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An Economic analysis of hydrogen production technologies using renewable energy resources

University of Florida Institutional Repository

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AN ECONOMIC ANALYSIS OF HYDROGEN PRODUCTION TECHNOLOGIES USING RENEWABLE ENERGY RESOURCES By SAMANTHA T. MIRABAL A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE UNIVERSITY OF FLORIDA 2003

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Copyright 2003 by SAMANTHA T. MIRABAL

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ACKNOWLEDGMENTS I would like to thank my husband for his support and understanding as I pursue my degree in Alachua County as he works in Broward County. I would like to thank my advisors Dr. Ingley, Dr. Goswami, and Dr. Sherif and my family for all of their support during this research. Finally, I would like to thank NASA Glenn and Kennedy Space Centers for their funding and support. iii

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TABLE OF CONTENTS Page ACKNOWLEDGMENTS..................................................................................................iii LIST OF TABLES.............................................................................................................vi LIST OF FIGURES...........................................................................................................vii ABSTRACT.....................................................................................................................viii CHAPTER 1 INTRODUCTION........................................................................................................1 Background.............................................................................................................1 Current Production Technologies............................................................................3 Steam Reformation of Natural Gas...................................................................3 Partial Oxidation of Heavy Hydrocarbons........................................................4 Coal and biomass gasification..................................................................5 Grid electrolysis.......................................................................................6 2 RENEWABLE HYDROGEN TECHNOLOGIES......................................................8 Renewable Energy...................................................................................................8 Current Barriers to Utilization of Renewable Energy.............................................8 Renewable Hydrogen..............................................................................................9 3 FEBRUARY 2003 ECONOMIC ANALYSIS AND MODEL DISCUSSION.........15 Modeling of Current Hydrogen Production Costs................................................15 Model Discussion..................................................................................................16 Total Capital Cost............................................................................................16 Annual Operating Costs..................................................................................17 Return on Investment......................................................................................20 Hydrogen Production February 2003$US Cost Results........................................21 4 ECONOMIC TREND ANALYSIS...........................................................................24 Scenario 1: Base Line Analysis.............................................................................24 Scenario 2: Optimistic Analysis Assuming New Technologies are Introduced On-time..................................................................................................................27 iv

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Scenario 3: Pessimistic Analysis Assuming New Technologies are Delayed......29 Summary of Trend Analysis.................................................................................31 5 SENSITIVITY DISCUSSION...................................................................................32 6 CONCLUSION..........................................................................................................35 APPENDIX.......................................................................................................................37 LIST OF REFERENCES..................................................................................................38 BIOGRAPHICAL SKETCH.............................................................................................41 v

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LIST OF TABLES Table page 3-1. Simplified data sheet used in the cost modeling analysis.........................................17 3-2. Consumer price index data for chemical and allied products as of July 2003..........18 3-3. Capital cost assumed for each technology modeled.................................................18 3-4. Detailed calculations used in the model with SMR data supplied as an example.....19 3-5. Data used to model the Feb2003$US hydrogen production cost..............................20 3-6. Assumed feedstock prices and miscellaneous costs.................................................21 3-7. Return on investment calculation method with SMR sample data............................21 3-8. Hydrogen production costs for modeled technologies...............................................22 3-9. Environmental damage caused by fossil fuels..........................................................22 4-1. Scenario 1 rates of yearly increases and decreases in cost.......................................27 4-2. Scenario 2 rates of yearly decreases in cost..............................................................28 4-3. Scenario 2 projected hydrogen costs.........................................................................29 4-4. Scenario 3 rates of yearly decrease in costs..............................................................30 4-5. Scenario 3 projected hydrogen costs.........................................................................31 vi

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LIST OF FIGURES Figure page 1-1. Block diagram of hydrogen production by steam reforming process, adapted from Sherif et al. (1999).....................................................................................................4 1-2. Block diagram of hydrogen production by partial oxidation, adapted from Sherif et al. (1999)....................................................................................................................5 1-3. Electrolysis of water in an alkaline electrolyzer.........................................................7 2-1. Schematic of the ammonia-based combined power/cooling cycle...........................13 4-1. Hydrogen production costs from renewable sources compared to the fossil fuel based technologies for scenario 1............................................................................27 4-2. Hydrogen production costs from renewable sources compared to the fossil fuel based technologies for scenario 2............................................................................29 4-3. Hydrogen production costs from renewable sources compared to the fossil fuel based technologies for scenario 3............................................................................30 5-1. Economic analysis results for PV/antenna electrolysis scenarios 1, 2, and 3 compared to SMR hydrogen production prices as the feedstock (natural gas, NG) inflation rate is adjusted from 7% to 4% and 10%..........................................33 5-2. Economic analysis results for the combined power/cooling ammonia cycle powered electrolysis scenarios 2 and 3 compared to SMR hydrogen production price.........................................................................................................................34 vii

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Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Science AN ECONOMIC ANALYSIS OF HYDROGEN PRODUCTION TECHNOLOGIES USING RENEWABLE ENERGY RESOURCES By SAMANTHA T. MIRABAL December 2003 Chair: Dr. H. A. (Skip) Ingley Major Department: Mechanical and Aerospace Engineering For hydrogen to play a major role in the energy sector in the midto long-term future, we must be able to produce hydrogen in an environmentally responsible and cost effective way. This thesis describes the present status of the conventional hydrogen production technologies and recent developments in the production of hydrogen using solar energy. An economic analysis is presented for conventional methods of hydrogen production (steam reformation, partial oxidation, coal gasification and grid electrolysis) as well as renewable methods (PV powered electrolysis, antenna conversion powered electrolysis, wind electrolysis, and solar thermal electrolysis). It was found that the conversion of fossil fuels currently represents some of the more significant methods of H2 production. Although fossil fuels are the most cost effective and most widely used sources of hydrogen production, it is argued from the results of economic analyses that renewable sources of hydrogen (electrolysis via PV, antenna power, wind, and solar thermal) are the most promising options for the future. viii

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CHAPTER 1 INTRODUCTION This chapter provides a discussion on the problems associated with the current energy infrastructure as well as the benefits associated with conforming to a hydrogen energy infrastructure. An overview of hydrogen production technologies commercially used is also presented. Background Upon the introduction of the steam engine in the 1860s, society began to change dramatically as fuels such as wood, coal, oil, and gas were utilized. As time continued, the world developed an economy based on fossil fuels. This economy facilitated technological improvements and helped increase the standard of living. However, the use of fossil fuels is not without consequences global problems have developed both economically and environmentally as a result of using these fuels. The greenhouse effect, ozone layer depletion, acid rain, and pollution are just a few of the environmental problems caused by the utilization of fossil fuels (Sherif, 1999, page 370). One of the main pollutants produced is carbon dioxide. It is reported that carbon dioxide accounts for over 84% of the greenhouse gas released into the atmosphere and originates almost exclusively from the utilization of fossil fuels (Energy Information Administration, 1998). Furthermore, the Energy Information Administration (EIA) estimates that if current trends continue, worldwide carbon dioxide emissions will increase from 1,559 to 2,237 million metric tons equivalent (1.5% annual change) by the year 2025 (Energy Information Administration, 2003). The steady increase predicted will 1

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2 adversely affect the world if changes in our energy sources are not made. The continuing carbon dioxide pollution to the environment would result in global warming in turn affecting forests, agriculture yields, ecosystems, as well as human health and well-being. The use of fossil fuels not only poses environmental and health risks, it also affects the economy as prices rise. The world population is continuing to grow and industrialize; as a result, the world energy demand is increasing. Although the demand for energy is increasing, the supply cannot increase indefinitely as there are finite amounts available. Many have attempted to forecast how long the fossil fuel reserves will last with varying results, but the same general idea is conveyed fossil fuel production will increase for a time, peak and then begin to decrease as the supply is depleted. Therefore, in the future, availability of fossil fuels will be a problem while demand is very high resulting in high energy prices. Because of the problems fossil fuels pose, it is important to seek out new sources of energy. One fuel that is expected to play a role in the mid to long-term future of the energy sector is hydrogen. Hydrogen is a desirable fuel source for several reasons: 1. Simplest and most abundant element on earth 2. Has the highest energy content per unit weight 3. Clean burning, only heat and water are produced when utilized 4. Can decrease the United States dependence on foreign oil imports 5. Convenient fuel for transportation 6. Can supply the energy needed for transportation, electric power as well as thermal needs 7. Efficient utilization and conversion Fuel cells can convert 4065% of hydrogens energy to electricity (as compared to IC engines 15 20%) 8. Safer to work with then gasoline if used properly 9. Renewable energy source 10. Can be produced from numerous feedstocks

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3 Hydrogen is a product that is fully capable of sustaining the worlds energy needs now and in the future. If renewably produced, hydrogen would be a fuel used that does not contribute to environmental damage (pollution) and supports the human well being. Current Production Technologies Hydrogen is an energy carrier and not a primary energy source. This means that the hydrogen cannot be directly found on earth it must be produced from a hydrogen rich feedstock. For example, water (H2O) and methane (CH4) both contain hydrogen and can both be used to produce a pure hydrogen stream (H2). Currently, society uses fossil fuels as the feedstock for the commercial hydrogen production technologies. The main processes utilized are steam reformation, partial oxidation, and coal gasification. Steam Reformation of Natural Gas Steam reforming of natural gas (or Steam Methane Reformation, SMR) is one of the most developed and commercially used technologies today. A block diagram of the SMR process is shown in Figure 1-1. Steam reforming of natural gas involves three steps: The first step is to react the feedstock consisting of light hydrocarbons, usually methane (CH4), with steam at elevated temperatures (700oC to 925oC) to produce syngas a mixture of hydrogen (H2) and carbon monoxide (CO). The second step, a water-gas shift reaction, reacts the carbon monoxide component of the syngas with steam to produce additional H2 and carbon dioxide (CO2). This shift reaction is used to increase the H2 content. Finally, a mixture of CO2 and H2 is sent to a gas purifier where the hydrogen is separated from CO2 via one of many methods (pressure swing absorption, wet scrubbing or membrane separation). Overall, SMR produces hydrogen with a purity

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4 of 96-98% (Minet and Desai, 1983) and with operating efficiencies ranging from 65-75% as estimated by Sherif et al. (1999). Reformer Desulfurization Shift ReactionCO + H2O --> CO2 + H2HeatRecovery Gas Purification FeedCH4 Steam CO2H2 Sulfur Products Figure 1-1. Block diagram of hydrogen production by steam reforming process, Adapted from Sherif et al. (1999) Partial Oxidation of Heavy Hydrocarbons Partial oxidation of heavy hydrocarbons (POX) utilizes hydrocarbon feedstocks (e.g. residual oil from the treatment of crude oil) and catalytically reacts (around 600C) the feed with superheated steam and oxygen to convert it into a mixture of H2, CO, and CO2. The mixture is then subjected to a shift reaction to increase the hydrogen content of the final gas and is finally separated to form the hydrogen product stream. Figure 1-2 provides a schematic representation of the POX process. The external energy required to drive the process is obtained through the combustion of the feedstock itself. As a result, pollutants such as NOx, SOx and CO2 can be generated in the process; to minimize the production of NOx, the air input to the process must be separated so that pure oxygen is supplied to the reformer. This results in the need for an air separation plant which increases the capital cost of the POX plant and results in a more expensive hydrogen product. However, a POX can operate with any liquid or gaseous hydrocarbon feedstocks. Overall, the POX process has an efficiency of about 50% (Sherif et al., 1999; Padro and Putsche, 1999).

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5 Desulfurization GasificationCarbon dioxide, hydrogen,steam and small amounts ofCH4 are produced as the raw gas. Gas Purification Feed: Residual Fuel OilCO2H2 Raw Gas Shift ReactionCO + H2O-->CO2 + H2Syngas Air Separation N2AirSteamSulfur Products O2 Figure 1-2. Block diagram of hydrogen production by partial oxidation, adapted from Sherif et al. (1999) Coal and biomass gasification Gasification is a versatile process similar to partial oxidation with two main differences: the oxidation and gasification occur at much higher temperatures (1100-1300oC) and the process uses a wide range of solid feedstocks (coal, heavy refinery residuals, biomass). In this process, a dry or slurried form of the feedstock is subjected to elevated temperature and pressure conditions which leads to an efficient and clean conversion of carbonaceous substances into syngas (carbon monoxide and hydrogen). Depending on the feed, any inorganic materials remaining are removed as a molten slag from the bottom of the reactor. The hydrogen content of the process is increased with the same water-gas shift reaction used in both the POX and SMR processes. Coal is the most abundant fossil fuel. Gasification of coal offers higher thermal efficiencies than conventional coal-fired power generation and also has less impact on the environment. Low-grade coal types can be effectively used in coal gasification, expanding the available fossil fuel options. Coal gasification is the oldest method known for the production of hydrogen. Two coal gasification processes commercially in use are The Koppers-Totzek process, which is operated at atmospheric pressure, and The Texaco process, which is operated at a pressure of about 5.5MPa. Both processes result in hydrogen product streams with purities of at least 97% (Sherif et al., 1999).

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6 Grid electrolysis Electrolysis is a clean process by which water is broken up into its elements: hydrogen and oxygen gas. The process utilizes water as the input feedstock, and electricity (completely supplied by the current electricity infrastructure) as the means by which the hydrogen is generated. Water decomposition by electrolysis consists of two partial reactions that take place at two electrodes separated by an ion-conducting electrolyte as shown in the Figure 1-3. Hydrogen and oxygen are produced at the cathode and the anode respectively. An ion-conducting separator (diaphragm) is used to separate the two chambers to keep the produced gases isolated from each other. The electrodes are used to apply a voltage to the water causing the water separation as seen in the following reaction: 22221OHOH+ For the simplest case of electrolysis at 25C and 1atm, the potentials of the electrode and cathode can be written as =OHcaElog059.828. =OHaaElog059.401. where a is the activity. The lowest voltage needed to drive the water splitting reaction is Ea Ec: 1.229V (this is called the reversible or equilibrium voltage). The electricity required to electrolyze water is 236.96kJ, however 285.58kJ is the amount of energy generated by combusting the same hydrogen generated (all at 25C). This means the difference, 45.62kJ, must be absorbed from the surroundings of electrolyser. To generate hydrogen and oxygen isothermally, 1.481V would need to be supplied to the process (this is called the thermoneutral voltage). Under normal conditions, Sherif et al. (1999) reports

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7 that electrolysers can typically operate at efficiencies of 72 82%, while Basye and Swaminathan (1997) report efficiencies 64 75%. OH Anode O2H2eCathode Diaphragm Figure 1-3. Electrolysis of water in an alkaline electrolyzer Many types of electrolyzers exist today the most common is an alkaline electrolyser, which uses an alkaline electrolyte to facilitate hydrogen production. Other electrolysis cells include: solid polymer electrolyte (SPE) electrolyzers, saltwater electrolyzers, and solid oxide electrolyzer. Note, electrolysis cells are normally characterized by their electrolytes, e.g. alkaline electrolyzer, solid polymer electrolyte (SPE) electrolyzer, or solid oxide electrolyzer.

