The German Federal Ministry of Economic Affairs and Climate Action has announced the target of producing almost all of Germany's electricity from renewable energies by 2035. In order to realize this, the EEG shall be extensively reformed this year. A corresponding draft bill for the "EEG 2023" contains various aspects that are intended to further strengthen the market ramp-up of hydrogen.

In this article, we describe the proposed amendments to promote the use of hydrogen as a means of storing surplus electricity generated from renewable sources.

Background

A central problem of today's wind- and solar-generated electricity is the volatility of production. While electricity is not consistently and reliably available in periods lacking sufficient wind and sun, a surplus of electricity is generated in opposite periods that can exceed the demand.  

Promotion of "innovative concepts with hydrogen-based electricity storage"

The German government is now looking to solve this problem by, among other things, specifically promoting hydrogen-based electricity storage. In times of surplus production volumes, hydrogen is to be generated in electrolysers and stored locally. In hydrogen-fuelled power plants, the hydrogen can then be used to produce electricity in times of production deficits.

In addition to the already established government auctions for the expansion of wind and solar capacities in Germany, among other things, an additional tender segment for so-called "innovative concepts with hydrogen-based electricity storage" is to be introduced, in order to promote combinations of onshore wind turbines or solar plants with a chemical electricity storage system using hydrogen as the storage gas, whereas several generation plants may also be connected together for a joint project.

The corresponding tenders are initially to take place biannually. The tender volume is to gradually increase from 400 MW of installed capacity in 2023 to 1,000 MW of installed capacity in 2028, with any tender volumes not awarded in one tender year having a correspondingly increasing effect on the tender volume for the following year.

Outlook

According to the draft law, a separate ordinance is to clarify the further details of the subsidy. This ordinance is planned to be issued in 2022 and may, among other things, deviate from the aforementioned tender volumes, clarify details of the procedure, specify special payment modalities and determine the technical requirements of the respective installations. 

This new support scheme is likely to offer new interesting opportunities for investors and project developers. Companies interested in benefiting from the program should therefore closely monitor the further developments in the legislative process for the EEG amendment and the relevant ordinance.