RGI Report: Can Europe Efficiently Produce 10 Million Tons of Green Hydrogen by 2030?

The Renewable Grid Initiative (RGI), a consortium of 13 European grid operators, has released a report that questions the efficiency of Europe’s plan to produce 10 million tons of green hydrogen annually by 2030. While this ambitious goal aligns with the EU’s energy plan REPowerEU, which also includes importing an additional 10 million tons of green hydrogen, concerns are arising regarding the optimal use of renewable energy in achieving this target.

Europe’s push for green hydrogen as a key component of its low-carbon future is evident in its plan to produce and import a combined total of 20 million tons of green hydrogen by 2030. This goal far surpasses previous estimates outlined in the European energy package Fit for 55. However, the report highlights a significant disparity between this target and Europe’s current annual hydrogen consumption of 8.32 million tons.

To produce 10 million tons of hydrogen annually, Europe would need a staggering 578 terawatt-hours (TWh) of renewable electricity. This calculation is based on an average consumption of 50-55 kilowatt-hours (kWh) to produce 1 kilogram of hydrogen, accounting for transmission and distribution losses. Notably, this energy demand exceeds Germany’s entire annual electricity consumption and is expected to consume roughly 30% of all electricity generated by wind and solar capacity installed in the EU by 2030.

The REPowerEU plan hinges on the construction of massive renewable energy capacity by 2030. This includes an estimated 592 gigawatts (GW) of solar generation (compared to around 209 GW in 2022) and 510 GW of wind capacity (compared to roughly 255 GW in 2022). These additions could generate approximately 1962 TWh of electricity annually, a quantity deemed sufficient both for green hydrogen production and to reach the EU’s objective of a 69% share of renewable energy sources in electricity consumption by 2030.

However, the RGI report sounds a cautionary note. It expresses concerns that the intense focus on reaching the 10 million-ton green hydrogen production target might lead to inefficient use of wind and solar energy. In particular, the report raises questions about whether hydrogen is the most efficient and cost-effective solution compared to direct electrification in various sectors.

Within the 10 million tons of green hydrogen included in REPowerEU, applications range from heating and industrial processes to transport and power generation. The report argues that in many of these cases, hydrogen is merely replacing fossil fuels without a thorough assessment of more efficient alternatives.

The report advocates for directing the additional renewable energy capacity from REPowerEU toward more efficient electrification options for heating and transport. This, the report contends, would lead to significant energy savings and system optimization. In particular, it emphasizes the importance of prioritizing efficiency when it comes to hydrogen destined for the transport sector and blending into gas networks for heating.

The report references a growing body of global research that underscores the drawbacks of using hydrogen for heating. Studies from various sources have raised concerns about the practicality and efficiency of hydrogen in heating applications, echoing RGI’s apprehensions.

As Europe charts its course toward a low-carbon future, the efficient utilization of renewable energy resources is pivotal. While green hydrogen remains a promising option, the report highlights the need for a balanced approach that optimizes energy resources while working toward decarbonization goals. Balancing ambition with efficiency may be the key to a sustainable and effective energy transition.