The German regulator Bundesnetzagentur has set a ramp-up tariff for the hydrogen core network at €25/kWh/h/a, marking a significant step toward expanding hydrogen production.
“We are creating planning certainty for all market participants and enabling access to the hydrogen core network at a fair price,” said Klaus Müller, President of the Bundesnetzagentur.
The ramp-up tariff is a uniform tariff applicable throughout Germany, which customers of the core network must pay for the injection and offtake of hydrogen. It is designed to allow recovery of network costs incurred up to 2055, while also remaining market-oriented.
The tariff of €25/kWh/h/a is the result of a comprehensive analysis of various scenarios for the development of the hydrogen market. With support from experts, the Bundesnetzagentur produced forecasts regarding the construction of network infrastructure, the associated costs, and the likely evolution of the hydrogen market based on current perspectives. This development depends not only on economic factors but is also influenced by political conditions.
Period of applicability and review of the tariff
The tariff will be adjusted annually in line with general inflation but will otherwise remain unchanged until 2055. However, the Bundesnetzagentur will review the ramp-up tariff every three years to respond to significant changes in framework conditions, if necessary. The regulator will assess whether the tariff remains appropriate for generating sufficient revenue to balance the cost allocation account up to 2055. Additionally, the ramp-up tariff must continue to be marketable and may be increased or decreased as needed.
Background
This determination builds on the WANDA decision adopted in June 2024, which introduced an intertemporal cost allocation mechanism for the hydrogen core network. The mechanism aims to address the imbalance between initially low demand for hydrogen transport capacity and high upfront infrastructure costs. It is intended to prevent prohibitively high tariffs, especially in the early years. One fundamental element of the cost allocation mechanism is the ramp-up tariff. In the initial phase, the tariff will be set below the actual cost-recovery level, resulting in temporary revenue shortfalls for network operators. However, over time, the same tariff is expected to generate revenues exceeding annual costs. These additional revenues will then be used to offset the earlier deficits, which are recorded in a cost allocation account.