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CHAPTER 2 RENEWABLE HYDROGEN TECHNOLOGIES This chapter provides an overview of renewable hydrogen production technologies. Methods such as solar electrolysis, thermochemical, photoelectrochemical, and photochemical methods are all discussed. Renewable Energy The term renewable energy describes any source of energy that is constantly replaced as it is utilized. Renewable energy sources include solar, wind, geothermal, biomass, hydropower, and ocean tides. All of these sources provide a supply of energy that is renewable and with technology, can be used to provide the world energy needs. From the current fossil fuel infrastructure, environmental problems such as the greenhouse effect, ozone layer depletion, acid rain, and pollution have developed. The need to reduce the environmental impact of fossil fuels in combination with the knowledge that the fossil fuel supplies are finite, leads to an important conclusion it is important to develop sustainable renewable energy sources for the future. With the implementation of a sustainable renewable energy source (such as hydrogen), air polluting emissions will be reduced and the quality of life in many cities will increase. Current Barriers to Utilization of Renewable Energy Renewable sources are often neglected today due to several reasons. First, renewable energy tends to be an intermittent source of energy leaving many to feel that it is unreliable. For example, solar energy is only available during daylight hours and therefore during storms, at night or on cloudy days, this source of energy is not available. 8

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9 This seems to be a problem however, with new storage technologies (eg. hydrogen, batteries) the energy can be stored during plentiful days for nighttime use and times when the solar energy is blocked significantly. Another reason renewable energy has not become wide spread is cost considerations. Initially, renewable technologies tend to be more costly than standard construction, which leads many to judge the technologies based on a first cost analysis rather than a lifecycle costing method. After the initial construction costs, the renewable systems are generally self sufficient and can pay for themselves within a few years. After that, the systems save the consumer considerable amounts of money. If consumers are willing to look to the long-term future rather than the short-term, it will become apparent that money can be saved and the environment will be benefited by pursuing renewable technologies and advanced storage technologies such as hydrogen. Renewable Hydrogen Renewable hydrogen can be categorized as follows: (1) hydrogen produced using technologies that directly utilize the supplied renewable energy to generate the hydrogen product (thermochemical, photochemical, and biological methods are a few examples) and (2) hydrogen produced by electrolysis with renewable energy supplying the electrical input. In general, renewable hydrogen includes any technology that produces hydrogen with all energy requirements supplied by renewable energy. Using solar power to electrolyze water produces hydrogen via a renewable energy source. The solar radiation is collected and converted into a useful form, usually heat or electricity, and then used to power an electrolyzer. This is an environmentally friendly process by which hydrogen is generated via a feedstock that will not be depleted from an energy source that is renewable. For hydrogen production by electrolysis to become a

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10 completely renewable technology, the power used must be solar generated. Currently, many solar methods of generating electricity from solar radiation exist such as photovoltaics, and solar thermal power systems using parabolic troughs, central receiver systems, and dish/Stirling systems. A brief description of these technologies is given below. Additionally there are a number of new developments that have the potential to dramatically reduce costs or improve the conversion efficiencies. Two such developments, antenna solar energy conversion and a new combined power/cooling thermodynamic cycle. These technologies are also summarized below. Photovoltaics. Photovoltaic (PV) solar cells directly convert solar energy into electricity. They are constructed from semiconductor materials, with crystalline silicon (c-Si) being the leading commercial material. The cells are well developed and commercially available. Silicon Photovoltaic cells have shown efficiencies of over 20% (Bolton, 1996a), and with present electrolysis technology, one can obtain electrolysis conversion efficiencies up to 95% (Hijikata, 2002). So, in the present scenario we can obtain an overall solar-to-hydrogen conversion efficiency of around 18% with PV assisted electrolysis. Bansal et al. (1999) has reported overall solar-to-hydrogen conversion efficiencies of 7.8%. Dish/Stirling systems. Dish/Stirling systems use parabolic dishes to focus the solar energy onto a centrally mounted receiver/absorber engine that transfers heat to a working gaseous fluid of an attached Stirling engine. The solar energy heats the engines working fluid and drives the engine. A single system can generate up to 50kWe (Al-Sakaf 1998). However, by grouping many of these dishes together, more power can be produced. This technology is attractive as an ideal Stirling cycle has the same efficiency as that of a

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11 Carnot cycle operating between the same temperatures. This allows for real systems based on this cycle to have potential high efficiencies. Solar-to-electric conversion efficiencies in excess of 29.4% (Strachan et al., 1995) have been demonstrated. If this electricity were to power an electrolyser operating at 95% conversion efficiency, the overall solar-to-hydrogen conversion efficiency would be approximately 28%. Solar thermal power plants. Several types of solar power plants exist today, including solar tower plants and parabolic trough power plants. A central receiver solar tower consists of a central receiver surrounded by a field of flat mirrors called heliostats that track the sun. The heliostats reflect the solar energy to the receiver/absorber where a working fluid (for example, water, molten salt, or air) is heated to temperatures around 570C (DeLaquil et al, 1993). This fluid can be stored or used to generate steam for electricity generation using the Rankine power cycle. It is reported that solar tower systems can achieve annual solar-to-electric efficiencies of 15% (Eisenbeiss, 1996). With electrolysis efficiencies reaching 95%, a solar tower powered electrolysis plant could have solar to hydrogen conversion efficiencies of up to 14%. Unlike the solar tower power plant, parabolic trough power plants use parabolic trough reflectors to heat a fluid. The fluid flows through a receiver tube located on the line of focus for each of the parabolic troughs and reaches temperatures in the range of 150-350oC (Goswami et al., 2000). The heated fluid is used to generate steam for use in a Rankine power plant. It has been reported that the solar electric generating systems (SEGS) plants in Southern California operate at an overall solar to electric efficiency of 12% and a cost of 8-10 /kWh (cost to produce electricity or cost of electricity)(Kolb,

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12 1995). With electrolysis efficiencies reaching 95%, a parabolic trough powered electrolysis plant could have solar to hydrogen conversion efficiencies of up to 11%. Combined power/cooling cycle. This cycle is a unique combination of the Rankine and absorption refrigeration systems developed by Goswami (1995). This new thermodynamic cycle improves the cycle efficiency and resource utilization by producing power and refrigeration in the same cycle. The new cycle uses a binary fluid as the working fluid; in this case an ammonia-water solution is utilized. Figure 2-1 illustrates a schematic of the cycle. Ammonia vapor is generated and then superheated prior to entering the turbine. The superheated, high quality ammonia vapor is expanded thru a turbine. The expansion of the ammonia in the turbine lowers the working fluid temperature allowing the fluid to provide a refrigeration effect in a heat exchanger. Finally, the expanded ammonia vapor is absorbed into a weak ammonia/water solution, and the cycle repeats. This cycle has several benefits: (1) the cycle can operate using low-grade sensible heat such as waste heat or solar thermal energy; (2) both power and refrigeration are supplied. In the case of hydrogen production, the power could be used to generate H2 via electrolysis and the refrigeration could be used to pre-cool the H2 prior to liquefaction and finally, (3) second law efficiencies greater than 60% are possible.

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13 Boiler Refrigeration HE 3 Absorber Superheater Recovery HE Rectifier Turbine 245679812'12102''11 Figure 2-1. Schematic of the ammonia-based combined power/cooling cycle Nanoscale antenna conversion. Solar radiation may be converted directly into electric power using the rectenna (antenna plus rectifier) concept (Fletcher and Bailey, 1973). This device would have to efficiently absorb the broadband electromagnetic radiation to create an AC field that is coupled to an optical frequency rectifier to provide a DC electric output. The antenna length should be in the order of a few microns while the diameter of antenna should be in the sub-micron to nano range. The efficiency limits imposed on the photovoltaic cell by the bandgap are not applicable to solar antennas. As discussed previously, maximum theoretical efficiency for a multijunction photovoltaic cell is 42%, whereas conversion efficiencies greater than 85% are theoretically possible for solar rectenna array (Goswami et al., 2001). The concept of antenna is well developed for millimeter wave frequencies. The feasibility of solar antenna has been further strengthened by the fact that reception and conversion of the microwave radiations were demonstrated to work at efficiencies as high as 90% (Brown, 1977; McSpadden et al., 1997; Suh and Chang, 2002). The idea proposed by Fletcher and Bailey (1973) seems to be simple, however rectification problems at such high optical frequencies (100-1000 THz) and the small scale of antennas have hindered the development of the solar antenna converters in the past. In

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14 addition, antenna design needs to be optimized to effectively absorb the randomly polarized broadband spectrum of solar radiation. However, with the recent advances in nanotechnologies, the concept is feasible.

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CHAPTER 3 FEBRUARY 2003 ECONOMIC ANALYSIS AND MODEL DISCUSSION Modeling of Current Hydrogen Production Costs To compare the hydrogen costs for the hydrogen technologies, a model created by Steinberg and Cheng of Brookhaven National Laboratory in 1989 was used. The model was revised to determine the current and future costs of hydrogen as production technologies improve and become more viable. The detailed assumptions used in the model calculations can be found in Tables 3-1, 3-4, and 3-7. The model can be broken down into three main parameters that are included in the cost analysis of the hydrogen production: (1) capital costs of the plant, (2) annual operating costs, and (3) return on investment (profit margin). Each of these three parameters are discussed in greater detail, but to summarize, the capital costs include the cost of the facility as well as interest and working capital. The operation costs account for the feedstock, utilities required to run the plant, as well as other operational costs (personnel, management, and benefits). Finally, all facilities in the United States are generally built to generate profit, therefore a 20% return of investment is included in the analysis. After gathering initial capital cost data for the analysis, the data needed to be normalized to a single year for accurate comparison. The US Department of Labors Bureau of Statistics publishes many monthly inflation indexes. To determine which inflation index would be the most appropriate for this analysis, a representative from American Petroleum Institute [(202) 682-8000; http://api.ecapi.org ] was contacted. The 15

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16 representative recommended that the Producer Price Index for Chemical and Allied Products (PPI-CAP) data be used for the comparison of hydrogen production technologies. The representative further discouraged the use of the Crude Petroleum, Natural Gas and Natural Gas data or the Miscellaneous Chemical Products data saying that a large variability would result due to the price of the US dollar varying on world markets and to crude oil price fluctuations. Based on the recommendation of this representative, the PPI-CAP (Table 3-2) was the index used for all inflation calculations included in this research. Model Discussion Total Capital Cost As seen in Table 3-1, the capital cost section of the model includes the cost of equipment and the facility, interest during construction, start up expenses, and working capital. The initial capital investment required for the equipment and facility of a plant (line 1 of Table 3-1) was obtained from research of the literature and adjusted to current dollar amounts using inflation rates. A sample calculation for the equipment and facility cost of a steam reformation plant is presented in Equation 3-1. As seen in the equation, the initial data, $110 million, was obtained from Basye and Swaminathan (1997). The PPI-CAP data found in Table 3-2, was used to adjust the data to current dollar amounts arriving at an adjusted Feb2003$US equipment cost of $121.14 million. For reference, the inflated equipment and facility costs for all the technologies are summarized in Table 3-5. Equipment and Facility Cost = millionmillion14.121$1.147162*110= $ (Equation 3-1)

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17 The interest during construction was assumed to be 10% of the equipment and facility cost while the start up expenses were assumed to be 2% of the equipment cost. Using SMR as an example, the Interest and start up expenses are calculated in Equation 3-2 to be $14.54million. Finally, line 4 of Table 3-1 details the assumption that the working capital used for the capital cost is 2 months of expenses. For SMR, this results in a working capital of $14.28 million. All of these areas summed up result in the total capital investment required for the plant (Table 3-1: Line 5). Continuing the SMR sample calculation, the total capital investment required for the plant would be approximately $150 million. The total capital required (also referred to as the installed capital cost) for all the technologies modeled is found in Table 3-3. Interest and Start Up Cost = $ (Equation 3-2) []millionmillion54.1402.01.0*14.121=+ Table 3-1. Simplified data sheet used in the cost modeling analysis Line Item Method of Calculation or assumption SMR data 1 Equipment and facility cost in millions of $ Obtained from research (Basye and Swaminathan, 1997) 121.14 2 Interest during construction in millions of $ Line (1) 0.1 12.11 3 Start up expenses in millions of $ Line (1) 0.02 2.42 4 Working capital in millions of $ 2 months of expenses = 2 [Line (aa): Table 3-4] / 12 14.28 5 Total Capital Investment Required in millions of $ Sum lines (1 thru 4) 149.96 Annual Operating Costs The annual operation costs of the production plants includes several parameters ranging from feedstock prices to employee benefits and insurance as seen in Table 3-4. Table 3-4 supplies the calculation methods used in the model and has sample data supplied for the SMR plant.

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18 Table 3-2. Consumer price index data for chemical and allied products as of July 2003 Series Id: PCU28__# (N) Industry: Chemicals and allied products Product: Chemicals and allied products Base Date: 8412 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual 1997 146.8 146.8 146.9 147 147 147 147.1 147.2 147.1 147.3 147.3 147.3 147.1 1998 147.3 147.1 149.2 149.8 149.7 149.5 149.5 149.1 148.5 148.3 148.1 147.9 148.7 1999 147.5 147.3 147.5 147.7 148.2 149 149.9 150 151 152.8 153 152.9 149.7 2000 153.6 154.5 155.2 155.5 156.4 156.5 157.4 157.5 158.3 158.6 158.3 158.7 156.7 2001 160.3 161.5 161.6 161.4 160.1 159.7 157.8 156.3 156.6 155.7 155.4 154.3 158.4 2002 154 154.3 155.1 155.9 156.3 157 158.5 158.6 158.7 159.6 159.7 159.3 157.3 2003 160.9 162 163.7 167 165.5 Table 3-3. Capital cost assumed for each technology modeled1 Production Technology Production Capacity 2 Efficiency 3 Installed Capital Cost 4 Production Cost Feb2003$US Steam Reforming of Natural Gas 100 million SCF/day (2.83 x 106 Nm3/day) 79% $150.0 Million 10.26 $/GJ POX 100 million SCF/day (2.83 x 106 Nm3/day) 89% $317.6 Million 12.43 $/GJ Gasification of Coal 100 million SCF/day (2.83 x 106 Nm3/day) 48% $507.3 Million 17.45 $/GJ Electrolysis Grid Power 100 million SCF/day (2.83 x 106 Nm3/day) 95% $341.7 Million 23.78 $/GJ Electrolysis PV Power 100 million SCF/day (2.83 x 106 Nm3/day) 95% $399.6 Million 5 54.02 $/GJ Electrolysis Wind Power 100 million SCF/day (2.83 x 106 Nm3/day) 95% $335.9 Million 5 20.75 $/GJ Electrolysis Solar Thermal Power 100 million SCF/day (2.83 x 106 Nm3/day) 95% $370.7 Million 5 38.90 $/GJ 1 Sample data sheets can be found in the appendix. All cost data are in February 2003US$ 2 Standard Cubic Foot, SCF. Normal cubic meters, Nm^3. 3 Bayse et al. (1997) lists the conversion efficiency for SMR as 78.5%, for POX as 89.0%, and for CG as 48%. Hijikata (2002) reported 94.4% achieved efficiency for PEM electrolysers. 4 All capital cost data is adjusted for inflation only to reflect February 2003US$. It includes equipment, facility, construction interest, start-up expenses, and working capital. The original equipment and facility capital cost data was taken from Basye and Swaminathan (1997). 5 This capital cost only reflects the cost of the electrolysis system. The cost modeling was completed assuming an independent PV/wind/ or solar thermal power plant is supplying electricity to the electrolysis plant at a cost of $0.15/$0.04/ or $0.10/kWh respectively.

