Hydrogen Pathway: Cost Analysis

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Introduction

The International Hydrogen Infrastructure Group (IHIG) requested a comparative economic analysis of different hydrogen pathways for fuel cell vehicles. Thus a cost estimation project was taken up by SFA Pacific, sponsored by the US Department of Energy.

SFA Pacific, a California based company which provides evaluation services ([1]), prepared cost modules for different hydrogen pathways. These pathways consist of different options for production, handling, distributing and dispensing hydrogen from central plants and on-site production plants (forecourt plants). The cost module worksheets have provision to enter alternative inputs for assumptions made. For example assumptions like production capacity, carrying capacity, distribution distance etc. can be provided by the user.

The investment and operating costs modules are developed based upon commonly accepted cost estimating practices. Capital build-up is based on percentages of battery limit process unit costs. Variable non-fuel and fixed operating and maintenance (O&M) costs are estimated based on percentages of total capital per year. Capital charges are also estimated as percentages of total capital per year assumptions for capital investment.

The capital cost estimates are based on U.S. Gulf Coast costs. A location factor adjustment is provided to facilitate the evaluation of costs for three targeted states: high cost urban areas such as New York/New Jersey and California and low-cost lower population density Texas. Two provisions are made at forecourt/fueling stations to allow "what-if" analysis: (1) road tax input accommodates possible government subsidies to jump-start the hydrogen economy and (2) gas station mark-ups permit incentives for lower revenue during initial stages of low hydrogen demand.

Table: Capital and Operating costs Assumptions

* 20-40% for steam methane reformer and additional 10% for gasification.

The investment and operating costs are based on SFA’s database and are verified with three gas companies (Air Products, BOC and Praxair) and hydrogen equipment vendors. As an example, comparison of hydrogen costs developed by SFA Pacific and Air Products is shown in table below.

a: The difference between SFA Pacific and Air Products cost can be regarded as large difference in capital investment for fueling station infrastructure.

Hydrogen Production

Three main commercial production technologies are considered in the cost analysis: reforming, gasification (partial oxidation) and electrolysis, out of which reforming is the most popular technology. It is observed that the cost of hydrogen production from hydrocarbons (natural gas, gasoline etc.) is less than that from renewable resources (biomass, water etc.). The costs for production of hydrogen and delivery by liquid tanker are given in the following table.

Source: SFA Pacific, Inc.

Economics of renewable resources for hydrogen production (biomass and water)

Biomass is a renewable source of hydrogen. From point of view of large scale hydrogen production it possesses certain limitations.

• Supply of biomass is a seasonal product. Thus it requires expensive storage facilities.
• It has high moisture content (except for field dried crop residue). As a result it requires extensive drying before gasification.
• Limited supplies are available.

However, available biomass can be used as a supplement for other solid feedstock and the utilisation of gasification units can be maximised.

Water contains hydrogen naturally, but the process of electrolysis used for extraction of hydrogen is expensive compared to the conventional methods of production of H₂ from hydrocarbons.

The list of feedstock and utility costs used in this analysis is given in table below.

Table: Central Hydrogen Production Feedstock and Utility Costs

Source: Annual Energy Outlook 2002 Reference Case Tables, EIA (units converted to SI).

Table: Forecourt (on-site) Hydrogen Production Feedstock and Utility Costs

Source: Annual Energy Outlook 2002 Reference Case Tables, EIA. Current Methanol Price, Methanex, February, 2002 (units converted to SI).

Electrolysis from renewable energy sources

Hydrogen can be extracted from water by electrolysis. Although this method is more expensive than the conventional methods, its cost is reducing with the advances in the electrolysis technology. Moreover, hydrogen does not damage the earth by global warming when produced electrochemically, the electricity coming from non-CO₂ producing sources such as wind and solar energy. This section presents the analysis of cost of hydrogen produced from these two renewable resources.

Method of calculation of cost of hydrogen:

Cost elements involved in hydrogen production by electrolysis using wind and solar energy
1 USD = 0.80 Euro

Various elements are involved in deciding the final cost of a product. The governing elements deciding the cost of hydrogen produced by electrolysis using wind and solar energy are illustrated in the figure.

The cost of hydrogen produced by electrolysis depends on two terms;

Cost of 1 GJ of H₂ = A + B

where A is the cost of electricity used to produce a certain unit (1 GJ corresponding to 1 MBTU) of hydrogen. This electricity can be obtained in various ways such as from wind, solar energy etc. The expression for A is given as;

A = 2.29Ec

where, E is cell potential (in volts) used in an electrolysis unit at a cell current density of 100mA / cm² and c is the cost of electricity in a large scale manufacturing plant in cents / kWh.

