“Every new renewable power plant should be feeding electricity to the grid, rather than to hydrogen electrolysers”, according to a a business executive quoted in the Financial Times in 2024.
For once, we may agree with a businessman. Indeed, this is one of the arguments that Counter Balance has made this week in our response to a consultation by the German Foreign Trade Promotion Agency. This agency funds projects under very advantageous financial conditions when they benefit German companies or the German market. For instance, it issues guarantees to Siemens Energy in building major gas and steam turbine power plants globally, to mining sites when the raw materials extracted get exported to Germany.
These companies have vast annual turnovers and a deep reach in European and international markets. Allianz Trade (formerly Euler Hermes), for example, does not value climate action very highly in its operations. It is therefore crucial that the German government, which has pledged to stop putting public money into fossil fuel projects, push them in the right direction. This is reflected in our contribution to the consultation.
Counter Balance argues that investing this amount of money in renewable energy can deliver affordable and clean energy to Europeans. Instead, the German government is considering financing gas power plants if they are ‘hydrogen-ready’ or if they start using hydrogen in 2035.
Our main concern is that these gas power plants may never become hydrogen-ready, yet still receive public funding from the German government by making unrealistic claims about transitioning away from gas. Indeed, Counter Balance takes the view, shared by many civil society organisations, that hydrogen does not reduce greenhouse gases emissions as much as industry claims, that it is a costly infrastructure, not always secure and that some of the projects being financed in Africa are not taking into account local needs.
Our submission in the consultation is available here:
