Germany aims to set up hydrogen core network by 2032

In a bid to have a country-wide efficient hydrogen infrastructure network by 2032, Germany’s federal cabinet has passed a draft law that provides regulations for financing the core network. At the same time, transmission system operators (TSOs) have submitted the draft application for the hydrogen core network to the Federal Network Agency and the Federal Ministry for Economic Affairs and Climate Protection (BMWK).

The draft law, which in principle states that the hydrogen core network should be financed entirely through network fees and thus built up privately, was passed on November 15, 2023. As explained, it contains important elements for a viable financing concept: a capped, market-compatible ramp-up fee, the creation of an amortization account for interim financing of the revenue shortfall resulting from the cap, and state protection in the event that the market ramp-up fails.

On the same day, TSOs submitted the draft application for the hydrogen core network outlining key locations across Germany to be connected by 2032.

The current draft envisages the total length of the optimized core network to be around 9,700 kilometers, around 60% of which consist of converted lines from the existing natural gas network and 40% of new lines. The feed-in and feed-out capacities of the network are around 100 GW and 87 GW respectively. The investment costs amount to €19.8 billion.

FNB Gas, the association of supra-regional gas transmission companies in Germany, said the TSOs have set a clear goal to start building the hydrogen core network next year.

In the next step, the Federal Network Agency will examine the draft application and conduct a general consultation which is open by January 8, 2024. The grid operators are expected to officially submit the final joint application in the first quarter of 2024, which will then be consulted on, reviewed, and approved by the Federal Network Agency.

“The transformation from natural gas to green gases, above all hydrogen, is an opportunity of the century: for our society, our energy supply and, last but not least, the achievement of climate targets. The federal government and transmission system operators are now making an advance contribution to this with the hydrogen core network. The market ramp-up is a joint task,” said Thomas Gößmann, Chairman of the Board of FNB Gas.

In July this year, Germany presented its updated national hydrogen strategy setting the framework for the new phase in the hydrogen market ramp-up.

In line with the import section outlined in the strategy, Germany has just signed joint declarations of intent with the Netherlands to strengthen cooperation in the field of hydrogen infrastructure and import and establish a cross-border hydrogen ecosystem.