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Effects of public funding on the commercial diffusion of on-site hydrogen production technology: A system dynamics perspective

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  • Gao, Jiayang
  • Zhang, Tao

Abstract

As the prospect of the fuel cell electric vehicle (FCEV) market is uncertain, the effects of government subsidies on the commercial diffusion of hydrogen production infrastructure will need to be effectively evaluated to help policymakers decide how they should financially support the development of future hydrogen technologies. Currently, there is a high intermediate cost in the supply chain of centralized hydrogen production. Decentralized on-site hydrogen production technology is an effective alternative method that can guarantee the operation of hydrogen refueling stations and has been attracting more and more attention from the public. In this paper, which is based on market data from California, we build a system dynamics model to simulate the feedback mechanism of the effects of public funding on the commercial diffusion of on-site hydrogen production technology. The insights derived from the simulation of our system dynamics model suggest that: (1) moderate public funding can help establish the scale of application of on-site hydrogen production technology in the early stages of market development and also provide buffer time for technology upgrading; (2) the adoption of large on-site hydrogen refueling stations is a feasible approach to shorten the standstill period; and (3) excess levels and periods of subsidies would stagnate the growth of supply and demand. We conclude with a discussion about the relevant policy implications from these findings.

Suggested Citation

  • Gao, Jiayang & Zhang, Tao, 2022. "Effects of public funding on the commercial diffusion of on-site hydrogen production technology: A system dynamics perspective," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    • Handle: RePEc:eee:tefoso:v:175:y:2022:i:c:s0040162521008118
    DOI: 10.1016/j.techfore.2021.121380
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    References listed on IDEAS

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    2. Yu, Biying & Fu, Jiahao & Dai, Ying, 2025. "Multi-agent simulation of policies driving CCS technology in the cement industry," Energy Policy, Elsevier, vol. 199(C).
    3. Tian Zhao & Zhixin Liu, 2023. "Investment Timing Analysis of Hydrogen-Refueling Stations and the Case of China: Independent or Co-Operative Investment?," Energies, MDPI, vol. 16(13), pages 1-17, June.
    4. Gao, Jiayang & Xu, Xianglong & Zhang, Tao, 2024. "Forecasting the development of Clean energy vehicles in large Cities: A system dynamics perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).
    5. Li, Chengzhe & Zhang, Libo & Ou, Zihan & Ma, Jiayu, 2022. "Using system dynamics to evaluate the impact of subsidy policies on green hydrogen industry in China," Energy Policy, Elsevier, vol. 165(C).
    6. Li, Chengzhe & Zhang, Libo & Wang, Qunwei & Zhou, Dequn, 2024. "Towards low-carbon steel: System dynamics simulation of policies impact on green hydrogen steelmaking in China and the European Union," Energy Policy, Elsevier, vol. 188(C).

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