Martin Palovic

OIES-Aramco Fellow

Martin Palovic is research associate in energy economics at Jacobs University and active for EERA Consulting. In his work, he uses locational marginal pricing methods to analyze coordination problems that are caused by the misaligned incentives among the stakeholders in the unbundled and increasingly decentralized energy sector. His research projects study current market design issues, such as efficiency of local flexibility markets and problems in the network operator coordination. As a market design expert, Martin participates on projects of German Energy Agency addressing up to day questions like strategic bidding at the local flexibility markets, interactions of energy market design with an integrated infrastructure planning, or market design challenges on the pathway towards the climate-neutral economy. He has experience with national and international gas trading strategies.

Martin holds master’s degree in international political economy from Jacobs University where he currently also pursues a PhD in energy economics.

Contact

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Development of a hydrogen economy will depend on adequate transportation infrastructure. Most discussion of hydrogen transportation to date has focused on adapting natural gas networks, but the issue is more complex. Hydrogen can also be transported by dedicated new pipelines as well as other transportation networks (e.g., truck, rail, and marine transport) and even produced on-site by transferring electrical energy instead of hydrogen. In future, end users’ ability to switch from one form of delivery to another will result in new linkages between these diverse infrastructures in the sense that energy flows of different sectors will become more interdependent, and the widespread use of hydrogen is likely to strengthen this. This raises the fundamental question of how to prevent inefficiency (such as unnecessarily high hydrogen infrastructure costs or suboptimal utilization of gas and power networks) and redundancy in the future hydrogen transport infrastructure. This task is made more challenging by technological uncertainty, the unpredictability of future supply and demand for hydrogen, network externality effects, and investment irreversibility of grid-based infrastructures. Meeting these challenges entails coordinating investments in hydrogen transportation infrastructures across all modes in order to establish a cross-sectoral hydrogen polygrid. This paper analyses the strengths and shortcomings of three possible approaches—centrally coordinated, market-based, and regulatory—to this task. Finally, the paper offers policy recommendations on establishing a coherent institutional framework governing investment in the future hydrogen polygrid.

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Development of a hydrogen economy will depend on adequate transportation infrastructure. Most discussion of hydrogen transportation to date has focused on adapting natural gas networks, but the issue is more complex. Hydrogen can also be transported by dedicated new pipelines as well as other transportation networks (e.g., truck, rail, and marine transport) and even produced on-site by transferring electrical energy instead of hydrogen. In future, end users’ ability to switch from one form of delivery to another will result in new linkages between these diverse infrastructures in the sense that energy flows of different sectors will become more interdependent, and the widespread use of hydrogen is likely to strengthen this. This raises the fundamental question of how to prevent inefficiency (such as unnecessarily high hydrogen infrastructure costs or suboptimal utilization of gas and power networks) and redundancy in the future hydrogen transport infrastructure. This task is made more challenging by technological uncertainty, the unpredictability of future supply and demand for hydrogen, network externality effects, and investment irreversibility of grid-based infrastructures. Meeting these challenges entails coordinating investments in hydrogen transportation infrastructures across all modes in order to establish a cross-sectoral hydrogen polygrid. This paper analyses the strengths and shortcomings of three possible approaches—centrally coordinated, market-based, and regulatory—to this task. Finally, the paper offers policy recommendations on establishing a coherent institutional framework governing investment in the future hydrogen polygrid.

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Latest Publications by Martin Palovic