Abstract
European hydrogen demand is projected to surge in the upcoming decade, leading to a potential risk of excessive dependence on imports, which may exceed 50% by 2035. This paper compares two strategies to tackle this hydrogen import disruption vulnerability. The first option is to invest in Underground Hydrogen Storage (UHS) for strategic stockpiling. The second option is to increase electrolysis capacity to inflate local production potential. We identify the most effective investment strategies for Central Western Europe (CWE) in 2035 by implementing a Multistage Stochastic Dynamic Programming (MSDP) model. Results show electrolysis outperforms UHS in preventing import disruption risks, although the two technologies are complementary. Notably, electrolysis represents 95% of the strategic investment budget. The overall cost of the optimal strategic investment amounts to 5–10% of the total investment in hydrogen infrastructure.
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