Risks in the design of regional hydrogen hub systems: A review and commentary

Abstract

AbstractEarly investments in regional hydrogen systems carry two distinct types of risk: (1) economic risk that projects will not be financially viable, resulting in stranded capital, and (2) environmental risk that projects will not deliver deep reductions in greenhouse gas emissions and through leaks, perhaps even contribute to climate change. This article systematically reviews the literature and performs analysis to describe both types of risk in the context of recent efforts in the United States and worldwide to support the development of “hydrogen hubs” or regional systems of hydrogen production and use. We review estimates of hydrogen production costs and projections of how future costs are likely to change over time for different production routes, environmental impacts related to hydrogen and methane leaks, and the availability and effectiveness of carbon capture and sequestration. Finally, we consider system‐wide risks associated with evolving regional industrial structures, including job displacement and underinvestment in shared components, such as refueling. We conclude by suggesting a set of design principles that should be applied in developing early hydrogen hubs if they are to be a successful step toward creating a decarbonized energy system.