Germany starts consultation on Eur20 bil hydrogen core grid plan

German gas grid operators have submitted their hydrogen core grid draft plan to regulator BNetzA and the energy ministry, FNB Gas said Nov. 15.

The pipeline operators estimate the 9,700 km core grid will cost around Eur19.6 billion ($21.3 billion) with around 60% of the grid based on conversion of gas pipelines to hydrogen.

"This completed the next milestone towards realization of the hydrogen core grid, putting Germany at the forefront to build hydrogen infrastructure in Europe," said FNB Gas Managing Director Barbara Fischer.

The draft starts a consultation by BNetzA, with the TSO to present a final version in first-quarter 2024 that needs to confirm projects and scope of the plan with a 2032 target for the full core grid, the association representing most German gas grid operators said.

The draft plan available at the BNetzA website is based on 100 GW of combined feed-in capacity as well as 87 GW of feed-out points.

Germany's government in May approved a legal framework for giving regulatory basis to a dedicated hydrogen pipeline system, with the reform of the EnWG law passed by the parliament Nov. 10.

The government also approved Nov. 15 guidelines on financing the hydrogen grid essential for the second phase of the grid rollout, the energy ministry said in a separate statement.

Berlin aims to have approved the first joint gas and hydrogen grid plan in 2026, the ministry added.

FNB Gas said the two measures now allow for financing of the plans via capital markets and a rapid implementation of the core grid by 2032.

A capped market-driven roll out fee, an amortization account to refinance the investment via grid fees and an annual cap on return on investment, as well as state guarantees in case of a failure of the hydrogen ramp-up, are now agreed with the regulator still needing to decide some pending issues, FNB Gas said.

BNetzA President Klaus Mueller pledged an accelerated review of the first draft with the "goal of a rapid ramp-up of a hydrogen market."

Platts, a unit of S&P Global Commodity Insights, assessed the cost to produce hydrogen from gas via steam reformation with carbon capture and storage in the Netherlands at an average $3.19/kg in October.

That compares to an average Eur6.41/kg for green hydrogen derived from alkaline electrolysis, significantly above comparable production in some regions outside Europe, according to the Platts Hydrogen Price Wall.