How a Grid Company Could Enter the Hydrogen Industry through a New Business Model: A Case Study in China

Abstract

The increasing penetration of renewable and distributed resources signals a global boom in energy transition, but traditional grid utilities have yet to share in much of the triumph at the current stage. Higher grid management costs, lower electricity prices, fewer customers, and other challenges have emerged along the path toward renewable energy, but many more opportunities await to be seized. Most importantly, there are insufficient studies on how grid utilities can thrive within the hydrogen economy. Through a case study on the State Grid Corporation of China, we identify the strengths, weaknesses, opportunities, and threats (SWOT) of grid utilities within the hydrogen economy. Based on these factors, we recommend that grids integrate hydrogen into the energy-as-a-service model and deliver it to industrial customers who are under decarbonization pressure. We also recommend that grid utilities fund a joint venture with pipeline companies to optimize electricity and hydrogen transmissions simultaneously.