New Energy Insights: Bulletin – German Fuelling of Hydrogen Sector Takes Off

This article is part of our New Energy Insights series from our Energy, Infrastructure and Resources team. Stay tuned for regular updates and commentary on topical issues across the sector.

In Germany, the Government has announced the names of 62 initiatives that will receive €8 billion (over $12.5 billion) in state funding as part of a joint European hydrogen project (Important Projects of Common European Interest Hydrogen), together with up to 22 European partner countries. The funding projects are spread across four main areas: hydrogen production, infrastructure, industrial uses and mobility uses. In addition to the state aid, the projects are expected to trigger an additional €33 billion in private investment.

The announcements coming from the German Government centre around making Germany a world leader in hydrogen technologies and to do this, massive investment in future hydrogen technology across the entire value chain is required.

“We’re rethinking mobility in a European and holistic way – from the energy system to engine technologies to filling infrastructure… At present 95 percent of transportation is dependent on fossil fuels. We therefore urgently need more mobility based on renewable energies.” – Transportation Minister Andreas Scheuer.

“We want to become number 1 in the world in hydrogen technologies. To do this, we are pooling our strengths in Europe and initiating massive investments in the future technology hydrogen with the first joint European hydrogen project. That secures competitiveness and jobs—in Germany as well as Europe. We are providing more than 8 billion euros in federal and state funds for the 62 German projects selected today and, with the selected projects, cover the entire value chain—from hydrogen generation and transport to industrial applications. We are taking a big step on the way to making our economy climate-neutral.” –  Federal Minister of Economics Peter Altmaier.

The German example proves that even in a country with relatively poor natural renewable resources in solar and wind and having been hit harder than expected economically by the COVID crisis, there appears to be no shortage of appetite for state aided investment in hydrogen technologies.

Looking closer to home, Australia has the potential to become a superpower in the global supply of hydrogen fuel, due to our world-leading renewable energy capacity and our existing strong networks of infrastructure for gas transport and storage. The cost of solar and wind power has also fallen dramatically in recent years and this trend is likely to continue.

Therefore, it is now time for Australia to push ahead and make crucial investment decisions for large scale hydrogen production. The Government has a key role to play early on in this regard in setting expectations and assisting pilot and demonstration projects. Otherwise, the risk is that we get left behind as other industrial powerhouses around the world power ahead and take advantage of the huge opportunities that can be realised through a large-scale hydrogen sector.

The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.