Germany announces US$17 billion package to subsidise gas-to-hydrogen shift

The stimulus aims to speed up the transition to low-carbon energy, providing a supplement to intermittent renewable energy sources.

Germany’s energy ministry said a tender process for the conversion of four gas plants with total capacity of up to 10 gigawatts (GW) would take place soon.

The state support will include capital and operating subsidies, according to Reuters.

The ministry said hydrogen transition plans should be drawn up by 2032 to enable the plants to be fully switched to hydrogen between 2035 and 2040.

The government will also subsidise power plants running exclusively on hydrogen with a capacity of up to 500 megawatts for energy research purposes, the ministry said, without providing financial details.

Last year, Germany agreed with the European Commission to tender 8.8 GW of new hydrogen plants, and up to another 15 GW that will run initially on natural gas before being connected to the hydrogen grid by 2035 at the latest.

But they have not reached an agreement on how the gas plants would be subsidised.

Germany’s power plant strategy was supposed to be ready last year, but a constitutional court ruling that vetoed €60 billion ($64.5 billion) of debt earmarked for climate projects forced the government to rethink its budget.