In this study published in Network Industries Quarterly, CRA’s Drake Hernandez and MIT Energy Initiative’s Emre Gençer develop a flexible optimisation model that yields a large-scale hydrogen transmission network.
The resulting network minimises the total expenditure on hydrogen across regions in the United States. The model consists of an upstream hydrogen production cost module that assesses the total cost of producing hydrogen via electric power within a region and a transmission module that determines the delivery rate for hydrogen between nodes. These modules are then paired with forecasted demand for hydrogen at each node. These inputs are fed into a linear program which solves for the optimal hydrogen transmission network. The model is meant to provide insight to policymakers as they navigate questions around hydrogen’s role within their country’s future energy system and the midstream infrastructure necessary to minimise the region’s total expenditure on hydrogen.
Results from this study could also inform an investor’s decision as to whether an investment in hydrogen transmission infrastructure is justified. We perform a case study for the United States where this model will be used to estimate an optimal 2050 hydrogen network between major regions. We find that in order for hydrogen transmission to be justified, the power prices must be differentiated enough to enable hydrogen arbitrage opportunities between the regions. If these power prices are not differentiated enough the optimal hydrogen transmission network could be no network at all.