EnBW will invest 1 billion euros ($1.09 billion) in Germany’s planned national hydrogen transport network, as announced during the unveiling of a nationwide planning application involving sector peers on Tuesday.
The infrastructure is expected to begin commercial operations by 2032, aiming to transport newly produced and imported hydrogen, a clean alternative to fossil fuels for many industrial and consumer applications.
Germany is paving the way for the importation and production of clean hydrogen to reduce its reliance on oil and natural gas and the carbon emissions they produce. Hydrogen, when produced via electrolysis using renewable electricity, can significantly aid in the transition to a lower-carbon economy. Given Germany’s limited land resources for wind and solar power, approximately 70% of its future hydrogen supply is expected to be imported from regions capable of producing it abundantly and at low cost.
EnBW’s investment is part of a national approval process recently initiated by the energy regulator. Dirk Guesewell, EnBW board member, stated, “The hydrogen core network is the entry point into the hydrogen economy of the future and therefore the prerequisite for the complete decarbonisation of the German economy and the achievement of climate goals.”
The Bundesnetzagentur, the regulator, received an overall set of designs planned by FNB, the industry group representing German gas transmission network operators. FNB expects approval from the regulator in September, with construction work starting in 2025. The plans include 9,666 kilometers (km) of lines, costing roughly 19.7 billion euros, capable of delivering 278 terawatt-hours (TWh) of hydrogen annually to consumers—equivalent to one-third of German gas usage in 2021.
The government plans to partially fund the project through amortisation accounts, spreading the cost over generations. Operators will spend from their balance sheets and recover their outlays mainly through network fees, with capital markets also invited to invest. Approximately 60% of the infrastructure projects involve switching natural gas pipelines to hydrogen operations, while new hydrogen pipelines will be built, and some existing gas lines will be idled.
As part of a joint application by EnBW and its subsidiaries VNG, an eastern German gas distributor, and Baden Wuerttemberg operator Terranets, investments are planned to initially link regional transport lines in Germany’s east and southwest, with plans to expand beyond these areas. Separately, Berlin grid operator Gasag has submitted plans to convert 60 km of the city’s gas pipelines to hydrogen, aiming to use it as feedstock for heat plants currently running on gas.