The momentum behind Germany's hydrogen economy appears robust on paper but lacks substantial progress in practice, according to the latest findings from E.ON's fourth H2-Bilanz report, collated with data from the Institute of Energy Economics at the University of Cologne (EWI).
Planned hydrogen generation capacity for 2030 has escalated from 8.7GW in August 2023 to 10.1GW by February 2024, aligning closely with the government's target of installing 10GW of electrolysis capacity within the same timeframe.
However, the report underscores a significant disparity between planned projects and actual investment decisions. Out of 88 announced projects, only 16 have received a final investment decision, accounting for a mere 0.3GW of planned generation capacity, representing just around 3% of the projected electrolysis capacity.
E.ON identifies various obstacles hindering investment decisions, including uncertainties surrounding the certification and crediting of renewable hydrogen, insufficient funding, and delays in funding commitments. Additionally, a lack of transportation and storage infrastructure poses further challenges.
While recent developments, such as the EU Delegated Acts on defining renewable hydrogen, offer increased legal certainty, crucial aspects like financing conditions and infrastructure expansion remain critical concerns.
Gabriël Clemens, managing director at E.ON Hydrogen, stressed the urgent need for accelerated progress, stating, “Germany is only at the beginning of a long road to hydrogen ramp-up. The current installed capacity has hardly developed at all… With this fourth H2-Bilanz, we want to demonstrate once again the urgency for more speed in the hydrogen ramp-up. We at E.ON see it as our responsibility to support policymakers with the appropriate impetus.”
The report also introduces a new section, “Regulatory Milestones,” providing insights into adopted framework conditions and pending milestones, facilitating a deeper understanding of the link between policy decisions and data development.
