Financial Risk Valuation of Green Hydrogen Hub Investment Under Techno-Economic Uncertainty: A Real Options Approach in Indonesia

Green hydrogen is increasingly viewed as a strategic energy carrier for industrial decarbonization, regional energy trade, and the transition to low-carbon energy systems. In Southeast Asia, Sumatra is well positioned to develop as a green hydrogen hub because of its abundant renewable energy resources and proximity to Singapore as a prospective import market. This study evaluates the economic feasibility and strategic investment value of a proposed green hydrogen hub in Sumatra under techno-economic uncertainty and identifies the most robust development scenario. An integrated valuation framework was applied, combining Discounted Cash Flow (DCF), sensitivity analysis, Monte Carlo Simulation (MCS), and Real Options Valuation (ROV) across three scenarios: an optimistic hydropower-dominant case, a base hybrid case, and a pessimistic solar-dominant case. The results show that project performance is primarily driven by electricity cost, electrolyzer efficiency, and financing conditions. Scenario A is the most attractive, delivering the lowest mean Levelized Cost of Hydrogen (LCOH) at USD 4.65/kg H2, the highest mean Net Present Value (NPV) at USD 958.65 million, and an Expanded Net Present Value (ENPV) of USD 1917.30 million. Scenario B remains feasible but more sensitive to uncertainty, while Scenario C is economically unattractive. These findings indicate that ROV provides a more realistic decision framework than static DCF by capturing the value of managerial flexibility under uncertainty.