Applicable law to hydrogen pipelines for energy purposes in Germany

Abstract

Although the awareness of the potentials of a hydrogen economy is growing, there are no specific rules for energy hydrogen pipeline networks in Germany. The relevant energy law is governed by the Energiewirtschaftsgesetz (EnWG), which is shaped by the actual dominance of natural gas, European Union law and a long tradition of German energy law. For navigating in this environment, a careful analysis is needed. This article argues for a general application of the German general energy law to energy hydrogen pipeline networks but shows that important aspects – especially in the market regulation regime – and the specific EU law don't apply.

Keywords:

• hydrogen
• hydrogen transport
• energy gas
• pipelines
• natural gas system
• German energy law
• EU energy law
• EnWG
• Natural Gas Directive

Acknowledgments

This article reflects research and results within the German Case Study of the ELEGANCY Project. The article is partly based on unpublished research of Christian Pielow on storage of feed-stock hydrogen. Parts of the subject were discussed with Johannes Dietlein, Alexander Lorz and Christian Kersting, who gave valuable feedback, at the University of Düsseldorf.

ORCID

Daniel Benrath http://orcid.org/0000-0001-8462-3667

Notes

1 Cp Johann-Christian Pielow and Hans-Martin Koopmann, ‘Energy Law in Germany’ in Martha Roggenkamp and others (eds), Energy Law in Europe: National, EU and International Regulation (3rd edn, Oxford University Press 2016) paras 8.01, 8.81.

2 Cp Ruven Fleming and Joshua Fershee, ‘The “Hydrogen Economy” in the United States and the European Union: Regulating Innovation to Combat Climate Change’ in Donald Zillman and others (eds), Innovation in Energy Law and Technology: Dynamic Solutions for Energy Transitions (Oxford University Press 2018) 137, 139, 147.

3 Cp Ad van Wijk and others, ‘The Green Hydrogen Economy in the Northern Netherlands’ (Groningen 2017) especially 8–9 http://profadvanwijk.com/wp-content/uploads/2017/04/NIB-BP-EN-DEF-webversie.pdf accessed 11 December 2019.

4 Cp, eg, ‘The Hydrogen Initiative’ of 17/18 September 2018, which was signed by most European Union Member States, further states, the Commission and manifold companies and organisations in Linz; see www.bmnt.gv.at/dam/jcr:41b6de96-b303-4b3d-a3e9-0d96da301d45/The%20Hydrogen%20Initiative_201120182019_2_barrierefrei.pdf accessed 11 December 2019.

5 For further information on an H₂–CCS chain and the ELEGANCY project, visit www.sintef.no/elegancy accessed 11 December 2019.

6 Eg, Wijk and others (n 3) for the Netherlands; Dan Sadler and others, ‘H21 North of England: H21 NoE Report/2018’ (23 November 2018) https://www.h21.green/wp-content/uploads/2019/01/H21-NoE-PRINT-PDF-FINAL-1.pdf for the UK; Monica Nagashima, Japan's Hydrogen Strategy and Its Economic and Geopolitical Implications (Etudes de l’Ifri, IFRI 2018) for Japan.

7 Eg, the Element Eins project of Gasunie, TenneT and Thyssengas (see www.element-eins.eu accessed 11 December 2019), the H2morrow project of Equinor and Open Grid Europe (see https://fuelcellsworks.com/news/hydrogen-pilot-project-h2morrow-to-support-deep-decarbonization-of-german-industry accessed 11 December 2019) and the Hybridge project of Amprion and Open Grid Europe (see www.tscnet.eu/hybridge-to-couple-energy-sectors accessed 11 December 2019).

8 This focus excludes natural gas pipelines with injected hydrogen, hydrogen storage, other means of hydrogen transport, single pipelines outside a network context and pipelines for hydrogen as feed-stock.

9 Directive 2009/73/EC of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC [2009] OJ L211/94.

10 Regulation (EC) 715/2009 of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 [2009] OJ L211/36.

11 Directive (EU) 2019/944 of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU [2019] OJ L158/125.

12 Act of 7 July 2005 (BGBl I 1970, 3621), last amended by art 1 of the act of 13 May 2019 (BGBl I 706).

13 Directive 2003/55/EC of 26 June 2003 concerning common rules for the internal market in natural gas and repealing Directive 98/30/EC [2003] OJ L176/57.

