# Presentation: 223676

## Challenges in Researching the Transition to a Hydrogen EconomyInitial investigations for NREL 

- Steve Bernow

- 14 November 2002

## Outline of Presentation

- Project in Context
- Overview of Tellus’ proposal
- Analytical tasks
- Open questions
- Results of initial explorations
- Conclusions

## Project in Context

- Fossil energy and GHG emissions in the USA
- Oil dependence
- Growing interest in hydrogen fuel for addressing environmental concerns
- Advances in feedstock, production, and conversion technologies

**Notes:**
1. Fossil energy and GHG emissions in the USA: 82% of US GHG emissions due to combustion of fossil fuels.
2. US economy dependent on politically volatile supplies from OPEC countries
3. Hydrogen has been proposed as a potential fuel to address GHGs and other environmental issues
4. Options
Feedstock options include natural gas, coal, gasoline, biomass, methanol, electricity
Production options include electrolysis, steam reforming, gasification
5. Fuel cells are conversion devices that has seen advances in recent years

## Analytical Tasks

- Assess hydrogen production and distribution methods
- Identify facilities that could produce hydrogen and compare to current transport & stationary demand
- Assess carbon sequestration options
- Create scenarios for urban hydrogen transition
- Determine delivered cost of hydrogen
- Analyze GHG emission implications
- Assess electric sector impacts

## Task 1: Assess hydrogen production and distribution methods

- Identify hydrogen production and distribution methods
- Feedstocks, technologies, H2 forms, scales
- Characterize each technology
- Cost & performance, scale dependence, technology learning prospects, commercialization time-frame
- “Technology-at-a-Glance” summaries
- ~3 page summary for each production and distribution method examined

## Production Technologies

**Production Technologies**

- Wind
- Solar
- Hydro, etc.

- Biomass

- Coal

- electrolysis

-   Gasification/
-   pyrolysis
- + reforming

- On-site

- Off-site

- pipeline

- tanker

- reforming

- Gas

- Oil

- liquid fuels

## Technological Options – hydrogen production

- Hydrogen Production
- Electrolysis
- Steam Methane Reforming of Natural Gas
- Gasification/Reforming of Coal
- Gasification/Reforming of Biomass
- Fast Pyrolysis of Biomass
- On-board reforming of liquid fuels (partial oxidation, autothermal,  reforming)

## Technological Options – distribution, storage, sequestration

- Distribution
- pipelines
- tanker trucks (gaseous)
- tanker trucks (liquified)
- Storage
- Compressed gas cylinders
- LH2 tanks
- Metal Hydrides
- Sequestration
- deep ocean
- saline aquifer
- depleted oil/gas fields
- solid state

## Open questions

- Rule out off-site electrolysis
- Rule out dedicated electric generation
- Rule out elec-H2-cogen (for storage, peak-shaving)
- Rule out liquid fuels (not within scope)

## Task 2a: Identify facilities that could supply hydrogen

- Identify range of factors influencing hydrogen production capacity
- Characterize into low, mid, high production potential
- Identify existing facilities in USA where hydrogen is currently (or potentially) produced
- Industrial facilities (refineries and merchant mfrs)
- Fossil-fueled power stations
- Renewable power stations
- Prepare graphical summary using a GIS framework

## Task 2b: Compare potential hydrogen supply to current transport & electricity service demand

- Assess current transport and stationary (buildings/industry cogen) demand
- Compare hydrogen capacity to demand
- Examine implications for electric & gas supply
- Compare to projected demand

## Open questions

- Basis for estimating the potential demand for stationary (buildings/industry)
- In what cases does using H2 for cogen make sense?

## Task 3: Assess carbon sequestration

- Characterize and assess carbon capture and sequestration options
- Determine costs and lifecycle GHG emissions from hydrogen production systems, with and without sequestration for hydrogen from:
- Thermo-chemical production
- Electrolytic production
- Conduct sensitivity analysis

## Open question

- Rule out sequestration options other than deep sea, depleted oil/gas fields, saline aquifers (e.g., solid state sequestration)

