This market simulation increased our understanding of the hydrogen system and associated dynamics, and volatility. The outcomes were meant to give insights in the market dynamics and volatility and the timescale of market variations. They do not provide a (price) prediction of the future, as this is affected by many more factors. The approach and intermediate results have been shared with many involved market parties and infrastructure operators during several digital meetings and working sessions. We thank all involved for their valuable feedback and input.
With support from TNO and Berenschot, HyXchange simulated the hydrogen trade over the Dutch hydrogen infrastructure as being designed, with national hydrogen production from renewable sources, imported hydrogen carriers and connections to other countries.
For 2027 two infrastructure scenarios were simulated: a system where the national hydrogen backbone materialised, and a regional system with three still disconnected areas. This allowed a better understanding of the added value of a national system versus a regional system. For 2030 a variety of scenarios were simulated, with low and high price of hydrogen carrier imports (ammonia), and diverse availability of ammonia cracking-to-hydrogen capacity. Findings are:
- Large hourly variation in volumes especially for electrolyzers and storage, driven by weather.
- Price volatility is lower, as import ammonia cracking and reformers+CCS tend to be price-setting.
- Green import ammonia is needed next to electrolyzers to achieve renewable hydrogen targets.
- Multiple Hydrogen sources are needed for a secure 24/7 hydrogen supply: electrolysers, import ammonia cracking, gas reformers+CCS, and hydrogen storage depending on the mix.
These findings provide information for blueprinting the trading system for a hydrogen exchange.
As a bonus, the hydrogen simulation study has highlighted some issues with the electricity system, such as growing congestions. If properly incentivised, electrolysers could be located in such a way, that these could reduce those congestions. Further study into this and other issues is recommended.
Both the policy and technical report are publicly available on the HyXchange platform: https://hyxchange.nl/document-library/. We welcome the use of this study’s findings by other experts working within the hydrogen economy. In case of questions please reach out to us directly.