Hydrogen Infrastructure Report | Hydrogen Grid
The lack of adequate hydrogen infrastructure is a critical challenge impairing the development of the hydrogen market across Europe. To unlock the potential of hydrogen and ensure European decarbonization targets are fulfilled, infrastructure will have to be developed throughout the continent to connect production to demand centres, enable imports of cheap hydrogen and provide a resilient system through storage capacities.
1. Hydrogen infrastructure is the best solution to accelerate a cross-sectorial decarbonisation at a
lower cost. A report based on METIS, a modelling software used by the European commission to
model the various energy systems, demonstrate that, at European level, two infrastructures
(combination of power grid and hydrogen grid) are cheaper than one; in concrete, it concludes
that the development of a pan European hydrogen network in a multi-energy model over the
2030-2050 timeframe could save as much as 330 billion EUR compared with a more isolated
approach. This has been also demonstrated by the French electricity and gas TSOs in a dedicated
joint-study for France.
2. Hydrogen will provide the flexibility needed to a power system dominated by electrification and
variable renewables. The European Commission expects electricity to satisfy about half of the
final energy demand in 2050 (from 23% today). To accommodate the new demand and the
massive installation of renewables, the electricity grid capacity must increase 47% by 2030 and
144% by 2040 in Europe. And even considering this aggressive expansion plans, ACER expects
flexibility needs to double already by 2030 with important seasonal flexibility needs. JRC estimates
that even with high levels of grid expansion, total redispatch volume increases almost six-fold by
2040. In 2022 Europe incurred 5 Bn EUR remedial actions; and those will increase to at least 30bn
EUR by 2040, potentially increasing to 103 Bn EUR if the grid would not expand as fast as
anticipated.
3. Investment in hydrogen infrastructure remain relatively modest compared to power grids. The
Grids Action Plan estimates the need for 584 bn EUR in electricity grid investments for 2030. In
comparison, for the hydrogen grid network buildout the European Commission expects
investment needs of 28-38 bn EUR for EU-internal pipelines and 6-11 bn EUR for storage to
transport about 20 Mt of renewable hydrogen.
4. Producing hydrogen near the generation source makes more economic sense than converting
electricity to hydrogen at the demand site. Research done by the Department of Energy in USA
indicates that ‘’the cost of electrical transmission per delivered MWh can be up to eight times
higher than for hydrogen pipelines’’, in particular when compared with HVDC networks and for a
distance of 1000 km. This comparison is relevant when the energy transported is meant to be
transformed into hydrogen.
5. An integrated hydrogen backbone (network of hydrogen pipelines and storage sites) is a key
enabler for cost optimisation – thus protecting the competitiveness of European energy
intensive industries. Abundant renewables are not distributed evenly throughout Europe. And
the energy intensive industries are concentrated in clusters where the possibility of sourcing
cheap renewable energy locally are limited. With transportation costs via high-capacity pipelines
as low as 0.3 EUR/kg per 1,000 km, the European economy would benefit from an integrated
hydrogen backbone.
6. The hydrogen backbone is expected to grow to over 50,000 km by 2040, consisting of about 60%
repurposed infrastructure and 40% new pipelines according to some stakeholders. However, this
will depend in the end on the intrinsic traits of each country. Retrofitting existing natural gas grid
present many advantages, such as reduced environmental impact, faster permitting times and
lower costs. According to TSO data, repurposing 20” pipelines incur only 30% of the expenses
associated with deploying new pipelines. Additionality, CO2 infrastructure needs to be urgently
