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KfW to shoulder financing + risk for hydrogen network: Germany’s state lender KfW is extending an EUR 24 bn (USD 25 bn) loan to develop a 9k km hydrogen transmission network, Reuters reports. The federal government will also shoulder about 76% of the loan’s risk.
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The details: KfW plans to keep user fees manageable by compensating operators through an amortization account, with costs expected to be repaid by 2055. As network revenues rise gradually, operators would be expected to redirect surplus income to the amortization account. If the account is not balanced by 2055, the federal government will cover 76% of the risk, with the remaining 24% borne by network operators.
The pipeline: About 60% of the planned core 9k km network — set for completion by 2032 — will be completed by retrofitting existing natural gas pipelines, and the rest will be from new constructions. The German government is banking on green hydrogen to decarbonize hard-to-abate heavy industries like chemicals and steel, Reuters reported.
Is this linked to SoutH2? The SoutH2 Corridor is a 3.3k km hydrogen pipeline connecting North Africa, Italy, Austria, and Germany. The project is set to use over 65% of repurposed infrastructure, with new segments only where necessary. The project’s website boasts governments’ “political endorsement” and “support” from companies involved in hydrogen production and offtake along the corridor. Algeria’s state-owned Sonatrach, Germany’s VNG, Italy’s Snam and Sea Corridor, and Austria’s Verbund are conducting feasibility studies for the implementation of the project.
Norwegian aluminum giant Norsk Hydro is phasing out its battery materials and green hydrogen divisions, Bloomberg reports. The company — which entered the battery-making business in 2017 with big plans — said it would still retain its battery recycling operation, a joint venture with the embattled Northvolt. Norsk Hydro also held a minority stake in Northvolt.
The company hasn’t written them off completely: CEO Eivind Kallevik is confident that green hydrogen and batteries “will play a role in the future” but will “focus on the core areas” of what the company knows in the meantime, he told BloombergTV.
A sign of the times: Battery-making and the low-carbon hydrogen sectors — two key sectors for the world’s decarbonization efforts — have recently taken hits as a result of different factors, including high costs, slower-than-expected demand, project delays, and fierce competition with China’s industries. Just this week, EV battery producer Northvolt filed for bankruptcy in the US after failing to secure rescue funding, leaving it with enough cash to support operations for only a week.
