Munich (energate) - With the update of the National Hydrogen Strategy, the Federal Ministry of Economics has proposed the establishment of a hydrogen grid company with state participation. Opposition came promptly from the Bavarian state government. In the Free State of Bavaria, the long-distance grid operator Bayernets is already working on a hydrogen start-up grid. energate spoke to Stefanie Jacobi, Hydrogen Project Development and Deputy Head of Grid Strategy & Innovation at Bayernets GmbH, about the project and the proposal from Berlin.
energate: Ms Jacobi, with your 'HyPipe Bavaria' project you want to lay the foundation for a hydrogen grid in Bavaria. What exactly is the network supposed to look like?
Jacobi: With 'HyPipe Bavaria - The Hydrogen Hub, Bayernets is setting up a hydrogen start-up network in Bavaria before the end of this decade. We will start with clusters in the industrial centres of Burghausen and Ingolstadt, where we will build regional hydrogen networks to connect local producers and consumers by the middle of the decade. In a further step, we will convert various lines between Burghausen, Munich, Ingolstadt and Ulm to transport hydrogen. The resulting hydrogen transport network with a length of around 300 kilometres can be used by all market participants without discrimination. It forms the basis for a widespread hydrogen supply in Bavaria and creates optimal conditions for the connection to the national and European hydrogen transport infrastructure.
energate: To what extent do you already use existing gas pipelines?
Jacobi: We plan to use existing natural gas pipelines for the most part for the Bavarian hydrogen grid. For example, 95 per cent of the planned hydrogen pipelines will be created by converting our pipelines from natural gas to hydrogen. The use of existing natural gas pipelines reduces costs considerably and speeds up the hydrogen network construction. In addition, our integrated planning processes and network modelling allow us to continue to guarantee the secure transport of natural gas while at the same time building a high-performance hydrogen transport network.
energate: In this context, how do you assess the proposals for a national hydrogen grid company?
Jacobi: The proposals are incomprehensible to us, as they would massively slow down the urgently needed development of a hydrogen network without any recognisable added value. Like many other gas grid operators, we are working on various projects with our partners to build a hydrogen transport infrastructure. In two to three years, we will convert the first pipelines to transport hydrogen. And if the hydrogen ramp-up succeeds as we all wish, things will continue to go at a rapid pace. That a national hydrogen grid company would be faster and more efficient here is wishful thinking at best.
energate: Why is that?
Jacobi: For one thing, additional interfaces would be created. The more existing natural gas pipelines are converted, the faster and more cost-effectively the urgently needed hydrogen transport infrastructure can be built. But since security of supply with natural gas must continue to be guaranteed, a national hydrogen-grid company would have to coordinate very closely with the gas grid operators. However, the processes required for this would first have to be established. In contrast, the gas grid operators have already been working together very successfully for years in the sense of secure natural gas transport and can develop the creative solutions for hydrogen transport that are needed in many places.
On the other hand, the gas grid operators have mastered the planning, construction and operation of pipelines for the transport of gaseous energy carriers for many decades. In contrast, a national hydrogen-grid company would start from scratch and would have to compete with the gas grid operators for the already scarce skilled personnel.
Furthermore, the gas grid operators and the customers connected to their grids have often worked together in a spirit of trust for decades. This is a basic prerequisite for a successful conversion from natural gas to hydrogen. How a newly founded hydrogen grid company is supposed to manage such a conversion without knowledge of the plants and processes is completely unclear.
energate: The federal government argues that state participation could ensure the financing of the necessary investments at favourable conditions.
Jacobi: There is sufficient equity and debt capital available as soon as the amortisation risk has been solved in the unlikely event that the hydrogen ramp-up does not succeed as expected. The German Energy Agency (Dena) has put a sensible proposal on the table for this. According to this proposal, the state does not have to put up any money, but 'only' acts as an insurer. It can significantly influence the risk of the insured event occurring through the right legal framework conditions. In this context, it is still important that the Dena model assumes a regulated system, so that losses are not socialised and profits privatised.
energate: Bavaria's Minister of Economic Affairs and Energy, Hubert Aiwanger, is at odds with the federal government on the national grid company. After 'HyPipe Bavaria' was not included in the list of funded IPCEI projects, the Bavarian government now wants to step in with the financing. What is the next step for the project?
Jacobi: We welcome the Bavarian government's initiative to provide start-up financing and thus offer our own solution for the amortisation risk. But we don't yet know the details. Irrespective of this, we are continuing to push the project 'HyPipe Bavaria - The Hydrogen Hub' intensively together with our partners.
The questions were asked by Thorsten Czechanowsky.
