The ramp-up of the hydrogen economy in Germany is well underway − but only on paper, according to the fourth H2-Bilanz published by E ON based on data from the Institute of Energy Economics at the University of Cologne (EWI).
The hydrogen generation capacity planned by 2030 has risen from 8.7GW in August 2023 to 10.1GW in February 2024.
The realisation of all planned projects would also mean that the German government’s goal of installing 10GW of electrolysis capacity in Germany by 2030 would be achieved.
However, there is a large discrepancy between planned projects and final investment decision, according to the analysis.
This is underpinned by figures for the first time in the fourth H2-Bilanz: out of 88 announced projects, a final investment decision has only been made for 16 projects with a planned generation capacity totaling 0.3GW − and thus for only around 3% of the announced electrolysis capacity.
E ON sees various reasons as potential obstacles to investment decisions.
The publication of the EU Delegated Acts on the definition of renewable hydrogen has led to greater legal certainty overall.
However, there are still uncertainties with regard to the certification and crediting of renewable hydrogen, the company said.
In addition, funding is still insufficient, and strict conditions and delayed funding commitments are also barriers to investment, it added.
There is also a lack of transportation and storage infrastructure, E ON said.
The agreement on the conditions and financial structure for the core network is an important step in the development of a hydrogen infrastructure.
However, with a possible extension of the completion date to 2037, some pipelines may not be available for customer supply until later, it forecast.
The length of the pure hydrogen pipelines operated in Germany has not changed, as was the case when the last H2-Bilanz was published in November 2023.
However, after a clearly positive development in the planning of a hydrogen network in autumn (increase of more than 100%), the fourth H2-Bilanz shows only a slight increase from 5,708 kilometres of planned pipelines to 6,207 kilometres (increase of just under 9%).
Although the recent agreement on the financing of the hydrogen core network provides more certainty, it remains to be seen whether the financing conditions are attractive enough for potential investors, E ON said.
Rapid implementation of the announced Hydrogen Acceleration Act could speed up infrastructure expansion by shortening planning and approval procedures, it added.
The “Regulatory milestones” section is new to the H2-Bilanz.
It provides an overview of which framework conditions have already been adopted and which milestones are still outstanding.
This makes it possible to show causal relationships between political decisions and the development of data.
Gabriël Clemens, managing director at E ON Hydrogen, said: “Germany is only at the beginning of a long road to hydrogen ramp-up.
“The clear upward trend in the electrolysis capacity planned by 2030 since the first H2-Bilanz was compiled looks good in theory.
“In practice, we are still a long way from our target.
“The current installed capacity has hardly developed at all.
“The proportion of planned projects that have a final investment decision is far too low.
“We would need thirty times more to reach the 10GW set by the German government.
“With this fourth H2-Bilanz, we want to demonstrate once again the urgency for more speed in the hydrogen ramp-up.
“We at E ON see it as our responsibility to support policymakers with the appropriate impetus.”