From Optimistic Models To Empty Pipelines: The Intellectual History Of Germany’s Hydrogen Backbone

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Germany’s hydrogen backbone now exists as steel in the ground and pressurized pipe, but the more important infrastructure was laid long before any trench was dug. That infrastructure was intellectual. A long sequence of studies, models, and policy-facing analyses created the impression that large scale hydrogen for energy use was not only plausible, but necessary. The backbone is best understood not as a technical project gone slightly wrong, but as the logical output of a decade of optimistic modeling choices that were never corrected during study execution or peer review. The physical pipeline is simply where those errors finally became visible.

The central failure was not enthusiasm for hydrogen as an industrial feedstock. Hydrogen has long been essential in refining, chemicals, and steelmaking. The failure was the systematic extension of hydrogen into general energy use cases, backed by studies that assumed away the hard parts of manufacturing, distributing, storing, and using hydrogen. Over and over, these studies treated hydrogen as a flexible energy carrier comparable to electricity, while ignoring that each step in the hydrogen chain imposes capital cost, operating cost, and energy loss. When optimistic assumptions are stacked across multiple stages, the result is not marginal error but a complete distortion of outcomes.

A full hydrogen cost stack is not complicated, but it is unforgiving. Electricity must first be generated, then converted to hydrogen through electrolysis with losses typically around 25% to 30%. The hydrogen must be dried, purified, compressed, and often liquefied or stored under pressure, each step consuming additional energy. Transmission through pipelines requires compression and leak management. Distribution to end users requires further infrastructure. At the point of use, hydrogen is converted back to heat or electricity with more losses. Even under favorable assumptions, less than 30% of the original electrical energy often reaches useful output in energy applications. Studies that treat any one of these steps lightly can still appear reasonable. Studies that treat several lightly create a fantasy.

By the late 2010s, a pattern had emerged in German and European energy modeling. Hydrogen was assigned optimistic production costs, often assuming electrolyzer capex far below market reality and near perfect utilization. Electricity prices feeding electrolyzers were assumed to be lower than those paid by direct electric alternatives drawing from the same grid. Compression, storage, and distribution costs were frequently simplified, aggregated, or omitted. Utilization rates for pipelines and refueling infrastructure were set at levels that assumed demand already existed. Each of these choices should have raised questions during peer review. Instead, they became normalized.

This normalization is best described as gruppendenken. Within Germany’s energy policy ecosystem, hydrogen for energy use became a shared assumption rather than a contested hypothesis. Research institutes, consultancies, industry stakeholders, and policymakers circulated the same premises through workshops, stakeholder processes, and commissioned reports. Once hydrogen appeared in enough credible looking studies, its role was treated as inevitable. At that point, models were used to optimize hydrogen systems rather than to test whether those systems made sense.

One of the clearest examples of repeated failure appears in the literature comparing hydrogen pipelines to high voltage direct current transmission. Over multiple studies, hydrogen pipelines were framed as an alternative way to move renewable energy over long distances. The recurring error was a failure to define system boundaries consistently. Electricity that is moved through HVDC lines arrives ready for use. Electricity converted to hydrogen and moved through pipelines arrives as a molecule that must still be compressed, distributed, and converted back to useful energy. When those downstream steps were treated lightly, hydrogen appeared competitive.

In the article—all cited articles are my published assessments of the studies from the past several years—Hydrogen Pipelines Studies Keep Making The Same Mistakes, the recurring flaws were laid out explicitly. Centralized hydrogen production feeding 1,000 km pipelines was assumed, even though realistic hydrogen economics favor production near point of use. Losses were often reported in energy units that obscured mass flow constraints. Capital costs for pipelines were compared directly to transmission lines without normalizing for delivered useful energy. These were not edge cases. They appeared across multiple peer reviewed papers.

A later assessment, New Hydrogen Pipeline Vs HVDC Study Less Wrong, More Clearly Shows Hydrogen Uneconomic, reviewed an Oxford Institute for Energy Studies report that corrected some earlier errors. The study modeled more realistic losses and costs, and its own results showed hydrogen pipelines to be more expensive in most scenarios. Yet the conclusions hedged. Rather than stating clearly that hydrogen pipelines were uneconomic for energy transmission, the authors emphasized complementarity. This was a critical moment where peer review should have insisted that conclusions follow results. It did not.

A related but distinct failure appeared in offshore wind to hydrogen studies, most notably in work produced by DNV. In Offshore Hydrogen Would Be 10x Cost Of Already Expensive LNG, Yet Europe Is Serious About It, an assessment was made of a report arguing that producing hydrogen offshore and piping it to shore was cheaper than transmitting electricity via HVDC. This study was funded by the European gas pipeline association, an organization with a direct interest in pipeline buildout. That conflict of interest did not invalidate the work automatically, but it raised the bar for transparency and rigor. The study did not clear that bar.

The DNV report assumed optimistic electrolyzer performance in harsh offshore environments, minimized offshore maintenance costs, and framed hydrogen pipelines as a straightforward substitute for electrical transmission. Costs were presented in MWh terms that concealed compression and storage realities. Downstream reconversion losses were downplayed. When the full hydrogen stack was accounted for, the claimed advantage disappeared. This was not a subtle modeling disagreement. It was a case where vested interests funded a study that leaned heavily on favorable assumptions, and the review process failed to challenge them.

