(Berlin) - The “Draft Law on the Implementation of Union Law Requirements and the Regulation of Pure Hydrogen Networks in Energy Industry Law” (19/27453) presented in March by the Federal Ministry for Economic Affairs and Energy (BMWi) is intended to implement EU requirements into national law.
This also makes changes to numerous laws and regulations necessary, from the Energy Industry Act (EnWG) to the Renewable Energy Sources Act (EEG) and the Gas Network Access Ordinance to the Electricity Network Fees Ordinance. In a hearing of the associations in the Committee for Economic Affairs and Energy, there were numerous and sometimes violent critical comments on the legal project surrounding the development of a hydrogen infrastructure.
VDMA: “Storage systems are not end consumers”
Gerd Krieger from the Association of German Mechanical and Plant Engineering (VDMA) criticized the definition of energy storage systems. The BMWi draft describes energy storage systems as systems that use electricity to store it and generate new electricity when it is withdrawn. This “perpetuates the fiction that storage systems should be viewed as final consumers” of electrical energy. As a final consumer, storage would also have to pay all duties, levies, taxes and fees for final consumers. “The resulting financial burden prevents storage from playing its useful role in system stability. “They also hinder the addition of necessary new storage capacities,” the statement says.
The Internal Market Directive, on the other hand, defines energy storage as “postponing the final use of electrical energy to a later date than when it is produced”. This formulation makes it “unmistakably clear that the storage of electricity is not a final use”. This means that storage systems are “consequently not end consumers”. The VDMA demands that storage be exempt from all taxes.
Wording of the VDMA statement
https://www.bundestag.de/resource/blob/833312/567de1c10bf1010d14656c08f7cdc1ce/19-9-1023_Stellungnahme_VDMA_oeA_Wasserstoffnetze-data.pdf
VKU: “Regulating hydrogen networks”
Ingbert Liebing from the Association of Municipal Companies (VKU) emphasized that the draft law provides for the possibility for operators of hydrogen networks to opt in to regulate their hydrogen network (“opt-in”). However, in the VKU's opinion, hydrogen network operators should not - "not even on a transitional basis" - have the option of opting in to regulatory requirements. Rather, it would be “more effective to provide mandatory regulatory requirements for all hydrogen network operators without a transition period”. Special regulations should be avoided. A technology-neutral expansion of the definition of gas in the EnWG to include hydrogen would lead to the application of the regulatory requirements applicable to gas network operators.
In addition, other aspects speak in favor of subjecting the operation of hydrogen networks to regulatory requirements from the outset. “So integrated and European-harmonized network development and planning between electricity, gas and hydrogen networks is only possible with equivalent regulation.” This would also provide reliable security about the applicable framework conditions from the perspective of hydrogen trading. Greater incentives for investment in infrastructure would be created.
Wording of the VKU statement
https://www.bundestag.de/resource/blob/833304/3f8cd8f19dcfa0f851eb17c6c27fce19/19-9-1019_Stellungnahme_VKU_oeA_Wasserstoffnetze-data.pdf
E.DIS: “Increase interest rate on equity”
Stefan Blache from the distribution network operator E.DIS Netz GmbH emphasized that the electricity and gas supplier is the second largest investor in Germany after vehicle construction. Most of the money flows into the electricity and gas networks; The distribution network operators (DSOs) alone invested over five billion euros annually. In order to invest in the networks, the existing regulatory framework needs to be modernized. “The constantly high capital requirements over the next decades for the expansion and conversion of the energy supply at home and abroad and the foreseeable development of German equity interest rates” contradict each other. Investors focused on international investment opportunities. The German energy networks would have to assert themselves against higher return prospects in other countries and fields. In an international comparison, Germany is at the bottom of the field when it comes to equity interest rates.
Investors expected interest rates of six to seven percent before taxes. In contrast, in the 4th regulatory period (RegP), the equity interest rate is at risk of falling by 6,91 percentage points from the current 2,6 percent to around 4,3 percent before taxes. This would mean almost halving the level of the 1st RegP. “The development is likely to weaken the financial strength of companies,” says E.DIS.
(Editor's note: Suppliers of gas and electricity must pay a fee to the operators of the networks they use. The total amount of these fees may not exceed a certain upper limit. The Federal Network Agency and the state regulatory authorities set this revenue upper limit for everyone within their area of responsibility Covered network operators are determined in advance for a specific period of time - the regulatory period. The current 3rd RegP for gas began in 2018 and ends in 2022.)
Text of the E.DIS statement
https://www.bundestag.de/resource/blob/833310/3035ee9f28a98c5d172fbee0364da9bd/19-9-1022_Stellungnahme_E-DIS_oeA_Wasserstoffnetze-data.pdf
DVGW: “Separate regulation of hydrogen networks is a dead end”
Gerald Linke from the German Gas and Water Association (DVGW) described it as “a step into a dead end that the bill proposes regulation of hydrogen networks separately from the gas infrastructure”. The natural gas pipelines are generally suitable for transporting hydrogen. “The technical rules for H2 are already available or will be finalized shortly.” In order to equip the existing natural gas pipelines accordingly, costs of around seven billion euros are expected by 2050 - compared to 2,3 billion euros annually for investments in new construction, maintenance and Maintenance. The conversion costs are therefore low. “Passing the costs on to all gas network users through a uniform network fee” makes sense and is necessary in order to successfully advance the development of a hydrogen economy. “Integrated regulation for hydrogen and gas networks is urgently needed.” A delay in the transformation of the gas networks would lead to cost increases.
