What happened

Shares of hydrogen fuel cell company Plug Power (PLUG -1.38%) were down about 5.5% as of 1:30 p.m. ET on Monday, presumably responding to a report from Euronews that suggested the prospects for building a hydrogen economy may no longer be as bright as once thought.

Citing data from non-governmental organization Global Witness, Euronews noted today that converting Europe's economy alone to run on hydrogen gas would cost 240 billion euros -- and double the cost of electricity for consumers.

So what

Over the past few years, predictions for the growth rate of the hydrogen economy have been ... optimistic, shall we say. Investment bank Goldman Sachs, for example, predicted in 2020 that the total addressable global market for green hydrogen could approach $12 trillion by 2050. That same year, a separate report from Barron's noted that the European Union plans to spend "hundreds of billions of euros in technologies enabling it to get a substantial share of its energy from hydrogen by 2050."

On the one hand, that prediction at least tallies with today's Euronews report. On the other hand, though, what Barron's failed to mention two years ago was the cost to consumers ... and how voters might react to it.

Now what

Consider: Prior to the advent of war in Ukraine, and the spike in the cost of energy that it caused, EU statistics agency Eurostat noted that natural gas cost 6.4 Euro cents per the equivalent of 100 kilowatt hours in 2021. That cost rose to 8.6 Euro cents in H1 2022, which was bad enough. But according to Global Witness, converting Europe from natural gas to hydrogen as a primary fuel source would be even more expensive, entailing costs-per-kilowatt hour that average 12.6 Euro cents.    

That's a 97% increase, or essentially double pre-war prices.

Now, there are certainly advantages to using hydrogen instead of natural gas for energy. At least when we're talking about "green hydrogen" produced from water that's been electrolyzed to produce gas using renewable energy, the carbon impact on the environment should be less than with gas. The question investors have to ask, though, is whether consumers in Europe (and elsewhere) will be willing to foot the bill for heating bills twice what they're used to in order to achieve this environmental benefit.

Because if they aren't, then any talk of a $12 trillion-by-2050 global market for hydrogen could evaporate -- and Plug Power's chances of profiting from that future could go up in smoke.