## Task 5: Create scenarios for urban hydrogen transition

- Focus on 7 cities, (under nationally consistent scenarios):
- Atlanta, Chicago, Seattle, Boston, Houston, Denver, Los Angeles
- Focus on 2 hydrogen scenarios per city
- Tasks involved in scenario creation
- Scoping out city-specific issues (e.g., resource constraints/endowments)
- Characterizing infrastructure needs (e.g., delivery options, costs)
- Ranking the potential scenarios relative to the most promising options for the particular city (I.e., addressing likely pathways)
- Scenario development

## Open questions

- Two counterfactual scenarios
- Business-as-usual scenario
- Low-carbon, non-hydrogen scenario
- What basis for hydrogen scenarios ?
- Local resource availability and infrastructure
- Highlight feedstocks ? (e.g., fossil w/ sequestration vs renewables)
- Highlight technologies ? (e.g., electrolysis vs thermochemical)
- Highlight infrastructure ? (e.g., on-site vs pipeline)
- Construct “optimal” mix of options?

## Shock scenario

-    Counterfactual
-    Gradual but pronounced shift toward hydrogen
-    Counterfactual up to 2020, when a shock induces acceleration toward the same level.
- What are cost and technological implications?

## Task 6: Determine delivered cost of hydrogen

- This task to be carried out as part of the scenario analysis of previous Task
- Delivered hydrogen cost per pathway per city
- Will involve:
- Production outputs required to meet demand (I.e., cost-curve and scale-dependent costs)
- Feedstock and hydrogen price to ensure acceptable IRR/margin

## Task 7: Analyze GHG emission implications

- Assess GHG emissions by fuel cycle stage:
- Feedstock production
- Feedstock transportation
- Hydrogen production
- Hydrogen storage
- Hydrogen transmission and distribution
- Hydrogen end-use

## Open questions

- How to characterize rate of technological  advancement and what range of assumptions to use?

## Task 8: Assess electric sector impacts of hydrogen production

- Assess electric system impacts
- Demand for both mobile and stationary end-uses
- Intermittency, storage, peak-shaving, off-peak use
- Assess impacts with a carbon cap holding CO2 emissions constant
- Approach: use of NEMS and LEAP/LDV

## Task 8: Scoping investigation of mid-term impacts of LDV H2 demand on electric supply

- Parameters:
- Electrolysis option at national scale
- Transport sector focus – gaseous H2 for use in LDVs
- H2 provided by grid electricity powering on-site (fueling station) electrolysis, compression, storage and dispensing
- Fuel cell phase-in reaching 30% of new LDV sales by 2020
- Five scenarios analyzed and compared
- Base case, Base + H2 case, “policy” case, “policy” + H2 case, “policy” + H2 + CO2 cap.
- Results
- Total electric sales by sectors and incremental costs
- Electric generation mix
- Carbon emission reductions

**Notes:**
NOTE TO STEVE AND SIVAN: ALL GRAPHS CORRESPOND TO THE INITIAL 60% PENETRATION ANALYSIS. UPDATING RUNS NOW FOR A 30% PENETRATION

## Task 8: Scoping investigation (con’t)

- Inputs:
- Hydrogen demand for LDVs (33% of LDVs by 2020)
- All hydrogen is electrolytically produced, on-site
- Capital costs and technical parameters (electrolyzer, compression, storage, FCV, ICEV, system H2 losses)
- Electric sector mix (NEMS BAU and Low-GHG)
- Fuel, capital, T&D, O&M costs  for electricity generation (NEMS)

**Notes:**
NOTE TO STEVE AND SIVAN: ALL GRAPHS CORRESPOND TO THE INITIAL 60% PENETRATION ANALYSIS. UPDATING RUNS NOW FOR A 30% PENETRATION

## Electricity Generation, 2020

## Marginal Electricity Generation, 2020 (each scenario relative to its counterfactual)

## Carbon Emissions, 2020

## Marginal Carbon Emissions, 2020(each scenario relative to its counterfactual)

## Cumulative Present Value Costs,  up to 2020 (each scenario relative to its counterfactual)

## Cumulative Present Value Costs,  up to 2020 (each scenario relative to BASECASE)

## Conclusions

- H2 for LDVs is a major demand on elec sector (~30% effect).
- C-emissions *increase *relative to counterfactual electric sector, unless capped
- Reducing C-emissions from hydrogen in LDVs requires policies targeted at low-C transition for electric sector
- Containing costs could require reducing fossil demand in all sectors.