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Linking Cost Decline and Demand Surge in the Hydrogen Market: A Case Study in China

Author

Listed:
  • Danlu Xu

    (Center of Entrepreneurship and Innovation, Zhejiang Branch, State Grid Corporation of China, Hangzhou 310007, China)

  • Zhoubin Liu

    (Center of Entrepreneurship and Innovation, Zhejiang Branch, State Grid Corporation of China, Hangzhou 310007, China)

  • Jiahui Zhu

    (Jianjing Investment Consulting Co., Ltd., Hangzhou 310004, China)

  • Qin Fang

    (Center of Entrepreneurship and Innovation, Zhejiang Branch, State Grid Corporation of China, Hangzhou 310007, China)

  • Rui Shan

    (Department of Environmental Sciences and Engineering, Gillings School of Global Public Health, University of North Carolina at Chapel Hill, Chapel Hill, NC 27599, USA)

Abstract

Hydrogen is crucial in achieving global energy transition and carbon neutrality goals. Existing market estimates typically presume linear or exponential growth but fail to consider how market demand responds to the declining cost of underlying technologies. To address this, this study utilizes a learning curve model to project the cost of electrolyzers and its subsequent impact on hydrogen market, aligning with a premise that the market demand is proportional to the cost of hydrogen. In a case study of China’s hydrogen market, projecting from 2020 to 2060, we observed substantial differences in market evolution compared to exponential growth scenarios. Contrary to exponential growth scenarios, China’s hydrogen market experiences faster growth during the 2020–2040 period rather than later. Such differences underscore the necessity for proactive strategic planning in emerging technology markets, particularly for those experiencing rapid cost decline, such as hydrogen. The framework can also be extended to other markets by using local data, providing valuable insights to investors, policymakers, and developers engaged in the hydrogen market.

Suggested Citation

  • Danlu Xu & Zhoubin Liu & Jiahui Zhu & Qin Fang & Rui Shan, 2023. "Linking Cost Decline and Demand Surge in the Hydrogen Market: A Case Study in China," Energies, MDPI, vol. 16(12), pages 1-13, June.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:12:p:4821-:d:1175116
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    References listed on IDEAS

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