08.03.2024
Source: Energy & Management Powernews
An expert report for the Federal Ministry of Economics deals with the financing of the hydrogen core network.
As is so often the case, the authors of the study have chosen a rather cumbersome title for their scientific work. "Expert opinion on the validation of a concept for private-sector financing of the development of a hydrogen core network with subsidiary state funding." The Federal Ministry of Economics wanted to know what the financing concept for this project was like.
The report was made available to the public on March 7 and is dated February 24. It was prepared by the Fraunhofer Research Institution for Energy Infrastructures and Geothermal Energy IEG, the Fraunhofer Institute for Systems and Innovation Research ISI, Congas Consulting and Consentec GmbH.
As is well known, the hydrogen core network is to be financed by the private sector. The initial problem here is that passing on the enormous start-up costs to the first network users of the hydrogen network would make it completely uneconomical for this group. A so-called amortization account is intended to compensate for this.
The losses at the start of grid operation are to be booked there over the years. These losses will then be amortized as soon as a sufficient number of grid users are connected and the fee income exceeds the costs of grid operation. The amortization account should be balanced by 2055 at the latest. This is to be guaranteed by the state.
Not surprisingly, the report also comes to the conclusion "that the hydrogen network will be dependent on state funding in the early phase of development in all financing models". Furthermore, the report shows that if the network is built too early, underutilization will pose major challenges for the financing model. "Unfortunately, this risk is very real," Benjamin Pfluger from Fraunhofer IEG and head of the report is quoted as saying. The new power plant strategy envisages that the H2-ready power plants will only switch to hydrogen between 2035 and 2040. All grid customers would then have to pay off the initial idling of the grid for a long time, which is unlikely to be manageable without subsidies. "However, such expensive idling could and should be reduced by postponing construction measures in line with demand", the demand states.
The report on financing the hydrogen core grid can be downloaded from the website of the Federal Ministry of Economics.
Author: Stefan Sagmeister
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