Optimizing emissions reduction: green hydrogen subsidies vs. Grid Interconnection in Texas

Araya, Fernando; Bockhold, Marcus; Marano Suffern, Nazarena

Optimizing emissions reduction: green hydrogen subsidies vs. Grid Interconnection in Texas

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Araya, F, Bockhold, M, Marano Suffern, N. Optimizing emissions reduction: green hydrogen subsidies vs. Grid Interconnection in Texas. 2024. handle: http://hdl.handle.net/10230/68739

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Abstract

Our paper analyzes the CO2 emissions reduction potential and cost of two alternative policies associated with installing new wind capacity (30 GW) in Texas-US: developing a green hydrogen industry through the Inflation Reduction Act (IRA) subsidy or investing in transmission infrastructure connecting Texas with Western US. We construct a model to simulate the electricity market outcomes for both regions in the two scenarios. We find that investing in transmission infrastructure can reduce up to 80 Mt CO2 per year at US$ 832 per ton, while the green hydrogen policy can reduce up to 18 Mt CO2 per year at US$ 300 per ton.

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Treball fi de màster de: Master's Degree in Specialized Economic Analysis: Economics of Energy, Climate Change, and Sustainability. Curs 2023-2024
Tutor: Mar Reguant