FNB Gas: Financing model for the hydrogen core network must be suitable for the capital market

• Balanced risk/reward ratio
• State protection at all times and for all core network operators
• Increase legal certainty

On the occasion of the expert hearing in the Committee for Climate Protection and Energy in the German Bundestag on the draft bill for a third law to amend the Energy Industry Act with regulations for the financing of the core network, FNB Gas Managing Director Barbara Fischer once again emphasizes the need for the financing model to be suitable for the capital market.

The transmission system operators (TSOs) agree with the Federal Government that the hydrogen infrastructure in Germany should be financed by the private sector. To this end, the draft law presents a financing model that works in principle, but with which the necessary private capital can only be mobilized if it is also assessed by investors as being suitable for the capital market and the investment conditions are at least no worse than for investments in other infrastructure sectors such as electricity, where there is currently a higher interest rate, without ramp-up risk and without retention risk.

“In order not to jeopardize the success of core grid planning to date, a few decisive changes to the draft legislation are necessary from an investor’s perspective. The main aim here is to improve the risk assessment for investors. Reducing the risks includes lowering the deductible to 15% and removing the conversion lines from the deductible regulation. The conditional obligation of grid operators to sell must be supplemented by an unconditional right of grid operators to sell in the event that the market ramp-up fails. A contract under public law would increase legal certainty.”

Please refer to the attached position paper for details of the adjustments required.