Bavaria to boost hydrogen hopes with €500M

With a 1.5 billion euro Bavarian hardship fund, the state administration hopes to lessen the effects of the energy crisis on businesses, people, and social institutions. The 71 billion euro budget for 2023, on which the cabinet in Munich adopted the pillars on Sunday, includes the aid package. Bavaria plans to invest an additional 500 million euros to promote the growth of renewable energy sources.

This is the first time since Corona that new loans shouldn’t be taken on, it stated. However, when questioned, CSU Finance Minister Albert Füracker stated that almost three billion euros needed to be taken out of the reserve to cover the costs. Bavaria still has “billions” of dollars in reserves, nevertheless. Although it wasn’t immediately evident how high these actually are, reports indicate that they should still be between 1.6 and over four billion euros.

After the brief cabinet meeting, Prime Minister Markus Söder (CSU) declared, “We have made critical decisions for the winter, but also for the future of Bavaria.” In contrast to the federal government, which has no hidden new obligations, everything is funded by additional income and reserves. The budget plan doesn’t leave anything unused or too inflated. The state parliament accepted new obligations for the state government of up to 20 billion euros as a result of the Corona issue.

Füracker noted that despite the recent better-than-anticipated tax estimate, the financial position is still precarious. He listed as sources of uncertainty the geopolitical environment, inflation, the oil crisis, and the forecast recession for the upcoming year by the top economic institutes. The combination of all of this makes budgeting extremely difficult and must be treated very carefully.

According to Söder, the objective of the Bavarian energy rescue package is to complement federal help initiatives and fill any gaps that may exist. In more specific words, Bavarian aid should be available to small or medium-sized businesses or craftsmen who receive little or no federal assistance and are in a situation that threatens their survival as a result of the energy crisis.

The same is true for social infrastructure facilities including hospitals, daycare centers, nursing homes, private schools, student unions, and areas related to culture and the media. However, residents who are “exposed to particular stress” despite receiving government assistance and can demonstrate that their existence is in danger should also be eligible to request for aid. Not just gas customers or the electrical industry says Söder, but also people who use heating oil or pellets.

Following the cabinet meeting, there was still uncertainty on the specifics, including the circumstances and a potential maximum amount per individual instance. But it is obvious that the money can only be asked for at some point in the new year. Hubert Aiwanger, the minister of economics, said, “It will be next year” (Free Voters).

The state administration once again exceeds Söder’s prior declarations with the total amount for the Bavarian hardship fund. Most recently, he stated that he would be spending at least one billion euros, but he also said that this was not the “end of the journey.” He then said once more that there is “room for improvement” if funds are short and that tweaks to the budget may always be made as needed. Söder insisted, “We don’t leave anyone alone.

In addition to the actual energy hardship fund, the LfA development bank will provide further extended guarantees worth up to 500 million euros to struggling businesses.

According to Söders, hydrogen should be a key component of the new “energy and climate turbo” with a volume of 500 million euros. The goal of this is to encourage the development of up to 50 small hydrogen power plants. According to Söder, these should be built specifically in areas with a surplus of production and a lot of renewable energy generation. The best additional fuel for storing this electricity is hydrogen. There are also plans to make investments in the development of new hydrogen filling stations and specialized pipes. In order to hasten the expansion, it is also being investigated if the Free State will join the gas, electricity, and hydrogen networks provided by the municipalities.

Söder declared that the remaining Eon stock held by the Free State should also be sold in order to fund the construction of the energy infrastructure in Bavaria. Söder estimates that the value of Bavaria’s stakes in the energy firm is close to 250 million euros. Although their sale has been suggested numerous times in the past, it has never really happened.

According to Söder, the proceeds from the share sale will also be used to increase the number of e-charging stations, geothermal energy, and photovoltaic systems on all state rooftops.

On November 22, the cabinet will decide the budget in its entirety. The project must then be discussed and approved by the state legislature.