The Hydrogen IGI report assesses the European hydrogen system using two time horizons as reference, 2030 and 2040, for two hydrogen infrastructure levels. It looks at demand satisfaction, market integration, and future planning.
Hydrogen infrastructure gaps are associated to differences in hydrogen market clearing prices between different country nodes (IGI Indicator 1). These are complemented by demand curtailment levels, assessed for both reference and stressful1 weather conditions (IGI indicators 2.1 and 2.2).
Hydrogen supply and infrastructure in the two infrastructure levels are insufficient at the European level, as indicated by the IGI indicators. Several countries, especially islands and countries in South-East Europe, are not connected to the European hydrogen backbone in one or both infrastructure levels, showing demand curtailment, in particular under stressful weather conditions.
A solution is to anticipate the realisation of hydrogen projects. Anticipatory investments might not be fully utilised in 2030, but have high utilisation expected by 2040. Projects under Advanced maturity status would be required to reduce unsatisfied demand levels, albeit not completely eliminate them. Projects currently in a less developed stage (Less-Advanced) should be considered in order to improve the supply and demand balance in 2040, under the NT+ scenario.
1 A stressful weather year has a combination of: lower renewable electricity production (limiting electrolytic hydrogen production), higher electricity consumption (limiting electricity availability for electrolytic hydrogen production) or a combination of cases described above. For further details, see Annex D1 – Implementation Guidelines for Project-specific Cost-Benefit Analyses of Hydrogen Projects, available in the download section.
7.1 Adding the advanced infrastructure visibly decreases or closes price spreads
- Significant price spreads are already visible in the 2030 PCI/PMI analysis, for instance between Poland-South and Czechia, Belgium and the UK.
- Adding the Advanced infrastructure level leads to a reduction or even elimination of price spreads at several borders (e.g., Hungary-Austria, Slovakia-Czechia), as new interconnections allow for market convergence.
- Notably, Italy forms a price region itself. While it has access to new Algerian imports, bottlenecks with Austria assessed on the basis of the current projects configuration limit cross-border transit into the EU. By 2040, increased hydrogen demand results in a general rise in average hydrogen market clearing prices across Europe.
- Price spreads widen at many borders, like: Finland/Sweden and Germany, Finland and Estonia, Lithuania and Poland-North as fully-used interconnections turn into bottlenecks.
- Adding the Advanced infrastructure level improves connectivity. More countries gain access to hydrogen supply, which maximises overall socio-economic welfare even if some prices remain high.
Figure 16: Average of the hourly hydrogen market clearing prices per country in the PCI/PMI hydrogen infrastructure level in 2040 (unit: €/MWh).2
2 See the TYNDP 2024 Infrastructure Gaps Identification report for further details, available in the download section.
Figure 17: Distribution of hydrogen production from natural gas in the PCI/PMI hydrogen infrastructure level in 2040 for stressful weather year (unit: GWh/y).3
3 The SMR capacities are based on the joint TYNDP Scenarios and represent both the expected future operation of currently installed SMR capacities and – where applicable – new-built SMR capacities for producing low-carbon hydrogen. See the TYNDP 2024 Infrastructure Gaps Identification report for further details, available in the download section.
7.2 Curtailment is visible in all simulations, even with advanced infrastructure
- Every simulation, across both infrastructure levels, and for both reference and stressful weather years, identified hydrogen demand curtailment, particularly in winter. This means that even with planned infrastructure, supply will not always meet demand.
- In 2030, the PCI/PMI hydrogen infrastructure level shows an 8.3% average curtailment rate in Europe for the reference weather year, rising to 11.1% in a stressful weather hypothesis.
- Electrolytic hydrogen production is the main hydrogen supply source in Europe in the 2030 PCI/PMI case, with Spain, Finland, Sweden and Germany as the top producers.
- Adding Advanced infrastructure significantly reduces curtailment, to 4.3% (reference year) and 6.1% (stressful year), due to access to extra-EU supplies and improved interconnections.
- In 2040, when overall hydrogen demand triples, curtailment rates in the PCI/PMI infrastructure level follow this trend, reaching an average of 15% in a reference year and 18% in a stressful weather year.
- All countries show over 0% curtailment in the PCI/PMI case. Electrolytic hydrogen production remains the main hydrogen supply source in Europe, satisfying 56% of demand.
- With mitigation through advanced infrastructure, a reduction can be seen, to 12% on average (reference year) and 15% (stressful year) in Europe. This is because such infrastructure includes non-PCI/PMI capacities, that enable transport to countries that were isolated in the PCI/PMI hydrogen infrastructure level. Examples are: the transit route through Slovakia, Hungary and Romania, which complement the maximisation of national hydrogen production enabled by increased capacities.
The complete analyses are available in the draft Hydrogen Infrastructure Gaps Identification report. In addition, an online visualisation platform, with flexible filtering, is available here.
Figure 18: Yearly average hydrogen demand curtailment rate at country or node level in the PCI/PMI hydrogen infrastructure level in 2040 for reference year (unit: %).
Figure 19: Yearly average hydrogen demand curtailment rate at country or node level in the PCI/PMI hydrogen infrastructure level in 2040 for stressful weather year (unit: %).