IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v311y2024ics0360544224030603.html
   My bibliography  Save this article

A multi-commodity partial equilibrium model of imperfect competition in future global hydrogen markets

Author

Listed:
  • Barner, Lukas

Abstract

Techno-economic studies are investigating procurement costs of hydrogen and related derivatives across various international trade routes. However, the strategic behavior of exporters is rarely considered in this context, despite similar behavior frequently observed in the fossil fuel world and market characteristics indicating some potential. This work introduces a novel techno-economic model of oligopolistic trade tailored around the value chain of potential future global hydrogen markets. It is formulated as a mixed complementarity problem with a convex reformulation, allowing to solve both competitive and oligopolistic equilibria much beyond the capabilities of traditional complementarity models. Illustrative results show that assuming perfectly competitive price formation in early phases of future global hydrogen markets may lead to overly optimistic hydrogen price projections. This is especially the case within Europe, Japan, and South Korea. In contrast, strategically withholding quantities in export may decrease prices for some domestic markets.

Suggested Citation

  • Barner, Lukas, 2024. "A multi-commodity partial equilibrium model of imperfect competition in future global hydrogen markets," Energy, Elsevier, vol. 311(C).
    • Handle: RePEc:eee:energy:v:311:y:2024:i:c:s0360544224030603
    DOI: 10.1016/j.energy.2024.133284
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544224030603
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2024.133284?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Steven A. Gabriel & Antonio J. Conejo & J. David Fuller & Benjamin F. Hobbs & Carlos Ruiz, 2013. "Complementarity Modeling in Energy Markets," International Series in Operations Research and Management Science, Springer, edition 127, number 978-1-4419-6123-5.
    2. Li, Xinyu & Mulder, Machiel, 2021. "Value of power-to-gas as a flexibility option in integrated electricity and hydrogen markets," Applied Energy, Elsevier, vol. 304(C).
    3. van Leeuwen, Charlotte & Mulder, Machiel, 2018. "Power-to-gas in electricity markets dominated by renewables," Applied Energy, Elsevier, vol. 232(C), pages 258-272.
    4. Megy, Camille & Massol, Olivier, 2023. "Is Power-to-Gas always beneficial? The implications of ownership structure," Energy Economics, Elsevier, vol. 128(C).
    5. Seck, Gondia S. & Hache, Emmanuel & Sabathier, Jerome & Guedes, Fernanda & Reigstad, Gunhild A. & Straus, Julian & Wolfgang, Ove & Ouassou, Jabir A. & Askeland, Magnus & Hjorth, Ida & Skjelbred, Hans , 2022. "Hydrogen and the decarbonization of the energy system in europe in 2050: A detailed model-based analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    6. Steven A. Gabriel & Supat Kiet & Jifang Zhuang, 2005. "A Mixed Complementarity-Based Equilibrium Model of Natural Gas Markets," Operations Research, INFORMS, vol. 53(5), pages 799-818, October.
    7. Egging-Bratseth, Ruud & Baltensperger, Tobias & Tomasgard, Asgeir, 2020. "Solving oligopolistic equilibrium problems with convex optimization," European Journal of Operational Research, Elsevier, vol. 284(1), pages 44-52.
    8. Takuma Watari & André Cabrera Serrenho & Lukas Gast & Jonathan Cullen & Julian Allwood, 2023. "Feasible supply of steel and cement within a carbon budget is likely to fall short of expected global demand," Nature Communications, Nature, vol. 14(1), pages 1-10, December.
    9. Guo, Zhongjie & Wei, Wei & Chen, Laijun & Zhang, Xiaoping & Mei, Shengwei, 2021. "Equilibrium model of a regional hydrogen market with renewable energy based suppliers and transportation costs," Energy, Elsevier, vol. 220(C).
    10. Zhang, Hui & Wang, Jiye & Zhao, Xiongwen & Yang, Jingqi & Bu sinnah, Zainab Ali, 2023. "Modeling a hydrogen-based sustainable multi-carrier energy system using a multi-objective optimization considering embedded joint chance constraints," Energy, Elsevier, vol. 278(C).
    11. Ansari, Dawud, 2017. "OPEC, Saudi Arabia, and the shale revolution: Insights from equilibrium modelling and oil politics," Energy Policy, Elsevier, vol. 111(C), pages 166-178.
    12. Ange Blanchard & Camille Megy, 2023. "Unraveling the Competition: Power-to-Gas vs. Energy Storage, Insights from a Stochastic Dynamic Programming Approach," Post-Print hal-04297212, HAL.
    13. Kirchem, Dana & Schill, Wolf-Peter, 2023. "Power sector effects of green hydrogen production in Germany," Energy Policy, Elsevier, vol. 182(C).
    14. Göke, Leonard & Weibezahn, Jens & Kendziorski, Mario, 2023. "How flexible electrification can integrate fluctuating renewables," Energy, Elsevier, vol. 278(PA).
