Germany's Innovative Approach to Hydrogen Pipeline Tariffs
Key Ideas
- Germany's Federal Network Agency finalizes a €25/kWh/h/a uniform tariff for hydrogen pipeline core network, balancing investment costs and affordability for early users.
- An ambitious 9,000-kilometre core network with an estimated investment of €18.9 billion is expected to be completed by 2032, supported by a €24 billion amortisation account.
- Operators will be responsible for a 24% deficit, with the German government covering the remaining amount, ensuring financial stability until 2055.
- Triennial reviews will be conducted to maintain the tariff's adequacy to support the amortisation account, offering planning security for market participants.
Germany's Federal Network Agency (BNetzA) has introduced a progressive approach to facilitate the growth of the nation's hydrogen pipeline 'core network.' The agency has set a uniform tariff of €25 per kilowatt-hour of energy per hour, designed to strike a balance between recovering substantial investment costs and ensuring accessibility for early adopters. The tariff, expressed as '€25/kWh/h/a,' guarantees users the right to transport a specific volume of hydrogen hourly throughout a year, aiming to foster investment in hydrogen infrastructure. The 9,000-kilometre core network, with an estimated investment of €18.9 billion, is a significant undertaking expected to be finalized by 2032. To support this initiative, the German government has established a €24 billion 'amortisation account' to aid pipeline operators in funding the project, with repayment expected by 2055.
The BNetzA's strategy includes provisions for addressing any financial shortfalls, where operators would bear 24% of the deficit, while the government would cover the remaining portion. This collaborative effort ensures the financial stability of the project over the long term. The agency plans to conduct regular triennial reviews to ensure that the established tariff facilitates operators in rebalancing the amortisation account. Klaus Müller, the president of BNetzA, highlighted the goal of providing planning security for all market participants while ensuring affordable access to the hydrogen core network.
Sections of the critical hydrogen pipeline are already in the final stages of completion, with projects like Nowega's 55-kilometre pipeline for the GET H2 network and Ontas' 25-kilometre link connecting key energy facilities. This development reflects Germany's commitment to advancing hydrogen infrastructure and marks a significant step towards a sustainable energy future.
Topics
Projects
Renewable Energy
Infrastructure
Investment
Energy
Government Support
Network Expansion
Market Participants
Pipeline Regulator
Latest News