This paper “Regulating Hydrogen: A Primer for Energy Regulators” by Energy Innovation concludes that Governments and energy companies are increasingly looking to hydrogen for its potential to reduce climate pollution and catalyze investment. As a result, energy regulators may soon face hydrogen-related proposals or feel hydrogen’s influence on traditional electric and natural gas sectors—and in several jurisdictions, this has begun playing out already. If regulators take nothing else from this paper, it should be this: It is worth developing a proactive approach to regulating hydrogen—including engaging in inter-agency coordination—to arrive at least-regrets decisions.
Regulators can use a holistic understanding of the hydrogen landscape and how it intersects with their jurisdictional context in order to make wise judgments. For example, regulators will need to separate hype from reality in hydrogen demand forecasts—both in terms of where hydrogen will likely be competitive with alternative technologies for decarbonizing specific end uses and in the aggregate—and stay on top of the latest assessments. They will also need to discern where hydrogen production will likely originate, both in terms of technology and location.
Such assessments will help regulators better judge which hydrogen-related investments are prudent, how to co-develop the hydrogen, electric, and gas sectors in a manner that avoids putting excess risk or undue cost on consumers, and how to prevent hydrogen from putting people’s safety at risk.
Regulators will also benefit from understanding how hydrogen-related policy goals, emissions accounting schemes, local air pollution risks, and water needs may impact the industry’s development. With visibility into the issues most likely to affect them, regulators can develop a proactive approach to low-emissions hydrogen that can influence or best manage government policies, energy company proposals, and economic realities. This in turn supports their core mandate of ensuring affordable, reliable, and safe energy services.
Access the paper here