    15. Hecking, Harald & Panke, Timo, 2012. "COLUMBUS - A global gas market model," EWI Working Papers 2012-6, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    16. Ikonnikova, Svetlana A. & Scanlon, Bridget R. & Berdysheva, Sofia A., 2023. "A global energy system perspective on hydrogen Trade: A framework for the market color and the size analysis," Applied Energy, Elsevier, vol. 330(PA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Megy, Camille & Massol, Olivier, 2023. "Is Power-to-Gas always beneficial? The implications of ownership structure," Energy Economics, Elsevier, vol. 128(C).
    2. Berk, Istemi & Çam , Eren, 2019. "The Shift in Global Crude Oil Market Structure: A model-based analysis of the period 2013–2017," EWI Working Papers 2019-5, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    3. Berk, Istemi & Çam, Eren, 2020. "The shift in global crude oil market structure: A model-based analysis of the period 2013–2017," Energy Policy, Elsevier, vol. 142(C).
    4. Egging-Bratseth, Ruud & Holz, Franziska & Czempinski, Victoria, 2021. "Freedom gas to Europe: Scenarios analyzed using the Global Gas Model," Research in International Business and Finance, Elsevier, vol. 58(C).
    5. Devine, Mel T. & Siddiqui, Sauleh, 2023. "Strategic investment decisions in an oligopoly with a competitive fringe: An equilibrium problem with equilibrium constraints approach," European Journal of Operational Research, Elsevier, vol. 306(3), pages 1473-1494.
    6. Christian Growitsch & Harald Hecking & Timo Panke, 2014. "Supply Disruptions and Regional Price Effects in a Spatial Oligopoly—An Application to the Global Gas Market," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 944-975, November.
    7. Martin Kittel & Wolf-Peter Schill, 2024. "Measuring the Dunkelflaute: How (not) to analyze variable renewable energy shortage," Papers 2402.06758, arXiv.org, revised Aug 2024.
    8. Zhang, Qianzhi & Wang, Lining & Chen, Wenying & Zhang, Chenglong, 2024. "Assessing the impact of hydrogen trade towards low-carbon energy transition," Applied Energy, Elsevier, vol. 376(PB).
    9. Christoph Loschan & Daniel Schwabeneder & Matthias Maldet & Georg Lettner & Hans Auer, 2023. "Hydrogen as Short-Term Flexibility and Seasonal Storage in a Sector-Coupled Electricity Market," Energies, MDPI, vol. 16(14), pages 1-35, July.
    10. Arriet, Andrea & Matis, Timothy I. & Feijoo, Felipe, 2024. "Electricity sector impacts of water taxation for natural gas supply under high renewable generation," Energy, Elsevier, vol. 294(C).
    11. Tang, Yanyan & Zhang, Qi & Mclellan, Benjamin & Li, Hailong, 2018. "Study on the impacts of sharing business models on economic performance of distributed PV-Battery systems," Energy, Elsevier, vol. 161(C), pages 544-558.
    12. Pierre, Cayet & Catherine, Azzaro-Pantel & Sylvain, Bourjade & Catherine, Muller-Vibes, 2024. "Beyond the “bottom-up” and “top-down” controversy: A methodological inquiry into hybrid modeling methods for hydrogen supply chains," International Journal of Production Economics, Elsevier, vol. 268(C).
    13. Durand-Lasserve, Olivier & Pierru, Axel, 2021. "Modeling world oil market questions: An economic perspective," Energy Policy, Elsevier, vol. 159(C).
    14. Guo, Yingjian & Hawkes, Adam, 2018. "Simulating the game-theoretic market equilibrium and contract-driven investment in global gas trade using an agent-based method," Energy, Elsevier, vol. 160(C), pages 820-834.
    15. Hecking, Harald, 2015. "CO2 abatement policies in the power sector under an oligopolistic gas market," EWI Working Papers 2014-14, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    16. Chyong, Chi Kong & Hobbs, Benjamin F., 2014. "Strategic Eurasian natural gas market model for energy security and policy analysis: Formulation and application to South Stream," Energy Economics, Elsevier, vol. 44(C), pages 198-211.
    17. Naguy Moussa & Michel Molière & Sophie Costil & Hanlin Liao & Pierre Montagne & Pierre Biehler & Eric Impellizzeri & Jean-Luc Fabre & Alexandre Serpollier & Térence Guillien, 2024. "Hydrogen Sensing Technologies for the Safe and Reliable Decarbonization of Electric Power: A Review," Energies, MDPI, vol. 17(18), pages 1-30, September.
    18. Alexandra Lüth & Jens Weibezahn & Jan Martin Zepter, 2020. "On Distributional Effects in Local Electricity Market Designs—Evidence from a German Case Study," Energies, MDPI, vol. 13(8), pages 1-26, April.
    19. Johannes Schaffert & Hans Christian Gils & Max Fette & Hedda Gardian & Christine Brandstätt & Thomas Pregger & Nils Brücken & Eren Tali & Marc Fiebrandt & Rolf Albus & Frank Burmeister, 2022. "Integrating System and Operator Perspectives for the Evaluation of Power-to-Gas Plants in the Future German Energy System," Energies, MDPI, vol. 15(3), pages 1-22, February.
    20. Awad, Ahmed S.A. & Ahmed, Mohamed Hassan & El-Fouly, Tarek H.M. & Salama, Magdy M.A., 2017. "The impact of wind farm location and control strategy on wind generation penetration and market prices," Renewable Energy, Elsevier, vol. 106(C), pages 354-364.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:311:y:2024:i:c:s0360544224030603. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.