The scheme aims to promote the development of a hydrogen supply network. Two main obstacles prevent a private unsubsidized initiative: i) investment costs are initially high and cannot be fully passed onto tariffs, and ii) over the long run, the probability that some pathbreaking innovation may make alternative zero-emission sources more attractive cannot be overlooked. For these reasons, the German Government’s approach is to hedge the risk for investors through a so-called Amortisation Account (AMK) and a subsidiary State assumption of the amortisation risk. Network charges are initially capped and the difference between initially high network deployment costs and low revenues is maintained. If at a later stage a sufficient number of network users are connected to the network and the revenues from network charges exceed the costs of deploying the network, the initial revenue gap shall be compensated. The remaining risk that the amortisation account cannot be offset by 2055 is covered by a subsidiary State guarantee.
