The next big step towards the hydrogen core network

FNB Gas e.V. today submitted the draft application for the hydrogen core network to the Federal Network Agency and the Federal Ministry for Economic Affairs and Climate Protection. “This marks the next milestone in the realization of the core network,” emphasizes Barbara Fischer, FNB Gas Managing Director.

The transmission system operators (TSOs) have been working flat out on the final modeling and optimization over the past few weeks. The total length of the optimized core grid is around 9,700 km . Of this, 710 km is accounted for by pipelines from 17 other potential hydrogen network operators, which the TSOs received as part of the opportunity to comment on the first planning status by 28.7.2023. The core network consists mainly of converted natural gas pipelines (approx. 60%). The investment costs amount to € 19.8 billion €. The feed-in and feed-out capacities amount to around 100 GW and 87 GW respectively. “The draft of the core network thus fulfills the goals of a Germany-wide, expandable, efficient and quickly realizable hydrogen network by the target year 2032, which are anchored in the EnWG amendment to the hydrogen core network. This puts Germany at the forefront of infrastructure development in Europe,” continued Fischer.

The submission of the draft application also marks the start of the first consultation of the draft core network by the Federal Network Agency on its website. Once the amendment to the EnWG on the hydrogen core grid (Sections 28o – 28s) comes into force, the grid operators are expected to officially submit the final joint application in the first quarter of 2024, which will then be consulted on, reviewed and approved by the Federal Network Agency.

The TSOs have the clear goal of starting to build the hydrogen core network next year. To this end, FNB will lobby its shareholders for the necessary investments. The legal establishment of a financing model suitable for the capital market is a prerequisite for the submission of the joint application by the TSOs and thus for the swift implementation of the core network. The draft bill passed by the cabinet today contains important elements for a viable financing concept: a capped, market-compatible ramp-up fee, the creation of an amortization account for interim financing of the revenue shortfall resulting from the cap and state protection in the event that the market ramp-up fails. Nevertheless, some questions remain unanswered or are to be settled by the Federal Network Agency. A conclusive assessment of capital market viability will only be possible once the interplay between statutory regulations, determinations by the Federal Network Agency and contractual regulations between the federal government and the core network operators is known.

“The transformation from natural gas to green gases, above all hydrogen, is an opportunity of the century: for our society, our energy supply and, last but not least, the achievement of climate targets. The federal government and transmission system operators are now making an advance contribution to this with the hydrogen core network. The market ramp-up is a joint task.”Dr. Thomas Gößmann, Chairman of the Board of FNB Gas, concludes.