PPAs Sufficient for Electrolyzers until 2030

The volume of green electricity suitable for PPAs meeting the EU criteria for “renewable fuels of non-biological origin” (RFNBOs) could grow to more than 42 TWh by 2030. This would be sufficient to cover the potential electricity demand for domestic electrolysis, estimated at 34 TWh. However, this volume may not suffice if data centers or industrial consumers increasingly seek RFNBO-compliant contracts to meet their own decarbonization targets.

Under the title “RFNBO-Compliant PPAs in Germany: Availability and Competing Demand”, the Institute of Energy Economics at the University of Cologne (EWI) investigated the medium-term market development of RFNBO-compliant PPAs. The study, commissioned by the Ministry of Economic Affairs, Industry, Climate Action and Energy of the State of North Rhine-Westphalia (MWIKE), compares supply and demand while analyzing competition between electrolyzers, data centers, large-scale heat pumps, and industry. It further provides a regulatory analysis of how strict RFNBO criteria influence market potential in Germany.

Regulation determines competition and choice of technology

Demand for green electricity could increase by approximately 90 TWh by 2030, though regulatory requirements vary significantly by sector. While electrolysis must strictly fulfill RFNBO criteria, industry and data centers can often meet their renewable quotas using less restrictive Guarantees of Origin (GoOs). Because electricity costs constitute a much higher share of total costs in hydrogen production and data centers compared to traditional industrial processes, these actors tend to have a higher willing-ness to pay for specialized PPAs, despite facing greater price risks.

On the supply side, the RFNBO potential is primarily driven by new offshore wind (31 TWh) and large-scale PV projects (10 TWh). In contrast, onshore wind currently does not contribute to the RFNBO-compliant market because state-backed subsidies remain more economically attractive for new onshore plants than PPAs. Since RFNBO compliance requires electricity to come from new, unsubsidized plants (“additionality”), onshore wind is largely unavailable for this specific segment and instead dominates the post-subsidy market.

Competition for capacity may intensify in the future

“In the medium term, the supply of RFNBO-compliant PPAs appears sufficient, however, the market could become very tight if electrification accelerates or if other sectors’ requirements increase,” explains project manager Dr. Nils Namockel, who conducted the analysis together with Pia Hoffmann-Willers and Philipp Theile. The team notes that structural supply bottlenecks could arise if the expansion of offshore wind is delayed or if sectors like data centers and industry demand higher volumes of RFNBO-quality electricity for their climate goals.

Methodologically, the study is based on sector-specific demand forecasts from literature, project pipelines, and regulatory frameworks. On the supply side, a distinction was made between newly built, operational, and post-subsidy plants for wind and solar energy. Since actual market data for PPAs are often difficult to access, the analysis provides indicative results that outline the upper end of the potential market volume until 2030.