Quantifying the Additionality of Grid-Connected Hydrogen in a Decarbonising Energy System

Hanzhe Xing, John Miles and Stuart Ashley Scott

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: This study quantifies the additionality of grid-connected hydrogen production, i.e., the additional CO2 emissions and system costs incurred when electrolysers divert variable renewable energy (VRE) from the grid. Using a power system model for the current and a future Great Britain (GB) power system with high VRE penetration, we define a fair cost and fair carbon intensity to analyse hydrogen with additionality produced via different electricity sourcing strategies: buying from the grid (on-grid), from VRE generators before the market (VRE-ahead), and using curtailment. It is found that the additional thermal generation led by grid-connected hydrogen production prevents hydrogen from being cost-efficient and clean. In the future GB power system with high VRE penetration, using curtailment is the most cost-effective option. Offsetting the additional emissions from hydrogen production requires substantially more VRE capacity in a future decarbonised system than in the current one, though the additional emissions are less in a decarbonised system. This risks increasing the cost of offsetting the additional emissions from hydrogen production in the future.

Keywords: Additionality; Green Hydrogen; Power System Model; Curtailment; Variable Renewable Energy (search for similar items in EconPapers)
JEL-codes: D24 H23 L94 Q42 Q47 (search for similar items in EconPapers)
Date: 2025-08-21
New Economics Papers: this item is included in nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:2552

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