EnBW’s €1bn investment: How Germany’s hydrogen future just took a major leap

EnBW Energie Baden-Württemberg AG (EnBW) is embarking on a pivotal journey in Germany’s energy transition by investing approximately €1 billion to develop and expand a national hydrogen core network. This initiative is integral to the German government’s strategy to construct a comprehensive hydrogen infrastructure by 2032, which will also contribute to the European Hydrogen Backbone (EHB).

The core network aims to provide hydrogen to major industrial centres, power plants, and energy generation facilities, while also facilitating transnational hydrogen import corridors. Dirk Güsewell, Board Member for System Critical Infrastructure at EnBW, underscored the project’s significance: “The hydrogen core network represents the first step into the hydrogen economy of the future, establishing the basis for the complete decarbonization of the German economy and the achievement of climate targets.” He further added that EnBW’s investment, part of a broader €40 billion commitment by 2030, signifies a substantial leap towards advancing Germany’s energy transition.

As part of this ambitious project, EnBW’s subsidiary, terranets bw, in collaboration with VNG/ONTRAS Gastransport, has submitted detailed pipeline plans to the Federal Network Agency. The proposal includes both the conversion of existing pipelines and the construction of new infrastructure. The planned pipelines will link Baden-Württemberg with significant parts of eastern and central Germany.

However, the proposal is pending approval by the Federal Network Agency. The gradual development of the hydrogen infrastructure will be influenced by both technical and economic factors. Güsewell highlighted the importance of providing effective investment incentives to facilitate rapid development and expansion. He pointed out that while the legislative framework includes provisions to address the gap between high initial investment costs and low early income from network user charges, other proposed improvements, such as a reduction in the deductible for transmission system operators, have not been implemented.

EnBW’s commitment includes integrating the South German natural gas pipeline (SEL), currently under construction, into the hydrogen core network. Once completed, the SEL will initially deliver natural gas and later transition to hydrogen, serving regions in Baden-Württemberg including Heilbronn, Altbach/Deizisau, and Stuttgart-Münster. This integration is expected to expedite the development process and reduce costs due to the pipeline’s hydrogen-readiness.

Additional projects include transporting hydrogen to Upper Swabia, Lake Constance, and establishing a cross-border link from France to the Breisgau region. ONTRAS, a subsidiary of VNG, will focus on constructing hydrogen transport pipelines in central Germany, linking key industrial and chemical hubs with Berlin, Meissen, and other regions.

The Federal Network Agency is set to review the core network application in the coming weeks. The hydrogen transport infrastructure will continue to evolve based on demand and integrated gas/hydrogen network development planning.

EnBW’s investment is a crucial step towards establishing a robust hydrogen economy in Germany, supporting both national and European energy transition goals. The project highlights the necessity of strategic planning and investment to build an efficient and scalable hydrogen infrastructure.