By Christoph Steitz
FRANKFURT (Reuters) - Energy firm HH2E plans to build a second major hydrogen production plant in Germany that could be scaled up to more than 1 gigawatts (GW) by 2030 and cost more than 1 billion euros ($1.1 billion), the company said.
The plant is to be built in the German state of Saxony and will be co-funded by HH2E and UK-based shareholders Foresight Group and HydrogenOne Capital Growth, it said, adding a final investment decision was expected in 2023.
In a first step, around 230 million euros will be spent to build a 100 megawatt production plant by 2025 to supply chemicals and transport companies, HH2E said, adding this could be scaled up to more than 1 GW by the end of the decade.
"Domestic green hydrogen production is crucial to secure a key role for Germany in the future global green energy sector, a sector that is receiving major support from governments in all the world's major economies," HH2E co-founder Andreas Schierenbeck said.
German industry could find it easier to stay competitive if it doesn't fully depend on energy imports, Schierenbeck, a former CEO of Uniper and Thyssenkrupp's elevator division, said.
The plant will rely on solar parks in the region to convert renewable energy into hydrogen, HH2E said.
News of the project, HH2E's second in Germany, comes as Europe's largest economy is grappling with an energy crisis triggered by the complete halt of Russian gas supplies, forcing it to look for new supplies at home and abroad.
The government is trying to build a hydrogen industry to lead what it hopes will become a large market globally. Critics of the technology point to uncertainty over costs and whether enough renewable energy will be available to produce sufficient green hydrogen.
($1 = 0.9381 euros)
(Reporting by Christoph Steitz; Editing by Mark Potter)