Modeling Green Hydrogen Supply and Demand Dynamics in India Using System Dynamics

Study develops a System Dynamics (SD) model to predict the effects of subsidies on the price and supply of Green Hydrogen (GH) while estimating demand based on varying production costs and prices up to 2030. SD leverages feedback system theory for modelling and simulation, making it ideal for analyzing complex systems like GH production, which represents the cleanest industrial method for hydrogen fuel. In response to global sustainability concerns, the Indian Government has launched the “National Green Hydrogen Mission.” This model provides insights into key factors affecting GH production, such as capital costs and construction timelines, and assesses their influence on the market's demand-supply gap. It also explores how different subsidy structures could shape the future of the GH market in India. Findings indicate that maintaining hydrogen plant construction times under two years is critical for achieving government targets. Moreover, implementing aggressive, short-term subsidies proves more effective in boosting hydrogen production than offering lower subsidies over extended periods. These insights can significantly guide industry decision-makers in strategizing and developing effective policies for GH's market success.