14 Cp recitals 5–8, 25 of the Natural Gas Directive; Johann-Christian Pielow and others, ‘Energierecht’ in Dirk Ehlers, Michael Fehling and Hermann Pünder (eds), Besonderes Verwaltungsrecht. Band 1: Öffentliches Wirtschaftsrecht (4th edn, CF Müller 2019) para 30; Hans Vedder and others, ‘EU Energy Law’ in Martha Roggenkamp and others (eds), Energy Law in Europe: National, EU and International Regulation (3rd edn, Oxford University Press 2016) para 4.202.

15 Gesetz über die Umweltverträglichkeitsprüfung (UVPG), of 24 February 2010 (BGBl I 94), last amended by art 22 of the act of 13 May 2019 (BGBl I 706).

16 For the different regimes in the context of hydrogen, see Daniel Benrath and others, ‘German Case Study: Final Design and First Results’ (2019) 23–28 www.sintef.no/globalassets/project/elegancy/deliverables/elegancy_d5.5.2_german-case-study_design_first-results.pdf accessed 11 December 2019.

17 Gesetz zur Förderung der Energiewirtschaft (Energiewirtschaftsgesetz) [EnWG 1935], of 13 December 1935 (RGBl I 1451).

18 Directive 2003/54/EC of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC [2003] OJ L176/37, repealed by Directive 2009/72/EC of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC [2009] OJ L211/55.

19 Directive 2003/55/EC, the predecessor of the Natural Gas Directive.

20 Benrath and others (n 16) 23–24.

21 See recital 41 of the Natural Gas Directive.

22 Ruven Fleming and Gijs Kreeft, ‘Power-to-Gas and Hydrogen for Energy Storage under EU Energy Law’, European Energy Law Report XIII (forthcoming) at section 4 and especially 4.2.1.

23 Ruven Fleming, ‘Regulating Power-to-Gas in the Energy Union’ (2018) Oil, Gas & Energy Law 7–11; Fleming and Fershee (n 2) 148–50; Fleming and Kreeft (n 22) at section 4.2.1.

24 Cp Fleming (n 23) 7–11; Fleming and Fershee (n 2) 151.

25 Benrath and others (n 16) 23.

26 See recital 9 of the Natural Gas Directive.

27 See recitals 6–22 and 25 of the Natural Gas Directive.

28 Cp Fleming and Kreeft (n 22) at section 6 on the uncertainty in regard to the application of the Natural Gas Directive to hydrogen.

29 Ibid. Cp Fleming (n 23) 13–14 on the proposal.

30 Cp Fleming and Kreeft (n 22) at section 4.2.2.

31 Cp ibid at section 4.2.2.

32 ‘Zweck des Gesetzes ist eine möglichst sichere, preisgünstige, verbraucherfreundliche, effiziente und umweltverträgliche leitungsgebundene Versorgung der Allgemeinheit mit Elektrizität und Gas, die zunehmend auf erneuerbaren Energien beruht’.

33 The actual content of the definition is actually somewhat ambiguous; cp André Brauner and Daniel Benrath, ‘A Legal Overview of the Construction, Operation and Regulation of Gas Transmission Grids in Germany’ (2019) Oil, Gas & Energy Law 15.

34 Gasversorgungsnetze: ‘alle Fernleitungsnetze, Gasverteilernetze, LNG-Anlagen oder Speicheranlagen, die für den Zugang zur Fernleitung, zur Verteilung und zu LNG-Anlagen erforderlich sind und die einem oder mehreren Energieversorgungsunternehmen gehören oder von ihm oder von ihnen betrieben werden, einschließlich Netzpufferung und seiner Anlagen, die zu Hilfsdiensten genutzt werden, und der Anlagen verbundener Unternehmen, ausgenommen sind solche Netzteile oder Teile von Einrichtungen, die für örtliche Produktionstätigkeiten verwendet werden’ [Gas supply systems: any transmission networks, gas distribution networks, LNG facilities and gas storage facilities which are necessary for providing access to transmission, distribution and LNG and are owned and/or operated by one ore more than one energy supply undertaking, including linepack and its facilities supplying ancillary services and those of related undertakings, excluding parts of networks or facilities which are used for local production].

35 Verteilung: ‘der Transport von Elektrizität mit hoher, mittlerer oder niederer Spannung über Elektrizitätsverteilernetze oder der Transport von Gas über örtliche oder regionale Leitungsnetze, um die Versorgung von Kunden zu ermöglichen, jedoch nicht die Belieferung der Kunden selbst; der Verteilung von Gas dienen auch solche Netze, die über Grenzkopplungspunkte verfügen, über die ausschließlich ein anderes, nachgelagertes Netz aufgespeist wird’ [Distribution: the transport of electricity on high-voltage, medium-voltage and low-voltage distribution systems or the transport of gas through local or regional pipeline networks with a view to its delivery to customers, but not including supply; …].