B is the aggregate amortization cost of building the plant, its insurance, maintenance and cost of employees. This value (in EUR / GJ of H₂) should be recalculated each year since it depends on the value of the currency, inflation etc. For 2006 value of B is calculated as $ 2.84 / MBTU (rounded to $3 i.e. 2.4 EUR / GJ). For high temperature electrolysis value of B is taken as $ 4.49 / MBTU (3.59 EUR / GJ).

The cost of H2 transport (more than 1000 miles) is added to the above calculated cost. For the year 2006 this cost is found to be $1.66 (1.34 EUR). Considering 25 % profit, the obtained value is multiplied by 1.25.

For high temperature electrolysis, the cost to maintain the system at high temperature is also considered. The difference between the cell potentials at high and room temperature is noted. According to a thumb rule, heat costs about one-third of corresponding electrical cost. Using this rule, one third of the potential difference is added to the cell voltage.

Cost of electricity from wind:

Relation between cost of electricity from wind and wind speed upto 8.94 m/s (20 mph)

The cost of energy from wind is inversely proportional to v³ up to an average wind speed of 20mph (8.94 m/s). Large number of locations in US have an average wind velocity around 15 mph (6.7 m/s). Cost of electricity produced from wind in September 2006 was 4.5 – 6 cents / kWh (3.6 - 4.8 euro cents / kWh). Cost of wind energy is decreasing continuously over a period of last twenty years. At the same time value of dollar is also decreasing. Thus the cost of electricity from wind changes with time and location.

In addition to the cost of electricity the final cost of hydrogen also depends on the potential and current density of electrolysis. The advances made in electrolysis help in further reducing the cost of hydrogen.

The following table shows an estimation for hydrogen prices depending on the temperature of the electrolysis.

Table: Price of hydrogen from wind of 15 mph (6.7 m/s) average as a function of the temperature of electrolysis

Note: The cost of wind energy used in the table is 4.5 cents / kWh (3.6 euro cents / kWh)
Source: John O'M. Bocjris, T. Nejat Veziroglu, Estimates of the price of hydrogen as a medium for wind and solar sources, International Journal of Hydrogen Energy, Volume 32, Issue 12, August 2007

The following table illustrates the effect of the wind velocity on the price of electric energy and thereby the price for hydrogen.

Table: Price of hydrogen from wind and with electrolysis at 25° C depending on two wind speeds

Note: 1 USD = 0.80 Euro
Source: John O'M. Bocjris, T. Nejat Veziroglu, Estimates of the price of hydrogen as a medium for wind and solar sources, International Journal of Hydrogen Energy, Volume 32, Issue 12, August 2007

Cost of solar electricity:

From solar energy electricity can be obtained in various ways, two of them being photovoltaic and Ocean Thermal Energy Conversion (OTEC). For photovoltaic path, the cost of solar energy depends on the efficiency of conversion of solar light to electricity, which is rather low at this stage of development. Additionally, the cost of solar cells is also high. Thus solar energy by photovoltaic is still too expensive than the conventional polluting energies, to be used on a large scale.

For OTEC the overall efficiency of conversion of heat to work is much low. But the warm energy available is very large and has low cost. Cost of OTEC is 1/2 to 1/3 times that of photovoltaic solar energy.

It is estimated that the PV electricity, used on large scale, will take 15 years (2021) to reach a price of 10 cents / kWh (20 % conversion efficiency). The costs given in the table below are the projected costs of H2 in 2021 based on value of dollar in 2006. The value of dollar is subjected to inflation by 2021.

Table: Projected cost of solar hydrogen in 2006$ in 2021 with varying costs of the temperature of electrolysis

Note: 1USD = 0.80 Euro
Source: John O'M. Bocjris, T. Nejat Veziroglu, Estimates of the price of hydrogen as a medium for wind and solar sources, International Journal of Hydrogen Energy, Volume 32, Issue 12, August 2007

Hydrogen Transport

This study considers three transport options: cryogenic liquid trucks, compressed H₂ tube trailers and pipelines. Cryogenic liquid trucks are the most economical way for transportation since they can carry large amounts of hydrogen and can cover more distance. However, losses due to liquid boil-off are incurred in liquid trucks.

Compressed H₂ tube trailers are suited for small market demands. The amount of hydrogen that can be carried is limited by the thickness of tube (container). Typical weight ratio of tube-to-hydrogen is around 100-150:1. The cost of delivery is high for tube trailers. Also only 75-85% of load is dispensable.

Pipelines are best suited for small distances and for handling large flows. The installation cost of pipelines is much high, $ 0.5 – 1.5 million / mile. However, their operating cost is relatively small.

