The unit uses wind power to run electrolysis equipment that transforms water into hydrogen. This is then injected into the regional gas transmission system as part of the natural gas mix.
The unit, which has a capacity of 2MW, can produce 360 cubic meters of hydrogen per hour.
"This project makes E.on one of the first companies to demonstrate that surplus energy can be stored in the gas pipeline system in order to help balance supply against demand," said Dr. Ingo Luge, chief executive of E.on Deutschland.
"It will reduce the need to take wind turbines offline when the local grid is congested and will therefore enable us to harness more wind power."
E.on will operate the unit in partnership with Swissgas, which will procure some of the unit's hydrogen output.
The location in Falkenhagen was chosen due to the region's high output of wind power and the presence of the necessary gas infrastructure.