Evaluating low-carbon mechanisms for hydrogen penetration in Iran's energy supply system

Hydrogen, as a clean fuel, can be a suitable replacement for conventional fossil fuels and can emerge as an energy carrier. Iran, with its abundant fossil fuel resources and high capacities in renewable energies, has a good opportunity to produce and export hydrogen in the coming decades. To increase the penetration of hydrogen in the country's energy mix, it is necessary to integrate this clean fuel into the energy supply system. Therefore, there's a need to evaluate the hydrogen integration/penetration and its potential impact within the energy mix along with other energy carriers. Several low-carbon financial mechanisms may be planned and applied to incentivize this transition. In this regard, the present research has modeled and optimized Iran's energy supply system with a focus on hydrogen penetration under low-carbon strategies such as imposing carbon taxes, low-rate facilities to the hydrogen supply chain, imposing caps on greenhouse gas (GHG) emissions, and eliminating energy subsidies over the period 2020 to 2055 using an Open-Source Energy Modeling System (OSeMOSYS) framework. Results indicate that by following the current trend and investing within the range of US$12-15 billion, there is the potential to construct 24 to 32 GW of new capacity for hydrogen production in the country. Subsequently, hydrogen production pathways in each scenario are examined, and economic and environmental performance indicators are used to evaluate and compare the mechanisms. The outcomes of this study provide a comprehensive roadmap for expanding hydrogen production and and understanding the impact of this energy carrier on other parts of the energy supply system in a fossil fuel rich country like Iran. • Iran's energy system is modeled to integrate hydrogen under low-carbon strategies. • OSeMOSYS is used to optimize hydrogen pathways and energy scenarios to 2055. • The effectiveness of carbon taxes, low-rate facilities, and GHG caps are assessed. • Identifies hydrogen production potential with $12-15B investment for 24-32 GW. • Provides a roadmap for hydrogen's role in decarbonizing a fossil-fuel-rich nation.