Germany's Proposal for Hydrogen Pipeline Network Fee
BERLIN (Reuters) - Germany's network regulator on Wednesday proposed a fixed annual fee of 25 euros ($27) per kilowatt-hour per hour to use the country's planned core hydrogen network, as it aims to ramp up and finance infrastructure for a key energy transition fuel.
Germany aims to increase its use of hydrogen to reduce greenhouse gas emissions in heavily polluting industries such as steel and chemicals, which are difficult to electrify, and lessen its reliance on imported fossil fuels.
The country's core network for hydrogen fuel, which is targeted for completion in 2037, will extend over 9,700 kilometres (6,000 miles) and cost around 20 billion euros, with existing gas pipelines making up 60% of the network.
The fee is meant to cover the high startup costs of building the network while keeping prices low enough to attract users.
The Federal Network Agency said it did not expect network usage revenue to cover costs in its early stages, but as usage rises, the fee will generate more income than needed, making up for earlier losses.
The fee will apply at all entry and exit points of the hydrogen network until 2055, it said, adding the fee would be adjusted annually for inflation, and reviewed every three years.
Alongside the fixed annual fee, the agency said it was also working on a more flexible pricing system to allow monthly or daily bookings, interruptible capacity where hydrogen delivery isn't guaranteed and storage-related price reductions.
($1 = 0.9260 euros)
(Reporting by Riham Alkousaa; Editing by Mark Potter)
