From ambition to reality: The impact of limited capacity expansion rates on the transformation pathway to a climate-neutral European energy system

The rapid expansion of renewable energy technologies is essential for the successful transition to a climate-neutral European energy system. This is particularly important for producing large quantities of green hydrogen to decarbonise hard-to-abate sectors. However, the annual expansion rate of renewable energy technologies could hinder this transformation. These limitations can stem from various sources, including policy incentives that influence investment decisions, import supply chains, and critical materials. To evaluate the potential impact of these limitations on the transformation pathway, we present a model-based scenario analysis with high temporal and subnational spatial resolution, which explicitly considers import corridors for energy carriers. Our results show that, when national limits on expansion rates are considered, hydrogen production shifts from southern Spain to Germany. Furthermore, our results highlight the need to balance green and blue hydrogen production to avoid an escalation in the required scale-up of photovoltaic and wind technologies. Analysing hydrogen import options reveals their significant impact on network topology. Here, the focus should be on connecting regions rich in renewable resources to hydrogen cavern storage sites. Our findings emphasise the need for European coordination to facilitate the development of sufficient energy infrastructure for a successful transformation. • Annual VRE expansion rate limiting factor for domestic green hydrogen production. • Limited national expansion rates causes spatial shifts in electrolyser deployment. • National capacity targets reduce import dependence and spatial concentration of VRE. • Reliance on blue hydrogen can exacerbate the required speed of expansion for VRE. • Early incentives for green hydrogen uptake mitigate strong expansion peaks.