The German Government has revealed plans to subsidise gas power plants that can switch to hydrogen as part of its strategy to supplement intermittent renewable energy and accelerate the shift to low-carbon generation.
The country's economy ministry this week revealed a substantial US$17 billion would be earmarked to subsidise the gas-to-hydrogen shift.
This decision follows industry pressure for detailed action after a promise made by the government last year.
Germany sees hydrogen as pivotal in its move away from gas and coal. The tender process for four gas plants, with a collective capacity of up to 10 gigawatts (GW), will start soon.
The state support will cover capital and operating subsidies for companies constructing and operating future hydrogen-ready gas power plants. These plans entail transitioning to hydrogen between 2035 and 2040, with transition plans expected by 2032.
Furthermore, the government will subsidise power plants exclusively running on hydrogen for energy research purposes.
This commitment is pivotal for Germany in persuading brown coal producers in the east to phase out coal-fired stations earlier than the official 2038 deadline and help Germany reach its greenhouse emissions targets faster.
Emerging green hydrogen play
With growing government backing for hydrogen across Germany and the broader European Union, companies such as Provaris Energy Ltd (ASX:PV1, OTC:GBBLF) which are actively pursuing hydrogen-related projects, are well-placed to capitalise on the trend.
Provaris struck up a partnership in December with leading international energy company Uniper Global Commodities SE, signing a non-binding Memorandum of Understanding (MoU) to investigate the supply of green hydrogen to Germany.
The partnership will explore the technical, operational and economic feasibility of the compressed hydrogen supply chain and will assess the use of Provaris' H2Neo compressed hydrogen carriers to deliver supply.
Hydrogen is expected to serve as an important part of Europe’s net-zero energy mix in future, as some of its largest steelmakers invest in hydrogen-based green steel.
Last month, Provaris engaged leading classification society DNV to issue a Front-End Engineering Design (FEED) statement for the company’s H2Neo carrier design and approval of its proprietary prototype tank.
DNV will apply its expertise towards the review and approval of Provaris’ H2Neo carrier's proprietary hydrogen cargo containment system.
This is an important step before Provaris begins the construction and testing of a prototype tank during the current quarter.
Successful completion of prototype tank testing will secure all necessary design and technology development approvals to commit to shipbuilding projects for Provaris’ H2Neo compressed hydrogen carriers.