BAKU, Azerbaijan, October 31. The EU’s total capital investment in hydrogen development by 2030 is estimated at $700-850 billion, the International Energy Agency (IEA) said, Trend reports via the latest World Energy Outlook from the IEA.
According to the outlook, this is the volume needed for the production of 10 million tons of hydrogen per year within the EU and the supply of an additional 10 million tons of hydrogen per year to the EU in 2030. At the same time, almost half of this amount relates to assets outside the EU, the IEA noted.
“This more than doubles when the cost of capital is included. The largest single cost component would be the purchase and installation of around 440 GW of renewable electricity generation, mostly solar PV and wind, to power the electrolysis process. The purchase and installation of 290 GW of electrolysers accounts for 15 percent of the estimated total, less than infrastructure such as pipelines, port terminals, ships and hydrogen storage,” the report said.
Meanwhile, as the IEA noted, conversion of the existing natural gas pipelines may cost less than half of what it would cost to build new ones for hydrogen, but this should be consistent with the phasing out of natural gas. According to the Announced Pledges Scenario (APS), repurposed natural gas pipelines account for about 50 percent of the new installed capacity of hydrogen pipelines in the 2030s.
As the IEA explained, the proposal, which is designed to displace 27 billion cubic meters of natural gas and 80,000 barrels of oil per day, is too large to be realistically realized solely by replacing existing hydrogen sources with electrolysis. New sources of demand will also be needed.
“In 2021, the European Commission proposed that by 2030 the industrial and transport sectors in the EU should use approximately 11 Mt H2 /year made from the electrolysis of water by renewable electricity. In May 2022, the European Commission proposed nearly doubling this to 20 Mt H2 /year across all end‐use and transformation sectors, with half of the total imported into the EU from other countries. To put this in context, EU industry currently produces and uses around 7 Mt H2 /year of hydrogen, nearly all of it from natural gas, and its transport sector uses less than 1,000 tons per year,” the agency added.
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