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19 Table 3-4. Detailed calculations used in the model with SMR data supplied as an example Line Item Method of Calculation or assumption SMR Data a Annual Production Assumed 100 million SCF/day 11,870,000 b Conversion Efficiency Obtained from research 79.0% c GJ of Feedstock Needed Line (a) / Line (b) 15,025,316 d Cost of Feedstock ($/GJ) Supplied by GRU or Research 4.74 e Annual Feedstock cost in millions of $ Line (c) Line (d) / 10^6 71.22 f Annual Power Needed (GWh) Obtained from research 32.4 g Cost of Power ($/GJ) Obtained from research 13.9 h Annual Cost of power in millions of $ Line (f) (10^6) Line (g) / 10^6 1.62 i Process water required in millions of Gallons Obtained from research 310 j Cost of Process Water ($/1000 gal) Obtained from research 0.5 k Annual Cost of process water in millions of $ Line (i) *10^3 Line (j) / 10^6 0.16 l Cooling water required (10^6 gallons) Obtained from research 440 m Cost of Cooling Water ($/1000 gal) Obtained from research 0.5 n Annual Cost of Cooling water in millions of $ Line (l) *10^3 Line (m) / 10^6 0.22 bb Cost of POX Clean Up ($/GJ) Obtained from research cc Annual Cost of POX clean up in millions of $ Line (a) Line (bb) / 10^6 dd Tons of burnt coal requiring clean up Obtained from research ee Cost of CG ash clean up ($/ton of coal burned) Obtained from research ff Annual cost of CG ash clean up in million $ Line (dd) Line (ee) o Number of Plant Operators (Employees) Obtained from research 17 p Salary of operators ($/year) Assumed 43,000 q Annual cost of employees in millions of $ Line (o) Line (p) / 10^6 0.73 r Annual Cost of Supervisors in millions of $ Line (q) *0.15 0.11 s Maintenance Labor Cost in millions of $ (Line 1: Table 3-1 )* 0.02 2.42 t Maintenance Supervisor Cost in millions of $ Line (s) 0.15 0.36 u Maintenance Material Cost in millions of $ (Line 1: Table 3-1 )* 0.02 2.42 v Operation and maintenance labor in millions of $ Line (q) + Line (r) + Line (s) + Line (t) 3.63 w Administrative/ Support Labor in millions of $ 0.20 Line (v) 0.73 x Fringe Benefits (Payroll Extras) in millions of $ 0.20 [Line (v) + Line (w)] 0.87 y Insurance Cost in millions of $ (Line 1: Table 3-1 )* 0.02 2.42 z General Administration Costs in millions of $ (Line 1: Table 3-1 )* 0.02 2.42 aa Total Annual Operation costs in millions of $ Sum lines (e, h, k, n, cc, ee, q, r, s, t, u, w, x, y, z) 85.71 Table 3-4 shows the general calculation procedures used to determine the annual operation costs specifically for SMR, however, some of the data change depending on what plant is currently being analyzed (i.e. SMR, CG, POX, Solar thermal, etc.). The other data used for all modeled technologies is summarized in Table 3-5. Table 3-6 summarizes the assumed feedstock prices. One critical assumption made in the analysis is the assumption that all the electrolysis plants buy their power from the indicated power

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20 plants. For example, the analysis titled PV electrolysis assumes that the power used to run the electrolysers is purchased from an independent PV power plant that supplies the PV power to the electrolysis plant at 0.15$/kWh (41.7$/GJ). This means that the cost of the PV array is not included in the Equipment and facility cost (Line 1 table 3-1) as that cost is built into the 0.15$/kWh power cost. Table 3-5. Data used to model the Feb2003$US hydrogen production cost Item SMR POX CG Grid Electrolysis PV Electrolysis Wind Electrolysis Solar Thermal Electrolysis Line 1 Table 3-1 Equipment and Facility Cost millions of $ 121.14 273.12 440.52 275.32 275.32 275.32 275.32 Line (b) Table 3-4 Conversion Efficiency 79% 89% 48% 95% 95% 95% 95% Line (d) Table 3-4 Cost of Feedstock ($/GJ) 4.74 3.11 1.36 13.9 41.7 11.12 27.8 Line (f) Table 3-4 Annual Power Needed (GWh) 32.4 11 Line (g) Table 3-4 Cost of Power ($/GJ) 13.90 13.90 13.90 13.9 41.7 11.12 27.8 Line (i) Table 3-4 Process water required in millions of Gallons 310 954 200 200 200 200 Line (l) Table 3-4 Cooling water required (10^6 gallons) 440 11600 Line (bb) Table 3-4 Cost of POX Clean Up1 ($/GJ) 0.04339 Line (dd) Table 3-4 Tons of burnt coal (ash) requiring clean up 0.763 Line (ee) Table 3-4 Cost of CG ash clean up ($/ton of coal burned) 1.39 Line (o) Table 3-4 Number of Plant Operators 17 26 30 10 10 10 10 1 Clean up refers to the handling and disposing of the products of the process. The ash or residual fuel must be collected and safely disposed. Return on Investment Finally, all the commercial plants modeled are assumed to be for-profit plants. A 20% return on investment was included in the model. The calculations used for the return on investment portion of the model are seen in table 3-7.\

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21 Table 3-6. Assumed feedstock prices and miscellaneous costs Coal 1.36 $/GJ Electricity Grid Wind 0.05 $/kWh 0.04 $/kWh 13.9 11.1 $/GJ $/GJ PV 0.15 $/kWh 41.7 $/GJ Solar Thermal Power 0.10 $/kWh 27.8 $/GJ Natural Gas 4.740 $/GJ Fuel Oil 3.110 $/GJ Process Water 0.5 $/1000 gal Cooling Water 0.5 $/1000 gal POX Clean Up 0.0434 $/GJ fuel Coal Clean Up 1.388 $/ton of coal burned Table 3-7. Return on Investment calculation method with SMR sample data. Line Item Method of Calculation or assumption SMR data a Annual Depreciation in millions of $ (Line 1: Table 3-1) 0.05 6.06 b Return on Investment (Line 5: Table 3-1) 0.20 29.99 c Total Revenue Required per Year in millions of $ Sum lines (a, b, and Line (aa) from table 3-4) 121.76 Hydrogen Production February 2003$US Cost Results The hydrogen production cost is calculated by dividing the total revenue required per year (Table 3-7: line c) by the annual hydrogen production amount (Table 3-4: Line a). For each process modeled, this results in hydrogen production prices per GJ for gaseous hydrogen the cost of liquefaction is not included in the analysis. Table 3-8 summarizes the resulting Feb2003$US hydrogen production costs associated with each of the plants modeled. As it can be seen in the table, steam reformation is currently the cheapest method of hydrogen production and electrolysis powered by the PV powered electrolysis is the most costly. However, the economic analysis of different H2 production technologies seems to be incomplete without the consideration of environmental cost associated with these processes. The combustion of fossil fuels has numerous health and environmental impacts, including air and water pollution, ozone depletion, and global warming. These environmental costs are never accounted for in the prices of H2 but they

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22 are indirectly subsidized by the community in terms of increased health expenditures, taxes, etc. Direct estimation of environmental costs is extremely difficult, however, several analysts have attempted to quantify them. One of the efforts made in this direction was by Sherif et al (1999). The environmental cost for different types of fossil fuels is listed in Table 3-9. Table 3-8. Hydrogen Production costs for modeled technologies (Sherif et. al., 1999) Production Technology Production Capacity Total Required Annual Revenue Production Cost Feb2003$US Steam Reforming of Natural Gas 11,870,000 GJ/year $121.76 Million 10.26 $/GJ POX 11,870,000 GJ/year $147.53 Million 12.43 $/GJ Gasification of Coal 11,870,000 GJ/year $207.14 Million 17.45 $/GJ Electrolysis Grid Power 11,870,000 GJ/year $282.24 Million 23.78 $/GJ Electrolysis PV Power 11,870,000 GJ/year $641.17 Million 54.02 $/GJ Electrolysis Wind Power 11,870,000 GJ/year $246.34 Million 20.75 $/GJ Electrolysis Solar Thermal Power 11,870,000 GJ/year $461.70 Million 38.90 $/GJ Table 3-9. Environmental damage caused by fossil fuels (Adapted from Sherif et. al., 1999) Environmental Damage 1998 ($/GJ) Coal Petroleum Natural Gas 14.51 12.52 8.26 The inclusion of such costs for different H2 production technologies is difficult and depends on various factors like, feedstock, production method, design characteristics and local topography. However, these environmental burdens incurred in some of these processes should be kept in mind. The recent awareness towards clean environment has led several countries to incorporate environmental costs in their resource planning.

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23 Imposition of environmental penalties in the near future is the global consensus. It is also apparent as the cost of environmental penalties constitutes a substantial portion of the total production cost, it will play a major role in deciding the future hydrogen production technology. For this analysis it is impractical to include these costs in the final hydrogen production value, however, if they were to be included, the renewable hydrogen production techniques would become more favorable in the near term.

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CHAPTER 4 ECONOMIC TREND ANALYSIS This chapter presents an economic analysis for the cost of hydrogen produced by steam reformation, partial oxidation, coal gasification, and electrolysis powered by grid, photovoltaics, and solar thermal power. For the analysis presented in this chapter, the dates used represent the time when hydrogen would become available. Therefore, actual plant construction would occur before the dates presented so the hydrogen would be available by the listed years. Further, the hydrogen production costs listed are for the raw gas produced via the process. The cost does not include any extra costs incurred for liquefaction of the hydrogen. Scenario 1: Base Line Analysis The previous chapter details the calculations of the current hydrogen production costs. Neglecting environmental impact costs, all of the technologies were re-examined to determine the projected hydrogen costs based on varying criteria. The first scenario examined assumed that fossil fuel prices would increase over the next 50 years as a result of increasing demand and decreasing supply, while the cost of electricity produced via solar means would decrease over time. All the assumed rates of increase and decrease are summarized in Table 4-1. As seen in the table, the rate of yearly cost increases for the fossil fuels (methane, coal, and fuel for POX) were estimated at a 5% to 7% yearly increase. This percentage seems reasonable based on the producer price index for natural gas and crude petroleum. The yearly rate of increase for grid power is assumed to be 3% (estimated based on the chemical and allied products producer price index). Additionally, 24

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25 it is assumed that wind power will initially be available at $0.04/kWh (Sherif, 2003) and as wind power is well developed; it will only improve with technology over time. Therefore, it is assumed that the cost of the produced wind electricity will decrease 1.5% per year. To estimate PV power costs, trends of the past 30 years were examined. In the 1970s, PV panels cost on the order of $30/W where currently they cost approximately $5/W. It seems reasonable that over the next 10 years as thin film and tandem cell technologies develop and improve, the cost of PVs will drop from the current $5/W system cost to $3/W. We have further assumed that the cost of electricity produced by PVs will decrease at the same rate as the cost of the PV panels, therefore between 2003 and 2013, it is assumed that the cost of PV power will decrease 5.5% per year and after that the cost of the produced electricity will decrease 2% per year. To verify this assumption, the cost of PV power was compared to Adamson and Pearsons (2000) estimation that by the year 2030, electricity will be produced from PVs for $0.03 $0.06/kWh. The given percentages we use result in an electrical cost of $0.059/kWh by the year 2030, so the yearly decreases assumed seem reasonable. The future cost of power produced via the combined power/cooling cycle (Goswami cycle) solar power plants is a little more difficult to predict. Currently, the cycle is in the research phase and will not be commercially available for another four to five years. In this scenario, it is assumed that the system will be commercially available in 2008. Once commercially available, the cycle is expected to produce electricity for half the cost of present solar thermal power plants so the ammonia system is expected to produce electricity for around $0.05/kWh.

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26 Finally, as electrolysis technologies are continuing to develop with the introduction of PEM and solid electrolyzers, it is assumed that over the next 20 years less costlier proton conducting membrane and technological improvements in high temperature electrolysis will decrease the capital cost of electrolysis plants by a half. This results in a 3.4% yearly decrease of cost for 20 years and after that it was assumed that technologies would continue to improve resulting in a 1% yearly decrease in capital costs. One thing we do not want to lose sight of is that all this new equipment will be made of materials and processes that consume energy of some sort. In the beginning this industry would be constructed using fossil fuel based energy but hopefully as the systems come into widespread use the energy for constructing the systems will come from the renewable systems. Furthermore, as the new systems are developed it is important to remain watchful that they do not shift to heavy plastic consumption. This would result in continuing depletion of our fossil fuels. On the basis of the scenario described in this section and presented in Table 4-1, the hydrogen cost ($/GJ) for different production technologies were predicted. Figure 4-1 shows the resulting hydrogen production costs. As seen in the figure, SMR will remain the most cost competitive technology until around 2010 at which point POX will be more cost competitive. Around 2016 wind powered electrolysis will be come the most cost effective technology and around 2020 electrolysis powered by the Goswami cycle based solar thermal power systems will become cost competitive with wind electrolysis resulting in renewable hydrogen becoming a better alternative than fossil-based technologies. Though environmental costs are not considered in this scenario, its

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27 inclusion will result in fossil fuel processes becoming more unattractive even earlier than predicted. Table 4-1. Scenario 1 rates of yearly increases and decreases in cost Natural Gas 7.0% Petroleum 5.0% Coal 5.0% Clean up cost of ash and fuel 4.0% Fossil Fuels Grid power 3.0% Yearly Increases PV power (for years 2003 2013) 5.5% PV Power (for years 2014 2050) 2.0% Solar Thermal Power 1.0% Ammonia combined power/cooling cycle solar power (Rate applies after introduction of technology in 2008) 2.0% Solar Generated Electricity Wind Power 1.5% Electrolysis Capital (for years 2003 2023) 3.4% Electrolysis Capital (for years 2024 2050) 1.0% Yearly Decreases 5.015.025.035.045.055.02003200820132018202320282033203820432048YearHydrogen Production Cost ($/GJ)(February $US 2003) Grid Electrolysis (Fossil Fuel Based) PV Electrolysis Solar Based Thermal Powered Electrolysis Ammonia Based Solar Powered Electrolysis Steam Reforming of Natural Gas Partial Oxidation Coal Gasification Wind Electrolysis Figure 4-1. Hydrogen production costs from renewable sources compared to the fossil fuel based technologies for Scenario 1 Scenario 2: Optimistic Analysis Assuming New Technologies are Introduced On-time Scenario 1 presented a reasonable estimate of future trends, however, it did not account for the addition of technologies such as the nanoscale antennas. To generate a more comprehensive model, the simulation was reworked to account for the introduction of new technologies in an aggressive manner. In this scenario, the fossil fuel based

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28 technologies grid electrolysis, coal gasification, partial oxidation, and steam methane reformation remain unchanged. The changes in this scenario are only with the solar-based technologies. In this scenario, the Goswami cycle solar power system will be commercially introduced in 2008 at which point it will take the place of solar thermal power plants and will produce electricity for $0.05/kWh. The antenna system will be introduced in 2012 which will cause the cost of PV electricity to reduce by half. Table 4-2 details the percentage increases assumed for this analysis. Table 4-3 details the hydrogen production costs determined after the analysis. The order of cost competitiveness from best to worst in 2050 is wind, solar thermal powered electrolysis, PV/antenna powered electrolysis, coal gasification, partial oxidation, grid-powered electrolysis, and steam methane reformation. Figure 4-2 shows the hydrogen cost trend as time progresses. Wind electrolysis, antenna powered electrolysis, and solar thermal electrolysis will eventually become the most cost effective means of hydrogen production. Table 4-2. Scenario 2 rates of yearly decreases in cost PV power for years 2003 2011 5.5% Antenna Conversion Power Introduced in 2012 (% decrease for years 2012 2050) 2.0% Solar Thermal Power (for years 2003 2007) 1.0% Ammonia Combined Power/Cooling Cycle Solar Power Introduced in 2008 (% decrease for years 2008 2050) 2.0% Solar Generated Electricity Wind Power 1.5% Electrolysis Capital (for years 2003 2023) 3.4% Electrolysis Capital (for years 2024 2050) 1.0% Yearly Decreases

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29 Table 4-3. Scenario 2 projected hydrogen costs Hydrogen Production Costs ($/GJ) Year 2003 2010 2030 2050 Steam Methane Reformation 10.26 14.05 42.76 153.57 Partial Oxidation 12.43 13.92 22.43 44.93 Coal Gasification 17.45 18.67 25.63 44.02 Electrolysis Grid Power (fossil fuel based) 23.78 25.40 37.66 64.00 Electrolysis PV / Antenna Power 54.02 37.33 14.10 10.04 Electrolysis Wind Power 20.75 17.68 12.11 9.28 Electrolysis Solar Thermal Power Systems 38.90 21.33 13.77 9.82 5.015.025.035.045.055.02003200820132018202320282033203820432048YearHydrogen Production Cost ($/GJ) (February $US 2003) Grid Electrolysis (Fossil Fuel Based) PV Electrolysis Solar Based Thermal Powered Electrolysis Solar Antenna Power Conversion Steam Reforming of Natural Gas Partial Oxidation Coal Gasification Ammonia Based Solar Powered Electrolysis Wind Electrolysis Figure 4-2. Hydrogen production costs from renewable sources compared to the fossil fuel based technologies for scenario 2 Scenario 3: Pessimistic Analysis Assuming New Technologies are Delayed The introduction times of the ammonia based solar thermal power and antenna power conversion systems presented in scenario 2 represent an optimistic model. Scenario 3 analyzes a more pessimistic situation where the introduction of the ammonia system is delayed seven years (introduced in 2015) and the antenna system is delayed eight years and is not introduced until 2020. Again, the fossil fuel based technologies remain unchanged for comparison. The percentages used to model the decreasing costs

