EPICO KlimaInnovation published a new report on improving offshore hydrogen infrastructure and financing in the North Sea. The paper provides actionable recommendations for enhancing regional cooperation in the North Sea and incentivising domestic offshore hydrogen production.
‘Made in Europe’ renewable hydrogen from the North Sea is emerging as a critical solution to reduce external energy dependencies and boost industrial competitiveness. By prioritising domestic hydrogen production, the EU can secure supply chains, assume technological leadership, and support the Green Deal’s industrial strategy and Clean Industrial Deal.
The authors call for an integrated infrastructure approach that integrates electricity and hydrogen planning across borders in the North Sea. This approach can significantly reduce energy and electricity grid tariff costs while optimising energy transport. Reducing the rising costs of extensive electricity grid expansion is crucial, yet the development of offshore infrastructure faces challenges, including regulatory, financial, technical, and spatial barriers.
Key recommendations include:
- Offshore hydrogen for energy security: Offshore hydrogen production helps the EU reduce reliance on imports, provides stable energy supply for the industry while meeting climate targets.
- Think big for economies of scale: Large-scale infrastructure in the North Sea can lower costs for projects and ensure competitive energy pricing for consumers.
- Unified regulatory framework needed: Fragmented regulations across Member States and neighbouring countries are slowing progress—harmonisation is essential. Cross-border collaborations like the North Seas Energy Cooperation are key to developing a unified hydrogen infrastructure.
- Adopting integrated planning for electricity and hydrogen at the EU level, including the European network operators for electricity, gas, and hydrogen (ENTSOE, ENNOH, ENTSOG), alongside Member States and National Regulatory Agencies - is vital to level the playing field to allow infrastructure development in the North Sea.
- Innovative financing: Hybrid financing models, such as the intertemporal cost allocation model to be used for German hydrogen infrastructure, are key to attracting investment while managing risks.