Full Title: Analysis of Hourly & Annual GHG Emissions: Accounting for Hydrogen Production
Author(s): Arne Olson, Gregory Gangelhoff, Anthony Fratto, Hadiza Felicien, and Karl Walter
Publisher(s): American Council on Renewable Energy
Publication Date: April 17, 2023
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Low-carbon hydrogen production has become an important component of many plans for reducing economy-wide greenhouse gas (GHG) emissions, including in the electricity sector. Hydrogen can be a valuable resource to decarbonize hard-to-electrify sectors of the economy, such as high-heat industrial processes and medium- and heavy-duty transportation. Power generation from hydrogen can also provide firm zero-carbon capacity to the electric grid. The attention paid to hydrogen has only increased in the United States since the passage of the Inflation Reduction Act (IRA) in 2022, which included a 10-year Production Tax Credit (PTC) for clean hydrogen (45V) produced with less than 4 kilograms (kg) of CO2e per kg of hydrogen. Additionally, the U.S. Department of Energy (DOE) published a draft “National Clean Hydrogen Strategy and Roadmap” in September 2022.
Energy and Environmental Economics, Inc. (E3) was commissioned by the American Council on Renewable Energy (ACORE) to study implementation scenarios for 45V and focus on a key question: how should we account for the carbon content of the electricity supply used to produce hydrogen? This study analyzes the incremental GHG emissions impacts of hydrogen when clean energy used for electrolytic hydrogen production is accounted for on an annual versus an hourly basis, and analyzes the potential impacts of each accounting method on the cost of producing hydrogen.