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30 can be found in Table 4-4 while the resulting hydrogen production costs can be found in Table 4-5 and Figure 4-3. When the results for scenarios 2 and 3 are compared, it can be seen that the time when the solar hydrogen technologies become the most cost effective remains relatively unchanged only a two-year variation is added. The significance of this scenario is large: the two-year variation shows us that relatively large delays in the design and commercialization of the ammonia and antenna systems will not greatly influence the future cost of the technologies. 5.015.025.035.045.055.02003200820132018202320282033203820432048YearHydrogen Production Cost ($/GJ)(February $US 2003) Grid Electrolysis (Fossil Fuel Based) PV Electrolysis Solar Based Thermal Powered Electrolysis Solar Antenna Power Conversion Steam Reforming of Natural Gas Partial Oxidation Coal Gasification Ammonia Based Solar Powered Electrolysis Wind Electrolysis Figure 4-3. Hydrogen production costs from renewable sources compared to the fossil fuel based technologies for scenario 3. Table 4-4. Scenario 3 rates of yearly decrease in costs PV power for years 2003 2013 5.5% PV power for years 2014 2019 1.0% Antenna Conversion Power Introduced in 2020 (% decrease for years 2021 2050) 2.0% Solar Thermal Power (for years 2003 2014) 1.0% Ammonia combined power/cooling cycle solar power Introduced in 2015 (% decrease for years 2015 2050) 2.0% Solar Generated Electricity Wind Power 1.5% Electrolysis Capital (for years 2003 2023) 3.4% Electrolysis Capital (for years 2024 2050) 1.0% Yearly Decreases

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31 Table 4-5. Scenario 3 projected hydrogen costs Hydrogen Production Costs ($/GJ) Year--> 2003 2010 2030 2050 Steam Methane Reformation 10.26 14.05 42.76 153.57 Partial Oxidation 12.43 13.92 22.43 44.93 Coal Gasification 17.45 18.67 25.63 44.02 Electrolysis Grid Power (fossil fuel based) 23.78 25.40 37.66 64.00 Electrolysis PV / Antenna Power 54.02 37.33 13.98 9.96 Electrolysis Wind Power 20.75 17.69 12.12 9.29 Electrolysis Solar Thermal Power Systems 38.90 34.99 15.24 10.80 Summary of Trend Analysis The trends analyzed reveal some common factors: as technology develops and fossil fuel prices begin to rise, hydrogen produced via renewable sources will become the most cost effective means of hydrogen production. From most economical to most costly, the order will be: wind, PV/antenna powered electrolysis, solar thermal powered electrolysis, coal gasification, partial oxidation, grid-powered electrolysis, and steam methane reformation. As seen, renewable sources will eventually become more cost competitive than any of the fossil fuel based technologies.

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CHAPTER 5 SENSITIVITY DISCUSSION The determination of the rates of inflation for the fossil-based technologies is based on an educated approximation looking at past trends and assuming that the rates will continue in a similar manner. However, fossil fuel prices today are volatile and change as global market and political views change. Therefore, it is important to see how the results of the trend analysis would change if the rates of escalation are lower or higher than estimated (Table 4-1 lists assumed rates). As steam reformation (SMR) is currently the cheapest method of hydrogen production, the results are compared to SMR hydrogen as natural gas prices fluctuate. The original analysis was run assuming natural gas prices increase yearly by 7%. To analyze a case that would be more favorable to fossil fuels, a 4% escalation rate was chosen. This rate seems reasonable as the cost of living increases between 4 to 6% yearly and the general energy prices should at a minimum increase at the same rate. For a case where fossil fuels become limited faster and demand increases drastically, a 10% escalation rate was chosen. To determine the effect of the feedstock on the price of SMR hydrogen, the escalation rate for the electricity used in the SMR process was set to 0% (it remained a constant). As a note, inclusion of the 3% escalation rate on the electricity only affected the final production cost by less than 0.25% and therefore is negligible. The results can be seen in Figures 5 1 and 5 2. The shaded region indicates the region where the SMR costs can fall. Figure 5-1 compares the PV and antenna results to the SMR region. As seen in the figure, the PV and antenna technologies will eventually 32

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33 become cost effective methods of hydrogen production. Depending on the rate of natural gas escalation, scenario 1 (PV electrolysis) has the potential to become cost effective anywhere between 2018 and 2031, with 2022 being the year predicted in the original trend analysis. However, scenario 1 does not account for technological advancements, so the ranges presented by scenarios 2 and 3 are more appropriate to consider. As seen in Figure 5-1, Scenario 2 PV/antenna electrolysis would become cost effective between the years 2014 and 2022, with 2016 being the nominal case. Finally, Scenario 3 PV/antenna electrolysis would become cost effective between 2018 and 2021. These results indicate that scenario threes pessimistic view on the introduction of the new antenna conversion technology (commercialized in 2020) actually provides the least amount of variation in the date where the antenna produced hydrogen will become the most cost effective. 101520253035404550552003200820132018202320282033203820432048YearHydrogen Production Cost ($/GJ)(February 2003US$) Scenario 1 PV Electrolysis Scenario 2 PV/Antenna Electrolysis Scenario 3 PV/Antenna Electrolysis SMR with 10% yearly N G increase SMR with 4% yearly NG increase Figure 5-1. Economic analysis results for PV/antenna electrolysis scenarios 1, 2, and 3 compared to SMR hydrogen production prices as the feedstock (natural gas, NG) inflation rate is adjusted from 7% to 4% and 10%.

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34 Another trend that can be observed when looking at the shaded region is that the hydrogen production via SMR cost is highly dependant on the feedstock price. It was observed that over 58% of the final production cost of SMR hydrogen is attributed to the cost of the feedstock. This calculation is in agreement with Basye et al. (1997) they report that 60% of the price of the hydrogen is attributed to the natural gas feedstock. Figure 5-2 presents the same SMR hydrogen production shaded variance region, but includes the combined power/cooling ammonia cycle scenarios for comparison. Upon observation of the results, it was seen that the combined ammonia cycle powered electrolysis will become more cost effective than SMR hydrogen within an eight year span Scenario 2 beginning 2015 and Scenario 3 beginning 2013. This indicates that somewhere between 2015 and 2023 the ammonia cycle will pass the SMR produced hydrogen and become more cost effective. 510152025303540455055602003200820132018202320282033203820432048YearHydrogen Production Cost ($/GJ)(February 2003US$) Scenario 2 Ammonia Powered Electrolysis Scenario 3 Ammonia Powered Electrolysis SMR with 10% yearly N G increase SMR with 4% yearly NG increase Figure 5-2. Economic analysis results for the combined power/cooling ammonia cycle powered electrolysis scenarios 2 and 3 compared to SMR hydrogen production price

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CHAPTER 6 CONCLUSION Hydrogen is a promising candidate for a clean, efficient and completely pollution free fuel; and possibly the best substitute for the fossil fuels in transportation applications. Although several possibilities exist for hydrogen production, solar-based hydrogen would be desirable. Further, hydrogen represents a good storage medium of solar energy. Among the various hydrogen production methods, renewably powered water electrolysis is the only developed non-polluting technology. Electrolysis efficiencies of 85-95% are currently possible. It was found that hydrogen produced via renewable electrolysis PV/antenna power, solar thermal power, and wind power will become as cost competitive as fossil technologies within the next 10 years and will eventually surpass the cost effectiveness of any non-renewable source of hydrogen. An important finding of the trend analysis is the fact that large delays in the introduction of the antenna (delayed until 2020) and the new combined power/cooling cycle (delayed until 2015) does not drastically affect the future of hydrogen production costs. In fact, the 7-8 year delay only shifts the date that the hydrogen becomes cost competitive by 2 years. However, for these technologies to become viable for the future, significant research and development activities are needed to bring them to commercialization. 1. Hydrogen is a promising candidate for a clean, efficient and completely pollution free fuel; and possibly the best substitute for the fossil fuels in transportation applications. 35

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36 2. For hydrogen to be a clean energy source, it needs to be produced from clean energy resources. 3. Steam Methane Reformation is currently the most cost effective hydrogen production technology, however it is a fossil-based technology and volatility in the price of the feedstock greatly affects the final hydrogen cost. 4. Renewable energy resources will be the most cost effective in the long-term future. 5. Hydrogen produced via renewable electrolysis PV/antenna power, solar thermal power, and wind power will become as cost competitive as fossil technologies within the next 10 years and will eventually surpass the cost effectiveness of any non-renewable source of hydrogen. 6. Trend analysis concluded that a delay in the introduction of the antenna and the new combined power/cooling cycle does not drastically affect the future of hydrogen production costs. In fact, the 7-8 year delay only shifts the date that the hydrogen becomes cost competitive by 2 years. 7. Renewable technologies are currently available, however aggressive research is needed to reduce the costs and develop new technologies.

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APPENDIX LIST OF PUBLICATIONS Goel, N., Mirabal, S. T., Ingley, H., and D.Y. Goswami, 2003, "Solar Hydrogen Production," Interim Progress Report for NASA Grant (NAG3-2750), Document SEECL2003-01. Goel, N., Mirabal, S. T., Ingley, H., and D. Y. Goswami, 2003, "Hydrogen Production," in D. Y. Goswami (Ed.) Advances in Solar Energy, Vol. 15. Golden, Colorado: American Solar Energy Society, Inc, pp. 405 458. Goswami, D. Y., Mirabal, S. T., Goel, N., and H. A. Ingley, 2003, "A Review of Hydrogen Production Technologies," ASME First International Conference on Fuel Cell Science, Engineering and Technology Proceedings, April 21 23, Rochester, New York. Mirabal, S.T, Goel, N., Ingley, H.A, and D.Y. Goswami, 2003, "Hydrogen Production," Paper A095, ASES Solar 2003 Conference Proceedings, June 21 23, Austin, Texas Mirabal, S. T., Ingley, H. A., Goel, N., and D.Y. Goswami, 2003, "Utilization of Domestic Fuels for Hydrogen Production," International Journal of Power and Energy Systems (In Press). Presented at the First International Conference on Co-Utilization of Domestic Fuels, February 5 6, Gainesville, Florida. 37

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LIST OF REFERENCES Adamson, K., and P. Pearson, 2000, Hydrogen and Methanol: A Comparison of Safety, Economics, Efficiencies and Emissions, Journal of Power Sources, 86, pp. 548-555. Al-Sakaf, O., 1998, Application Possibilities of Solar Thermal Power Plants in Arab Countries, Renewable Energy, 14, pp. 1-9. Bansal, A., J. Beach, R. Collins, O. Khaselev, O., and J. Turner, 1999, Photoelectrochemical Based Direct Conversion Systems for Hydrogen Production, Proceedings of the 1999 U.S. DOE Hydrogen Program Review, NREL/CP/570-26938. Basye, L., and S. Swaminathan, 1997, Hydrogen Production Costs A Survey, U.S. Department of Energy, DOE/GO/10170-T18. Bolton, J. R., 1996a, Solar Photoproduction of Hydrogen, International Energy Agency Technical Report, IEA/H2/TR-96. Brown, W. C., 1977, Electronic and Mechanical Improvement of the Receiving Terminal of a Free-Space Microwave Power Transmission System, Raytheon Contractor Rep. PT-4964, NASA CR-135194. DeLaquil, P., D. Kearney, M. Geyer, and R. Diver, 1993, Solar Thermal Electric Technology, Chapter 5, Renewable Energy Sources for Fuel and Electricity, Washington, DC, Island Press. Eisenbeiss, G., 1996, Solar Thermal Power Stations, Solar Thermal Power is Bigger Brother of Photovoltaics, Proceedings of EuroSun, pp. 446-463. Energy Information Administration, 1998, Emissions of Greenhouse Gases in the United States 1997, DOE/EIA--0573(97), Washington, DC: Author. Available at http://tonto.eia.doe.gov/FTPROOT/environment/057397.pdf Energy Information Administration, 2003, Annual Energy Outlook 2003, DOE/EIA--0383(2003). Washington, DC: Author. Available at http://tonto.eia.doe.gov/FTPROOT/forecasting/0383(2003).pdf Erickson, P. A., and D. Y. Goswami, 2001, Hydrogen from Solar Energy: An Overview of Theory and Current Technological Status, Proceedings of the 36th Intersociety Energy Conversion Engineering Conference, IECEC2001-RE-06. 38

PAGE 47

39 Fletcher, J. C., and R. L. Bailey, 1973, Electromagnetic Wave Energy Converter, U.S. Patent Serial No. 3760257. Goel, N., Mirabal, S. T., Ingley, H., and D. Y. Goswami, 2003, "Hydrogen Production," in D. Y. Goswami (Ed.) Advances in Solar Energy, Vol. 15. Golden, Colorado: American Solar Energy Society, Inc, pp. 405 458. Goswami, D. Y., 1995, Solar Thermal Power Status of Technologies and Opportunities for Research, Proceedings of the 2nd ASME-ISHMT Heat and Mass Transfer Conference, Surathkal, India. Goswami, D. Y., 1998, Solar Thermal Power Technology: Present Status and Ideas for the Future, Energy Sources, 20, pp. 137-145. Goswami, D. Y., F. Kreith, F., and J. F. Kreider, 2000, Principles of Solar Engineering, 2nd Ed. Philadelphia: Taylor & Francis. Goswami, D. Y., Vijayaraghavan, S., Lu, S., Tamm, G., 2001, New and Emerging Developments in Solar Energy, Keynote Lecture World Solar Congress, Proceedings of the 2001 World Solar Congress, ISES, Adelaide, South Australia. Hijikata, T., 2002, Research and Development of International Clean Energy Network Using Hydrogen Energy (WE-NET), International Journal of Hydrogen Energy, 27, pp. 115-129. Kolb, G. J., 1995, Evaluation of Power Production from the Solar Electric Generating Systems at Kramer Junction: 1989 to 1993, Solar Engineering 1995, Proceedings of the 1995 ASME/JSME/JSES International Solar Energy Conference, Maui, Hawaii, pp. 499-504. Mann, M. K., 1995, Technical and Economic Assessment of Producing Hydrogen by Reforming Syngas from the Battelle Indirectly Heated Biomass Gasifier, National Renewable Energy Laboratory, NREL/TP-431-8143. McSpadden, J. O., L. Fan, and K. Chang, 1997, A High Conversion Efficiency 5.8GHz Rectenna, IEEE MTT-S International Microwave Symposium Digest, 2, pp. 547-550. Minet, R., and K. Desai, 1983, Cost-effective Methods for Hydrogen Production, International Journal for Hydrogen Energy, 8, pp. 285-290. Padro, C. E. G., and V. Putsche, 1999, Survey of the Economics of Hydrogen Technologies, National Renewable Energy Laboratory, NREL/TP-570-27079. Sherif, S., T. Veriziglo, and F. Barbir, 1999, Hydrogen Energy Systems, Wiley Encyclopedia of Electrical and Electronics Engineering, vol. 9, J. G. Webster (Editor), New York: John Wiley & Sons, pp. 370-402.

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40 Sherif, S.A., Barbir, F., and Veziroglu, T.N., 2003, "Wind Energy and the Hydrogen Economy." Proceedings of the 22nd ASME Wind Energy Symposium, Reno, Nevada, January 6-9, AIAA Paper 2003-0691, pp. 155 166. Steinberg, M., and H. Cheng, 1989, Modern and Prospective Technologies for Hydrogen Production from Fossil Fuels, International Journal of Hydrogen Energy, 14, pp. 797-820. Strachan, J., R. Diver, and C. Estrada, 1995, Dish/Stirling Systems: Overview of an Emerging Commercial Solar Thermal Electric Technology, SAND-2355C, Available at http://www.osti.gov/dublincore/gpo/servlets/purl/125072-DrNDjB/webviewable/125072.pdf Suh, Y. S., and K. Chang, 2002, A Novel Dual Frequency Rectenna for High Efficiency Wireless Power Transmission at 2.45 and 5.8 GHz, IEEE MTT-S International Microwave Symposium Digest, 2, pp. 1297-1230.

