Prospects for the hydrogen transition based on the network economic approach : Insights from the electricity and gas experience in Europe

Nuno Bento (1)

1 LEPII - Laboratoire d'Economie de la Production et de l'Intégration Internationale

This paper aims to investigate the transition to a new energy system based on hydrogen in the European liberalized framework. After analyzing the literature on the hydrogen infrastructure needs in Europe, we estimate the size and scope of the transition challenge.
We take the theoretical framework of network economics to analyze early hydrogen infrastructure needs. Therefore, several concepts are applied to hydrogen economics such as demand club effects, scale economies on large infrastructures, scope economies, and positive socio-economical externalities. On the examples of the electric and natural gas industry formation in Europe, we argue for public intervention in order to create conditions to reach more rapidly the critical size of the network and to prompt network externalities allowing for the market diffusion of and, thus, an effective transition to the new energy system.

Mots clés: Economics of regulation; network economics; technological change; energy economics; hydrogen; electricity; natural gas

Domaines: Economies et finances

Nuno Bento. Prospects for the hydrogen transition based on the network economic approach : Insights from the electricity and gas experience in Europe. Economics and management of energy in industry, 4th european congress. ECEMEI, Porto, 27-30 novembre 2007., Nov 2007, Porto, Portugal. ⟨halshs-00193674⟩