Sensitivity Analysis
Following the analysis of the model under the given conditions, we conducted a detailed sensitivity analysis
by varying several key parameters, including transportation costs and demand, to evaluate their effect on
the overall supply chain. Sensitivity analysis plays a crucial role in understanding how changes in these
parameters influence the model, enabling better decision-making and optimization in green hydrogen
production and distribution.
The first parameter we examined was the transportation cost of green hydrogen. We assumed an initial
hydrogen transport cost of 0.4 €/[Link] and evaluated how this variation impacted the total supply chain
cost. To isolate this effect, other parameters were held constant, such as the energy transportation cost (0.5
€/[Link]) and the demand target of 3.5%.
The graph clearly shows that the total cost of the supply chain increases proportionally with the hydrogen
transportation cost. This direct proportionality indicates that changes in hydrogen transport costs have a
linear effect on the overall expenses. However, it is important to note that while hydrogen transport costs
rise, they do not appear to significantly affect the configuration of the supply chain. This suggests that,
although the transportation cost of hydrogen influences the total cost, it has no impact on other model
decisions such as facility placement or energy source allocation. Reducing transportation costs might not
be the primary focus for optimizing the supply chain.
Next, we investigated the impact of varying energy transportation costs on the total supply chain cost. In
this scenario, we kept the the hydrogen transportation cost constant at 0.4 €/[Link], and maintaining the
demand target of 3.5%.
At first glance, the graph seems to suggest that energy transportation costs have little to no effect on the
total supply chain cost. However, this flat appearance is somewhat misleading. A closer look reveals that
energy transportation costs are indeed factored into the model, but their influence is overshadowed by other
elements.
One key reason for the minimal variation is that energy is dissipated during transportation, with around 3%
of the energy lost as it moves from the energy sources (feedstocks) to the production facilities. To counter
this, the model places energy sources as close as possible to production facilities to minimize both the
transportation costs and the energy losses. This proximity reduces the impact of energy transport costs on
the overall supply chain expenses.
On the other hand, hydrogen transportation costs tend to rise because facilities need to distribute hydrogen
over longer distances to meet market demand. Consequently, the model balances the energy transportation
costs with hydrogen distribution costs, leading to an overall stable total cost curve.
The third part of the sensitivity analysis focused on the effect of varying hydrogen demand on the number
and size of facilities (Small, Medium, and Large) required to meet market needs. In this scenario,
transportation costs were kept constant, and the model was used to determine the number of facilities of
different sizes in various locations based on increasing demand levels.
Analysis of the Graph: The distribution of facilities shows distinct trends based on the size and flexibility
of each facility type.
• Small Facilities: Initially, the number of small facilities grows irregularly, reflecting their
flexibility and ability to meet small-scale demand quickly. These facilities are relatively easy to
deploy and are favored at lower demand levels due to their adaptability and lower capital
requirements. However, as demand continues to rise, the number of small facilities declines. This
decline is particularly evident when the demand reaches 48.5% of the total target. At this point,
small facilities become less viable, and the model begins to phase them out in favor of larger
production units.
• Medium Facilities: In contrast, medium facilities show a more uniform increase in number as
demand rises. This indicates that medium-sized facilities are well-suited to scale production to
meet increasing hydrogen demand efficiently. Their ability to handle larger volumes of hydrogen
makes them essential as the market grows, bridging the gap between small, flexible units and
large-scale production centers.
• Large Facilities: Finally, as demand reaches around 50% of the total target, the model begins to
introduce large facilities. These large-scale units are designed to operate in stable and mature
hydrogen markets, where consistent and high-volume production is required. The emergence of
large facilities indicates that the market has reached a point where economies of scale are necessary
to meet demand efficiently.