Network connection agreements, bankable offtake deals and critical sector regulations on financing and certification are all lagging behind Europe's boom in renewable hydrogen production projects, threatening delivery of ambitious near-term goals, delegates at the FT's hydrogen summit heard June 16.
The REPowerEU program seeks to double the EU's 2030 domestic renewable hydrogen production target to 10 million mt/year, requiring in the region of 80 GW of electrolysis, with an additional 10 million mt/year in imports.
The UK meanwhile has recently doubled its low-carbon hydrogen production target to 10 GW by 2030, with half of this from electrolysis.
"The production is there, the capital is there, but in transportation there is a lot of work to be done. There are a daily stories of new projects, but matching supply and demand is the challenge," said Shehzad Haq, MD, New Energies EMEA for Sumitomo Mitsui Banking Corporation.
Delegates heard that electrolysis projects in Europe were struggling to gain grid connection agreements in time for 2025 production targets, while several panelists noted the critical need for a robust certification system before mass balancing and co-production of mixed origin hydrogen could proceed without the risk of fraud.
"Without certification and the trust throughout the network it brings, you're left with green projects that today produce 10,000 tonnes and you're not going to achieve your 2030 goals," said Ahmed El-Hoshy, CEO of OCI and Fertiglobe.
National Grid's Hydrogen Director Antony Green said the UK transmission company first had to demonstrate that existing gas pipelines could be retrofitted securely.
"We know, for instance, that our compressor fleet will have to be updated over time," Green said.
European H2 transmission calculations put the cost of a retrofit conversion at Eur400,000- 500,000/km, versus Eur2 million/km ($2.11 billion) for a new dedicated hydrogen pipeline, he said.
A Hydrogen Backbone for the UK of 1,500-2,000-km linking the country's main ports, production centers and demand sinks could cost around GBP1.5-2 billion ($1.9-2.5 billion).
Before National Grid could go much further, however, "we need a clear signal from government that this is needed, that we are the ones to deliver it, and then the regulator can look at how that is funded," Green said, noting NG's next regulatory cycle was from 2026.
"That's a long way away. We need to get going now and we're ready to start on the design phase," he said.