The network construction period has been extended until 2037

Germany’s government coalition agreed at the end of last week on a financing mechanism for the country’s future hydrogen network, extending its construction period to 2037 and providing investor protection in the event of bankruptcy, Hydrogen Insight reports.

The main hydrogen network in the country will stretch for more than 9.7 thousand kilometers and will cost about €20 billion, 60% of the network will be made up of existing gas pipelines.

Energy policy lawmakers from the three parties of the government coalition have agreed on the details of the network to be discussed. The agreed financial framework will be included in the third amendment to the Energy Industry Law, which will now be submitted to the relevant parliamentary committees. It may be approved by the Bundestag in the near future.

According to the agreement, the grid should be in place no later than 2037, which is five years later than the original deadline, in an attempt to ease the financial burden on operators.

The project will be financed by subscriber fees and built by private companies.

To encourage investment in the emerging technology, network operators will not be liable if one of them goes bankrupt. At the same time, the state guarantees a 6.7% return on capital before taxes.

The government will also set up an «amortization account» to cover the costs of building the network, which will be gradually returned by operators until 2055.

As GMK Center reported earlier, the decarbonization of the German steel industry requires political decisions, according to Salzgitter CEO Gunnar Gröbler. In particular, the age pointed to the lack of a regulatory framework for the development of hydrogen infrastructure in Germany.