'Not hydrogen-ready' | Germany is falling short on reaching its 2030 H2 targets, warns E.ON
Lack of regulatory visibility, slow permitting and poor fiscal support all responsible for industry’s underperformance, utility says
Hydrogen: hype, hope and the hard truths around its role in the energy transition
And even if enough hydrogen could be found, the country has insufficient infrastructure to transport it to where it is needed, the company added, citing data from the Energy Economics Institute at the University of Cologne (EWI).
This will have a knock-on effect on demand for imports, and here too the situation is precarious. The German Energy Agency predicts import demand of 66TWh by 2030, of which just 15.5TWh is secured. This leaves an import hole of around 50.5TWh, the equivalent to a whopping 1.5 million tonnes of hydrogen.
Germany currently has just 417km of hydrogen pipeline, equivalent to 0.1% of the country's gas network.
“The analysis of the data shows: Germany is not hydrogen-ready,” E.ON added.
Perhaps unsurprisingly, E.ON blames the lack of progress on regulatory delays at national and EU level, which the company says is holding up investment. In particular, the utility singles out the EU’s failure to define green hydrogen.
Moreover, E.ON calls for the EU to scrap its plans to force Europe’s fossil-gas pipeline operators to unbundle their hydrogen assets, which the company says disincentivises gas companies from investing in hydrogen pipes.
However, such a move would be controversial: the unbundling measure is designed to prevent cross-subsidisation of the gas and hydrogen networks, so that gas consumers don’t end up paying for hydrogen infrastructure they never use.
Finally, E.ON calls for a “pragmatic funding framework” for hydrogen projects that support operating costs, and a permanent accelerated approvals process that mirrors the “overriding public interest” classification that is planned for solar and wind power. Currently, hydrogen pipelines only qualify under this classification until 2025 which is too early to catch the bulk of major investments, the company said.
“The global competition for investment in the hydrogen industry has now begun,” said E.ON’s chief operating officer, Patrick Lammers. “We are at a crossroads in Germany and Europe: now we will see whether the development of this new market will be successful by 2030. Our competitiveness and the success of the hydrogen ramp-up depend on whether the right course is now swiftly set in politics and regulation."