Distributional Trends in the Generation and End-Use Sector of Low-Carbon Hydrogen Plants

James, Nick; Menzies, Max

doi:10.3390/hydrogen4010012

Cited by 8 publications

(3 citation statements)

References 84 publications

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“…The global energy landscape is undergoing a significant transformation, driven by the urgent need to address climate change and the collective shift towards a clean energy economy. Hydrogen, especially low-carbon-intensity hydrogen, stands at the forefront of this transition, promising to bridge the gap where direct electrification is challenging, such as in the heavy industry and transport sectors [1][2][3][4]. Unlike conventional hydrogen production, low-carbon-intensity hydrogen can be produced through various processes, from fossil fuels to renewables, significantly reducing greenhouse gas emissions and aligning with global sustainability goals [5][6][7][8].…”

Section: Introductionmentioning

confidence: 99%

Navigating the Implementation of Tax Credits for Natural-Gas-Based Low-Carbon-Intensity Hydrogen Projects

Lin,

2024

Energies

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This paper delves into the critical role of tax credits, specifically Sections 45Q and 45V, in the financing and economic feasibility of low-carbon-intensity hydrogen projects, with a focus on natural-gas-based hydrogen production plants integrated with carbon capture and storage (CCS). This study covers the current clean energy landscape, underscoring the importance of low-carbon hydrogen as a key component in the transition to a sustainable energy future, and then explicates the mechanics of the 45Q and 45V tax credits, illustrating their direct impact on enhancing the economic attractiveness of such projects through a detailed net present value (NPV) model analysis. Our analysis reveals that the application of 45Q and 45V tax credits significantly reduces the levelized cost of hydrogen production, with scenarios indicating a reduction in cost ranging from USD 0.41/kg to USD 0.81/kg of hydrogen. Specifically, the 45Q tax credit demonstrates a slightly more advantageous impact on reducing costs compared to the 45V tax credit, underpinning the critical role of these fiscal measures in enhancing project returns and feasibility. Furthermore, this paper addresses the inherent limitations of utilizing tax credits, primarily the challenge posed by the mismatch between the scale of tax credits and the tax liability of the project developers. The concept and role of tax equity investments are discussed in response to this challenge. These findings contribute to the broader dialogue on the financing of sustainable energy projects, providing valuable insights for policymakers, investors, and developers in the hydrogen energy sector. By quantifying the economic benefits of tax credits and elucidating the role of tax equity investments, our research supports informed decision-making and strategic planning in the pursuit of a sustainable energy future.

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Section: Introductionmentioning

confidence: 99%

Navigating the Implementation of Tax Credits for Natural-Gas-Based Low-Carbon-Intensity Hydrogen Projects

Lin,

2024

Energies

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“…These modeling techniques have been widely applied to the study of several asset classes including equities, cryptocurrencies and fixed income [ 33 , 34 , 35 , 36 , 37 , 38 ]. Finally, we would be remiss not to mention the wide range of techniques in time series analysis that have been used to study financial problems [ 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 ], including cryptocurrencies [ 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 ] and diverse fields in socio- and econophysics [ 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 ].…”

Section: Introductionmentioning

confidence: 99%

Collective Dynamics, Diversification and Optimal Portfolio Construction for Cryptocurrencies

James

Menzies

2023

Entropy

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Since its conception, the cryptocurrency market has been frequently described as an immature market, characterized by significant swings in volatility and occasionally described as lacking rhyme or reason. There has been great speculation as to what role it plays in a diversified portfolio. For instance, is cryptocurrency exposure an inflationary hedge or a speculative investment that follows broad market sentiment with amplified beta? We have recently explored similar questions with a clear focus on the equity market. There, our research revealed several noteworthy dynamics such as an increase in the market’s collective strength and uniformity during crises, greater diversification benefits across equity sectors (rather than within them), and the existence of a “best value” portfolio of equities. In essence, we can now contrast any potential signatures of maturity we identify in the cryptocurrency market and contrast these with the substantially larger, older and better-established equity market. This paper aims to investigate whether the cryptocurrency market has recently exhibited similar mathematical properties as the equity market. Instead of relying on traditional portfolio theory, which is grounded in the financial dynamics of equity securities, we adjust our experimental focus to capture the presumed behavioral purchasing patterns of retail cryptocurrency investors. Our focus is on collective dynamics and portfolio diversification in the cryptocurrency market, and examining whether previously established results in the equity market hold in the cryptocurrency market and to what extent. The results reveal nuanced signatures of maturity related to the equity market, including the fact that correlations collectively spike around exchange collapses, and identify an ideal portfolio size and spread across different groups of cryptocurrencies.

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“…In financial markets, these methodologies have been applied to a wide range of asset classes such as equities [45][46][47][48], foreign exchange [49], cryptocurrencies [50][51][52][53][54][55][56][57] and debt-related instruments [58]. Such methods from applied mathematics have been used in a variety of other disciplines including epidemiology [59][60][61][62][63][64][65][66][67][68], environmental sciences [69][70][71][72][73][74][75][76][77], crime [78][79][80], and other fields [81,82].…”

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confidence: 99%

Portfolio diversification with varying investor abilities

James,

Menzies

2024

EPL

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We introduce new mathematical methods to study the optimal portfolio size of investment portfolios over time, considering investors with varying skill levels. First, we explore the benefit of portfolio diversification on an annual basis for poor, average and strong investors defined by the 10th, 50th and 90th percentiles of risk-adjusted returns, respectively. Second, we conduct a thorough regression experiment examining quantiles of risk-adjusted return as a function of portfolio size across investor ability, testing for trends and curvature within these functions. Finally, we study the optimal portfolio size for poor, average and strong investors in a continuously temporal manner using more than 20 years of data. We show that strong investors should hold concentrated portfolios, poor investors should hold diversified portfolios; average investors have a less obvious distribution with the optimal number varying materially over time.

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Distributional Trends in the Generation and End-Use Sector of Low-Carbon Hydrogen Plants

Cited by 8 publications

References 84 publications

Navigating the Implementation of Tax Credits for Natural-Gas-Based Low-Carbon-Intensity Hydrogen Projects

Navigating the Implementation of Tax Credits for Natural-Gas-Based Low-Carbon-Intensity Hydrogen Projects

Collective Dynamics, Diversification and Optimal Portfolio Construction for Cryptocurrencies

Portfolio diversification with varying investor abilities

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