Hydrogen's Value in the Energy chain (HyVE)

Project Overview

Associated with the EPSRC Supergen Hydrogen and Fuel Cells (H2FC) Hub, this project will determine the value of hydrogen under different plausible future energy system scenarios that examine resource and technology cost variations as well as the impact of decarbonisation targets and energy security policies. It will develop a number of tools with many novel features for this analysis. These tools and the project outputs will be able to inform industry investment and government policy decisions as well as having substantial scientific impact.

Background

Substantial investments into hydrogen technologies and supply infrastructure would be required to support the widespread adoption of hydrogen energy. These investments, and government policies necessary to support them, are currently difficult to justify because the overall value of hydrogen to the UK, and to the many companies in the supply chain, is opaque. Uncertain future demand, depending on the long-term costs of resources and the cost dynamics of hydrogen vehicle components and supply infrastructure, is priced into company investment decisions but is not considered by energy system models, which assume perfect foresight for each scenario. The management of such uncertainty is a key factor for the development of hydrogen but it has not previously been investigated in whole energy system studies.

Key Objectives

The project will establish the direct value of hydrogen when used as a fuel in different industries and the indirect value for reducing electricity system operating costs and avoiding network reinforcement.

- extend and integrate several existing energy and power system models

- develop real options and stochastic programming methodologies for each of the models to assess uncertainty and to systematically price the risk of hydrogen investments into the overall value of hydrogen.

- establish the value of hydrogen beyond economic considerations by considering the potential impacts on the environment (including on air quality) and on UK energy security

University of Reading are developing the electricity network balancing and storage utilisation assessment, which includes enhancing existing analytical tools to produce and document a coherent analytical toolkit.

Partners

1. University College London (UCL)

2. University of Edinburgh

3. The Department of Energy and Climate Change (DECC)

4. London Hydrogen Partnership

5. Scotia Gas Networks (SGN)

6. National Grid

7. Air Products

8. The Scottish Hydrogen and Fuel Cell Association (SHFCA)

9. E4Tech

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