Recognizing the role of uncertainties in the transition to renewable hydrogen

Abstract

Achieving the goal of net zero emissions targeted by many governments and businesses around the world will require an economical zero-emissions fuel, such as hydrogen. Currently, the high production cost of zero emission ‘renewable’ hydrogen, produced from electrolysis powered by renewable electricity, is hindering its adoption. In this paper, we examine the role of uncertainties in projections of techno-economic factors on the transition from hydrogen produced from fossil fuels to renewable hydrogen. We propose an integrated framework, linking techno-economic and Monte-Carlo based uncertainty analysis with quantitative hydrogen supply-demand modelling, to examine hydrogen production by different technologies, and the associated greenhouse gas (GHG) emissions from both the feedstock supply and the production process. The results show that the uncertainty around the cost of electrolyser systems, the capacity factor, and the gas price are the most critical factors affecting the timing of the transition to renewable H2. We find that hydrogen production will likely be dominated by fossil fuels for the next few decades if the cost of carbon emissions are not accounted for, resulting in cumulative emissions from hydrogen production of 650 Mt CO2-e by 2050. However, implementing a price on carbon emissions can significantly expedite the transition to renewable hydrogen and cut the cumulative emissions significantly.