H2@Scale Analysis

Mark F. Ruth, Paige Jadun:

National Renewable Energy Laboratory

Amgad Elgowainy: Argonne National Laboratory 

April 30, 2019

DOE Hydrogen and Fuel Cells Program 

2019 Annual Merit Review and Peer Evaluation Meeting

This presentation does not contain any proprietary, confidential, or otherwise restricted information.

Project ID # sa171 
NREL | 2

Overview

• Project start date: 10/1/18

– Follow-on project after 

completing H2@Scale lab call

• FY19 planned DOE funding: 

$350,000

• Total DOE funds received to 

date: $350,000

Timeline and Budget

• Project lead: NREL

• Lab Partners: ANL, LBNL, PNNL, INL, 

LLNL

• DOE Partners: Nuclear Energy

• Industrial and Academic Reviewers

Partners

• A: Future Market Behavior

– Potential market for low value 

energy and potential hydrogen 

markets beyond transportation

• D: Insufficient Suite of Models 

& Tools

– Tools integrating hydrogen as an 

energy carrier into the overall 

energy system and quantifying 

the value hydrogen provides

• E: Unplanned Studies and 

Analysis

– H2@Scale is a new concept and 

requires analysis of its potential 

impacts for input in prioritizing 

research and development

Barriers (Systems Analysis)
NREL | 3

Relevance:

H2@Scale Concept

*Illustrative example, not comprehensive

Hydrogen at Scale (H2@Scale): Key to a Clean, Economic, and 

Sustainable Energy System, Bryan Pivovar, Neha Rustagi, 

Sunita Satyapal, Electrochem. Soc. Interface Spring 2018 

27(1): 47-52; doi:10.1149/2.F04181if
NREL | 4

Relevance:

Objective

In support of Title VIII of the Energy Policy Act and feedback from the 

Hydrogen Technical Advisory Committee, the H2@Scale Analysis Objectives 

are to:

• Quantify the potential of the H2@Scale vision for the 48 contiguous states 

in the U.S. 

• Maximum Market Potential and Resource Technical Potential

– The maximum market potential is the estimated market size and 

resource availability constrained by the services for which society 

currently uses energy, real-world geography, and system performance, 

but not by economics

• Economic Potential

– The quantity and price of hydrogen at which suppliers are willing to sell 

and consumers are willing to buy, assuming various market and 

technology-advancement scenarios.

Analysis results will help prioritize the initiative’s early-stage research & development
NREL | 5

Approach:

FCTO and Systems Analysis Framework

Analysis 

Framework

H2A design parameters 

GREET emissions data

H2USA fleet evolution

GIS analysis tools

Models & Tools

H2A

GREET

Fleet evolution tools

ReEDS & PLEXOS

HDSAM

SERA

Sankey Diagram Tool

Studies & 

Analysis

Demand assessment

Resource assessment

Grid analyses

Curtailed electricity

Economic equilibria

Impact assessment

Outputs & 

Deliverables

Analysis of H2@Scale 

concept and potential 

opportunity and 

impacts

National Labs

ANL – GREET, fleet 

evolution

NREL – H2A, ReEDS

NREL Annual 

Technology Baseline

NREL, FCT Office, 

Nuclear Energy 

Office, & External 

Reviews

H2@Scale Analysis

• Integrates many transportation, 

industrial, and electrical sector 

analyses and tools 

• Estimate opportunities for hydrogen 

as a multi-sector integrator
NREL | 6

Approach: Maximum Market Potential & 

Resource Technical Potential

Figure Source: Brown, A., P. Beiter, D. Heimiller, C. Davidson, P. Denholm, J. Melius, A. Lopez, D. Hettinger, D. Mulcahy, and G. Porro. 

2015. Estimating Renewable Energy Economic Potential in the United States: Methodology and Initial Results. Golden, CO: National Renewable 

Energy Laboratory. NREL/TP-6A20-64503

Maximum Market Potential – For possible hydrogen markets, estimate 

the quantity of hydrogen necessary to provide all the services within the 

market (i.e., without competing options)

Resource Technical potential – Constrained by existing end-uses, realworld geography, and system performance. Not by economics.
NREL | 7

Accomplishments: Improved Estimates of 

Maximum Market Potential

Application

Maximum Market 

Potential

(MMT/yr)

Refineries and the chemical 

processing industry (CPI) a 8

Metals 12

Ammonia 4

Biofuels 4

Synthetic Fuels and Chemicals 14

Natural Gas Supplementation 10

Light-duty Fuel Cell Electric Vehicles 

(FCEVs) 57

Other Transportation (Medium- & 

Heavy-Duty) 29

Seasonal Energy Storage for the 

Electricity Grid 28

Total 166

Maximum growth potential 

of hydrogen market by 2050 

is 16X.