36 Gas: ‘Erdgas, Biogas, Flüssiggas im Rahmen der Paragraphen 4 und 49 sowie, wenn sie in ein Gasversorgungsnetz eingespeist werden, Wasserstoff, der durch Wasserelektrolyse erzeugt worden ist, und synthetisch erzeugtes Methan, das durch wasserelektrolytisch erzeugten Wasserstoff und anschließende Methanisierung hergestellt worden ist’ [Gas: natural gas, biogas, liquid gas in the context of sec. 4 and 49 as well as hydrogen which is injected into the gas supply system and was produced by electrolysis and synthetic methane which was was produced by electrolysed hydrogen and methanation].

37 BT-Drs 17/6072, 50. Cp Brauner and Benrath (n 33) 15.

38 Eg, see generally Katarzyna P Sokol and others, ‘Bias-free Photoelectrochemical Water Splitting with Photosystem II on a Dye-Sensitized Photoanode Wired to Hydrogenase’ (2018) 3 Nature Energy 944.

39 Christian Theobald, ‘Paragraph 3 EnWG’ in Wolfgang Danner and Christian Theobald (eds), Energierecht: Energiewirtschaftsgesetz mit Verordnungen, EU-Richtlinien, Gesetzesmaterialien, Gesetze und Verordnungen zu Energieeinsparung und Umweltschutz sowie andere energiewirtschaftlich relevante Rechtsregelungen Kommentar, Band 1 (CH Beck 2019) para 66b.

40 Gesetz zur Neuregelung energiewirtschaftlicher Vorschriften, of 26 July 2011 (BGBl I 1554).

41 Biogas: ‘Biomethan, Gas aus Biomasse, Deponiegas, Klärgas und Grubengas sowie Wasserstoff, der durch Wasserelektrolyse erzeugt worden ist, und synthetisch erzeugtes Methan, wenn der zur Elektrolyse eingesetzte Strom und das zur Methanisierung eingesetzte Kohlendioxid oder Kohlenmonoxid jeweils nachweislich weit überwiegend aus erneuerbaren Energiequellen im Sinne der Richtlinie 2009/28/EG (ABl. L 140 vom 5.6.2009, S. 16) stammen’ [Biogas: biomethane, other gases from biomass, sewage gas, mine gas as well as hydrogen which was produced by electrolysis and synthetic methane if the power for the electrolysis and the carbon dioxide/monoxide for methanation have vastly predominant renewable sources].

42 Cp Brauner and Benrath (n 33) 15.

43 BT-Drs 15/3917, 11.

44 BT-Drs 15/5268, 117.

45 Wilm Tegethoff, Ulrich Büdenbender and Heinz Klinger, ‘Paragraph 2 EnWG’ in Wilm Tegethoff, Ulrich Büdenbender and Heinz Klinger (eds), Das Recht der öffentlichen Energieversorgung: Kommentar, Band I (etV 2000) paras 4, 5.

46 Cp Fleming (n 23) 5.

47 See BT-Drs 15/3917, 48.

48 BT-Drs 15/5268, 117. See Theobald (n 39) paras 168, 171a.

49 Johannes Hellermann, ‘Paragraph 3 EnWG’ in Gabriele Britz, Johannes Hellermann and Georg Hermes (eds), EnWG: Energiewirtschaftsgesetz Kommentar (3rd edn, CH Beck 2015) para 37; Bernhard Schex, ‘Paragraph 3 EnWG’ in Martin Kment (ed), Energiewirtschaftsgesetz (2nd edn, Nomos 2019) para 45; Theobald (n 39) paras 168, 171a.

50 Fernleitung: ‘der Transport von Erdgas durch ein Hochdruckfernleitungsnetz, mit Ausnahme von vorgelagerten Rohrleitungsnetzen, um die Versorgung von Kunden zu ermöglichen, jedoch nicht die Versorgung der Kunden selbst’ [transmission: the transport of natural gas through a high-pressure network, other than an upstream pipeline network, with a view to its delivery to customers, but not including supply].