Wording of the DVGW statement
https://www.bundestag.de/resource/blob/833308/9ae9e41d4c1ac2bf63b91934d5c9e85e/19-9-1021_Stellungnahme_DVGW_oeA_Wasserstoffnetze-data.pdf
VzBv: “Ban on cross-financing by natural gas customers is welcome”
Thomas Engelke from the Federal Association of Consumer Organizations (VzBv) pointed out that for the time being the availability of wind and solar power for the production of green hydrogen is very limited and the import question remains unanswered. Since hydrogen remains a scarce commodity for the time being, it will initially play no role for use by private consumers in the heating and building sectors. He therefore welcomed the proposed ban on proportional cross-financing of the hydrogen networks by private consumers via the instrument of network fees for the natural gas networks.
Wording of the VzBv statement
https://www.bundestag.de/resource/blob/833302/2f3d75b47e37e43e881cc99be9984ea2/19-9-1018_Stellungnahme_vzbv_oeA_Wasserstoffnetze-data.pdf
FNB Gas: “Separation of natural gas and hydrogen infrastructure is problematic”
Thomas Gößmann (Association of Gas Transmission System Operators, FNB Gas) explained that in order to build a sustainable hydrogen economy in the long term, the current draft falls short. This is due in particular to the approach chosen by the federal government of a strict separation of gas and hydrogen infrastructure in definition, financing and planning. “The National Hydrogen Strategy is intended to make Germany the world market leader in hydrogen technology. However, this requires a functioning domestic market.”
It is economically efficient and technically possible to develop the hydrogen infrastructure from the natural gas network and to convert existing natural gas pipelines to exclusively transport hydrogen. A regulatory system should be envisaged that considers financing and network planning as a unit of the hydrogen network and gas network in close coordination with the electricity network.
Wording of the FNB Gas statement
https://www.bundestag.de/resource/blob/833306/6a440f4617b04403ed6c1ee4ee2c83ef/19-9-1020_Stellungnahme_FNB-Gas_oeA_Wasserstoffnetze-data.pdf
BNE: “Hydrogen will not likely be used across the board in houses”
Robert Busch (Federal Association for the New Energy Industry, BNE) said that hydrogen was far too good to be burned as an admixture in gas networks. It is a scarce and expensive commodity for the foreseeable future: “Dumping it somewhere is not the energy transition that we want.” He does not see hydrogen being used across the board in houses, but rather has importance for industry and as a raw material. It is not there to give “gas networks a second life”. As soon as the hydrogen network is more than an isolated network for a few industrial customers, it must be regulated. After connecting to a pure hydrogen network, users would only be able to change the type of supply with high conversion costs. Regulated network access is therefore investment protection for producers and customers.
Text of the BNE statement
https://www.bundestag.de/resource/blob/833350/dfc33b2cca2942bcc7e0c614e796bd10/19-9-1027_Stellungnahme_bne_oeA_Wasserstoffnetze-data.pdf
Greenpeace: “Hydrogen not for the heating sector”
Carolin Dähling (Greenpeace Energy) described the analysis of supply and demand as an important basis for examining the needs of hydrogen infrastructure. In terms of demand, she sees it as rather critical if hydrogen is used in large quantities across the board in the heating sector. And the supply of green hydrogen is closely related to the federal government's efforts to promote the expansion of renewables. The market ramp-up of hydrogen is not an end in itself, but is primarily necessary for achieving the climate goals and for the decarbonization of all sectors.
Text of the Greenpeace statement
https://www.bundestag.de/resource/blob/833314/473ba35d9d958c5a40028cb93437e1af/19-9-1024_Stellungnahme_Greenpeace_Energy_oeA_Wasserstoffnetze-data.pdf
City Council: “Don’t just serve heavy industry”
Detlef Raphael from the German Association of Cities said that a one-sided focus of funding and political attention on the use of hydrogen in heavy industry with its own hydrogen networks - outside of network regulation - was "wrong from our point of view". Rather, the many hydrogen projects would have to be supported at the municipal level in order to develop the areas of application of hydrogen in mobility (public transport, waste vehicles) and heat supply as well as as energy storage. “These measures can be supported by targeted funding or relief from taxes and levies on electricity prices for hydrogen electrolysis.”
The draft law does not offer a long-term and reliable energy policy course. Gas, hydrogen and electricity infrastructures would have to be thought about and planned more closely in a joint network development plan. The interaction between infrastructures is increasing due to sector coupling and must be reflected in network development. The legal framework should therefore be designed to be open to technology in order to be able to use the potential arising from further technical developments.
Wording of the city council statement
https://www.bundestag.de/resource/blob/833492/9f25cd71270f67a33fc4e8b40d3f4dd5/19-9-1028_Stellungnahme_DST_oeA-Wasserstoffnetze-data.pdf
deep link
https://www.bundestag.de/services/suche?suchbegriff=wasserstoff+ausschuss+für+wirtschaft+und+energie
Photos
Reichstag Berlin © German Bundestag