Following table shows the assumptions made in the study.

Table: Road Hydrogen Delivery Assumptions

Source: SFA Pacific, Inc.

Costs for different modes of transport are given below. It can be seen that cost of cryogenic liquid trucks is 10% of the tube trailers ($0.18 / kg vs $2.09 / kg).

Source: SFA Pacific, Inc.

Hydrogen Storage

Hydrogen can be stored either in liquefied or compressed gaseous form.

Liquefaction of hydrogen is a costly option. Compressors and aluminium heat exchanger cold-boxes account for most of the cost. SFA Pacific estimates the total cost for a liquefier as $ 1015 kg/d (estimate from Air Products is $1125 kg/d). Energy consumption by multi stage compression is approximately 10 - 13 kWh / kg of H2.

Compressors play a major roll in the capital and operating costs for compressing hydrogen. Multi stage compressors are required to achieve the required pressure of hydrogen. For gaseous hydrogen compression SFA estimated a capital cost of $ 2000 - 3000 / kW and power requirement of 0.5 – 2 kW / kg / hr.

Although liquefaction is costlier than compression, storing H₂ in liquid form is inexpensive and more practical than storing H₂ in compressed gaseous form. Hydrogen has the lowest energy density and thus more amount of hydrogen is needed to give equal amount of energy as gasoline. For example, to provide energy equivalent to one gallon of gasoline 3.72 gallons of liquid hydrogen and 8 gallons of gaseous hydrogen (pressurised to 400 atm) are required. Thus higher the pressure lower the storage volume and higher the energy stored.

However, as the pressure increases the thickness and thus cost of the storage tube increases. At 140 atm the cost of tube is $400 / kg H2 whereas at 540 atm the cost is $ 2100 / kg H₂. Following figure shows the dependence of cost of gaseous storage tubes on pressure.

Dependence of cost of gaseous H₂ storage tubes on pressure

Source: SFA Pacific Inc.

Energy Converters

PEFC

Cost for a PEFC system are available from the study: "The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs (2004)". Typical stationary systems with 10 kW and 200 kW respectively are compared. Results are shown in the following table:

A different study called "Mass Production cost of PEM fuel cell by learning curve" from the 29^th International Journal of Hydrogen Energy states the cost per unit of energy to be 1522 €/kW, whereas an article about the GM HydroGen3 gives a figure of 500 $/kW for a transportation system, and a target value of 50 $/kW.

SOFC

Maintenance cost and capital investment for stationary SOFC systems can be found in the study "The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs (2004)", on a basis of a 100 kW system. The values are presented in the following table:

PAFC

The costs for a stationary PAFC system the study "The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs (2004)" base on a 1991 200 kW PAFC system produced by International Fuel Cells, now called UTC. Prices for these units have not decreased, but in fact increased. Due to the lack of cost-competitiveness UTC decided not to manufacture any more units. Nevertheless, costs are shown in the following table:

A further source, a report on Natural Gas Fuel Cells from 1995, gives a value of 3000 $/kW for a 200 kW system.

MCFC

The cost for a stationary 2000 kW MCFC system can be found in the study "The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs (2004)".

According to the database of the Advanced Power and Energy program of the University of California the costs for a DFC 300A MCFC from Fuel Cell Energy amount to 7700 $/kW for installation, and variable operation and maintenance costs of 0.01 $/kWh.

AFC

Cost data for Alkaline Fuel Cells have not been collected yet.

ICE

Cost for hydrogen fuelled Internal Combustion Engines are not available at the moment.

Hydrogen Gas Turbine

The capital investment for a stationary 10.7 MW hydrogen turbine is reported to be 5.8 million Euro. This figure is taken from the 2006 report "Int. J. Nuclear Hydrogen Production and Application".

References

• D. Simbeck, E. Chang
  Hydrogen Supply: Cost Estimate for Hydrogen Pathways - Scoping Analysis
  NREL/SR-540-32525, November 2002 [2]
• N. N.
  The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs (2004)
  National Academy of Engineering (NAE), Board on Energy and Environmental Systems (BEES), page 32, [3]
• H. Tsuchiya, O. Kobayashi
  Mass Production cost of PEM fuel cell by learning curve
  International Journal of Hydrogen Energy 29, 985 (2004)
• G. Gigliucci, F. Donatini and M. Schiavetti
  Int. J. Nuclear Hydrogen Production and Application 1, 26 (2006)
• J. O'M. Bockris, T.N. Veziroglu
  Estimates of the price of hydrogen as a medium for wind and solar sources
  International Journal of Hydrogen Energy, Volume 32, Issue 12, August 2007