51 Directive 98/30/EC of 22 June 1998 concerning common rules for the internal market in natural gas [1998] OJ L204/1.

52 Verordnung über die Entgelte für den Zugang zu Gasversorgungsnetzen (Gasnetzentgeltverordnung – GasNEV), of 25 July 2005 (BGBl I 2197), last amended by art 118 of the act of 29 March 2017 (BGBl I 626). The provision stipulates that for the injection of biogas into the transmission system injection tariffs are not to be paid.

53 Gesetz über die Elektrizitäts- und Gasversorgung (Energiewirtschaftsgesetz – EnWG) [EnWG 1998], of 24 April 1998 (BGBl I 730), repealed by art 5(2) no 1 of the act of 7 July 2005 (BGBl I 1970).

54 This finding doesn't preclude the definition of gas in respect of hydrogen when admixed. However, the core of the argument can be transferred to this discussion.

55 Cp Fleming (n 23) 15; Fleming and Kreeft (n 22) at section 6.

56 This starting point is relevant for the legal reasoning. However, a case-by-case analysis of the specific provisions is necessary regardless of the position on the general application of the EnWG: if the EnWG wasn't applicable, potential analogies would have to be examined (whereas there is little room for the analogous application of specific natural gas stipulations on dedicated hydrogen pipelines assuming the general application of the EnWG).

57 Gesetz gegen Wettbewerbsbeschränkungen (GWB), of 26 June 2013 (BGBl I 1750, 3245), last amended by art 10 of the act of 12 July 2018 (BGBl I 1151).

58 See recitals 6 and 8 of the Natural Gas Directive; BT-Drs 15/3917, 51.

59 Cp Vedder and others (n 14) para 4.130.

60 See Christian Jung, ‘Art. 102 AEUV’ in Eberhard Grabitz, Meinhard Hilf and Martin Nettesheim (eds), Das Recht der Europäischen Union (CH Beck 2019) paras 248–260; Vedder and others (n 14) paras 4.139–4.145.

61 See recital 25 of the Natural Gas Directive.

62 See recital 35 of the Natural Gas Directive; Felix Arndt, ‘Paragraph 28a EnWG’ in Gabriele Britz, Johannes Hellermann and Georg Hermes (eds), EnWG: Energiewirtschaftsgesetz Kommentar (3rd edn, CH Beck 2015) para 1.

63 See for the concept of specification levels Daniel Benrath, ‘Spezifizierungsbeziehungen: Eine Beschreibungskategorie für systematisch-teleologische Beziehungen’ (2017) 48(1) Rechtstheorie 123, especially 126 and 128.

64 This is necessary regardless of the starting point of the analysis: whereas the transferability of specific provisions cannot be ruled out in the case of general non-application, in the case of general application to hydrogen, specific provisions may be bound to the natural gas context.

65 Cp for a discussion on derogation and network access Hans Heller, Neue Erdgasinfrastrukturen und Freistellung von der Regulierung: Ein legitimes Instrument der Investitionsförderung (Nomos 2013) 211; generally Hans Heller, ‘Neue Erdgasinfrastrukturen und Freistellung von der Regulierung: Art. 36 der Erdgasrichtlinie 2009/73/EG (Paragraph 28a EnWG) als legitimes Instrument der Investitionsförderung?’ [2016] Netzwirtschaften & Recht 66; Matthias Wegner, Regulierungsfreistellungen für neue Elektrizitäts- und Erdgasinfrastrukturen: Gemäß Art. 17 der Verordnung (EG) Nr. 714/2009 und gemäß Art. 36 der Richtlinie 2009/73/EG (2010) 234.

66 See Gabriele Britz, Karsten Herzmann and Felix Arndt, ‘Paragraph 20 EnWG’ in Gabriele Britz, Johannes Hellermann and Georg Hermes (eds), EnWG: Energiewirtschaftsgesetz Kommentar (3rd edn, CH Beck 2015) paras 131–138 and more specifically in regard to sentence 10 paras 189–193.

67 See ibid para 180.

68 Stephanie Neveling, ‘Paragraph 20 Abs. 1b EnWG’ in Wolfgang Danner and Christian Theobald (eds), Energierecht: Energiewirtschaftsgesetz mit Verordnungen, EU-Richtlinien, Gesetzesmaterialien, Gesetze und Verordnungen zu Energieeinsparung und Umweltschutz sowie andere energiewirtschaftlich relevante Rechtsregelungen Kommentar, Band 1 (CH Beck 2019) para 24.

