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Issue title:

Hydrogen strategy of the German government

Publication date:
11.03.2020
In this issue:

I had a bit of "bad luck" regarding the editorial deadline of the February edition. One day after I finished the manuscript, the ministry of economics and energy (BMWi) published the draft of the National Hydrogen Strategy. Frankly, I thought it would take longer. But such things happen. And you, dear reader, will find an analysis of the draft strategy in this edition, of course. I might be out of luck again, and the coordination of the ministries is finished faster than expected. If that happens, the final National Hydrogen Strategy may already have been approved by the time you receive this edition.

However, regarding a different topic, I had the correct information. Again, one or two days after the manuscript was finished, FNB Gas, the association of the TSOs, announced that the draft of the Network Development Plan (NEP) 2020-2030 would not be finished as scheduled on April 1. I pointed out in the last edition that such a delay is likely. 

In this edition, I compare the annual results of the major German storage operators. Unfortunately, only the results for 2018 are available. The last ones were published in December in the Federal Bulletin. Is that maybe more historical research than analysis? I hope not. I think the annual results show nicely the economic performance of each operator and the general condition of the storage market. However, many operators presumably generated higher profits in 2019 than predicted in the outlook of the 2018 annual results - thanks to the seasonal spreads that soared during 2019. And in 2020, the Winter-Summer-spread is much higher than during the last years. The market area merger takes up a lot of space in this edition. During E-world, the fourth TSOs’ Market

Topic of the month: Hydrogen strategy of the German government

The draft of the National Hydrogen Strategy released by the ministry of economics and energy (BMWi) did not result in any enthusiasm in the stakeholders. This is plausible after reading the 21 pages (not 25 as assumed in the last edition). Although 35 actions are listed, most of them scheduled to be implemented 2020, the draft is not very concrete. It is difficult to see how the intended market launch for carbon-free hydrogen could be achieved.

The paper is divided into the chapters Targets, Fields for Action and Future Markets, Governance, and an Action Plan with the already-mentioned 35 different actions. It is supplemented by an introductory chapter in which the importance of carbon-free hydrogen for the energy transition is described more general...

TransportOperative implementation of the market area merger

Assuming that the big questions about the market area merger are now answered, the focus shifts to all detailed questions of implementation. The two market area operators are working on these questions. During the fourth Market Dialogue, they presented the current status. Shortly before Christmas, EFET sent a wish list with several pages to the market area operators. The list contains detailed proposals for an improvement of functionalities, communication and data provision in the THE market area. The market area operators promised to work on this list as far as possible. EFET also requests substantial improvements for the future calculation of the liquidity buffers for the neutrality accounts. This calculation is currently mostly a "black box", EFET writes in a press release published during E-world where the traders’ association held a press conference.

Another topic on which work still has to be done is the design of the MBIs. That also became clear during the TSOs’ event at E-world. One example: The TSOs want renomination restrictions for all traders that offer the spread product. EFET thinks that will severely restrict liquidity for the spread product because traders value the flexibility from the renomination higher and do not want to give it up for the provision of the spread product...