Model to Inform the Expansion of Hydrogen Distribution Infrastructure

A growing hydrogen economy requires new hydrogen distribution infrastructure to link geographically distributed hubs of supply and demand. The Hydrogen Optimization with Deployment of Infrastructure (HOwDI) Model helps meet this requirement. The model is a spatially resolved optimization framework that determines location-specific hydrogen production and distribution infrastructure to cost-optimally meet a specified location-based demand. While these results are useful in understanding hydrogen infrastructure development, there is uncertainty in some costs that the model uses for inputs. Thus, the project team took the modeling effort a step further and developed a Monte Carlo methodology to help manage uncertainties. Seven scenarios were run using existing infrastructure and new demand in Texas exploring different policy and tax approaches. The inclusion of tax credits increased the percentage of runs that could deliver hydrogen at <$4/kg from 31% to 77% and decreased the average dispensed cost from $4.35/kg to $3.55/kg. However, even with tax credits there are still some runs where unabated SMR is deployed to meet new demand as the low-carbon production options are not competitive. Every scenario, except for the zero-carbon scenario (without tax credits), resulted in at least 20% of the runs meeting the $4/kg dispensed fuel cost target. This indicates that multiple pathways exist to deliver $4/kg hydrogen.