EnBW to invest 1 bln euros as Germany's hydrogen grid takes shape
EnBW and subsidiaries to take part in national plan
Pipeline group FNB has submitted overall plan to regulator
Regulator expected to give approval in two months
Aim is for construction to begin next year
Adds detail on clean hydrogen in paragraph 4, on scope of national plan in paragraph 11, Gasag plan in paragraph 16
By Vera Eckert
FRANKFURT, July 23 (Reuters) -EnBW EBKG.DE will invest 1 billion euros ($1.09 billion) in Germany's planned national hydrogen transport network, the utility said as a nationwide planning application involving sector peers was unveiled on Tuesday.
The infrastructure, which is expected to start commercial operations by 2032, is meant to transport newly produced and imported hydrogen, a clean alternative to fossil fuels in many industry and consumer applications.
Looking to reduce its reliance on oil and natural gas and the carbon they produce, Germany is paving the way for the importation and production of clean hydrogen.
Hydrogen, provided it is produced in an electrolysis process using renewable electricity, can help the transition to a lower carbon economy.
Since German land resources for wind and solar power are limited, some 70% of its future hydrogen is expected to be imported from regions that can produce it amply and at low cost.
EnBW's planned spending is part of a national approval process just opened by the energy regulator, it said in a press release.
"The hydrogen core network is the entry point into the hydrogen economy of the future and therefore the prerequisite for the complete decarbonisation of the German economy and the achievement of climate goals," said EnBW board member Dirk Guesewell.
The regulator, called the Bundesnetzagentur, on Tuesday was handed an overall set of designs planned by FNB, the industry group representing German gas transmission network operators, an FNB statement said.
BUILDING WORK TO START NEXT YEAR
FNB said that it expected to receive approval from the regulator in September and that construction work could start in 2025.
The plans encompass 9,666 kilometres (km) of lines costing roughly 19.7 billion euros.
The pipelines will be able to deliver 278 terawatt hours (TWh) of hydrogen a year to consumers, equivalent to one third of German gas usage in 2021, prior to Moscow's invasion of Ukraine which prompted Germany to begin curbing its use of Russian energy.
The government plans to partially fund the plans with amortisation accounts that will spread the cost over generations. Operators will spend from their balance sheet and recover their outlays mainly through network fees, with capital markets also invited to invest.
Some 60% of the infrastructure projects involve switching natural gas pipelines to hydrogen operations.
Some new hydrogen pipelines will be built and some lines currently used for gas will be idled.
As part of a joint application by EnBW and its subsidiaries VNG, an eastern German gas distributor, and Baden Wuerttemberg operator terranets, investments are planned to initially link regional transport lines in Germany's east and southwest, and later beyond those areas.
Separately, Berlin grid operator Gasag said it has submitted plans to convert 60 km of the city's gas pipelines to hydrogen, to take it as feedstock to heat plants currently running on gas.
($1 = 0.9195 euros)
Reporting by Vera Eckert: editing by Ludwig Burger and Jason Neely
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