The EU’s green hydrogen production goals could see electrolysers consume nearly a third of all Europe’s renewable electricity supply by 2030 — while potentially forcing customers to overpay for electrons used to make H2 in applications in which direct electrification would have been a cheaper and more efficient use of the bloc’s wind and solar resources, a German non-profit organisation has warned.

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The Berlin-based Renewable Grid Initiative (RGI) estimates that the REPowerEU target of producing ten million tonnes of green hydrogen by 2030 — announced in the wake of Russia’s invasion of Ukraine in 2022 — would require 578TWh of renewable electricity (based on the requirement of 50-55kWh of power to produce 1kg of H2 and including transmission and distribution losses).

This is more than all of Germany current annual electricity demand, and is likely to account for 30% of all electricity produced by new wind and solar capacity installed to 2030, said RGI in today’s (Tuesday’s) report, the Role of Hydrogen in Future Low-Carbon and Secure European Energy Systems.

REPowerEU is also targeting 592GW of solar capacity (up from around 209GW in 2022) and 510GW of wind power (up from around 255GW in 2022) by 2030, producing around 1,962TWh per year — which RGI said would be enough to sustain both green hydrogen production and the EU’s target of achieving 69% of renewable penetration in its power supply by 2030.

And in principle, the EU’s recently enacted Delegated Acts — which stipulate both additionality and temporal and geographic correlation — should guard against green hydrogen producers “cannibalising” renewable energy supply, as well as ensuring that they don’t incentivise prolonged fossil fuel use in the power mix.

But RGI warned that RePowerEU’s over-emphasis on achieving the ten million tonne-per-year green hydrogen production target means that wind and solar will be used to make renewable H2 for use in segments in which direct electrification would be both more efficient and less expensive.

“The prioritisation of hydrogen production over direct electrification means Europe will have to use significant amounts of electricity based on wind and solar in an inefficient way, which will generate energy losses and will not serve to optimise the system,” the report says.

This means that electricity will be consumed in making green hydrogen — which has 60-90% efficiency depending on the electrolysis technology — rather than running directly to the customer, meaning that Europeans would pay more for less.

“[It] seriously questions the ‘energy efficiency first’ principle, as this additional renewable energy capacity could feed more electric vehicles instead of using hydrogen for transport, and heat pumps, instead of blending [into fossil-gas networks] outlined in REPowerEU,” the non-profit explains.

RGI, which includes 13 power grid transmission system operators and 15 environmental NGOs among its members and is partly funded by the EU and the German government, singled out the use of hydrogen in transport and blending as a particularly egregious use of Europe’s renewable resources.

“Directing additional renewables proposed by REPowerEU towards more efficient electrification options for transport and heating would contribute to significant savings and system optimisation,” it says. “This is especially true for hydrogen intended for the transport sector (excluding synthetic fuels) and blending (for heating), which in REPowerEU accounts for 3.6 million tonnes [of green hydrogen].”

The EU is hoping to blend 1.3 million tonnes of H2 into the gas network by 2030 — which is likely to cost customers billions of euros more for their heating, even at a low blending percentage, due to green hydrogen’s relative expense and its lower energy density by volume compared to natural gas.

UPDATED: to clarify RGI's membership and funding