Hydrogen valleys for local energy system decarbonization. An assessment of the environmental and economic aspects

The necessity to address the adverse impact of global climate change has led to the widespread adoption of clean energy and the prioritization of decarbonising “hard-to-abate” sectors. This work aims to investigate the environmental and economic aspects of a Hydrogen Valley to facilitate the decarbonization of local energy systems and to integrate the hydrogen value chain across various stages from production to utilization. The southern Italian province of Taranto was selected for the case study, and the energy system is modelled in EnergyPLAN software considering the ‘business as usual' scenario. The levelized cost of hydrogen (LCOH) is calculated, and its variation with the installation cost of the electrolyser is analysed. The result shows that the carbon emissions and total annual costs of the business-as-usual scenario are 4.098 Mt of CO2 emissions and 0.98 billion euros, respectively. The levelized cost of hydrogen is found to be 4.09 €/kg. A 71.4% reduction in capital expenditure (CAPEX) will decrease the levelized cost of hydrogen (LCOH) to 2.78 €/kg, highlighting the crucial role of cost reductions in electrolyser technologies for achieving a lower levelized cost of hydrogen.