PAGE 49

BIOGRAPHICAL SKETCH Samantha T. Mirabal holds a BS in Mechanical Engineering with honors from the University of Florida (UF). Samantha will graduate December 2003 with a Master of Science degree from UF. She is currently conducting research on hydrogen production for a hydrogen energy project funded by National Aeronautics and Space Administration (NASA). 41


Permanent Link: http://ufdc.ufl.edu/UFE0002060/00001

Material Information

Title: An Economic analysis of hydrogen production technologies using renewable energy resources
Physical Description: Mixed Material
Language: English
Creator: Mirabal, Samantha T. ( Dissertant )
Ingley, Herbert A. ( Thesis advisor )
Goswami, Dr. ( Reviewer )
Sherif, Dr. ( Reviewer )
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2003
Copyright Date: 2003

Subjects

Subjects / Keywords: Mechanical Engineering thesis, M.S
Dissertations, Academic -- UF -- Mechanical Engineering

Notes

Abstract: For hydrogen to play a major role in the energy sector in the mid- to long-term future, we must be able to produce hydrogen in an environmentally responsible and cost effective way. This thesis describes the present status of the conventional hydrogen production technologies and recent developments in the production of hydrogen using solar energy. An economic analysis is presented for conventional methods of hydrogen production (steam reformation, partial oxidation, coal gasification and grid electrolysis) as well as renewable methods (PV powered electrolysis, antenna conversion powered electrolysis, wind electrolysis, and solar thermal electrolysis). It was found that the conversion of fossil fuels currently represents some of the more significant methods of H₂ production. Although fossil fuels are the most cost effective and most widely used sources of hydrogen production, it is argued from the results of economic analyses that renewable sources of hydrogen (electrolysis via PV, antenna power, wind, and solar thermal) are the most promising options for the future.
Subject: cost, economic, hydroge
General Note: Title from title page of source document.
General Note: Includes vita.
Thesis: Thesis (M.S.)--University of Florida, 2003.
Bibliography: Includes bibliographical references.
General Note: Text (Electronic thesis) in PDF format.

Record Information

Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
System ID: UFE0002060:00001

Permanent Link: http://ufdc.ufl.edu/UFE0002060/00001

Material Information

Title: An Economic analysis of hydrogen production technologies using renewable energy resources
Physical Description: Mixed Material
Language: English
Creator: Mirabal, Samantha T. ( Dissertant )
Ingley, Herbert A. ( Thesis advisor )
Goswami, Dr. ( Reviewer )
Sherif, Dr. ( Reviewer )
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2003
Copyright Date: 2003

Subjects

Subjects / Keywords: Mechanical Engineering thesis, M.S
Dissertations, Academic -- UF -- Mechanical Engineering

Notes

Abstract: For hydrogen to play a major role in the energy sector in the mid- to long-term future, we must be able to produce hydrogen in an environmentally responsible and cost effective way. This thesis describes the present status of the conventional hydrogen production technologies and recent developments in the production of hydrogen using solar energy. An economic analysis is presented for conventional methods of hydrogen production (steam reformation, partial oxidation, coal gasification and grid electrolysis) as well as renewable methods (PV powered electrolysis, antenna conversion powered electrolysis, wind electrolysis, and solar thermal electrolysis). It was found that the conversion of fossil fuels currently represents some of the more significant methods of H₂ production. Although fossil fuels are the most cost effective and most widely used sources of hydrogen production, it is argued from the results of economic analyses that renewable sources of hydrogen (electrolysis via PV, antenna power, wind, and solar thermal) are the most promising options for the future.
Subject: cost, economic, hydroge
General Note: Title from title page of source document.
General Note: Includes vita.
Thesis: Thesis (M.S.)--University of Florida, 2003.
Bibliography: Includes bibliographical references.
General Note: Text (Electronic thesis) in PDF format.

Record Information

Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
System ID: UFE0002060:00001


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AN ECONOMIC ANALYSIS OF HYDROGEN PRODUCTION TECHNOLOGIES
USING RENEWABLE ENERGY RESOURCES














By

SAMANTHA T. MIRABAL


A THESIS PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF SCIENCE

UNIVERSITY OF FLORIDA


2003

































Copyright 2003

by

SAMANTHA T. MIRABAL















ACKNOWLEDGMENTS

I would like to thank my husband for his support and understanding as I pursue my

degree in Alachua County as he works in Broward County. I would like to thank my

advisors Dr. Ingley, Dr. Goswami, and Dr. Sherif- and my family for all of their

support during this research. Finally, I would like to thank NASA Glenn and Kennedy

Space Centers for their funding and support.
















TABLE OF CONTENTS
Page

A C K N O W L E D G M E N T S ..................................................................................................iii

LIST OF TABLES ............................. .. ........... ..................................... vi

LIST OF FIGURES .................................................... vii

A B S T R A C T .....................................................................................................................v iii

CHAPTER

1 IN TR O D U C TIO N .......................................................... .... ......... .............. 1

B background ......................................................................................... 1...............
Current Production Technologies........................................................ .............. 3
Steam Reform ation of N natural G as ............................................... .............. 3
Partial Oxidation of Heavy Hydrocarbons.................................................. 4
C oal and biom ass gasification.............................................. .............. 5
G rid electrolysis ................................................................................. 6

2 RENEWABLE HYDROGEN TECHNOLOGIES ...................................................... 8

R en ew ab le E n erg y ..................................................... .. .................... .... .......... 8
Current Barriers to Utilization of Renewable Energy ....................................... 8
R enew able H ydrogen ...... .. ...................................... ....................... .............. 9

3 FEBRUARY 2003 ECONOMIC ANALYSIS AND MODEL DISCUSSION......... 15

Modeling of Current Hydrogen Production Costs ................................................ 15
M odel D discussion ...... .. ................................ .......................... .............. 16
Total Capital Cost .......................................................... ............ .. 16
A annual O operating C costs ................................. ....................... .............. 17
R eturn on Investm ent .................................................................. .............. 20
Hydrogen Production February 2003 $US Cost Results.................................. 21

4 ECON OM IC TREND ANALY SIS ....................................................... .............. 24

Scenario 1: Base Line Analysis.................................. 24
Scenario 2: Optimistic Analysis Assuming New Technologies are Introduced
O n -tim e .............................................................................................................. .. 2 7










Scenario 3: Pessimistic Analysis Assuming New Technologies are Delayed...... 29
Sum m ary of Trend A analysis ..................................... ...................... .............. 31

5 SEN SITIVITY D ISCU SSION .................................. ....................... .............. 32

6 CONCLUSION ................................ .. ......... ................................... 35

A P P E N D IX ....................................................................................................... ........... 3 7

L IST O F R E FE R E N C E S ................................................ ............................................ 38

B IO G R APH ICAL SK ETCH .. ..................................................................... .............. 41











































v















LIST OF TABLES


Table page

3-1. Simplified data sheet used in the cost modeling analysis................................... 17

3-2. Consumer price index data for chemical and allied products as of July 2003.......... 18

3-3. Capital cost assumed for each technology modeled ........................................... 18

3-4. Detailed calculations used in the model with SMR data supplied as an example..... 19

3-5. Data used to model the Feb2003$US hydrogen production cost.............................. 20

3-6. Assumed feedstock prices and miscellaneous costs ........................................... 21

3-7. Return on investment calculation method with SMR sample data.........................21

3-8. Hydrogen production costs for modeled technologies......................................... 22

3-9. Environmental damage caused by fossil fuels...................................... .............. 22

4-1. Scenario 1 rates of yearly increases and decreases in cost ................................. 27

4-2. Scenario 2 rates of yearly decreases in cost.......................................... .............. 28

4-3. Scenario 2 projected hydrogen costs..................................................... .............. 29

4-4. Scenario 3 rates of yearly decrease in costs.......................................... .............. 30

4-5. Scenario 3 projected hydrogen costs..................................................... .............. 31















LIST OF FIGURES


Figure page

1-1. Block diagram of hydrogen production by steam reforming process, adapted from
Sh erif et al. (1999) ...................................................................... .. . .............. 4

1-2. Block diagram of hydrogen production by partial oxidation, adapted from Sherif et
a l. ( 1 9 9 9 ) ......................................................... ................................................ 5

1-3. Electrolysis of water in an alkaline electrolyzer..................................... .............. 7

2-1. Schematic of the ammonia-based combined power/cooling cycle........................ 13

4-1. Hydrogen production costs from renewable sources compared to the fossil fuel
based technologies for scenario 1 ........................................................ .............. 27

4-2. Hydrogen production costs from renewable sources compared to the fossil fuel
based technologies for scenario 2 ........................................................ .............. 29

4-3. Hydrogen production costs from renewable sources compared to the fossil fuel
based technologies for scenario 3 ....................................................... .............. 30

5-1. Economic analysis results for PV/antenna electrolysis scenarios 1, 2, and 3
compared to SMR hydrogen production prices as the feedstock (natural gas,
NG) inflation rate is adjusted from 7% to 4% and 10%.................................... 33

5-2. Economic analysis results for the combined power/cooling ammonia cycle
powered electrolysis scenarios 2 and 3 compared to SMR hydrogen production
p ric e ........................................................................................................ ........... 3 4















Abstract of Thesis Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Master of Science

AN ECONOMIC ANALYSIS OF HYDROGEN PRODUCTION TECHNOLOGIES
USING RENEWABLE ENERGY RESOURCES

By

SAMANTHA T. MIRABAL

December 2003

Chair: Dr. H. A. (Skip) Ingley
Major Department: Mechanical and Aerospace Engineering

For hydrogen to play a major role in the energy sector in the mid- to long-term

future, we must be able to produce hydrogen in an environmentally responsible and cost

effective way. This thesis describes the present status of the conventional hydrogen

production technologies and recent developments in the production of hydrogen using

solar energy. An economic analysis is presented for conventional methods of hydrogen

production (steam reformation, partial oxidation, coal gasification and grid electrolysis)

as well as renewable methods (PV powered electrolysis, antenna conversion powered

electrolysis, wind electrolysis, and solar thermal electrolysis).

It was found that the conversion of fossil fuels currently represents some of the

more significant methods of H2 production. Although fossil fuels are the most cost

effective and most widely used sources of hydrogen production, it is argued from the

results of economic analyses that renewable sources of hydrogen (electrolysis via PV,

antenna power, wind, and solar thermal) are the most promising options for the future.














CHAPTER 1
INTRODUCTION

This chapter provides a discussion on the problems associated with the current

energy infrastructure as well as the benefits associated with conforming to a hydrogen

energy infrastructure. An overview of hydrogen production technologies commercially

used is also presented.

Background

Upon the introduction of the steam engine in the 1860s, society began to change

dramatically as fuels such as wood, coal, oil, and gas were utilized. As time continued,

the world developed an economy based on fossil fuels. This economy facilitated

technological improvements and helped increase the standard of living. However, the use

of fossil fuels is not without consequences -global problems have developed both

economically and environmentally as a result of using these fuels.

The greenhouse effect, ozone layer depletion, acid rain, and pollution are just a few

of the environmental problems caused by the utilization of fossil fuels (Sherif, 1999, page

370). One of the main pollutants produced is carbon dioxide. It is reported that carbon

dioxide accounts for over 84% of the greenhouse gas released into the atmosphere and

originates almost exclusively from the utilization of fossil fuels (Energy Information

Administration, 1998). Furthermore, the Energy Information Administration (EIA)

estimates that if current trends continue, worldwide carbon dioxide emissions will

increase from 1,559 to 2,237 million metric tons equivalent (1.5% annual change) by the

year 2025 (Energy Information Administration, 2003). The steady increase predicted will









adversely affect the world if changes in our energy sources are not made. The continuing

carbon dioxide pollution to the environment would result in global warming in turn

affecting forests, agriculture yields, ecosystems, as well as human health and well-being.

The use of fossil fuels not only poses environmental and health risks, it also affects

the economy as prices rise. The world population is continuing to grow and industrialize;

as a result, the world energy demand is increasing. Although the demand for energy is

increasing, the supply cannot increase indefinitely as there are finite amounts available.

Many have attempted to forecast how long the fossil fuel reserves will last with varying

results, but the same general idea is conveyed fossil fuel production will increase for a

time, peak and then begin to decrease as the supply is depleted. Therefore, in the future,

availability of fossil fuels will be a problem while demand is very high resulting in high

energy prices.

Because of the problems fossil fuels pose, it is important to seek out new sources of

energy. One fuel that is expected to play a role in the mid to long-term future of the

energy sector is hydrogen. Hydrogen is a desirable fuel source for several reasons:

1. Simplest and most abundant element on earth
2. Has the highest energy content per unit weight
3. Clean burning, only heat and water are produced when utilized
4. Can decrease the United States dependence on foreign oil imports
5. Convenient fuel for transportation
6. Can supply the energy needed for transportation, electric power as well as thermal
needs
7. Efficient utilization and conversion Fuel cells can convert 40- 65% of hydrogen's
energy to electricity (as compared to IC engines 15 20%)
8. Safer to work with then gasoline if used properly
9. Renewable energy source
10. Can be produced from numerous feedstocks









Hydrogen is a product that is fully capable of sustaining the world's energy needs now

and in the future. If renewably produced, hydrogen would be a fuel used that does not

contribute to environmental damage (pollution) and supports the human well being.

Current Production Technologies

Hydrogen is an energy carrier and not a primary energy source. This means that

the hydrogen cannot be directly found on earth it must be produced from a hydrogen

rich feedstock. For example, water (H20) and methane (CH4) both contain hydrogen and

can both be used to produce a pure hydrogen stream (H2). Currently, society uses fossil

fuels as the feedstock for the commercial hydrogen production technologies. The main

processes utilized are steam reformation, partial oxidation, and coal gasification.

Steam Reformation of Natural Gas

Steam reforming of natural gas (or Steam Methane Reformation, SMR) is one of

the most developed and commercially used technologies today. A block diagram of the

SMR process is shown in Figure 1-1. Steam reforming of natural gas involves three

steps: The first step is to react the feedstock consisting of light hydrocarbons, usually

methane (CH4), with steam at elevated temperatures (700C to 925C) to produce syngas

- a mixture of hydrogen (H2) and carbon monoxide (CO). The second step, a water-gas

shift reaction, reacts the carbon monoxide component of the syngas with steam to

produce additional H2 and carbon dioxide (C02). This shift reaction is used to increase

the H2 content. Finally, a mixture of CO2 and H2 is sent to a gas purifier where the

hydrogen is separated from CO2 via one of many methods (pressure swing absorption,

wet scrubbing or membrane separation). Overall, SMR produces hydrogen with a purity









of 96-98% (Minet and Desai, 1983) and with operating efficiencies ranging from 65-75%

as estimated by Sherif et al. (1999).

FSteam ---- Shift Reaction
Refonner Heat CO + H20 -->CO2 + H2
Recovery
Feed Gas Purification
SDesulfurization CH4 C02 Products H2
Figure 1-1. Block diagram of hydrogen production by steam reforming process, Adapted
from Sherif et al. (1999)

Partial Oxidation of Heavy Hydrocarbons

Partial oxidation of heavy hydrocarbons (POX) utilizes hydrocarbon feedstocks

(e.g. residual oil from the treatment of crude oil) and catalytically reacts (around 6000C)

the feed with superheated steam and oxygen to convert it into a mixture of H2, CO, and

CO2. The mixture is then subjected to a shift reaction to increase the hydrogen content of

the final gas and is finally separated to form the hydrogen product stream. Figure 1-2

provides a schematic representation of the POX process. The external energy required to

drive the process is obtained through the combustion of the feedstock itself. As a result,

pollutants such as NOx, SOx and CO2 can be generated in the process; to minimize the

production of NOx, the air input to the process must be separated so that pure oxygen is

supplied to the reformer. This results in the need for an air separation plant which

increases the capital cost of the POX plant and results in a more expensive hydrogen

product. However, a POX can operate with any liquid or gaseous hydrocarbon

feedstocks. Overall, the POX process has an efficiency of about 50% (Sherif et al., 1999;

Padro and Putsche, 1999).













