Power

Germany may only finance a fraction of cost to build out gigawatts of hydrogen-ready gas power plants: report

The state is also set to delay its first tender by two years

German vice-chancellor and federal minister for economy and climate action Robert Habeck.
German vice-chancellor and federal minister for economy and climate action Robert Habeck.Photo: BMWK

Germany is set to only offer €7.55bn ($8.28bn) from its state coffers in subsidies for hydrogen-ready gas power plants, according to leaked documents seen by Bloomberg.

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However, the government’s own figures reportedly put the cost of building enough gas power plants — which can later be converted to run on H2— to replace coal at €60bn, meaning state aid will only cover just 12.5% of this estimated spend, with the industry expected to pick up the rest of the bill.
In August last year, German vice-chancellor Robert Habeck had announced a series of auctions for up to 23.8GW of hydrogen-fired power plants — 15GW of which would initially run on gas and be converted to H2 no later than 2035 — starting with a 10GW tender in 2026.

However, the leaked documents — due to be tabled for the parliament’s budget committee on 18 January, ahead of a vote at the end of the month — now push back this first auction to 2028.

Hydrogen Insight has reached out to Germany’s Federal Ministry for Economic Affairs and Climate Action to confirm whether the €7.55bn represents only the budget for the initial 10GW tender, or the total sum offered for the full 23.8GW.

The German government in November saw a major setback to its planned support for hydrogen, after the country’s constitutional court ruled against its transfer of €60bn from unused post-Covid recovery budgets to the Climate and Transformation Fund.

In December, the government cut €12bn in climate spending for this year and €45bn in total up to 2027, with subsidies for solar power reduced and a bonus on electric vehicle purchases phased out earlier than scheduled.

The state is also set to raise the carbon price on heating and transport fuels to €45 per tonne of CO2 next year in a bid to generate extra revenue.
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GermanyPowerSubsidies
Published 12 January 2024, 11:05Updated 12 January 2024, 11:05