Hydrogen Central

Germany Hails Breakthrough In EU Talks On Power Plant Plans, Hydrogen Included

germany power plant hydrogen

Germany hails breakthrough in EU talks on power plant plans, hydrogen included.

Germany’s economy minister said Berlin had made a “breakthrough” in its talks with the European Commission on plans for new hydrogen and gas power plants, but has yet to agree on how they will be subsidised.

Germany wants to use hydrogen and gas power plants to cover gaps in wind and solar supply, but has been at odds with Brussels on implementing public funding for them.

Economy Minister Robert Habeck told journalists in Hamburg that the two have now agreed Germany will tender 8.8 gigawatts (GW) of new hydrogen plants, and up to another 15 GW that will run initially on natural gas before being connected to the hydrogen grid by 2035 the latest.

Habeck said the tender process for 10 GW of these gas- and hydrogen-ready plants would take place by 2026. The government will then evaluate the process before tendering the remaining 5 GW, he said.

Robert Habeck, Economy Minister said:

Politically, it is the breakthrough, one must say that clearly. Now it has to be implemented.

Berlin is still to reach agreement with the Commission on how the plants will be subsidised.

Germany wants subsidies for future plants to be agreed under guidelines for decarbonisation projects, which would guarantee faster EU approval and more money, Spiegel magazine reported last month.

But the Commission wanted those guidelines to cover only purely hydrogen plants and not gas, Spiegel added.

Big producers have in recent years heavily promoted gas as a transition fuel as it creates lower emissions when burned than coal, but environmentalists have resisted that push.

National utility lobby group BDEW welcomed the initial agreement, but said the question of how the subsidies are specifically structured must still be clarified.

Kerstin Andreae, BDEW managing director said in a statement:

The agreement on central components and guidelines is not yet a legally secure basis for investment decisions to be made in a timely manner.

Tenders must be tailored towards a future market design – such as a capacity market, which ensures a reliable power supply to meet demand peaks -, and subsidies for hydrogen-ready power plants must be performance-based, Andreae added.

The government will write its power plant strategy this summer and conduct a consultation before starting a tendering process next year, Habeck added.

Germany is pushing to phase out coal by 2030 and has reached an agreement with RWE (RWEG.DE) in western Germany. However, concerns over security of supply in eastern Germany have stalled talks on reaching a similar agreement there.

READ the latest news shaping the hydrogen market at Hydrogen Central

Germany hails breakthrough in EU talks on power plant plans, August 1, 2023

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