Designing innovative business models for Hydrogen Valleys

The energy transition requires more than new technologies. It demands innovative ways of creating, capturing, and sharing value across society. Hydrogen Valleys are large-scale regional ecosystems that integrate hydrogen production, distribution, and end-use. They are emerging across Europe as testbeds for this transformation.  

Yet as promising as the technology is, their success will not depend on engineering alone. It will depend on business model innovation, on the ability to align diverse stakeholders, make projects financially viable, and ensure that hydrogen adoption benefits local communities as much as industry.  

This is where Esade’s expertise comes in. As a partner in the CYLH2Valley project—which aims to develop and demonstrate a large-scale Hydrogen Valley in Castilla y León, Spain, encompassing mobility, industry, and energy applications—Esade contributes its knowledge under the leadership of professors Jan Brinckmann, Xavier Ferràs, and Ivanka Visnjic. 

The challenges of green hydrogen

As part of the CYLH2Valley efforts, Esade is leading the design of innovative business models that connect technological advances with viable market strategies. To achieve this, however, several critical challenges must be addressed.  

1. Making green hydrogen financially viable 

The first is cost. Today, green hydrogen remains more expensive than fossil-based alternatives. While costs are expected to decline with scaling and innovation, projects like CYLH2Valley must already find ways to ensure financial sustainability. This involves exploring new contractual arrangements and revenue models, from the way municipalities acquire hydrogen-powered buses, as in the city of Burgos, to how industrial users commit to guaranteed demand even when prices fluctuate (with take-or-pay or take-and-pay models). Designing models that distribute risks and benefits fairly across the value chain is essential to create pathways for hydrogen to compete with conventional energy sources not in the distant future, but today.  

2. Enabling coordination across actors 

A second challenge lies in coordination. A Hydrogen Valley is not a single project but a regional ecosystem involving producers, distributors, end-users, municipalities, technology providers, research centers, and citizens. Aligning these actors, each with its own priorities and incentives, requires building trust, clarifying the value proposition for each, and creating governance structures that make collaboration possible across traditional sector boundaries. Esade’s role is to design business models that integrate these diverse perspectives into a common strategy.  

3. Balancing public and private investment 

A third challenge is financial structure. Hydrogen Valleys often depend on a delicate mix of public and private investment. Too much reliance on subsidies risks making projects unsustainable once external funding ends, while an overdependence on private capital can discourage socially valuable but less profitable applications. Esade contributes by helping identify hybrid models where EU grants and national programs de-risk initial infrastructure, while private partners commit to long-term operations once demand is secured. In this way, business models ensure that projects remain viable even after subsidies are phased out.  

4. Earning citizens’ trust in hydrogen 

Another critical challenge is public acceptance. No energy transition can succeed without citizens’ support, yet hydrogen remains largely unfamiliar to the public. Misconceptions about safety, cost, and reliability can slow adoption. For Burgos, the introduction of hydrogen-powered buses is not only about reducing emissions but about demonstrating to its citizens that hydrogen can deliver modern, safe, and dependable services. Esade’s approach embeds economic assessment and stakeholder engagement into the business model, measuring impacts such as regional competitiveness. By doing so, the project demonstrates that hydrogen is not only an industrial solution but a driver of community well-being.  

5. Scaling hydrogen valleys across Europe 

Finally, Hydrogen Valleys must be replicable and scalable. For Europe’s hydrogen strategy to succeed, lessons learned in Castilla y León must be transferable to regions with different industrial, geographic, and social contexts. This requires business models that are modular and adaptable, able to scale from one municipality to an entire region, and eventually to a European network of Hydrogen Valleys. In this way, CYLH2Valley becomes a blueprint for Europe’s hydrogen economy.  

Where technology meets strategy  

Esade’s contribution lies in its ability to bridge technology with strategy. By combining entrepreneurial insight, economic evaluation, and effective stakeholder facilitation, Esade helps ensure that CYLH2Valley is not just about deploying hydrogen technologies, but about building viable ecosystems where long-term value can be created for all.