Ca ada02 I | Gas Purification
Carbon dioxide, hydrogen, i
steam and small amounts of (cCO2 H2
Feed: Residual Fuelt s CH4 are produced as the raw gas. Steam Products
Oil
Figure 1-2. Block diagram of hydrogen production by partial oxidation, adapted from
Sherif et al. (1999)

Coal and biomass gasification

Gasification is a versatile process similar to partial oxidation with two main

differences: the oxidation and gasification occur at much higher temperatures (1100-

1300C) and the process uses a wide range of solid feedstocks (coal, heavy refinery

residuals, biomass). In this process, a dry or slurried form of the feedstock is subjected to

elevated temperature and pressure conditions which leads to an efficient and clean

conversion of carbonaceous substances into syngas (carbon monoxide and hydrogen).

Depending on the feed, any inorganic materials remaining are removed as a molten slag

from the bottom of the reactor. The hydrogen content of the process is increased with the

same water-gas shift reaction used in both the POX and SMR processes.

Coal is the most abundant fossil fuel. Gasification of coal offers higher thermal

efficiencies than conventional coal-fired power generation and also has less impact on the

environment. Low-grade coal types can be effectively used in coal gasification,

expanding the available fossil fuel options. Coal gasification is the oldest method known

for the production of hydrogen. Two coal gasification processes commercially in use are

The Koppers-Totzek process, which is operated at atmospheric pressure, and The Texaco

process, which is operated at a pressure of about 5.5MPa. Both processes result in

hydrogen product streams with purities of at least 97% (Sherif et al., 1999).









Grid electrolysis

Electrolysis is a clean process by which water is broken up into its elements:

hydrogen and oxygen gas. The process utilizes water as the input feedstock, and

electricity (completely supplied by the current electricity infrastructure) as the means by

which the hydrogen is generated. Water decomposition by electrolysis consists of two

partial reactions that take place at two electrodes separated by an ion-conducting

electrolyte as shown in the Figure 1-3. Hydrogen and oxygen are produced at the cathode

and the anode respectively. An ion-conducting separator (diaphragm) is used to separate

the two chambers to keep the produced gases isolated from each other. The electrodes are

used to apply a voltage to the water causing the water separation as seen in the following

reaction:

1
H20 H2 + 2
2
For the simplest case of electrolysis at 25C and latm, the potentials of the

electrode and cathode can be written as

Ec = -.828-.0591ogaOH

E, =.401-.0591ogaOH

where a is the activity. The lowest voltage needed to drive the water splitting reaction is

Ea Ec: 1.229V (this is called the reversible or equilibrium voltage). The electricity

required to electrolyze water is 236.96kJ, however 285.58kJ is the amount of energy

generated by combusting the same hydrogen generated (all at 25C). This means the

difference, 45.62kJ, must be absorbed from the surroundings of electrolyser. To generate

hydrogen and oxygen isothermally, 1.481V would need to be supplied to the process (this

is called the thermoneutral voltage). Under normal conditions, Sherif et al. (1999) reports









that electrolysers can typically operate at efficiencies of 72 82%, while Basye and

Swaminathan (1997) report efficiencies 64 75%.









Figure 1-3. Electrolysis of water in an alkaline electrolyzer

Many types of electrolyzers exist today the most common is an alkaline

electrolyser, which uses an alkaline electrolyte to facilitate hydrogen production. Other

electrolysis cells include: solid polymer electrolyte (SPE) electrolyzers, saltwater

electrolyzers, and solid oxide electrolyzer. Note, electrolysis cells are normally

characterized by their electrolytes, e.g. alkaline electrolyzer, solid polymer electrolyte

(SPE) electrolyzer, or solid oxide electrolyzer.














CHAPTER 2
RENEWABLE HYDROGEN TECHNOLOGIES

This chapter provides an overview of renewable hydrogen production technologies.

Methods such as solar electrolysis, thermochemical, photoelectrochemical, and

photochemical methods are all discussed.

Renewable Energy

The term "renewable energy" describes any source of energy that is constantly

replaced as it is utilized. Renewable energy sources include solar, wind, geothermal,

biomass, hydropower, and ocean tides. All of these sources provide a supply of energy

that is renewable and with technology, can be used to provide the world energy needs.

From the current fossil fuel infrastructure, environmental problems such as the

greenhouse effect, ozone layer depletion, acid rain, and pollution have developed. The

need to reduce the environmental impact of fossil fuels in combination with the

knowledge that the fossil fuel supplies are finite, leads to an important conclusion it is

important to develop sustainable renewable energy sources for the future. With the

implementation of a sustainable renewable energy source (such as hydrogen), air

polluting emissions will be reduced and the quality of life in many cities will increase.

Current Barriers to Utilization of Renewable Energy

Renewable sources are often neglected today due to several reasons. First,

renewable energy tends to be an intermittent source of energy leaving many to feel that it

is unreliable. For example, solar energy is only available during daylight hours and

therefore during storms, at night or on cloudy days, this source of energy is not available.









This seems to be a problem however, with new storage technologies (eg. hydrogen,

batteries) the energy can be stored during plentiful days for nighttime use and times when

the solar energy is blocked significantly.

Another reason renewable energy has not become wide spread is cost

considerations. Initially, renewable technologies tend to be more costly than standard

construction, which leads many to judge the technologies based on a first cost analysis

rather than a lifecycle costing method. After the initial construction costs, the renewable

systems are generally self sufficient and can pay for themselves within a few years. After

that, the systems save the consumer considerable amounts of money. If consumers are

willing to look to the long-term future rather than the short-term, it will become apparent

that money can be saved and the environment will be benefited by pursuing renewable

technologies and advanced storage technologies such as hydrogen.

Renewable Hydrogen

Renewable hydrogen can be categorized as follows: (1) hydrogen produced using

technologies that directly utilize the supplied renewable energy to generate the hydrogen

product (thermochemical, photochemical, and biological methods are a few examples)

and (2) hydrogen produced by electrolysis with renewable energy supplying the electrical

input. In general, renewable hydrogen includes any technology that produces hydrogen

with all energy requirements supplied by renewable energy.

Using solar power to electrolyze water produces hydrogen via a renewable energy

source. The solar radiation is collected and converted into a useful form, usually heat or

electricity, and then used to power an electrolyzer. This is an environmentally friendly

process by which hydrogen is generated via a feedstock that will not be depleted from an

energy source that is renewable. For hydrogen production by electrolysis to become a









completely renewable technology, the power used must be solar generated. Currently,

many solar methods of generating electricity from solar radiation exist such as

photovoltaics, and solar thermal power systems using parabolic troughs, central receiver

systems, and dish/Stirling systems. A brief description of these technologies is given

below. Additionally there are a number of new developments that have the potential to

dramatically reduce costs or improve the conversion efficiencies. Two such

developments, antenna solar energy conversion and a new combined power/cooling

thermodynamic cycle. These technologies are also summarized below.

Photovoltaics. Photovoltaic (PV) solar cells directly convert solar energy into

electricity. They are constructed from semiconductor materials, with crystalline silicon

(c-Si) being the leading commercial material. The cells are well developed and

commercially available. Silicon Photovoltaic cells have shown efficiencies of over 20%

(Bolton, 1996a), and with present electrolysis technology, one can obtain electrolysis

conversion efficiencies up to 95% (Hijikata, 2002). So, in the present scenario we can

obtain an overall solar-to-hydrogen conversion efficiency of around 18% with PV

assisted electrolysis. Bansal et al. (1999) has reported overall solar-to-hydrogen

conversion efficiencies of 7.8%.

Dish/Stirling systems. Dish/Stirling systems use parabolic dishes to focus the solar

energy onto a centrally mounted receiver/absorber engine that transfers heat to a working

gaseous fluid of an attached Stirling engine. The solar energy heats the engines working

fluid and drives the engine. A single system can generate up to 50kWe (Al-Sakaf, 1998).

However, by grouping many of these dishes together, more power can be produced. This

technology is attractive as an ideal Stirling cycle has the same efficiency as that of a









Carnot cycle operating between the same temperatures. This allows for real systems

based on this cycle to have potential high efficiencies. Solar-to-electric conversion

efficiencies in excess of 29.4% (Strachan et al., 1995) have been demonstrated. If this

electricity were to power an electrolyser operating at 95% conversion efficiency, the

overall solar-to-hydrogen conversion efficiency would be approximately 28%.

Solar thermal power plants. Several types of solar power plants exist today,

including solar tower plants and parabolic trough power plants. A central receiver solar

tower consists of a central receiver surrounded by a field of flat mirrors called heliostats

that track the sun. The heliostats reflect the solar energy to the receiver/absorber where a

working fluid (for example, water, molten salt, or air) is heated to temperatures around

570C (DeLaquil et al, 1993). This fluid can be stored or used to generate steam for

electricity generation using the Rankine power cycle. It is reported that solar tower

systems can achieve annual solar-to-electric efficiencies of 15% (Eisenbeiss, 1996). With

electrolysis efficiencies reaching 95%, a solar tower powered electrolysis plant could

have solar to hydrogen conversion efficiencies of up to 14%.

Unlike the solar tower power plant, parabolic trough power plants use parabolic

trough reflectors to heat a fluid. The fluid flows through a receiver tube located on the

line of focus for each of the parabolic troughs and reaches temperatures in the range of

150-350C (Goswami et al., 2000). The heated fluid is used to generate steam for use in a

Rankine power plant. It has been reported that the solar electric generating systems

(SEGS) plants in Southern California operate at an overall solar to electric efficiency of

12% and a cost of 8-10 C/kWh (cost to produce electricity or cost of electricity)(Kolb,









1995). With electrolysis efficiencies reaching 95%, a parabolic trough powered

electrolysis plant could have solar to hydrogen conversion efficiencies of up to 11%.

Combined power/cooling cycle. This cycle is a unique combination of the

Rankine and absorption refrigeration systems developed by Goswami (1995). This new

thermodynamic cycle improves the cycle efficiency and resource utilization by producing

power and refrigeration in the same cycle. The new cycle uses a binary fluid as the

working fluid; in this case an ammonia-water solution is utilized. Figure 2-1 illustrates a

schematic of the cycle. Ammonia vapor is generated and then superheated prior to

entering the turbine. The superheated, high quality ammonia vapor is expanded thru a

turbine. The expansion of the ammonia in the turbine lowers the working fluid

temperature allowing the fluid to provide a refrigeration effect in a heat exchanger.

Finally, the expanded ammonia vapor is absorbed into a weak ammonia/water solution,

and the cycle repeats.

This cycle has several benefits: (1) the cycle can operate using low-grade sensible

heat such as waste heat or solar thermal energy; (2) both power and refrigeration are

supplied. In the case of hydrogen production, the power could be used to generate H2 via

electrolysis and the refrigeration could be used to pre-cool the H2 prior to liquefaction

and finally, (3) second law efficiencies greater than 60% are possible.





















Figure 2-1. Schematic of the ammonia-based combined power/cooling cycle

Nanoscale antenna conversion. Solar radiation may be converted directly into

electric power using the rectenna (antenna plus rectifier) concept (Fletcher and Bailey,

1973). This device would have to efficiently absorb the broadband electromagnetic

radiation to create an AC field that is coupled to an optical frequency rectifier to provide

a DC electric output. The antenna length should be in the order of a few microns while

the diameter of antenna should be in the sub-micron to nano range. The efficiency limits

imposed on the photovoltaic cell by the bandgap are not applicable to solar antennas. As

discussed previously, maximum theoretical efficiency for a multijunction photovoltaic

cell is 42%, whereas conversion efficiencies greater than 85% are theoretically possible

for solar rectenna array (Goswami et al., 2001).

The concept of antenna is well developed for millimeter wave frequencies. The

feasibility of solar antenna has been further strengthened by the fact that reception and

conversion of the microwave radiations were demonstrated to work at efficiencies as high

as 90% (Brown, 1977; McSpadden et al., 1997; Suh and Chang, 2002). The idea

proposed by Fletcher and Bailey (1973) seems to be simple, however rectification

problems at such high optical frequencies (100-1000 THz) and the small scale of

antennas have hindered the development of the solar antenna converters in the past. In






14


addition, antenna design needs to be optimized to effectively absorb the randomly

polarized broadband spectrum of solar radiation. However, with the recent advances in

nanotechnologies, the concept is feasible.














CHAPTER 3
FEBRUARY 2003 ECONOMIC ANALYSIS AND MODEL DISCUSSION

Modeling of Current Hydrogen Production Costs

To compare the hydrogen costs for the hydrogen technologies, a model created by

Steinberg and Cheng of Brookhaven National Laboratory in 1989 was used. The model

was revised to determine the current and future costs of hydrogen as production

technologies improve and become more viable. The detailed assumptions used in the

model calculations can be found in Tables 3-1, 3-4, and 3-7.

The model can be broken down into three main parameters that are included in the

cost analysis of the hydrogen production: (1) capital costs of the plant, (2) annual

operating costs, and (3) return on investment (profit margin). Each of these three

parameters are discussed in greater detail, but to summarize, the capital costs include the

cost of the facility as well as interest and working capital. The operation costs account for

the feedstock, utilities required to run the plant, as well as other operational costs

(personnel, management, and benefits). Finally, all facilities in the United States are

generally built to generate profit, therefore a 20% return of investment is included in the

analysis.

After gathering initial capital cost data for the analysis, the data needed to be

normalized to a single year for accurate comparison. The US Department of Labor's

Bureau of Statistics publishes many monthly inflation indexes. To determine which

inflation index would be the most appropriate for this analysis, a representative from

American Petroleum Institute [(202) 682-8000; http://api.ecapi.org] was contacted. The









representative recommended that the Producer Price Index for Chemical and Allied

Products (PPI-CAP) data be used for the comparison of hydrogen production

technologies. The representative further discouraged the use of the "Crude Petroleum,

Natural Gas and Natural Gas" data or the "Miscellaneous Chemical Products" data saying

that a large variability would result due to the price of the US dollar varying on world

markets and to crude oil price fluctuations. Based on the recommendation of this

representative, the PPI-CAP (Table 3-2) was the index used for all inflation calculations

included in this research.

Model Discussion

Total Capital Cost

As seen in Table 3-1, the capital cost section of the model includes the cost of

equipment and the facility, interest during construction, start up expenses, and working

capital. The initial capital investment required for the equipment and facility of a plant

(line 1 of Table 3-1) was obtained from research of the literature and adjusted to current

dollar amounts using inflation rates. A sample calculation for the equipment and facility

cost of a steam reformation plant is presented in Equation 3-1. As seen in the equation,

the initial data, $110 million, was obtained from Basye and Swaminathan (1997). The

PPI-CAP data found in Table 3-2, was used to adjust the data to current dollar amounts

arriving at an adjusted Feb2003$US equipment cost of $121.14 million. For reference,

the inflated equipment and facility costs for all the technologies are summarized in Table

3-5.



Equipment and Facility Cost = $1 lOmillion =147.6 l $121.14million (Equation 3-1)
^147.1)










The interest during construction was assumed to be 10% of the equipment and

facility cost while the start up expenses were assumed to be 2% of the equipment cost.

Using SMR as an example, the Interest and start up expenses are calculated in Equation

3-2 to be $14.54million. Finally, line 4 of Table 3-1 details the assumption that the

working capital used for the capital cost is 2 months of expenses. For SMR, this results in

a working capital of $14.28 million. All of these areas summed up result in the total

capital investment required for the plant (Table 3-1: Line 5). Continuing the SMR sample

calculation, the total capital investment required for the plant would be approximately

$150 million. The total capital required (also referred to as the installed capital cost) for

all the technologies modeled is found in Table 3-3.