At the European level, the Joint Research Centre played a central role in normalizing cheap hydrogen narratives. In EU JRC Puts Heavy Thumbs On Scale So Delivered Green Hydrogen From Africa Will Be Cheap, an analysis was critiqued for assuming delivered hydrogen costs around €2 to €3 per kg from North Africa. These figures relied on low electricity prices, high electrolyzer utilization, optimistic shipping or pipeline costs, and minimal risk premiums. Sensitivity analysis was narrow. Uncertainty was underplayed. The resulting numbers were then cited widely in policy discussions as if they were robust forecasts rather than optimistic scenarios.

The issue was not a single model run, but how results were presented. Headline numbers emphasized low costs. Caveats were buried. Alternative pathways, such as direct electrification or local production of industrial hydrogen only, were not given equal prominence. For a body whose outputs directly inform EU policy, this framing mattered.

The same pattern appeared in modeling work from the Potsdam Institute for Climate Impact Research. In Another European Energy Study Assumes Unrealistically Cheap Hydrogen & Finds Significant Demand, a Europe-wide energy system model showed large hydrogen demand across sectors. The driver was not new insight into industrial need, but assumed hydrogen prices below realistic delivered costs. Given those prices, the optimizer selected hydrogen. That is how optimization models work. Peer review should have interrogated whether the input prices were defensible. Instead, the demand outputs were reported as findings.

Germany’s own energy agency followed a similar path. In German Energy Agency Dena Is Just As Subject To Hydrogen Gruppendenken As JRC & PIK, Dena analyses were reviewed and found to echo the same optimistic assumptions. Hydrogen was positioned as a broad energy carrier for transport, heating, and power balancing. Distribution challenges were minimized. End use efficiencies were treated generously. Once again, this was not about malice. It was about institutional alignment around a narrative that no longer faced internal challenge.

By this stage, hydrogen had become embedded as a default solution in German energy discourse. Studies cited other studies. Assumptions were inherited rather than reexamined. When enough credible institutions repeat the same framing, dissent begins to look fringe even when it is grounded in arithmetic.

The same methodological failures were visible in hydrogen transportation studies. In New ICCT Report On European Trucking Has Fatal Flaw Favoring Hydrogen, a European trucking total cost of ownership analysis was examined. The study used much lower electricity prices for hydrogen production than for battery electric truck charging, even when both were assumed to draw from the same grid at the same truck stops. This single inconsistency was enough to tilt results toward hydrogen. It should have been caught immediately.

A later German study reviewed in German Hydrogen Vs Battery Trucking Study Much Better Than ICCT’s But Still Optimistic On Hydrogen Pathway Costs corrected several errors and provided a more careful comparison. Even so, hydrogen distribution and retail costs were still treated optimistically. The gap between production cost and delivered at pump cost was compressed beyond what existing infrastructure and utilization rates support.

By the time the European Commission reviewed its own spending record, assessed in EU Spent €1.2 Billion On Hydrogen Transportation, Asked For More To Compete With Batteries, the empirical evidence was clear. Over €1.2 billion spent since 2008 had not produced competitive hydrogen transport systems. Reliability issues persisted. Costs remained high. Battery electric alternatives were winning deployments. Yet the response was not reassessment, but an executive summary claim of success and a request for more funding.

One of the reasons these failures matter is that they were not universal. In New European Heavy Freight Decarbonization Study Is Much Better Than Most, a rare example of a well grounded analysis was highlighted. The Swedish RISE study used consistent electricity pricing, realistic pricing for hydrogen manufacturing and distribution, realistic refueling operations and maintenance costing, realistic infrastructure assumptions, and explicit constraints. That’s because it sought inputs from outside of the hydrogen for energy bubble as well as in, including requesting that I be an advisor to the study group. So was Daimler’s head of hydrogen and the founder and director of the Cambridge Centre for Sustainable Road Freight, as an indicator of balance. The study concluded that hydrogen had no economically viable role in ground transportation. This demonstrated that better work was possible within the same institutional context.

The flawed studies fed into Germany’s hydrogen backbone narrative. Maps were drawn and corridors were sized. The backbone was justified on modeled future demand rather than contracted demand. Pipelines were framed as enabling infrastructure that would unlock markets, rather than as assets that require customers to justify their existence. Once construction began, the logic reversed. The existence of steel became evidence that hydrogen demand must arrive.

The failure here was not technological optimism. It was governance. Study after study contained assumptions that should have been challenged during execution and peer review. Electricity price inconsistencies, missing cost layers, optimistic utilization rates, and undisclosed conflicts of interest were allowed to pass. The result is a hydrogen backbone that reflects the confidence of its models more than the reality of its markets.

What Germany built in steel was first built in spreadsheets. The backbone is not an isolated mistake. It is the accumulated output of years of modeling choices that were never forced to confront full system costs. When those choices finally met reality, they did so in the form of a pipeline with no suppliers and no customers, and a lesson about what happens when gruppendenken replaces scrutiny.