Germany’s push to hardwire hydrogen into Europe’s largest economy gained momentum in July, with a €4.6b ($5b) public funding commitment to multiple projects, as well as the fleshing out of plans to tender for hydrogen-fired power generation and the signing of a first major green ammonia import deal.

Twenty-three projects spanning electrolysis, storage, pipelines and the use of liquid organic carriers have secured public funding under Hy2Infra-Welle, an umbrella project waved through by the EU in February as an Important Project of Common European, allowing it to circumvent EU competition rules on state aid. The funding will be provided by both the federal government (70%) and the individual states hosting the various projects (30%). The private sector is expected to invest another €3.3b in the projects.

Germany’s increased commitment to hydrogen comes against the backdrop of a sluggish economy and pressure on public finances, with support for the wider transition under intense scrutiny. However, the coalition government recently agreed a budget for 2025 that it said included “record levels” of investment in renewables and decarbonisation, which it sees as the engines of future growth.

“Hydrogen pipelines will be the lifeblood of industrial centres” Habeck, federal minister for economic affairs and climate action

“The energy transition remains one of the greatest challenges for our country, even in the face of further crises and conflicts,” said Robert Habeck, federal minister for economic affairs and climate action, on announcing the funding.

“We are giving the green light for the construction of electrolysers in the three-digit megawatt class, thus enabling important progress in the domestic production of green hydrogen. An efficient hydrogen infrastructure plays a key role in enabling the decarbonisation of industry and the energy sector. Hydrogen pipelines will be the lifeblood of industrial centres.”

Germany’s hydrogen strategy envisages the country’s demand rising from 55TWh/yr currently to 95–130TWh/yr (2.4–3.3mt/yr) by 2030, with 50–70% of that to be met by imports.

The 23 Hy2Infra-Welle projects are designed to deliver a combined 1.4GW of green production capacity, as well as 370GWh of storage, 2,000km of pipelines and capacity to use liquid organic hydrogen carriers to transport about 1,800t/yr.

A major beneficiary of the public funding is German energy firm RWE. It has secured €619m of grants towards the construction of a 300MW electrolyser at Lingen in Lower Saxony as part of the GET H2 Nukleus project, as well as a hydrogen storage facility in Gronau-Epe in North Rhine-Westphalia. A third strand of funding has been granted to a consortium developing a 100MW electrolyser plant at the port of Rostock as part of the HyTechHafen Rostock project. RWE is a member of this consortium.

“Today is a great day for the ramp-up of the hydrogen economy, said Markus Krebber, CEO of RWE, as the funding was announced. “Thanks to the funding from the German government and the federal state governments, the first industrial-scale hydrogen projects in Germany can now be implemented.”

RWE told Hydrogen Economist that confirmation of the funding meant “all the conditions are now in place to make an investment decision quickly” on the projects.

The Lingen project site is pivotal to RWE’s hydrogen strategy. It aims to commission the first electrolyser there in 2025, rising to 300MW by 2027. The storage project, which is aimed at balancing out fluctuations in hydrogen production, is projected to start up in 2026.

Other companies in line for funding under Hy2Infra-Welle include French industrial gases firm Air Liquide, with a project to develop 120MW of electrolyser capacity in North Rhine-Westphalia, with projected output 18,400t/yr aimed at the steel and other industrial offtakers in the region.

Hydrogen sprinters

Storage will be increasingly important in Germany as hydrogen is introduced to the power generation mix. In July, the government fleshed out the details of a new power generation strategy that calls for the deployment of 5GW of new “hydrogen-ready” capacity. In addition, 2GW of gas-fired capacity should undergo retrofits to accommodate the use of hydrogen. To qualify for subsidies that will cover the spread between gas and hydrogen fuel prices, projects must commit to switch to hydrogen from the eighth year of operation. Subsidies will be allocated via competitive tenders, which the government expects to launch at the end of 2024 or early 2025.

€7.9b – Total investment

The strategy also calls for 500MW of “hydrogen sprinters”—new plants that run on hydrogen from day one of their operations.

It also calls for the deployment of 5GW of gas-fired generation aimed specifically at maintaining power supplies during periods of so-called ’dunkelflauten’, where both wind and solar generation dips.

Import strategy

Germany’s hydrogen strategy recognised the need for imports to meet up to 70% of future hydrogen demand, and the government claimed a breakthrough in January with the signing of its first deal to import green ammonia. The country will take up to 397,000t of green ammonia from Egypt between 2027 and 2033 under a contract awarded to Emirati fertiliser group Fertiglobe. The deal is the first to be awarded for ammonia supply via Germany’s state-backed H2Global pilot auction, which is designed to secure imports that the government will then auction to German offtakers at a subsidised rate. The imported ammonia is priced at €1,000/t delivered to northwest Europe. This nets back to a price of €811/t, excluding freight and insurance, and implies a green hydrogen cost of less than €4.50/kg, according to the German government.

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Author: Stuart Penson