Definition: The maximum market potential is the estimated market size constrained by the services for which 

society currently uses energy, real-world geography, and system performance, but not by economics. 
NREL | 8

Approach: Economic Potential

Develop national supply and demand curves for hydrogen 

and use them to estimate market size and composition

Price

Quantity

Demand Curve

Demand Curve: The quantity that users will 

purchase across a range of threshold prices.

Price

Quantity

Supply Curve

Price

Quantity

Economic Equilibrium

Supply

Demand

Supply Curve: The quantity that producers 

will produce across a range of production 

costs.

Economic Equilibrium: Quantity where demand 

price is equal to the supply price. 

• No excess supply or demand. 

• Market pushes price and quantity to equilibrium.

Methodology described in Schwartz, Robert A. Micro Markets A Market Structure Approach to Microeconomic Analysis. 

Wiley Finance. Chichester: Wiley, 2010. 
NREL | 9

Approach for Economic Potential: 

Five National Scenarios

Scenario 

Name Business as Usual Low NG 

Resource

Improved 

Electrolysis

Available Biomass 

Resource

Low-Cost 

Electrolysis

Natural gas 

price 

assumption

AEO 2017 

Reference 

scenario

AEO 2017 Low Oil and Gas Resource and Technology scenario

Availability 

of Steam 

Methane 

Reforming 

facilities

Hydrogen generation from SMRs for non-ammonia production is capped at three times 

current levels (23 MMT/yr)

Hydrogen generation from SMRs estimated for future ammonia production is capped at 

5 MMT hydrogen/yr

Nuclear 

hydrogen 20% of current nuclear fleet available at $25/MWhe equivalent

Low-Temp. 

Electrolysis 

capital costs

$400/kW $200/kW $100/kW

Otherwisecurtailed 

electricity 

market 

assumption

Available at retail price Between retail and wholesale Wholesale price

Biomass Not available Available Not Available

Metals 

demand

Must compete with existing 

technologies

Markets are willing to pay a premium for metals 

refined using hydrogen
NREL | 10

Accomplishment: 

Aggregated Demand Curves Across End Uses

• Validated and improved estimates of threshold price / market size 

combinations for each application
NREL | 11

Accomplishment: Supply Curves Using 

Otherwise Curtailed Electricity (OCE)

• Used ReEDS capacity expansion model to estimate generator fleet and 

generation mix at multiple OCE values

• Improved supply curves for low temperature electrolysis-generated hydrogen 

using the PLEXOS dispatch model to estimate price/availability combinations

Transaction Cost Assumption: $20/MWh $0/MWh
NREL | 12

Accomplishment: 

Aggregated Supply Curves Across Production Options

Based on estimates of levelized production cost / supply availability 

combinations for each production option
NREL | 13

Based on estimates of levelized production cost / supply availability 

combinations for each production option

Accomplishment: 

Aggregated Supply Curves Across Production Options
NREL | 14

Accomplishment: Identified Market Prices and 

Equilibrium for Each Scenario

The intersection of the supply and demand curves indicate the 

market size and price at equilibrium. Low-cost electrolysis 

scenario shown 
NREL | 15

Accomplishment: Developed and Reviewed 

Economic Potential Results
NREL | 16

Accomplishment: Developed and Reviewed 

Economic Potential Results

Business as Usual Scenario

Low-cost natural gas drives growth in H2 markets with some nuclear 

participation
NREL | 17

Accomplishment: Developed and Reviewed 

Economic Potential Results

Low NG Resources Scenario

Higher cost natural gas results in minimal growth in hydrogen 

applications
NREL | 18

Accomplishment: Developed and Reviewed 

Economic Potential Results

Improved Electrolysis Scenario

Drivers for metals applications increase market. Some LTE 

penetration at $200/kW capital cost with grid value
NREL | 19

Accomplishment: Developed and Reviewed 

Economic Potential Results

Available Biomass Resources Scenario

If the biomass is not used for higher value purposes, it could be a 

key resource
NREL | 20

Accomplishment: Developed and Reviewed 

Economic Potential Results

Low-Cost Electrolysis Scenario

Low-cost electrolyzers with high grid value can enable additional H2 

applications
NREL | 21

Accomplishment: Estimated Potential Impact 

on Wind and Solar PV Markets

H2@Scale has the potential to increase the total market size of 

wind and solar photovoltaic (PV) generation

Estimates are based on national scenarios with minimal resolution into 

regional constraints. Increased resolution will likely impact the most 

competitive source of energy supply
NREL | 22

Accomplishments and Progress: Responses 

to Previous Year Reviewers’ Comments

• Comment: The supply and demand curves should point out which 

industries and applications would be able to deliver hydrogen at 

the equilibrium price and which ones would be willing to pay that 

price.

