The state government will cover 45% of electrolyser and associated system costs from a €45m funding pot

The German state of Bavaria has opened its first €45m ($48m) funding round, as part of a wider €150m initiative to support the development of up to 50 green hydrogen projects within the region.

The state government will only fund 45% of the cost of the electrolyser and associated systems, with a minimum size of 1MW per bid. Given the most optimistic costs for an electrolyser are around €1m/MW, this first round could potentially support 100MW of new capacity.

The first round will close for application on 16 October. A second call is also due to take place next year, although a budget has not yet been set.

Bavaria’s government had last November pledged to set aside €150m in cash to fund 50 electrolysers, as well as €100m for hydrogen infrastructure including a pipeline network backed by automotive firm Audi, and €20m for an H₂ filling station scheme.

Bavaria, which is Germany's largest state, is a major economic and industrial hub for Germany, with a gross domestic product of around €610bn.

However, the southern state has also lagged in terms of rapidly transitioning its energy supply towards greener sources, although its government has pledged to reach 80% renewables in its power mix by 2030.

This is mainly due to restrictions on the distance a wind turbine can be from the nearest community, as well as an abundance of cheap gas from Russia up until early 2022 and nuclear energy up until the last power stations were shut down this year.

The lack of renewable electricity — either to directly electrify processes or power local green hydrogen production — has prompted concerns that, particularly as more requirements to reduce emissions such as those in the updated EU-level Renewable Energy Directive come into force, Bavaria could start to lose its industries to other regions.

The German state’s economy and energy minister Hubert Aiwanger — embroiled in an antisemitism scandal in recent weeks — has been a major proponent of hydrogen as a potential lifeline for the state.

However, his advocacy for a prototype hydrogen-powered version of the BMW iX5 had earlier this summer inadvertently revealed that the running costs were twice as high as the existing battery-electric model.

At pump prices of around €13.85/kg and Aiwanger’s estimation that his vehicle consumed around 1.3kg of H₂ per kilometre, the fuel-cell BMW iX5 was estimated by German media to cost around €18 to run over 100km compared to €9-12 per 100km for the electric version based on charging rates.

Source:HydrogenInsight