Investigating the dynamics between the developing Nordic hydrogen market and the electricity system under uncertainty

Sammanfattning: The potential of hydrogen as a clean energy carrier is hotly debated, but it promises to significantly contribute to a sustainable energy future. Hydrogen can replace fossil fuels in carbon-intensive industries, heavy transport and aviation, and support a renewable energysystem by acting as energy storage to balance intermittent supply. With increasing investment, high demand projections and the promise of hydrogen to reduce carbon emissions, it is becoming increasingly important to include hydrogen in energy models. While some studies include hydrogen in their energy models, they don’t comprehensively analyse the effects of uncertainty, which is significant in the hydrogen sector. This thesis addresses this gap by developing a Nordic energy model that includes hydrogen supply and storage using OSeMOSYS, based on the European OSeMBE model. In addition to a scenario analysis, a global sensitivity analysis is performed to identify the most influential uncertainties and key interactions between the hydrogen and electricity sectors. The study identifies hydrogen demand and carbon pricing as key uncertain drivers of change, affecting system costs and emissions levels. Uncertainty about the efficiency of carbon capture and the potential for biomass technology with carbon capture and storage also significantly impact emissions. While the share of renewables is projected to be robust, the technologies used for hydrogen production are susceptible to uncertainties. Steam reforming dominates in the absence of a strong carbon price. Electricity and hydrogen from biomass can provide negative emissions and have the potential to play an important role in decarbonisation. However, biomass availability is limited and policy support like carbon pricing is needed to make these technologies competitive in the market. A key link between the electricity and the hydrogen system is electrolysers. However, while cheaper electricity makes electrolysers more attractive, the cost and performance of hydrogen production technologies, such as steam reforming or biomass gasification, are more relevant in determining which hydrogen technologies will dominate. Hydrogen storage and fuel cells aren’t used in the study, except in small amounts for some of the runs in the sensitivity analysis. However, this may change with a specified time-dependent hydrogen demand or a finer time representation in the model. The thesis shows that uncertainties around hydrogen have a much larger impact on emissions than uncertainties around the electricity system. Hydrogen technologies are in close competition, with steam reforming difficult to displace. While in the Nordic countries, the advance of renewables in electricity generation seems unstoppable, the hydrogen sector needs public policy support to become an ally in decarbonisation rather than a burden.