– Response: This year’s presentation is more clear regarding the mix of 

hydrogen supply and applications at equilibrium in each scenario. 

• Comment: The project just needs a scenario for utopia.

– Response: The maximum market size scenario is a maximum without 

considering other opportunities. One could consider it a utopia that is 

not met by the economic potential scenarios. Additional opportunities 

to exceed the economic equilibria could be considered.

• Comment: The project needs a sensitivity analysis.

– Response: Many sensitivity analyses have been performed and are 

included in our draft report. Some are provided in the supporting slides 

but, due to limitations in presentation length, could not be provided in 

the body of the presentation.
NREL | 23

Collaboration and Coordination

Role

NREL Lead; production cost 

estimates, supply-demand 

scenarios, impact 

assessments, spatial and 

temporal analysis, case studies

ANL Deputy lead; hydrogen 

demand analysis, emission 

and water use impact analysis

LBNL Support scenario development

PNNL Support scenario development

INL Nuclear and metals 

characterization

LLNL Visualizations including 

Sankey diagrams

Office of 

Nuclear 

Energy

Identify synergies between 

H2@Scale and nuclear energy

This project involves multiple labs performing analysis and industry 

providing insights and feedback.

Organizations Providing Input and Review

EPRI

SoCal Gas

California Air Resources Board

Exelon

Shell

ExxonMobil

General Motors

NH3 Energy Association

Nexceris

DOE Office of Nuclear Energy 

DOE EERE Offices (Fuel Cell Technologies Office, Solar Energy Technologies 

Office, Wind Energy Office, Bioenergy Technologies Office)

NREL

ANL

PNNL

Sandia
NREL | 24

Remaining Challenges and Barriers

• Additional markets

• National analysis does not represent 

regional opportunities and challenges 

• Transportation and storage requirements 

and costs are overly simplified 

Economic Potential 

Estimates

• Strategies for achieving economic potential 

are not available Transition

• Opportunities for individual businesses 

have yet to be identified Business Cases

• Technologies roadmaps to meet R&D 

targets have not been developed R&D Targets
NREL | 25

Proposed Future Work: Estimate Hydrogen 

Transport and Storage Costs

Any proposed future work is subject to change based on funding levels

We are using the Scenario Evaluation and 

Regionalization Analysis (SERA) Model estimate 

optimal transport and storage infrastructure

Any proposed future work is subject to change based on funding levels
NREL | 26

Proposed Future Work: 

Regional Transition Analysis

Any proposed future work is subject to change based on funding levels

We are identifying and developing a potential 

transition scenario from today’s market in Texas 

to the “Low Cost Electrolysis” Scenario results.

Airport zero 

emission 

rules

hotel 

shuttles

Hydrogen 

fueling 

infrastructure 

at hotels

Rental 

cars

hotel 

resilience Identifying possible 

order and 

interactions within 

and across 

application sectors 

and using SERA to 

identify transition of 

production 

technologies.
NREL | 27

Lab Team Industry

Technology Transfer Activities

Current: Receive input and feedback on technical and economic potential through 

extensive reviews and workshops

Planned: Receive extensive input for regional roadmaps to ensure the 

opportunities, implementation order, and synergies are reasonable

Planned: Provide hydrogen supply and demand data and projections to help 

companies identify business opportunities. Key niche: grid interactions

Current: Provide information about potential production options and market 

opportunities to businesses looking to invest
NREL | 28

Summary

H2@Scale can transform our energy system by 

• economically benefitting nuclear and renewable hydrogen production 

technologies 

• providing energy for transportation, feedstock for industry, and seasonal 

electricity storage 

Report is in final review

Further analysis is needed to understand the spatial 

and temporal aspects of H2@Scale, possible transition 

options, and quantify research and development 

targets.

