Germany's HH2E, brown coal firm Leag agree on green hydrogen cooperation

Opencast lignite mine in Nochten

FRANKFURT (Reuters) - German energy firm HH2E and brown coal miner and power generator Leag plan to cooperate on green hydrogen plants at sites in the eastern German states of Saxony, Saxony-Anhalt and Brandenburg, the companies said on Friday.

Germany is aiming to make emissions-free hydrogen a crucial part of the energy sector by 2030, although disruption of gas supplies following Russia's invasion of Ukraine has forced the country to resort to polluting forms of energy in the short term, while pursuing renewable fuel as a longer term goal.

The two companies said they will create a value chain from producing green hydrogen from renewable energy to transporting and commercialising its use.

Leag, based in eastern Germany's Lusatia region and owned by Czech investor EPH and private equity group PPF Investments, aims to bring 7 gigawatts (GW) of solar and wind power plants online by 2030.

HH2E co-founder Andreas Schierenbeck said the company, which plans to install 4 GW of electrolysis capacity to get access to renewable power.

The electrolysers pass renewably-produced electricity through water to split it into hydrogen and oxygen.

Last week, HH2E announced plans for a second major plant.

Green hydrogen releases energy without making carbon dioxide, meaning it can be used as an emissions-free source of energy.

Hydrogen sceptics, however, say the new industry could serve to artificially prolong the life of fossil fuel incumbents instead of giving new players a chance.

Some critics also say it is uncertain whether the costs of the new infrastructure will become competitive and whether enough renewable power will be available to make green hydrogen.

(Reporting by Vera Eckert, editing by Miranda Murray and Louise Heavens)