European supply potential for hydrogen could exceed final demand quite substantially, Trend reports with reference to the European Hydrogen Backbone (EHB) report.
First, reaching the potential is subject to a step-change in ambition as it requires more than 2 times more renewable energy capacity to be built by 2030 compared to what is targeted in existing national climate and energy plans. As shown in Figure 23, total Europe-wide NECP installed capacity targets for solar PV and wind by 2030 add up to around 720 GW, whereas reaching the potential outlined in this study would require almost 1,700 GW to be deployed by 2030, and 4,500 GW by 2050.
Second, not all domestic green hydrogen supply potential will—excluding policy support—be cost-competitive with alternative decarbonised options such as blue hydrogen, especially in the early 2030s, and green hydrogen imports, towards the late 2030s and 2040s. At production costs above 2.0 €/kg, green hydrogen without subsidies will be outcompeted by large-scale greenfield blue hydrogen projects and CCS-retrofitted steam methane reformers, which can reach production costs of around 2.0 €/kg at CO₂ prices of 50 €/tCO₂. Furthermore, green hydrogen production might face additional costs due to the intermittency of renewable electricity, which have not yet been included in the calculations.
Third, the supply-demand picture is highly country-specific. The fact that Europe has enough supply potential to meet demand on aggregate does not mean that this is the case for each member state. Some countries have the potential to be in a renewable energy surplus whereas others are likely to find themselves in a deficit. Accordingly, some countries can become net exporters of renewable energy – as electricity, hydrogen, or both – whereas others will likely need to import. These international energy flows will be driven by economics as well as energy politics and, depending on the country, can include production from within and from outside Europe.
Fourth, NIMBY-ism (“Not In My BackYard”) already hampers the development of onshore wind and land-based solar-PV today, even in countries with a relatively low population density such as Sweden. Scaling up domestic renewables within EU and UK to the potential will surely meet significant societal opposition. This could be one further reason to import green hydrogen from less densely populated areas along the European borders whilst also providing an income to these neighbouring countries. For these reasons, complementing domestic production with hydrogen imports by pipeline from neighbouring regions can be a viable strategy for the EU, even though European supply potential is sufficient.