Interest and Start Up Cost = $121.14million [0.1 + 0.02] = 14.54million (Equation 3-2)


Table 3-1. Simplified data sheet used in the cost modeling analysis
Method of Calculation or
Line Item assumption SMR data
1 Equipment and facility cost in millions of $ Obtained from research (Basye and 121.14
Swaminathan, 1997)
2 Interest during construction in millions of $ Line (1) 0.1 12.11
3 Start up expenses in millions of $ Line (1) 0.02 2.42
4 Working capital in millions of $ 2 months of expenses 14.28
S_______________________________2 [Line (aa): Table 3-4] / 12142
5 Total Capital Investment Required in millions of $ Sum lines (1 thru 4) 149.96


Annual Operating Costs

The annual operation costs of the production plants includes several parameters

ranging from feedstock prices to employee benefits and insurance as seen in Table 3-4.

Table 3-4 supplies the calculation methods used in the model and has sample data

supplied for the SMR plant.










Table 3-2. Consumer price index data for chemical and allied products as of July 2003


Series Id: PCU28 # (N)
Industry: Chemicals and allied products
Product: Chemicals and allied products
Base Date: 8412


146.8 146.8 146.9 147 147 147 147.1 147.2 147.1 147.3 147.3 147.3 147.1
J 147.3 147.1 149.2 149.8 149.7 149.5 149.5 149.1 148.5 148.3 148.1 147.9 148.7
i ^ 147.5 147.3 147.5 147.7 148.2 149 149.9 150 151 152.8 153 152.9 149.7
II 153.6 154.5 155.2 155.5 156.4 156.5 157.4 157.5 158.3 158.6 158.3 158.7 156.7
II 160.3 161.5 161.6 161.4 160.1 159.7 157.8 156.3 156.6 155.7 155.4 154.3 158.4
II 154 154.3 155.1 155.9 156.3 157 158.5 158.6 158.7 159.6 159.7 159.3 157.3
II 160.9 162 163.7 167 165.5


Table 3-3. Capital cost assumed for each technology modeled1

Production Production n 3 Installed Capital Production Cost
Technology Capacity2 EfficieCost 4 P Feb2003SUS
Steam Reforming 100 million SCF/day
of Natural Gas (2.83 x 106 Nm3/day) 79% $150.0 Million 10.26 $/G
POX 100 million SCF/day
x(2.83 x 106 Nm3/day) 89% $317.6 Million 12.43 $/GJ
Gasification of 100 million SCF/day
Coal (2.83 x 106 Nn/day) 48% $507.3 Million 17.45 $/GJ
Electrolysis Grid 100 million SCF/day
Power (2.83 x 106 Nm3/day) 95% $341.7 Million 23.78 $/GJ
Power (2.83 x 10 Nmn/day)
Electrolysis PV 100 million SCF/day5
Power (2.83 x 106 N3/day) 95% $399.6 Million 54.02 $/GJ
Power (2.83 x 10 Nmn/day)
Electrolysis 100 million SCF/day5
Wind Power (2.83 x 106 N3/day) 95% $335.9 Million 20.75 $/GJ
Wind Power (2.83 x 10 Nmn/day) ____________________________
Electrolysis Solar 100 million SCF/day 5
Thermal Power (2.83 x 106 Nm /day) 95% $370.7 Million 38.90 $/GJ


1 Sample data sheets can be found in the appendix. All cost data are in February 2003US$

2 Standard Cubic Foot, SCF. Normal cubic meters, Nm^3.

3 Bayse et al. (1997) lists the conversion efficiency for SMR as 78.5%, for POX as 89.0%, and for CG as
48%. Hijikata (2002) reported 94.4% achieved efficiency for PEM electrolysers.

4 All capital cost data is adjusted for inflation only to reflect February 2003US$. It includes equipment,
facility, construction interest, start-up expenses, and working capital. The original equipment and facility
capital cost data was taken from Basye and Swaminathan (1997).

5 This capital cost only reflects the cost of the electrolysis system. The cost modeling was completed
assuming an independent PV/wind/ or solar thermal power plant is supplying electricity to the electrolysis
plant at a cost of $0.15/$0.04/ or $0.10/kWh respectively.







19


Table 3-4. Detailed calculations used in the model with SMR data supplied as an example
Line Item Method of Calculation or assumption SMR Data
a Annual Production Assumed 100 million SCF/day 11,870,000
b Conversion Efficiency Obtained from research 79.0%
c GJ of Feedstock Needed Line (a) / Line (b) 15,025,316
d Cost of Feedstock ($/GJ) Supplied by GRU or Research 4.74
e Annual Feedstock cost in millions of $ Line (c) Line (d) / 10'6 71.22
f Annual Power Needed (GWh) Obtained from research 32.4
g Cost of Power ($/GJ) Obtained from research 13.9
h Annual Cost of power in millions of $ Line (f) (10^6) Line (g) / 10^6 1.62
i Process water required in millions of Gallons Obtained from research 310
j Cost of Process Water ($/1000 gal) Obtained from research 0.5
k Annual Cost of process water in millions of $ Line (i) *10^3 Line (j) / 106 0.16
1 Cooling water required (10^6 gallons) Obtained from research 440
m Cost of Cooling Water ($/1000 gal) Obtained from research 0.5
n Annual Cost of Cooling water in millions of $ Line (1) *10'3 Line (m) / 10^6 0.22
bb Cost of POX Clean Up ($/GJ) Obtained from research
cc Annual Cost of POX clean up in millions of $ Line (a) Line (bb) / 10^6
dd Tons of burnt coal requiring clean up Obtained from research
ee Cost of CG ash clean up ($/ton of coal burned) Obtained from research
ff Annual cost of CG ash clean up in million $ Line (dd) Line (ee)
o Number of Plant Operators (Employees) Obtained from research 17
p Salary of operators ($/year) Assumed 43,000
q Annual cost of employees in millions of $ Line (o) Line (p) /10^6 0.73
r Annual Cost of Supervisors in millions of $ Line (q) *0.15 0.11
s Maintenance Labor Cost in millions of $ (Line 1: Table 3-1 )* 0.02 2.42
t Maintenance Supervisor Cost in millions of $ Line (s) 0.15 0.36
u Maintenance Material Cost in millions of $ (Line 1: Table 3-1 )* 0.02 2.42
v Operation and maintenance labor in millions of $ Line (q) + Line (r) + Line (s) + Line (t) 3.63
w Administrative/ Support Labor in millions of $ 0.20 Line (v) 0.73
x Fringe Benefits (Payroll Extras) in millions of $ 0.20 [Line (v) + Line (w)] 0.87
y Insurance Cost in millions of $ (Line 1: Table 3-1 )* 0.02 2.42
z General Administration Costs in millions of $ (Line 1: Table 3-1 )* 0.02 2.42
aa Total Annual Operation costs in millions of Sum lines (e, h, k, n, cc, ee, q, r, s, t, u, 85.71
w, x, y, z) 8.



Table 3-4 shows the general calculation procedures used to determine the annual

operation costs specifically for SMR, however, some of the data change depending on

what plant is currently being analyzed (i.e. SMR, CG, POX, Solar thermal, etc.). The

other data used for all modeled technologies is summarized in Table 3-5. Table 3-6

summarizes the assumed feedstock prices. One critical assumption made in the analysis is

the assumption that all the electrolysis plants buy their power from the indicated power











plants. For example, the analysis titled PV electrolysis assumes that the power used to run

the electrolysers is purchased from an independent PV power plant that supplies the PV

power to the electrolysis plant at 0.15$/kWh (41.7$/GJ). This means that the cost of the

PV array is not included in the Equipment and facility cost (Line 1 table 3-1) as that cost

is built into the 0.15$/kWh power cost.


Table 3-5. Data used to model the Feb2003$US hydrogen production cost
Grid PV Wind
Item SMR POX CG Electrolysis Electrolysis Electrolysis


Solar Thermal
Electrolysis


Line 1 Equipment and Facility 121.14 273.12 440.52 275.32 275.32 275.32 275.32
Table 3-1 Cost millions of $
Line (b) Conversion Efficiency 79% 89% 48% 95% 95% 95% 95%
Table 3-4 ,
Line(d) CostofFeedstock 4.74 3.11 1.36 13.9 41.7 11.12 27.8
Table 3-4 ($/ GJ)
Line (f) Annual Power Needed 32.4 11
Table 3-4 (GWh)
Line (g) Cost of Power ($/GJ) 13.90 13.90 13.90 13.9 41.7 11.12 27.8
Table 3-4
Line (i) Process water required 310 954 200 200 200 200
Table 3-4 in millions of Gallons
Line (1) Cooling water required 440 11600
Table 3-4 (10 6 gallons)
Line (bb) Cost of POX Clean 0.04339
Table 3-4 Up1 ($/GJ)
n Tons of burnt coal
Line (dd)
Table 3-4 (ash) requiring clean 0.763
Table 3-4 :

Te up((/Cost of CG ash clean
Table 3-4 up (Ston of coal 1.39
burned)
Line (o) Number of Plant 17 26 30 10 10 10 10
Table 3-4 OperatorsI I II
1 Clean up refers to the handling and disposing of the products of the process. The ash or residual
fuel must be collected and safely disposed.

Return on Investment

Finally, all the commercial plants modeled are assumed to be "for-profit" plants. A

20% return on investment was included in the model. The calculations used for the return

on investment portion of the model are seen in table 3-7.\










Table 3-6. Assumed feedstock prices and miscellaneous costs
Coal 1.36 $/GJ
Electricity Grid 0.05 $/kWh 13.9 $/GJ
Wind 0.04 $/kWh 11.1 $/GJ
PV 0.15 $/kWh 41.7 $/GJ
Solar Thermal Power 0.10 $/kWh 27.8 $/GJ
Natural Gas 4.740 $/GJ
Fuel Oil 3.110 $/GJ
Process Water 0.5 $/1000 gal
Cooling Water 0.5 $/1000 gal
POX Clean Up 0.0434 $/GJ fuel
Coal Clean Up 1.388 $/ton of coal burned


Table 3-7. Return on Investment calculation method with SMR sample data.
Line Item Method of Calculation or assumption SMR data
a Annual Depreciation in millions of $ (Line 1: Table 3-1) 0.05 6.06
b Return on Investment (Line 5: Table 3-1) 0.20 29.99
c Total Revenue Required per Year in millions of $ Sum lines (a, b, and Line (aa) from table 3-4) 121.76


Hydrogen Production February 2003$US Cost Results

The hydrogen production cost is calculated by dividing the total revenue required

per year (Table 3-7: line c) by the annual hydrogen production amount (Table 3-4: Line

a). For each process modeled, this results in hydrogen production prices per GJ for

gaseous hydrogen the cost of liquefaction is not included in the analysis. Table 3-8

summarizes the resulting Feb2003 $US hydrogen production costs associated with each of

the plants modeled. As it can be seen in the table, steam reformation is currently the

cheapest method of hydrogen production and electrolysis powered by the PV powered

electrolysis is the most costly. However, the economic analysis of different H2 production

technologies seems to be incomplete without the consideration of environmental cost

associated with these processes. The combustion of fossil fuels has numerous health and

environmental impacts, including air and water pollution, ozone depletion, and global

warming. These environmental costs are never accounted for in the prices of H2 but they










are indirectly subsidized by the community in terms of increased health expenditures,

taxes, etc. Direct estimation of environmental costs is extremely difficult, however,

several analysts have attempted to quantify them. One of the efforts made in this

direction was by Sherif et al (1999). The environmental cost for different types of fossil

fuels is listed in Table 3-9.


Table 3-8. Hydrogen Production costs for modeled technologies (Sherif et. al., 1999)

Production Production Total Required Production Cost
Technology Capacity Annual Revenue Feb2003$US
Steam Reforming 11,870,000 GJ/year $121.76 Million 10.26 $/GJ
of Natural Gas
POX 11,870,000 GJ/year $147.53 Million 12.43 $/GJ
Gasification of 11,870,000 GJ/year $207.14 Million 17.45 $/GJ
Coal
Electrolysis Grid 11,870,000 GJ/year $282.24 Million 23.78 $/GJ
Power
Electrolysis PV 11,870,000 GJ/year $641.17 Million 54.02 $/GJ
Power
Electrolysis 11,870,000 GJ/year $246.34 Million 20.75 $/GJ
Wind Power
Electrolysis Solar 11,870,000 GJ/year $461.70 Million 38.90 $/GJ
Thermal Power


Table 3-9. Environmental
1999)


damage caused by fossil fuels (Adapted from Sherif et. al.,


Environmental Damage 1998 ($/GJ)
Coal Petroleum Natural Gas
14.51 12.52 8.26


The inclusion of such costs for different H2 production technologies is difficult and

depends on various factors like, feedstock, production method, design characteristics and

local topography. However, these environmental burdens incurred in some of these

processes should be kept in mind. The recent awareness towards clean environment has

led several countries to incorporate environmental costs in their resource planning.






23


Imposition of environmental penalties in the near future is the global consensus. It is also

apparent as the cost of environmental penalties constitutes a substantial portion of the

total production cost, it will play a major role in deciding the future hydrogen production

technology. For this analysis it is impractical to include these costs in the final hydrogen

production value, however, if they were to be included, the renewable hydrogen

production techniques would become more favorable in the near term.














CHAPTER 4
ECONOMIC TREND ANALYSIS

This chapter presents an economic analysis for the cost of hydrogen produced by

steam reformation, partial oxidation, coal gasification, and electrolysis powered by grid,

photovoltaics, and solar thermal power. For the analysis presented in this chapter, the

dates used represent the time when hydrogen would become available. Therefore, actual

plant construction would occur before the dates presented so the hydrogen would be

available by the listed years. Further, the hydrogen production costs listed are for the raw

gas produced via the process. The cost does not include any extra costs incurred for

liquefaction of the hydrogen.

Scenario 1: Base Line Analysis

The previous chapter details the calculations of the current hydrogen production

costs. Neglecting environmental impact costs, all of the technologies were re-examined to

determine the projected hydrogen costs based on varying criteria. The first scenario

examined assumed that fossil fuel prices would increase over the next 50 years as a result

of increasing demand and decreasing supply, while the cost of electricity produced via

solar means would decrease over time. All the assumed rates of increase and decrease are

summarized in Table 4-1. As seen in the table, the rate of yearly cost increases for the

fossil fuels (methane, coal, and fuel for POX) were estimated at a 5% to 7% yearly

increase. This percentage seems reasonable based on the producer price index for natural

gas and crude petroleum. The yearly rate of increase for grid power is assumed to be 3%

(estimated based on the chemical and allied products producer price index). Additionally,









it is assumed that wind power will initially be available at $0.04/kWh (Sherif, 2003) and

as wind power is well developed; it will only improve with technology over time.

Therefore, it is assumed that the cost of the produced wind electricity will decrease 1.5%

per year.

To estimate PV power costs, trends of the past 30 years were examined. In the

1970's, PV panels cost on the order of $30/W where currently they cost approximately

$5/W. It seems reasonable that over the next 10 years as thin film and tandem cell

technologies develop and improve, the cost of PV's will drop from the current $5/W

system cost to $3/W. We have further assumed that the cost of electricity produced by

PV's will decrease at the same rate as the cost of the PV panels, therefore between 2003

and 2013, it is assumed that the cost of PV power will decrease 5.5% per year and after

that the cost of the produced electricity will decrease 2% per year. To verify this

assumption, the cost of PV power was compared to Adamson and Pearson's (2000)

estimation that by the year 2030, electricity will be produced from PV's for $0.03 -

$0.06/kWh. The given percentages we use result in an electrical cost of $0.059/kWh by

the year 2030, so the yearly decreases assumed seem reasonable.

The future cost of power produced via the combined power/cooling cycle

(Goswami cycle) solar power plants is a little more difficult to predict. Currently, the

cycle is in the research phase and will not be commercially available for another four to

five years. In this scenario, it is assumed that the system will be commercially available

in 2008. Once commercially available, the cycle is expected to produce electricity for

half the cost of present solar thermal power plants- so the ammonia system is expected to

produce electricity for around $0.05/kWh.









