Hydrogen (H2) is a key enabler of Europe’s energy transition as it is one of the few green sustainable
options for seasonal storage at regional level. Next to energy storage it is also an important feedstock for industry. It offers a clean alternative to fossil fuels for heating, power generation and long-haul transportation. The production of green hydrogen with electrolysers also enables a large source of grid flexibility. DSOs are key to transport and supply security of hydrogen, as they can design and operate infrastructure to deliver hydrogen efficiently and cost-effectively. Next to the distribution of hydrogen the location of the high electric power electrolysers and their (flexible) grid connection contracts are of great importance for the planning (expansion) and operation of the electricity grids.
Highlights
Hydrogen demand is projected to grow significantly, with at least half of sectoral demand (mainly industry and transport) supplied via distribution grids by 2040. Depending on the local production surplus of renewable energy, electrolysers can become a significant load factor for the design of the electricity grids. DSOs are recognised as essential players in the EU’s hydrogen strategy, with policy frameworks evolving to support their role in both the hydrogen distribution as the optimal support of grid flexibility by the electrolysers.
Opportunities for DSOs
- Decarbonisation of industrial consumers through hybrid or full hydrogen conversion, supporting EU net zero goals.
- Seasonal energy storage and grid flexibility: Using power-to-gas technologies with the potential to act as a large scale, dispatchable load that can help electricity grid congestion.
- System integration: Allowing for an optimised use of infrastructure and for the integration of higher levels of wind and solar production.
- Accelerated regional development: By connecting hydrogen production sites to consumers without investing in high pressure transmission pipelines.
- Cost effective and safe transport of hydrogen: using the knowledge of gas distribution system operation.
Challenges for DSOs
- Regulatory uncertainty: Who holds exclusive responsibility for hydrogen distribution at the national level?
- Start up risks: due to the high capital expenditure and slow ramp-up of production and demand.
- Managing large electrical loads: The connection of multi-megawatt electrolysers presents a significant challenge for electricity grid planning and operation. These concentrated, high-power loads can require substantial grid reinforcement and may impact local power quality if not managed correctly.
- Smart grid integration: Real-time monitoring and control of hydrogen flows using digital platform and coordinating electrolyser operation with the real-time state of the electricity grid.
- Public awareness and acceptance of hydrogen as a viable energy carrier remains limited.
E.DSO considerations
- DSOs have to advocate for clear regulatory frameworks and integrated planning across electricity, gas and heat sectors as they are essential to optimise infrastructure investments.
- E.DSO emphasizes hydrogen’s role in industry, sector coupling, grid flexibility, and security of supply.
- E.DSO emphasizes the need for flexible connection agreements for electrolysers as these large additional loads can become dominant in grid planning, operation and system stability. These agreements are essential to unlock the value of electrolysers as a grid balancing tool, allowing DSOs to modulate their consumption to support the network.
- E.DSO encourages DSOs to engage in knowledge sharing, pilot projects, and training to build hydrogen readiness.
- E.DSO recommends coordinated EU support, including funding, innovation programs, and stakeholder engagement to accelerate deployment.
Potential use cases
- Seasonal storage: Repurposed gas storage facilities for hydrogen to balance renewable energy
- supply.
- Production of green biomethane: which can be used in the present gas systems enabling a robust and adaptive transition to fully decarbonized gas system.
- Industrial decarbonisation: Hydrogen for process heat in large and small manufacturing sectors.
- Power generation: Hydrogen-fired plants and e-fuel production near carbon capture hubs.
- Smart grid integration: Real-time monitoring and control of hydrogen flows using digital platforms.
- Transport: Supply to refueling stations and ports and industrials, especially where demand is dispersed.
- Hydrogen Fuel Cells provide clean electricity for construction sites, events and temporary power needs.
- Hydrogen can be used in steelmaking processes to replace coal, reducing Iron Ore without emitting CO₂.
- Green hydrogen for ammonia enables carbon-free fertilizer and chemical production.
Ongoing projects
- HyNetherlands (Eemshaven, Netherlands): Large-scale hydrogen production from offshore wind,
with distribution via existing gas infrastructure. - HyNetworks: the construction of a hydrogen backbone in The Netherlands.
- H2L (Lochem, Netherlands): Repurposed existing gas infrastructure for heating houses on 100%
hydrogen. - Underground Sun Storage (Gampern Austria): On site seasonal hydrogen production and storage in repurposed geological gas storage (4,2GWh).
- RAG Energy valley (Kremsmünster Austria): Production of turquoise hydrogen by plasmolysis of
natural gas. - CRAVE H2 (Crete, Greece): The scope of CRAVE H2 is to create a hydrogen valley in the island of
Crete, Greece incorporating energy storage applications, aggregation activities to the grid and green mobility applications (fuel-cell buses). - Crete Valley (Crete, Greece): Crete Valley will deliver community-scale demonstrations of green
hydrogen production and use, including fuel-cell buses, local electricity and heat supply via hydrogen fuel cells, EV charging with hydrogen-powered fuel cells, and vehicle-to-grid (V2G) integration as part of renewable energy communities in Crete.
Last update: 30 September 2025