Lower Saxony sets course for financing large-scale hydrogen projects
On Tuesday, August 30, 2022, the cabinet launched the financing for the production and import of hydrogen and thus set the course for the future energy supply. As part of the European IPCEI program for hydrogen technologies and systems, a sustainable green hydrogen economy is to be established in Lower Saxony.
The German government, with co-financing from the German states, supports large, cross-border projects in the field of hydrogen technologies and systems through IPCEI "Important Projects of Common European Interest" and according to the State Aid Guidelines for Climate, Environment and Energy (KUEBLL).
At the beginning of 2021, companies were able to submit project outlines for investment projects in an expression of interest procedure. In the meantime, more than 400 projects from 18 countries have been registered at EU level and will be notified by the EU Commission in various "waves", i.e. examined and approved under state aid law.
On May 28, 2021, 62 major German projects were selected by the federal government in consultation with the states. The projects are to receive over eight billion euros in federal and state funding.
Lower Saxony benefits far above average from the support program. Its location on the coast with seaports, a well-developed gas network, large cavern storage facilities and the enormous potential of renewable energies predestine Lower Saxony as a generation center, import hub and hub of the German and European hydrogen economy.
Provided today's cabinet decision is followed by a corresponding resolution in the September plenary session of the state parliament, over 2.3 billion euros in state funding would be mobilized for Lower Saxony's investments in hydrogen projects: The federal government is offering more than 1.6 billion euros if the state contributes another 700 million euros.
To finance this, the bill launched by the cabinet today provides for a further increase in the Economic Development Fund. On June 29, 2022, the Lower Saxony state parliament had already decided to allocate 459.5 million euros to the Economic Development Fund for this purpose, which was available due to the favorable course of the 2021 fiscal year. Now the Economic Development Fund is to receive further funds totaling 240 million euros for hydrogen projects in the years 2024 to 2026. The bill passed today is to be adopted - if possible - in the September plenary session.
"With a state share of 700 million euros, we are creating the conditions for co-financing twelve major, cross-border projects in the field of hydrogen technologies and systems. In total, we are talking about billions of euros in investments, including federal funding of more than 1.6 billion euros for industrial companies in Lower Saxony," says Minister President Stephan Weil. "Green hydrogen will be an essential pillar of our future energy supply. Lower Saxony is a leader in this respect. This is also a contribution to becoming Energy State No. 1."
Minister of Economics Bernd Althusmann says: "In addition to securing existing jobs by decarbonizing today's CO2-intensive industries, these projects represent a very great opportunity for the further industrial development of Lower Saxony. Renewable, inexpensive and securely available energy is a decisive locational advantage for new industrial settlements in Lower Saxony."
"With a strong hydrogen economy, we in Lower Saxony are doing our part for energy security and for Germany's independence. It is an important part of the foundation for the success of our climate policy goals. The production of green hydrogen, transport, storage and finally large-scale application must be thought through and managed together in terms of space and infrastructure. Only in this way can we succeed in building up electrolysis capacity on an industrial scale and reduce the costs of producing and using hydrogen," says Energy Minister Olaf Lies.
"In the medium-term plan for 2022 to 2026, we have already earmarked a total of 750 million euros for an 'investment offensive in Lower Saxony', which will now be used to counter-finance the promotion of hydrogen technology. This is money well spent, especially since we are mobilizing a total volume of over three billion euros. This is further proof that with a forward-looking financial policy, the black zero and three-digit million euro sums for future technologies are not a contradiction in terms," says Finance Minister Reinhold Hilbers.
Source: Lower Saxony State Chancellery
Background to IPCEI Hydrogen
The abbreviation "IPCEI" stands for "Important Projects of Common European Interest (IPCEI)". An IPCEI program for hydrogen technologies and systems is intended to stimulate the development of a sustainable green hydrogen economy by providing investment support for cross-value-chain hydrogen projects on an industrial scale - both nationally and across Europe.
At the beginning of 2021, companies were able to submit project outlines for investment projects in an expression of interest procedure. In the meantime, over 400 projects from 18 countries have been registered at EU level and are being notified by the EU Commission, i.e. examined and approved under state aid law. On May 28, 2021, 62 major German projects were selected by the federal government in consultation with the states. The projects are to receive over eight billion euros in federal and state funding.
Lower Saxony is benefiting far more than average from this - with today's cabinet decision, over 2.3 billion euros in state funding can be mobilized for investment in Lower Saxony , assuming a corresponding resolution is passed by the state parliament in the September plenary session: The federal government is offering around 1.6 billion euros if the state contributes a further 700 million euros.
This would enable private-sector investment by industry and the energy sector worth several billion euros in Lower Saxony.
What is the purpose of this?
- Construction of around 850 MW of electrolysis pipeline in Lower Saxony to be funded over the next 5 years - i.e. around 40% of the electrolysis capacity financed nationwide via this funding program is to be built in Lower Saxony !
- With the current project , the Federal Ministry of Economics and Technology expects a total of over 2 GW nationwide . By comparison, the target in the National Hydrogen Strategy is 10 GW of electrolysis capacity nationwide by 2030.
- In addition: Creation of more than 500 km of hydrogen transport infrastructure in Lower Saxony, largely through the rededication of existing natural gas pipelines but also through the construction of new hydrogen pipelines as well as the conversion of caverns for natural gas storage to
- Entry into the transformation of industry toward climate neutrality through the use of green hydrogen, e.g., in steel production and refinery processes.