H2Global
H2Global is a temporarily restricted subsidy tool to promote the emergence and ramp-up of a market for green hydrogen (H2) and Power-to-x-products (PtX) by means of a symmetrical market premium scheme.[1][2] The H2Global concept is aiming at the creation of an economic environment with sufficient planning and investment security, allowing investors and operating companies to invest into production and investment capabilities today, even though there is no existing functioning market for green hydrogen and PtX products.
Background and goals of the scheme[edit]
In line with the Paris Agreement, Germany and the EU have set themselves ambitious greenhouse gas reduction targets. In Germany’s strategy to meet the Paris Agreement’s targets hydrogen and more specifically the market ramp-up of a hydrogen economy play an important role.[3] The public funding as well as the production of green hydrogen on the basis of renewable energy was therefore classified as “indispensable” by the German federal government to achieve the long-term climate protection goals and to promote the transformation towards a CO2-neutral future in the national hydrogen strategy (NWS) in July 2020.[4]
Germany’s national hydrogen strategy however is facing the following problems: The medium-and long-term demand for green hydrogen in Germany will exceed, according to recent estimates, the possible supply in the EU and Germany by far. Germany will therefore have to import H2 and H2 derivatives to meet its decarbonisation goals. Additionally, the price for the production of green hydrogen and its PtX-derivatives (e.g. so-called e-fuels such as green kerosene) is currently significantly higher than the price for the production of their established fossil-derived equivalents. This leads to a significant difference between the price of demand and the price of supply for green hydrogen and its derivatives which prevents an unsupported market ramp-up in the foreseeable future.[5]
H2Global addresses the following goals defined in Germany’s national hydrogen strategy:
- A global market ramp-up and connected scaling and cost degression in the production of green hydrogen and its derivatives during a period of time where the necessary regulatory framework for a market-relevant price has not been realised yet (bridging function).[4] H2Global is limited in terms of time and volume.
- The support of private investments into the economic and sustainable production as well as the transport and usage of green hydrogen and its derivatives, to stimulate market demand for emission-free produced hydrogen and its follow-up products in Germany.[4]
- The establishment of hydrogen supply chains to Germany.[4]
Functionality[edit]
The concept includes the founding of a non-governmental intermediary (a special-purpose enterprise named Hydrogen Intermediary Network Company ‘HINT.CO’) to link demand and supply. The intermediary determines the best or most favourable offer for the production of a defined quantity of green hydrogen or a derivative through competitive market processes and concludes long-term purchase agreements (Hydrogen Purchase Agreements - HPA) including the transportation to Germany. Afterwards the intermediary makes sales agreements with a shorter duration (Hydrogen Service Agreements – HSA) with commercial consumers in Germany (“double auction scheme”). The purchase price will exceed the market price that could be realised in Germany in the foreseeable future. The remaining price difference will be compensated by the intermediary through funding by the German federal government.[1][6] This model takes reference to the already existing mechanisms of compensation in the Contracts-for-Difference (CfD) approaches. The long-term purchase agreements and the high creditworthiness of the HINT.CO due to the existing risk assumption by the German federal government guarantee the necessary planning and investment security for the development of large scale electrolysis capacities and transport infrastructure.[1][7] With foreseeable adjustments to the regulatory framework (e.g. ambitious implementation of RED-II) the demand for and therefore the price of CO2-free energy carriers is expected to increase. Consequently, in the medium term it will likely be possible to achieve a premium for the sale of green hydrogen or its derivatives in Germany compared to grey hydrogen or PtX derivatives. The HINT.CO can participate in a potential increase in market prices for CO2-free energy sources when selling due to the divergence of maturities of the purchase and the sales contracts. The necessary compensation of the cost difference by the German federal government would therefore be reduced over the term of the purchase agreements (HPAs). H2Global will be implemented by a foundation under civil law.[8]
Recent and future developments[edit]
On the basis of the national hydrogen strategy as well as the Covid-19 recovery package's aim of a timely market ramp-up for green hydrogen products, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH presented a first conceptual sketch of H2 Global to the German Federal Ministry for Economic Affairs and Energy (BMWi) in autumn 2020. After the funding commitment by the BMWi, a team of interdisciplinary experts under the project sponsorship of the Deutsche Wasserstoff- und Brennstoffzellen Verband (DWV), evolved the concept in a second phase.[9] The installation of the industrial foundation is planned for summer 2021.[10] The launch of the first projects is expected within the course of the year 2021.[11]
References[edit]
- ↑ 1.0 1.1 1.2 "Germany launches H2Global system to galvanize green hydrogen imports | S&P Global Platts". www.spglobal.com. 2021-03-17. Retrieved 2021-06-10.
- ↑ "Energiepolitik: Wie Deutschland sich den Zugriff auf grünen Wasserstoff sichern will". www.handelsblatt.com (in Deutsch). Retrieved 2021-06-10.
- ↑ Bundesministerium für Wirtschaft und Energie. "Deutsche Klimaschutzpolitik". www.bmwi.de (in Deutsch). Retrieved 2021-06-10. Unknown parameter
|url-status=ignored (help) - ↑ 4.0 4.1 4.2 4.3 Bundesministerium für Bildung und Forschung - Internetredaktion. "Nationale Wasserstoffstrategie". Bundesministerium für Bildung und Forschung - BMBF (in Deutsch). Retrieved 2021-06-10. Unknown parameter
|url-status=ignored (help) - ↑ Bundesministerium für Bildung und Forschung - Internetredaktion. "Woher soll der Grüne Wasserstoff kommen? - BMBF". Bundesministerium für Bildung und Forschung - BMBF (in Deutsch). Retrieved 2021-06-10. Unknown parameter
|url-status=ignored (help) - ↑ "BMWi plant Auktionsprogramm für Import von grünem Wasserstoff". Handelskammer Bremen - IHK für Bremen und Bremerhaven (in Deutsch). Retrieved 2021-06-10.
- ↑ "Energiepolitik: Grüner Wasserstoff: Deutschland ebnet Weg für industrielle Produktion". www.handelsblatt.com (in Deutsch). Retrieved 2021-06-10.
- ↑ "Energiewende: Turbo beim grünen Wasserstoff: Der globale Durchbruch für den Energieträger ist in Sicht". www.handelsblatt.com (in Deutsch). Retrieved 2021-06-10.
- ↑ "Förderkonzept "H2 Global": Bundesregierung will Wasserstoff-Großprojekte vorantreiben". www.handelsblatt.com (in Deutsch). Retrieved 2021-06-10.
- ↑ Bundesministerium für Wirtschaft und Energie. "Presseöffentliche Termine". www.bmwi.de (in Deutsch). Retrieved 2021-06-10. Unknown parameter
|url-status=ignored (help) - ↑ "Energiepolitik: Grüner Wasserstoff: Deutschland ebnet Weg für industrielle Produktion". www.handelsblatt.com (in Deutsch). Retrieved 2021-06-10.
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