being funded by the BMWK as a real-world laboratory for the energy transition. In the pilot project, the gas network operator wants to gain experience that will save time and work when converting other gas pipelines, explains Gunar Schmidt, Ontras Managing Director of Operations and Safety. As part of the H2 core network, Ontras intends to create a total of around 600 km of hydrogen transport pipelines in central Germany.
From the Baltic Sea to Sachsen-Anhalt
Gascade Gastransport is also in the starting blocks. “We have been working on the planning for the implementation of the H2 transportation projects for some time. Now we can actually get started – with conversions of current natural gas pipelines and new construction projects,” said Managing Director Christoph von dem Bussche in October. Gascade primarily wants to build import pipelines in the North Sea and Baltic Sea regions. The first pipeline project entitled “Flow – making hydrogen happen” should be able to transport large quantities of hydrogen from Lubmin on the Baltic coast to Bobbau, a district of Bitterfeld-Wolfen in Sachsen-Anhalt, by 2025.
The Lubmin-based electrolyzer operator HH2E, of all companies, has just made headlines with its insolvency (see p. 7). However, this does not affect the pipeline project, as Gascade explains. On the one hand, the company is hoping for a new investor and, on the other, there are other producers who want to feed into the pipeline.
Pipelines in the Baltic Sea region and southwest Europe are to follow in subsequent years, as well as the AquaDuctus offshore pipeline, which will bring hydrogen from a North Sea wind farm with a capacity of 1 GW to land.
Hydrogen in the West
Construction work on the first core network section, the GET H2 Nukleus project, is also underway in the Ruhr region. The overall system with many partners involved is scheduled to go into operation as early as mid-2025. It includes a large electrolyzer (RWE), a conversion of existing pipelines (Nowega and OGE) and a partially new pipeline route (Nowega, Evonik). Construction of several pipelines has already begun in 2023.
Investment security required
A grid operator would secure the construction of a normal new pipeline with watertight contracts with customers. However, for a complete grid for a new energy source, the sums involved and the uncertainties are too great. Many grid operators say that the H2 core grid is a historic task for them. Even for large corporations, the investments are at least very unusual, if not unique.
And so, despite being financed by the private sector, state aid is still needed. In addition to the IPCEI projects (Important Projects of Common European Interest), which receive large subsidies from the federal and state governments with the explicit blessing of the EU’s state aid watchdogs, the assistance consists primarily of government backing for amortization via the grid fees. The Federal Network Agency is to set the standardized nationwide ramp-up grid fee at the start, so that the first customers are not deterred.
The high level of investment at the beginning and the delay in income has resulted in a financial gap. The federal government wants to bridge this gap with a so-called amortization account. Initially, money is to flow from this account to the network operators, and later back again – at least that is the plan of the Ampel Coalition. “Offsetting costs via the amortization account allows us to invest in the core network without having to have all the deals clear,” says Dr. Dirk Flandrich, Head of the “Flow – making hydrogen happen” program at Gascade.
The northern German grid operator Hamburger Energienetze, which wants to supply several industrial companies in the port area with hydrogen, has expressed similar views. The prospect of uniform grid fees now gives the grid operators financial security, they say.
So the foundations are there. However, neither the H2 ramp-up nor the core grid are in the bag. For the amortization account to fill up again as planned, the conditions must also be right for H2 producers, storage companies and consumers. They all have to come together to conclude long-term contracts.
And this in turn requires a stable political framework, both in Germany and in Europe. The expansion of renewable energies, the definition of green or low-carbon hydrogen and the EU’s gas package are just a few of the keywords. While the grid operators are working on their core grid construction sites, there are therefore also plenty of political construction sites for the German government and the EU. Tackling these will be the task of the new EU Commission and the future German government.
Author: Eva Augsten
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