Integrated Energy Modeling Tool for Electric and Gas Infrastructure Decision Support

Abstract

This dissertation compares the total yearly cost to customers of a gas utility company fully electrifying heat with a focus on infrastructure costs versus utilizing hydrogen blending, taking into account the current cost of green hydrogen. Previous research has separately discussed implications and costs of both hydrogen blending and electrification. The former leading to increased safety risks at high blend rates, and minimal or low additional risk at low blend rates. The latter showing strong decarbonization capabilities, but not comparing the two directly in a case study format.

The infrastructure costs associated with fully electrifying heat are substantial, including the installation of heat pumps and the associated electrical infrastructure. In contrast, the infrastructure costs associated with hydrogen blending are relatively low. We use 2022 company and customer data to model the cost to upgrade infrastructure to support the additional imposed electric load due to electrification of heating. This cost is aggregated to the energy cost for this new method of heating, taking into consideration energy transformation losses. While not a factor to cost, risks imposed by hydrogen blending are analyzed as a "go no-go" criteria. The paper also looks at the thermodynamic compatibility of hydrogen blends with existent natural gas systems and piping.

Our analysis suggests that hydrogen blending is likely to result in a lower cost-to customer for utilities looking to decarbonize their heating systems. While the current cost of green hydrogen is high, it is expected to decrease with further adoption of hydrogen. Moreover, the gradual transition facilitated by hydrogen blending can minimize the overall cost impact on customers. We find that risk imposed by hydrogen blending can be mitigated at the target blending rate of 20%, however margins to risks such as fires, explosions, and pipeline brittle fracture are reduced. In conclusion, the decision between fully electrifying heat and utilizing hydrogen blending as a means of decarbonizing heat requires careful consideration of the associated costs, risks, andhow it helps to achieve company strategy. Our findings have important implications for company executives, who can use this information to determine how the customerwill be affected by major strategy decisons, just one aspect to be considered out of many before making the final decision for a given city or region.