The federal government has introduced a bill to synchronize the expansion of power generation facilities with grid expansion. The grid connection package is intended to make the expansion of the power grids more cost-effective and stabilize the grids. In the future , large-scale storage facilities and large renewable energy plants are to be built where there is a need in the grid. Until now, new capacity has been concentrated in many places in regions where sufficient capacity already exists.
This leads to excess electricity and, consequently, high costs due to redispatch measures. This curtailment of power plants to protect sections of the grid resulted in costs of more than three billion euros in 2025. These costs are borne by all electricity consumers. The grid connection package is intended to reduce such interventions in the future.
Hydrogen production is more efficient than curtailment
Dr. Timm Kehler, CEO of the German Gas and Hydrogen Industry Association, assesses the grid package from the perspective of the hydrogen industry. Kehler explains that the expansion of renewable energy and the power grids must be better coordinated. Electrolyzers produce hydrogen from renewable electricity that would otherwise go unused. In this way, large amounts of electricity can be stored for long periods of time.
Kehler points to the permits for wind turbines with a capacity of more than 20 gigawatts in northern and western Germany by 2025. These capacities pose challenges for the power grids. According to the association’s assessment, a portion of this electricity can be transferred to the natural gas grid. In the north and west, a dense natural gas network, large storage capacities, and industrial demand all converge.
Kehler went on to say that hydrogen as a storage medium is more economically efficient than curtailing plant output. Electrolyzers, wind power, control technology, and steel construction could thereby generate industrial value in Germany and Europe. The association proposes that the grid package be viewed as a “flex package.” Electrolyzers, hydrogen storage facilities, and the future hydrogen infrastructure must be factored in from the outset to limit redispatch costs and relieve strain on the grids.
Hydrogen Regulations Scrapped
The German Renewable Energy Federation (BEE) submitted comments as part of the industry consultation on the draft bill for the amendment to the Renewable Energy Sources Act (EEG). According to initial assessments, the Cabinet decision of July 29 deviates only slightly from this draft. The association criticizes the elimination of the electricity volume pathway as well as the removal of existing regulations on green hydrogen. The draft removes both Section 4a and the existing regulatory authority in Section 93 regarding requirements for green hydrogen.
According to the association, the electricity volume pathway has served as a benchmark for actual renewable electricity generation. The removal of the regulatory authority under the ordinance deprives the EEG of a key component for storage capacity, sector coupling, and a flexible renewable electricity system. The federal associationis calling for an integrated approach that linksthe expansion of renewable energy with grid and storage expansion, as well as a flexible electricity system.
