Peak-load power plants in 2035
Transport and storage can double the cost of green hydrogen
What costs will German hydrogen customers face in 2035? Answers to this question are provided by an analysis by Fraunhofer IEG with partners from the Fraunhofer Cluster of Excellence “Integrated Energy Systems” CINES. The researchers have systematically calculated this for the first time and took into account not only the production costs of green hydrogen, but also transport and storage. These infrastructure costs are much more important for power plants than for industrial customers. The findings of the analysis, which will be presented in a webinar on July 6, will help buyers and producers of hydrogen in industry and the energy sector to be better equipped for the future.
“Hydrogen is considered a key technology for the decarbonization of industry, but usually only generation prices are considered,” says Dr. Benjamin Pfluger from Fraunhofer IEG. “But hydrogen must be transported, stored and made available at the right time. Our study closes this gap and shows the differences in procurement costs between industrial base load, flexible industrial processes, combined heat and power and power plants. We show consumers from industry and the energy sector the way to map their costs in a structured way. «
“A major reason for the faltering ramp-up of the German hydrogen market is that investors have no certainty about the costs to be expected in the future,” says Prof. Martin Wietschel, lead author of the study, explaining the background. “Although there are already many analyses of the production costs of green hydrogen, customers in industry and the energy sector also have to pay costs for transport and storage.” In the study “Application-Specific Hydrogen Procurement Costs in Germany 2035”, Wietschel and his team have now systematically determined the resulting procurement costs for the first time for 2035 and compared them between different use cases.
Hydrogen power plants: High costs due to storage requirements and low full load hours
The respective demand profile has a significant influence on the procurement costs. In the case of electricity-driven hydrogen turbines, the hydrogen demand for reconversion arises precisely when green hydrogen is not produced. It must therefore be operated entirely from storage systems, which increases storage costs.
In addition, there are grid fees for the hydrogen core network. These are generated at the entry and exit points, i.e. at the producer, at the injection and withdrawal and at the consumer. Here, in particular, costs are rising due to the fact that peak-load power plants only run for a few hours a year. This is because the ramp-up fee for the core network is currently an annual fixed price for the input or exit power provided. “If the booked output power is only used with 500 full-load hours per year, the specific transport costs per kilogram of hydrogen fed out increase,” explains Dr. Benjamin Pfluger from Fraunhofer IEG, co-author and expert in energy infrastructures. Fraunhofer IEG contributed its expertise in the field of comprehensive technical and economic analysis of hydrogen infrastructures and storage facilities to the study.
In total, power plant operators with a grid connection must expect to pay 8.77 to 15.16 euros per kilogram (265–460 €/MWh), around half of which is for infrastructure. “In view of these high costs, it is difficult to imagine that such power plants can be operated economically in the energy-only market,” says Pflüger. “Alternatives with on-site electrolysis or renewable methanol are conceivable.”
Industry: Advantage in flexibility
For industrial customers who use hydrogen as an energy carrier or chemical raw material, infrastructure costs remain comparatively moderate. With constant acceptance over time (“belt load”), they amount to a maximum of 16 percent of the total costs, even in the maximum case. The procurement costs in 2035 are 4.41 to 8.43 euros per kilogram. Compared to power plants, the grid charges are apportioned over a very large number of full-load hours, which means that the specific transport costs are lower. Storage costs are also lower, as the researchers assume a larger number of injection and withdrawal cycles per year.
Industrial companies can manage completely without storage costs if they flexibly shift their hydrogen use to the times when green hydrogen is produced. Hydrogen produced locally also eliminates transport costs. “Whether it is cheaper to make a company’s production more flexible or to rely on a continuous supply from the hydrogen network and storage facilities must be calculated on a case-by-case basis,” says Lukas Jansen, who carried out the model-based analyses for the study.
Consulting: Dealing with uncertainty strategically
The CINES researchers are now using the analytical methods developed for the study to advise potential buyers and producers of hydrogen in industry and the energy sector.” Hydrogen investments will remain subject to structural uncertainty for the foreseeable future,” says study leader Martin Wietschel, looking ahead. Our analyses in particular show how much future regulation and fees will influence profitability. The CINES approach therefore focuses on enabling companies to deal with this uncertainty.” Instead of point forecasts, the researchers determine cost ranges, which they model, compare and optimize depending on factors such as regulation, technical design and the future development of the energy system. This forms a reliable basis for strategic options for action, risk analyses and hedging. ( Further information on the CINES advisory service)
Webinar on the study on 6 July 2026
The results of the study will be presented and discussed in a webinar on 6 July at 15:00–16:30. The event is aimed at stakeholders from industry, the energy sector, politics and research. (Registration)
Original publication:
Wietschel, Martin; Jansen, Lukas; Pflüger, Benjamin; Frischmuth, Felix; Weissenburger, Bastian (2026): Application-specific hydrogen procurement costs in Germany 2035. (Download)