Finally, as electrolysis technologies are continuing to develop with the

introduction of PEM and solid electrolyzers, it is assumed that over the next 20 years less

costlier proton conducting membrane and technological improvements in high

temperature electrolysis will decrease the capital cost of electrolysis plants by a half. This

results in a 3.4% yearly decrease of cost for 20 years and after that it was assumed that

technologies would continue to improve resulting in a 1% yearly decrease in capital

costs. One thing we do not want to lose sight of is that all this new equipment will be

made of materials and processes that consume energy of some sort. In the beginning this

industry would be constructed using fossil fuel based energy but hopefully as the systems

come into widespread use the energy for constructing the systems will come from the

renewable systems. Furthermore, as the new systems are developed it is important to

remain watchful that they do not shift to heavy plastic consumption. This would result in

continuing depletion of our fossil fuels.

On the basis of the scenario described in this section and presented in Table 4-1,

the hydrogen cost ($/GJ) for different production technologies were predicted. Figure 4-1

shows the resulting hydrogen production costs. As seen in the figure, SMR will remain

the most cost competitive technology until around 2010 at which point POX will be more

cost competitive. Around 2016 wind powered electrolysis will be come the most cost

effective technology and around 2020 electrolysis powered by the Goswami cycle based

solar thermal power systems will become cost competitive with wind electrolysis

resulting in renewable hydrogen becoming a better alternative than fossil-based

technologies. Though environmental costs are not considered in this scenario, its











inclusion will result in fossil fuel processes becoming more unattractive even earlier than

predicted.

Table 4-1. Scenario 1 rates of yearly increases and decreases in cost
Natural Gas 7.0%
Petroleum 5.0%
Fossil Fuels Coal 5.0% Increarly
Increases
Clean up cost of ash and fuel 4.0%
Grid power 3.0%
PV power (for years 2003 2013) 5.5%
PV Power (for years 2014 2050) 2.0%
Solar Generated Solar Thermal Power 1.0%
Electricity Ammonia combined power/cooling cycle solar power 2.0% Yearly
(Rate applies after introduction of technology in 2008) Decreases
Wind Power 1.5%
Electrolysis Capital (for years 2003 2023) 3.4%
Electrolysis Capital (for years 2024 2050) 1.0%


2003 2008 2013 2018 2023 2028 2033 2038 2043 2048
Year

Figure 4-1. Hydrogen production costs from renewable sources compared to the fossil
fuel based technologies for Scenario 1

Scenario 2: Optimistic Analysis Assuming New Technologies are Introduced On-
time

Scenario 1 presented a reasonable estimate of future trends, however, it did not

account for the addition of technologies such as the nanoscale antennas. To generate a

more comprehensive model, the simulation was reworked to account for the introduction

of new technologies in an aggressive manner. In this scenario, the fossil fuel based









technologies grid electrolysis, coal gasification, partial oxidation, and steam methane

reformation -remain unchanged. The changes in this scenario are only with the solar-

based technologies. In this scenario, the Goswami cycle solar power system will be

commercially introduced in 2008 at which point it will take the place of solar thermal

power plants and will produce electricity for $0.05/kWh. The antenna system will be

introduced in 2012 which will cause the cost of PV electricity to reduce by half. Table 4-

2 details the percentage increases assumed for this analysis. Table 4-3 details the

hydrogen production costs determined after the analysis. The order of cost

competitiveness from best to worst in 2050 is wind, solar thermal powered electrolysis,

PV/antenna powered electrolysis, coal gasification, partial oxidation, grid-powered

electrolysis, and steam methane reformation. Figure 4-2 shows the hydrogen cost trend as

time progresses. Wind electrolysis, antenna powered electrolysis, and solar thermal

electrolysis will eventually become the most cost effective means of hydrogen

production.



Table 4-2. Scenario 2 rates of yearly decreases in cost
PV power for years 2003 2011 5.5%
Antenna Conversion Power Introduced in 2012 (% 2.0%
Solar decrease for years 2012 2050)
Generated Solar Thermal Power (for years 2003 2007) 1.0%
Electricity Ammonia Combined Power/Cooling Cycle Solar Power 2.0% Yearly
Introduced in 2008 (% decrease for years 2008 2050) Decreases
Wind Power 1.5%
Electrolysis Capital (for years 2003 2023) 3.4%
Electrolysis Capital (for years 2024 2050) 1.0%










Table 4-3. Scenario 2 projected hydrogen costs


Year 2003 2010 2030 2050
Steam Methane Reformation 10.26 14.05 42.76 153.57
Partial Oxidation 12.43 13.92 22.43 44.93
Coal Gasification 17.45 18.67 25.63 44.02
Electrolysis Grid Power (fossil fuel based) 23.78 25.40 37.66 64.00
Electrolysis PV / Antenna Power 54.02 37.33 14.10 10.04
Electrolysis Wind Power 20.75 17.68 12.11 9.28
Electrolysis Solar Thermal Power Systems 38.90 21.33 13.77 9.82


5 0 I1
2003 2008 2013 2018 2023 2028 2033 2038 2043 2048
Year
Figure 4-2. Hydrogen production costs from renewable sources compared to the fossil
fuel based technologies for scenario 2


Scenario 3: Pessimistic Analysis Assuming New Technologies are Delayed

The introduction times of the ammonia based solar thermal power and antenna

power conversion systems presented in scenario 2 represent an optimistic model.

Scenario 3 analyzes a more pessimistic situation where the introduction of the ammonia

system is delayed seven years (introduced in 2015) and the antenna system is delayed

eight years and is not introduced until 2020. Again, the fossil fuel based technologies

remain unchanged for comparison. The percentages used to model the decreasing costs


!h'drn ~en Prnductinn Cn'~t'~ (~/G.fl











can be found in Table 4-4 while the resulting hydrogen production costs can be found in


Table 4-5 and Figure 4-3.

When the results for scenarios 2 and 3 are compared, it can be seen that the time


when the solar hydrogen technologies become the most cost effective remains relatively


unchanged only a two-year variation is added. The significance of this scenario is large:


the two-year variation shows us that relatively large delays in the design and


commercialization of the ammonia and antenna systems will not greatly influence the


future cost of the technologies.


55.0


45.0
0 0
0 35.0


25.0


1 15.0


5.0 I i
2003 2008 2013 2018 2023 2028 2033 2038 2043 2048
Year

Figure 4-3. Hydrogen production costs from renewable sources compared to the fossil
fuel based technologies for scenario 3.



Table 4-4. Scenario 3 rates of yearly decrease in costs
PV power for years 2003 2013 5.5%
PV power for years 2014 -2019 1.0%
Antenna Conversion Power Introduced in 2020 (% 2.0%
Solar Generated decrease for years 2021 2050)
Electricity Solar Thermal Power (for years 2003 2014) 1.0% Yearly
Ammonia combined power/cooling cycle solar power 2.0% Decreases
Introduced in 2015 (% decrease for years 2015 2050)
Wind Power 1.5%
Electrolysis Capital (for years 2003 2023) 3.4%
Electrolysis Capital (for years 2024 2050) 1.0%00










Table 4-5. Scenario 3 projected hydrogen costs
Hydrogen Production Costs (S/GJ)
Year--> 2003 2010 2030 2050
Steam Methane Reformation 10.26 14.05 42.76 153.57
Partial Oxidation 12.43 13.92 22.43 44.93
Coal Gasification 17.45 18.67 25.63 44.02
Electrolysis Grid Power (fossil fuel based) 23.78 25.40 37.66 64.00
Electrolysis PV / Antenna Power 54.02 37.33 13.98 9.96
Electrolysis Wind Power 20.75 17.69 12.12 9.29
Electrolysis Solar Thermal Power Systems 38.90 34.99 15.24 10.80


Summary of Trend Analysis

The trends analyzed reveal some common factors: as technology develops and

fossil fuel prices begin to rise, hydrogen produced via renewable sources will become the

most cost effective means of hydrogen production. From most economical to most costly,

the order will be: wind, PV/antenna powered electrolysis, solar thermal powered

electrolysis, coal gasification, partial oxidation, grid-powered electrolysis, and steam

methane reformation. As seen, renewable sources will eventually become more cost

competitive than any of the fossil fuel based technologies.














CHAPTER 5
SENSITIVITY DISCUSSION

The determination of the rates of inflation for the fossil-based technologies is based

on an educated approximation looking at past trends and assuming that the rates will

continue in a similar manner. However, fossil fuel prices today are volatile and change as

global market and political views change. Therefore, it is important to see how the results

of the trend analysis would change if the rates of escalation are lower or higher than

estimated (Table 4-1 lists assumed rates).

As steam reformation (SMR) is currently the cheapest method of hydrogen

production, the results are compared to SMR hydrogen as natural gas prices fluctuate.

The original analysis was run assuming natural gas prices increase yearly by 7%. To

analyze a case that would be more favorable to fossil fuels, a 4% escalation rate was

chosen. This rate seems reasonable as the cost of living increases between 4 to 6% yearly

and the general energy prices should at a minimum increase at the same rate. For a case

where fossil fuels become limited faster and demand increases drastically, a 10%

escalation rate was chosen. To determine the effect of the feedstock on the price of SMR

hydrogen, the escalation rate for the electricity used in the SMR process was set to 0% (it

remained a constant). As a note, inclusion of the 3% escalation rate on the electricity only

affected the final production cost by less than 0.25% and therefore is negligible.

The results can be seen in Figures 5 1 and 5 2. The shaded region indicates the

region where the SMR costs can fall. Figure 5-1 compares the PV and antenna results to

the SMR region. As seen in the figure, the PV and antenna technologies will eventually










become cost effective methods of hydrogen production. Depending on the rate of natural

gas escalation, scenario 1 (PV electrolysis) has the potential to become cost effective

anywhere between 2018 and 2031, with 2022 being the year predicted in the original

trend analysis. However, scenario 1 does not account for technological advancements, so

the ranges presented by scenarios 2 and 3 are more appropriate to consider. As seen in

Figure 5-1, Scenario 2 PV/antenna electrolysis would become cost effective between

the years 2014 and 2022, with 2016 being the nominal case. Finally, Scenario 3 -

PV/antenna electrolysis would become cost effective between 2018 and 2021. These

results indicate that scenario three's pessimistic view on the introduction of the new

antenna conversion technology (commercialized in 2020) actually provides the least

amount of variation in the date where the antenna produced hydrogen will become the

most cost effective.


55"
80 ",----,,' -'---- -n-nn --'l-,-- 7-----,',--------


S 45 -

mS 40-

Ig 35 /
10
S>' 30 --

25--



z 15-

10
2003 2008 2013 2018 2023 2028 2033 2038 2043 2048
Year

Figure 5-1. Economic analysis results for PV/antenna electrolysis scenarios 1, 2, and 3
compared to SMR hydrogen production prices as the feedstock (natural gas,
NG) inflation rate is adjusted from 7% to 4% and 10%.











Another trend that can be observed when looking at the shaded region is that the

hydrogen production via SMR cost is highly dependant on the feedstock price. It was


observed that over 58% of the final production cost of SMR hydrogen is attributed to the

cost of the feedstock. This calculation is in agreement with Basye et al. (1997) they

report that 60% of the price of the hydrogen is attributed to the natural gas feedstock.

Figure 5-2 presents the same SMR hydrogen production shaded variance region,

but includes the combined power/cooling ammonia cycle scenarios for comparison. Upon

observation of the results, it was seen that the combined ammonia cycle powered

electrolysis will become more cost effective than SMR hydrogen within an eight year

span Scenario 2 beginning 2015 and Scenario 3 beginning 2013. This indicates that

somewhere between 2015 and 2023 the ammonia cycle will pass the SMR produced

hydrogen and become more cost effective.


60
-x- Scenario 2 Ammonia Powered Bectrolyss
55 -- Scenario 3 Ammonia Powered Bectrolyss

50
0 SMR with 10% yearly
S 45 NG increase

8 40

O 8 35-
0
> 30

25 SMR with 4%
Yearly NG increase
20
0
15
10

5
2003 2008 2013 2018 2023 2028 2033 2038 2043 2048
Year

Figure 5-2. Economic analysis results for the combined power/cooling ammonia cycle
powered electrolysis scenarios 2 and 3 compared to SMR hydrogen
production price














CHAPTER 6
CONCLUSION

Hydrogen is a promising candidate for a clean, efficient and completely pollution

free fuel; and possibly the best substitute for the fossil fuels in transportation applications.

Although several possibilities exist for hydrogen production, solar-based hydrogen would

be desirable. Further, hydrogen represents a good storage medium of solar energy.

Among the various hydrogen production methods, renewably powered water

electrolysis is the only developed non-polluting technology. Electrolysis efficiencies of

85-95% are currently possible. It was found that hydrogen produced via renewable

electrolysis PV/antenna power, solar thermal power, and wind power will become as

cost competitive as fossil technologies within the next 10 years and will eventually

surpass the cost effectiveness of any non-renewable source of hydrogen. An important

finding of the trend analysis is the fact that large delays in the introduction of the antenna

(delayed until 2020) and the new combined power/cooling cycle (delayed until 2015)

does not drastically affect the future of hydrogen production costs. In fact, the 7-8 year

delay only shifts the date that the hydrogen becomes cost competitive by 2 years.

However, for these technologies to become viable for the future, significant research and

development activities are needed to bring them to commercialization.

1. Hydrogen is a promising candidate for a clean, efficient and completely pollution

free fuel; and possibly the best substitute for the fossil fuels in transportation

applications.









2. For hydrogen to be a clean energy source, it needs to be produced from clean

energy resources.

3. Steam Methane Reformation is currently the most cost effective hydrogen

production technology, however it is a fossil-based technology and volatility in

the price of the feedstock greatly affects the final hydrogen cost.

4. Renewable energy resources will be the most cost effective in the long-term

future.

5. Hydrogen produced via renewable electrolysis PV/antenna power, solar thermal

power, and wind power will become as cost competitive as fossil technologies

within the next 10 years and will eventually surpass the cost effectiveness of any

non-renewable source of hydrogen.

6. Trend analysis concluded that a delay in the introduction of the antenna and the

new combined power/cooling cycle does not drastically affect the future of

hydrogen production costs. In fact, the 7-8 year delay only shifts the date that the

hydrogen becomes cost competitive by 2 years.

7. Renewable technologies are currently available, however aggressive research is

needed to reduce the costs and develop new technologies.














APPENDIX
LIST OF PUBLICATIONS

Goel, N., Mirabal, S. T., Ingley, H., and D.Y. Goswami, 2003, "Solar Hydrogen
Production," Interim Progress Report for NASA Grant (NAG3-2750), Document
SEECL2003-01.

Goel, N., Mirabal, S. T., Ingley, H., and D. Y. Goswami, 2003, "Hydrogen Production,"
in D. Y. Goswami (Ed.) Advances in Solar Energy, Vol. 15. Golden, Colorado:
American Solar Energy Society, Inc, pp. 405 458.

Goswami, D. Y., Mirabal, S. T., Goel, N., and H. A. Ingley, 2003, "A Review of
Hydrogen Production Technologies," ASME First International Conference on Fuel
Cell Science, Engineering and Technology Proceedings, April 21 23, Rochester,
New York.

Mirabal, S.T, Goel, N., Ingley, H.A, and D.Y. Goswami, 2003, "Hydrogen Production,"
Paper A095, ASES Solar 2003 Conference Proceedings, June 21 23, Austin,
Texas

Mirabal, S. T., Ingley, H. A., Goel, N., and D.Y. Goswami, 2003, "Utilization of
Domestic Fuels for Hydrogen Production," International Journal of Power and
Energy Systems (In Press). Presented at the First International Conference on Co-
Utilization of Domestic Fuels, February 5 6, Gainesville, Florida.















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Sherif, S.A., Barbir, F., and Veziroglu, T.N., 2003, "Wind Energy and the Hydrogen
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BIOGRAPHICAL SKETCH

Samantha T. Mirabal holds a BS in Mechanical Engineering with honors from the

University of Florida (UF). Samantha will graduate December 2003 with a Master of

Science degree from UF. She is currently conducting research on hydrogen production

for a hydrogen energy project funded by National Aeronautics and Space Administration

(NASA).