Utilities Are Moving Away from Hydrogen in Gas Pipeline Networks
European utilities are increasingly stepping back from the idea of repurposing existing natural gas pipelines to transport hydrogen. A survey of 91 utilities across Germany, Austria, and Switzerland shows that most companies no longer believe hydrogen can be deployed at scale within current gas grid infrastructure.
Compared with earlier transition visions centered on “replacing natural gas with hydrogen,” utilities are now more inclined to gradually retire gas pipeline networks and redirect investment toward electrification and battery energy storage solutions.
- 65% of surveyed companies plan to reduce investments in gas grids.
- 61% expect gas networks to be significantly reduced or fully decommissioned by 2040.
- Only 4% believe full conversion of existing gas pipelines to hydrogen is feasible.
- Around two-thirds expect to double investments in energy storage to support future demand.
The key drivers behind this shift include hydrogen’s high cost, its relatively low efficiency for space heating, and the substantial, high-cost upgradeㄊs required to make existing pipelines compatible with hydrogen transport.
At the same time, regulators are advancing policy reforms that allow utilities to decommission gas networks as demand continues to decline. As heat pumps gain adoption, electrification accelerates, and natural gas demand falls over the long term, maintaining extensive gas pipeline networks is becoming increasingly uneconomical.
Overall, this development signals a major recalibration of energy transition pathways: hydrogen is not expected to replace methane in residential heating at scale. Instead, electrification—supported by energy storage—will increasingly form the backbone of future energy systems.
```
