Czech Republic Hydrogen Industrial Heating Infrastructure Development Feasibility Study with Clean Energy Market Outlook

Executive Viability Abstract

This feasibility study evaluates the transition of the Czech Republic's industrial heating sector—specifically steel, glass, and chemical manufacturing—to hydrogen-based energy. The study focuses on leveraging the national 'Hydrogen Strategy of the Czech Republic' and the repurposing of existing natural gas infrastructure to facilitate the distribution of green and low-carbon hydrogen. While technical hurdles exist regarding burner retrofitting and high CAPEX for electrolyzers, the market outlook is bolstered by rising EU ETS carbon prices and the strategic location of the Czech Republic within the European Hydrogen Backbone.

## Market Analysis The Czech industrial sector accounts for approximately 40% of the country's energy consumption, with high-temperature processes being the most difficult to decarbonize. Current market drivers include the European Green Deal and the 'Fit for 55' package, which push Czech heavy industries away from coal and natural gas. The demand for industrial hydrogen in the CR is projected to reach 100,000 tonnes per year by 2030. Competitiveness depends heavily on the price of renewable electricity for PEM electrolysis and the potential for hydrogen imports from Ukraine and North Africa via the H2EU+Store corridor. ## Technical Feasibility Technical viability hinges on three pillars: 1. Electrolyzer Deployment: Utilizing Proton Exchange Membrane (PEM) technology near industrial hubs (e.g., Ústí nad Labem, Moravian-Silesian region). 2. Pipeline Repurposing: NET4GAS infrastructure assessment for hydrogen blending (up to 20%) and eventual pure H2 transport. 3. Industrial Burner Conversion: Retrofitting existing gas-fired furnaces to handle hydrogen's higher flame speed and different heat radiation profiles. Initial pilots indicate that 100% H2 firing is achievable for glass melting and steel reheating furnaces with minor metallurgical adjustments. ## Financial Projections Total estimated CAPEX for a regional 100MW cluster is €180M. Revenue models rely on a combination of direct hydrogen sales, Carbon Contract for Difference (CCfD) subsidies, and the sale of 'green' industrial products (e.g., green steel) at a premium. OPEX is dominated by electricity costs, requiring a PPA price below €50/MWh to ensure parity with carbon-taxed natural gas by 2028. ## Risk Assessment The primary risks include regulatory delays in defining 'Low-Carbon Hydrogen' under EU delegated acts, grid bottlenecks for renewable energy connection, and the volatility of the natural gas market which impacts the relative savings of switching to H2.