• Technical potential: 166 MMT H2/ yr

• Economic potential: 14 - 48 MMT H2 / yr

• Use of low-cost, low-availability 

electricity could increase wind & solar PV 

markets
NREL | 29

Major Assumptions

Category Assumption

Markets Markets are at equilibrium – projected 2050 economic conditions

PV & Wind 

CAPEX

Based on 2017 Annual Technology Baseline Low Prices. Land-based 

wind CAPEX in 2050: $1174/kW; Commercial solar in 2050: $972/kW

Coal with CCS Hydrogen levelized production cost: $1.94/kg. Adding storage and 

delivery cost would be $2.33/kg on the supply curve

Delivery and 

Storage Costs

Supply curves include storage and delivery cost assumptions of 

~$0.10/kg for steam methane reforming (SMR) and ~$0.40/kg for 

other technologies (cost for pipeline transport of 200,000 MT/yr 250 

miles with geologic storage

Demand Price 

Thresholds

At demand centers -- delivery & dispensing costs for vehicles added 

separately in vehicle market models (i.e., $5.00/kg at pump)

Carbon Dioxide 100 MMT/yr of concentrated carbon dioxide available from ethanol 

production

Vehicle Fleet In 2050: 163 million cars, 163 million light trucks, 14 million medium 

duty trucks, 6.7 million heavy duty trucks

Key scenario assumptions are reported on Slide 5
www.nrel.gov

NREL/PR-6A20-73559

Thank You

This work was authored by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy, 

LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. Funding provided by the 

U.S. Department of Energy Office of Energy Efficiency and Renewable Energy Fuel Cell Technologies Office. The 

views expressed in the article do not necessarily represent the views of the DOE or the U.S. Government. The U.S. 

Government retains and the publisher, by accepting the article for publication, acknowledges that the U.S. 

Government retains a nonexclusive, paid-up, irrevocable, worldwide license to publish or reproduce the published 

form of this work, or allow others to do so, for U.S. Government purposes.
Technical Backup Slides
NREL | 32

Technical Potential Supply from Renewable, 

Fossil, and Nuclear Resources

Wind Technical 

Total demand Potential

including hydrogen is 

satisfied by ≈20% of 

wind, 3% of solar, and 

≈200% of biomass 

technical potential

Solar Technical 

Potential

Current

consumption

2015

Required to meet

demand of 166

MMT of H2

Residual

Technical

Potential

Hydrogen can be 

produced from diverse 

domestic resources to 

meet aggressive growth 

in demand
NREL | 33

ReEDS Results

(AEO Reference NG Price)

(AEO Low Oil & Gas Resource NG Price)

Buildout with $0/MWh OCE 2050 Results at Various OCE Values

Used ReEDS to estimate generator fleet and generation mix at multiple 

OCE values
NREL | 34

Accomplishment: Identified Spatial Aspects of 

Economic Potential Scenarios

• In the Low-Cost 

Electrolysis Scenario, 

the majority of the 

hydrogen is generated 

in the central U.S.

• Demands are primarily 

near urban centers 

• Large delivery 

infrastructure 

investments could be 

necessary
NREL | 35

Accomplishment: Estimated Impacts on U.S. 

Energy System

The Low-Cost Electrolysis Scenario primarily offsets oil for 

transportation with hydrogen from wind. It also reduces 

natural gas for electricity and hydrogen production.
NREL | 36

Sensitivities

We have performed sensitivities 

on a number of parameters: • Natural gas prices • Natural gas SMR availability • Low temperature 

electrolysis cost and 

electricity price availability

• Nuclear high temperature 

electrolysis availability

• Biomass resource 

availability

• Metals refining support and • Increased support for other 

demands.

The figure on the right shows 

results from the low 

temperature electrolysis cost 

and electricity price availability 

sensitivity. It indicates 

electricity price has a stronger 

impact on market size than the 

electrolyzer capital cost. 
NREL | 37

Acronyms

Acronym Definition

AEO Annual Energy Outlook

ANL Argonne National Laboratory

CAPEX Capital Expenditure

CCS Carbon Capture and Sequestration

CPI Chemical Processing Industry

DOE Department of Energy

EERE Energy Efficiency and Renewable Energy

FCEV Fuel Cell Electric Vehicle

FY Fiscal Year

H2 Hydrogen

HDV Heavy Duty Vehicle

HTE High Temperature Electrolysis

INL Idaho National Laboratory

LBNL Lawrence Berkeley National Laboratory

LDV Light Duty Vehicle

Acronym Definition

LLNL Lawrence Livermore National Laboratory

LTE Low Temperature Electrolysis

MDV Medium Duty Vehicle

MMT Million Metric Tonnes

NH3 Ammonia

NG Natural Gas

NREL National Renewable Energy Laboratory

OCE Otherwise Curtailed Electricity

PNNL Pacific Northwest National Laboratory

PV Photovoltaic

SERA Scenario Evaluation and Regionalization Analysis 

SMR Steam methane reforming

Syn. Synthetic

yr Year