69 Cp Case C–239/07 Julius Sabatauskas [2008] ECR I–7523.

70 Cp OPAL NEL Transport GmbH, Bundesnetzagentur BK7-08-009 (2009), 26 against derogation; Olaf Däuper and Knut Wöstehoff, ‘Die Entscheidung der Bundesnetzagentur in Sachen OPAL: Eine kritische Auseinandersetzung’ (2009) 13(2) Zeitschrift für Neues Energierecht 99, 102 for derogation.

71 BT-Drs 15/3917, 58; Karsten Bourwieg, ‘Paragraph 18 EnWG’ in Gabriele Britz, Johannes Hellermann and Georg Hermes (eds), EnWG: Energiewirtschaftsgesetz Kommentar (3rd edn, CH Beck 2015) para 2.

72 BT-Drs 15/3917, 63; Vedder and others (n 14) para 4.132.

73 Jens Wahlhäuser, ‘Paragraph 30 EnWG’ in Martin Kment (ed), Energiewirtschaftsgesetz (2nd edn, Nomos 2019) para 4.

74 Verordnung über die Anreizregulierung der Energieversorgungsnetze (Anreizregulierungsverordnung – ARegV), of 29 October 2007 (BGBl I 786), last amended by art 2 of the ordinance of 13 June 2019 (BGBl I 786).

75 Cp Sadler and others (n 6) 433 for the UK.

76 Bernd Grzeszick, ‘Art. 20 GG’ in Theodor Maunz and Günter Dürig (eds), Grundgesetz: Kommentar (CH Beck 2019) para VII/66; Stefan Huster and Johannes Rux, ‘Art. 20 GG’ in Volker Epping and Christian Hillgruber (eds), BeckOK Grundgesetz (CH Beck 2019) para 182.

77 BVerfGE 110, 33 (53–54). Cp Huster and Rux (n 76) para 182.

78 Regulation (EU) 2017/1938 of 25 October 2017 concerning measures to safeguard the security of gas supply and repealing Regulation (EU) No 994/2010 [2017] OJ L280/1.

79 Karsten Bourwieg, ‘Paragraph 52 EnWG’ in Gabriele Britz, Johannes Hellermann and Georg Hermes (eds), EnWG: Energiewirtschaftsgesetz Kommentar (3rd edn, CH Beck 2015) para 2.

80 Christoph Görisch, ‘Paragraph 52 EnWG’ in Martin Kment (ed), Energiewirtschaftsgesetz (2nd edn, Nomos 2019) para 1.

81 BT-Drs 15/3917, 68; Bourwieg, ‘Paragraph 52 EnWG’ (n 79) para 2; Görisch (n 80) para 1.

82 Cp Georg Hermes, ‘Planung von Erzeugungsanlagen und Transportnetzen’ in Jens-Peter Schneider and Christian Theobald (eds), Recht der Energiewirtschaft: Praxishandbuch (4th edn, CH Beck 2013) paras 1–5, 21; Pielow and Koopmann (n 1) para 8.154.

83 BVerfG NVwZ 2008, 1229 (1230).

84 BT-Drs 15/3917, 66.

85 See recitals 29–30 of the Natural Gas Directive.

86 Alexander Hanebeck, ‘Vor Paragraphen 75 ff. EnWG’ in Gabriele Britz, Johannes Hellermann and Georg Hermes (eds), EnWG: Energiewirtschaftsgesetz Kommentar (3rd edn, CH Beck 2015) para 1.

87 Cp Brauner and Benrath (n 33) 16.

88 Olaf Däuper, ‘Paragraph 15a EnWG’ in Wolfgang Danner and Christian Theobald (eds), Energierecht: Energiewirtschaftsgesetz mit Verordnungen, EU-Richtlinien, Gesetzesmaterialien, Gesetze und Verordnungen zu Energieeinsparung und Umweltschutz sowie andere energiewirtschaftlich relevante Rechtsregelungen Kommentar, Band 1 (CH Beck 2019) para 2.

89 Benrath and others (n 16) 23, 24, 26, 29.

Additional information

Funding

This work was supported by the Bundesministerium für Wirtschaft und Energie (BMWi) in the context of the German Case Study of the ELEGANCY Project. ACT ELEGANCY, Project No 271498, has received funding from DETEC (CH), BMWi (DE), RVO (NL), Gassnova (NO), BEIS (UK), Gassco, Equinor and Total, and is co-funded by the European Commission under the Horizon 2020 programme, ACT Grant Agreement No 691712.