For multiple clients, including a large global utility and a European gas TSO, we assessed the development of the forthcoming hydrogen sector in Europe and evaluated its possible regulatory framework and market structure.
Firstly, we analysed the European hydrogen Strategy published by the European Commission and assessed the implications for the European energy sector, for instance in terms of additional renewable generation capacity required and the associated costs.
Secondly, we analysed the potential evolution of demand and supply in the hydrogen sector, as well as the likely market structure that will emerge in the near and longer terms. Aspects analyzed include:
- The evolution of the potential demand of hydrogen in Europe;
- To what extent demand/supply imbalances may be expected;
- The need and scope for long-distance transportation of hydrogen in Europe;
- The scope for hydrogen-methane blending;
- The scope for hydrogen imports from non-EU countries;
- The expected liquidity of the hydrogen market; and
- The expected degree of competition in the European hydrogen sector.
Finally, we assessed the regulatory framework that might apply to the hydrogen sector. This part of the project entailed an analysis of alternative ownership structures in the hydrogen generation sector, and a comprehensive review of alternative support instruments such as Carbon Contracts for Differences, Guarantees of Origin or tariffs allocated via competitive tenders.
