Hydrogen Is Still A Tonnes Market, No Matter How Many MWh We Assign To It

Support CleanTechnica’s work through a Substack subscription, on Patreon, or on Stripe. Help us produce all of the high-quality, original content we publish week after week despite the challenges of content-scraping AI, antisocial media, inflation, and other hurdles.

Global hydrogen demand exceeded 100 million tonnes in 2025, and almost all of it was still consumed where hydrogen has been used for decades: refining and industry. That is why kilograms and tonnes are not merely traditional units. They describe the market that exists. An ammonia plant buys a chemical feedstock by mass. A refinery has an annual hydrogen requirement. A direct-reduced-iron plant can be assessed in kilograms of hydrogen per tonne of iron. The molecule is entering an industrial process, not arriving as an abstract bundle of energy.

There is nothing mathematically wrong with converting hydrogen into megawatt-hours. Its lower heating value is about 33.33 kWh per kilogram. The problem starts when dimensional validity is treated as though the choice of unit were analytically neutral. Electricity is generated, traded and consumed in kWh, MWh and TWh because energy is the product. Hydrogen today is overwhelmingly manufactured, transported and consumed as an industrial molecule. Expressing both in MWh can make them look like competing energy commodities before hydrogen has actually won the energy markets being imagined for it.

The European Energy Exchange makes the purpose unusually explicit in its HYDRIX methodology. EEX allows hydrogen prices in euros per kilogram or euros per MWh, then converts the benchmark to €/MWh specifically so it can be compared with electricity and gas prices. That is reasonable for an exchange building price transparency around a developing commodity. It is also an analytical frame, not merely a unit conversion.

EEX’s HYDRIX benchmark is revealing because it says explicitly why hydrogen is being expressed in €/MWh. The full TFIE Strategy Briefing follows what that framing can hide, the related denominator problem in U.S. energy statistics, and what investors and policymakers should measure instead.

Put electricity at €70/MWh, natural gas at €40/MWh and hydrogen at €200/MWh in the same table and the presentation suggests three broadly substitutable energy commodities at different prices. But one MWh of electricity is already in the form used by motors, electronics, induction equipment and heat pumps. A nominal MWh of hydrogen is chemical heating value. For most energy services it still has to pass through additional equipment and conversion losses. For the industrial uses that dominate demand, the heating value may be secondary to the chemical role of the atoms.

That leads to the larger point: a hydrogen application is not automatically a hydrogen market. Space heating belongs to the heat market. Hydrogen-fired generation belongs to electricity, capacity and balancing markets. Grid storage belongs to flexibility and reliability markets. Hydrogen can compete as an input to any of them, but new hydrogen demand exists only after customers choose it over the alternatives. Starting with a modeled 200 TWh of hydrogen for heating reverses the causality: it assumes the application first, then calculates the molecule afterward.

A better sequence starts with actual and prospective tonnes of hydrogen demand. Separate refining, fertilizer, methanol, iron and steel and other chemical uses, then ask which activities will grow, shrink or disappear. For proposed energy uses, start with the service customers are buying: useful heat, mobility, electricity or grid reliability. Only if hydrogen wins on delivered cost, emissions, infrastructure and performance should the resulting kilograms or tonnes be added to the demand outlook.

The same discipline improves investment diligence. Several gigawatts of electrolysers says little about a business without evidence for tonnes sold, firm offtake, utilization, delivered price and a buyer that genuinely requires the molecule. Announcements and policy targets show activity. Operating plants, repeat buyers and high utilization are much stronger evidence that a market exists.

Hydrogen can be expressed in MWh. The arithmetic is fine. The question is whether the conversion clarifies the decision or quietly manufactures an energy market that buyers have not yet created.

The full analysis in TFIE Strategy Briefing examines the HYDRIX framing, the parallel U.S. primary-energy accounting problem, and practical denominator checks for policy, strategy and investment.