Clean Hydrogen
Industry
Prepared by
H2 Regulatory Policies
H2 Distribution and End Uses
H2 Transportation
H2 Storage
H2 Production
H2 Pricing & Commercial Disputes
Hydrogen (H2) is gaining significant attention as a low-carbon alternative fuel or energy carrier that can help achieve economy-wide decarbonization mandates. Supportive government policies and technological innovations are accelerating investment across the hydrogen value chain to foster the emerging hydrogen economy. However, questions regarding costs, feasibility, market structure, and regulation will need to be resolved to enable widespread adoption.
Hydrogen use is currently limited to certain industrial processes (petrochemical refining, food processing, etc.), but it has many potential applications. This includes in high heat industrial applications; heavy-duty transport; aviation and marine fuel; clean, dispatchable power generation; and energy storage technologies. Hydrogen is also being considered as a means to decarbonize gas utilities by blending into distribution networks.
Work is underway to address technical consideration for use in novel applications and to reduce the costs of using hydrogen. Policymakers and regulators are evaluating the role and market structures for hydrogen in a decarbonized future.
Experts at The Brattle Group can help clients to address the emissions, technological, regulatory, and economic opportunities and challenges that come with the rapidly evolving hydrogen industry.
US
Europe
Overview of Current and Potential Hydrogen Storage Technologies – Europe
Source: Hydrogen Infrastructure Map produced by ENTSOG, GIE, CEDEC, EuroGas, GEODE, GD4S, and the European Hydrogen Backbone Initiative.
Overview of Current and Potential Hydrogen Storage Technologies – US
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Transportation service agreements between pipelines and hydrogen shippers
Storage agreements between high-deliverability storage facilities (e.g., salt caverns) and hydrogen producers/buyers
Electric transmission agreements between generators and electrolyzers
Engineering construction agreements
Offtake agreements between hydrogen sellers and buyers
Power purchase agreements (PPAs) between renewable generators and electrolyzes
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Pricing and commercial arrangements will be a very important element for the economics of the hydrogen industry. New commercial agreements will form the building blocks that will be required to enable the hydrogen economy.
All of these commercial arrangements will need to be in place in order to promote a fully functioning hydrogen economy.
- Offtake agreements are critical to ensuring buyers and sellers can reliably transact and incentivize investments in hydrogen infrastructure
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Unlike in the natural gas markets, which have standard contracts (e.g., North American Energy Standards Board contracts), the nascent hydrogen market does not have standard pricing and other commercial contract terms established
- Offtake contracts will likely begin with bilateral agreements. Some considerations include:
Offtake Agreements
– Will the contracts use cost-of-service or market-based pricing?
– If the contracts rely on market-based pricing:
Which reference price will the parties rely on (perhaps natural gas price indices)?
Will price reviews be a feature of long-term contracts?
How will the source of hydrogen factor into the market-based price?
– Will the contracts require specific hydrogen colors? How can the parties verify the source of hydrogen production?This could have tax and/or other regulatory implications for hydrogen buyers
– Other commercial considerations: take-or-pay? Allocation of price and volume risk?
Hydrogen Overview
Engagements and Recent Developments
Department of Energy Hydrogen Program: H2Hubs
Overview of the US Department of Energy’s Regional Clean Hydrogen Hubs Program (H2Hubs) and the seven hubs selected to receive up to $8 billion in federal funding to kick-start the hydrogen economy
Emerging Economics of Hydrogen Delivery and Production
Brattle economists evaluate how production and delivery costs of hydrogen (H2) are changing under the influence of recent strong tax incentives, US Department of Energy (DOE) support for hydrogen research and hub development, rapid commercialization, and projected technology improvements.
Role of Hydrogen in a Decarbonized Future
This presentation, “Role of Hydrogen in a Decarbonized Future,” was presented at the Bank of America 2023 Hydrogen Conference.
Hydrogen Could Compete With Natural Gas by 2030, but There’s a Catch
A recent Utility Dive article cites findings from a recent Brattle report that evaluates the factors driving investment in hydrogen as a low-carbon alternative fuel or energy carrier.
Section 45V Clean Hydrogen Production Tax Credits: Comments on Proposed Treasury Guidelines
In this white paper, we provide comments on each of the EAC Criteria proposed by the Treasury and in some instances propose alternative approaches for each criteria where we believe they will be helpful in achieving the goal of reducing GHG emissions from hydrogen production.
Alternative Power Plays:
The Primer on Hydrogen Power
Hydrogen is becoming an increasingly popular fuel in the energy sector. Discussion of the fuel source as an alternative to natural gas has continued to grow.
Engagements and Recent Developments
Department of Energy Hydrogen Program: H2Hubs
Overview of the US Department of Energy’s Regional Clean Hydrogen Hubs Program (H2Hubs) and the seven hubs selected to receive up to $8 billion in federal funding to kick-start the hydrogen economy
Role of Hydrogen in a Decarbonized Future
This presentation, “Role of Hydrogen in a Decarbonized Future,” was presented at the Bank of America 2023 Hydrogen Conference.
Alternative Power Plays: The Primer on Hydrogen Power
Hydrogen is becoming an increasingly popular fuel in the energy sector. Discussion of the fuel source as an alternative to natural gas has continued to grow.
Emerging Economics of Hydrogen Delivery and Production
Brattle economists evaluate how production and delivery costs of hydrogen (H2) are changing under the influence of recent strong tax incentives, US Department of Energy (DOE) support for hydrogen research and hub development, rapid commercialization, and projected technology improvements.
Hydrogen Could Compete With Natural Gas by 2030, but There’s a Catch
A recent Utility Dive article cites findings from a recent Brattle report that evaluates the factors driving investment in hydrogen as a low-carbon alternative fuel or energy carrier.
Engagements and Recent Developments
How Brattle Can Help
Brattle can help clients address some of the most pressing questions in the hydrogen industry today:
Assess the economics of hydrogen as a decarbonization technology
Analyze impacts of electrolyzers on the electric systems (interconnection opportunities,
load flexibility, etc.)
Provide regulatory support for review and approval of hydrogen projects and in discussions with regulators on developing regulatory frameworks for regulated segments of the value chain
Evaluate greenhouse gas (GHG) emission reduction impacts of hydrogen versus other decarbonization technologies
Provide expert support in contract disputes related to feedstock and hydrogen offtake agreements
Analyze trade-offs of different national and local hydrogen regulatory frameworks and enabling policies
Questions? Contact Our Hydrogen Experts
about brattle
The Brattle Group answers complex economic, finance, and regulatory questions for corporations, law firms, and governments around the world. We are distinguished by the clarity of our insights and the credibility of our experts, which include leading international academics and industry specialists. Brattle has 500 talented professionals across North America, Europe, and Asia-Pacific.
Frank Graves
Principal | Boston
Anul Thapa
Principal | Boston
Josh Figueroa
Senior Associate | Boston
Dean Murphy
Principal | Boston
Ragini Sreenath
Senior Energy Associate | Boston
Metin Celebi
Principal | Boston
Nathalie Hinchey
Senior Associate | Toronto
Andrew Thompson
Energy Associate | Boston | Madrid