Global Hydrogen Demand: Analysis and Integration into the Market Model

Abstract:

This thesis explores the allocation of hydrogen demand across different regions and its implications for market dynamics. In the study, we apply three different top-down methods to allocate hydrogen demand from a global scale to regional levels. Specifically, we employ an objective weighting method based on information entropy, a subjective weighting method that relies on expert judgment, and a linear combination weighting method to combine the weights derived from these approaches. Additionally, we employ the Data Envelopment Analysis (DEA) to assess the efficiency of the derived weights, representing a novel approach in hydrogen demand allocation research. The findings reveal that while the entropy-based method and the subjective assessment can provide useful insights, there are inherent limitations, including data completeness and participant biases, which affect the effectiveness of the linear combination weighting method, as it depends on the quality of the other two methods. The thesis also investigates the impact of hydrogen market dynamics, highlighting that while regional integration is common due to similar production and transport conditions, global market integration can occur when domestic needs exceed nearby supply capabilities, leading to a willingness to accept higher prices from distant sources. Furthermore, our analysis indicates that Germany uniquely functions as an exporter, importer, and self-supplier in the hydrogen market, while Australia leads in exports, supplying over 55 Mt to 115 countries. Countries like the Netherlands, Denmark, and the United States act as both importers and exporters without self-supply, whereas nations such as France and Poland focus on hydrogen production exclusively for domestic consumption. Notably, even in a case study examining a 20% increase in hydrogen demand across Europe, the market remains remarkably stable, demonstrating its resilience despite significant shifts in demand.