Energy System Modelling of Carbon-Neutral Hydrogen as an Enabler of Sectoral Integration within a Decarbonization Pathway

This paper explores the alternative roles hydrogen can play in the future European Union (EU) energy system, within the transition towards a carbon-neutral EU economy by 2050, following the latest policy developments after the COP21 agreement in Paris in 2015. Hydrogen could serve as an end-use fuel, a feedstock to produce carbon-neutral hydrocarbons and a carrier of chemical storage of electricity. We apply a model-based energy system analysis to assess the advantages and drawbacks of these three roles of hydrogen in a decarbonized energy system. To this end, the paper quantifies projections of the energy system using an enhanced version of the PRIMES energy system model, up to 2050, to explore the best elements of each role under various assumptions about deployment and maturity of hydrogen-related technologies. Hydrogen is an enabler of sectoral integration of supply and demand of energy, and hence an important pillar in the carbon-neutral energy system. The results show that the energy system has benefits both in terms of CO2 emission reductions and total system costs if hydrogen technology reaches high technology readiness levels and economies of scale. Reaching maturity requires a significant investment, which depends on the positive anticipation of market development. The choice of policy options facilitating visibility by investors is the focus of the modelling in this paper.