Fast Enough? The Consequences of Delayed Renewable Energy Expansion on European Hydrogen Import Needs

This study investigates the impact of delayed and accelerated expansion of the volatile renewable energy sources (vRES) onshore wind, offshore wind and photovoltaics on Europe’s (EU27, United Kingdom, Norway and Switzerland) demand for hydrogen imports and its derivatives to meet demand from final energy consumption sectors and to comply with European greenhouse gas (GHG) emission targets. Using the multi-energy system model ISAaR, we analyze fourteen scenarios with different levels of vRES expansion, including an evaluation of the resulting hydrogen prices. The load-weighted average European hydrogen price in the BASE scenario decreases from 4.1 €/kg in 2030 to 3.3 €/kg by 2050. Results show that delaying the expansion of vRES significantly increases the demand for imports of hydrogen and its derivatives and thus increases the risk of not meeting GHG emission targets for two reasons: (1) higher import volumes to meet GHG emission targets increase dependence on third parties and lead to higher risk in terms of security of supply; (2) at the same time, lower vRES expansion in combination with higher import volumes leads to higher resulting hydrogen prices, which in turn affects the economic viability of the energy transition. In contrast, an accelerated expansion of vRES reduces dependency on imports and stabilizes hydrogen prices below 3 €/kg in 2050, which increases planning security for hydrogen off-takers. The study underlines the importance of timely and strategic progress in the expansion of vRES and investment in hydrogen production, storage and transport networks to minimize dependence on imports and effectively meet the European climate targets.