hydrogen pathway: cost analysis

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Hydrogen Pathway: Cost Analysis

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About Roads2HyComRoads2HyCom is a project supported by the European Commission's Framework Six program. Its purpose is to assess and monitor

hydrogen and fuel cell technologies for stationary and mobile energy applications.This is done by considering what the technology is capable

of, relative to current and future hydrogen infrastructures and energy resources, and the needs of communities that may be early adopters of

the technology.By doing this, the project will support the Commission and stakeholders in planning future research activities. Project main

website: http://www.roads2hy.com

HyLights, Roads2HyCom and the Hydrogen and Fuel Cells Technology Platform (HFP)The European Commission is supporting the Coordination Action "HyLights" and the Integrated Project "Roads2HyCom" in the field of

Hydrogen and Fuel Cells. The two projects support the Commission in the monitoring and coordination of ongoing activities of the HFP, and

provide input to the HFP for the planning and preparation of future research and demonstration activities within an integrated EU strategy.

The two projects are complementary and are working in close coordination. HyLights focuses on the preparation of the large scale

demonstration for transport applications, while Roads2Hycom focuses on identifying opportunities for research activities relative to the needs

of industrial stakeholders and Hydrogen Communities that could contribute to the early adoption of hydrogen as a universal energy vector.

Further information on HyLights is available on the project web-site at http://www.hylights.org.
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Contents

1 Introduction

2 Hydrogen Production

2.1 Economics of renewable resources for hydrogen production

(biomass and water)

3 Hydrogen Transport

4 Hydrogen Storage

5 Energy Converters

5.1 PEFC

5.2 SOFC

5.3 PAFC

5.4 MCFC

5.5 AFC

5.6 ICE

5.7 Hydrogen Gas Turbine

6 References

Introduction

The International Hydrogen Infrastructure Group (IHIG) requested a comparative economic analysis ofdifferent 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 estimatingpractices. 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


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initial stages of low hydrogen demand.

Table: Capital and Operating costs Assumptions

Capital Build-up % of Process unit Typical range (%)

General facilities 20 20-40*

Engineering, Permitting and Startup 15 10-20

Contingencies 10 10-20

Working capital, Land and othes 7 5-10

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

Operating Costs Build-up % / year of Capital Typical RangeVariable non-fuel operating and maintenance 1.0 0.5-0.5

Fixed operating and maintenance 5.0 4-7

Capital Charges 18.0 20-25 (for refiners)

14-20 (for utilities)

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.

Feedstock H2 capacity (t/d) H2 source Investment ($ million) Hydrogen cost ($/kg)

SFA Pacific Air Products SFA Pacific Air Products

Natural Gas 27 Liquid 102a 63a 4.34 3.35

Natural Gas 27 Pipeline 72 82 3.08 2.91

Natural Gas 2.7 Forecourt 6.2 9.6 3.30 3.57

Methanol 2.7 Forecourt 6.0 6.8 3.46 3.76

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 Cost ($ / kg)


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Natural gas 2.21

Coal 3.06

Biomass 3.53

Water 6.17

Source: SFA Pacific, Inc.

Economics of renewable resources for hydrogen production (biomassand water)

Biomass is a renewable source of hydrogen. From point of view of large scale hydrogen production itpossesses 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 isexpensive 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

Unit cost ($)

Natural gas (industrial) 3.317 / GJ HHV

Electricity (industrial) 0.045 /kW

Electricity (commercial) 0.070 /kWBiomass (type not specified) 62.8 / metric ton

Coal 1.043 / GJ dry HHV

Petroleum coke 0.1896 / GJ dry HHV

Residue (Pitch) 1.422 / GJ dry HHV

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

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


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Unit cost ($)

Natural gas (commercial) 5.213 / GJ HHV

Electricity (commercial) 0.07 / kW

Methanol 6.635 / GJ HHV

Gasoline 5.687 / GJ HHV

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 energy1 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


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where, Eis cell potential (in volts) used in an electrolysis unit at a cell current density of 100mA / cm 2 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 isadded 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 theelectrolysis.

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

electrolysis


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Temperature and

corresponding cell voltage

Cost of 1 GJ of H2 + Cost of transmission

in pipe 1600 km + 25% profit

Cost of H2 having the first

law of energy in a US

gallon of gasoline25 C (1.6 V) 21.14 EUR (26.43 USD) 2.48 EUR (3.10 USD)

1000 C (1.00 V) 18.9 EUR (23.63 USD) 2.22 EUR (2.78 USD)

1500 C (0.63 V) 14.07 EUR (17.59 USD) 1.66 EUR (2.07 USD)

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

Available wind speed [mph] Price of 1 GJ of

H2

Cost of H2 equivalent to 1 gal (3.79 liter) of

gasoline

15 (4.5 cents/kWh i.e. 3.6 euro cents /

kWh)

21.14 EUR (26.43

USD)

2.48 EUR (3.10 USD)

20 (1.89 cents/kWh i.e. 1.51 euro cents

/kWh)

12.58 EUR (15.73

USD)

1.48 EUR (1.85 USD)

Note: 1 USD = 0.80 Euro


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 isvery 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


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Cell

potential

100 mAcm-2

Cost of 1 GJ of H2,

efficiency = 15%, 13

cents/kWh (10.4 eurocents /kWh)

Cost of 1 GJ of H2,

efficiency = 20%, 10

cents/kWh (8 eurocents / kWh)

Cost of H2 = 1 gal

(3.79 liter) gasoline

equivalent,efficiency = 15%

Cost of H2 = 1 gal

(3.79 liter) gasoline

equivalent,efficiency = 20%

1.6 V (25 C) 53.38 EUR (66.73 USD) 41.29 EUR (51.62 USD) 6.4 EUR (8 USD) 4.8 EUR(6 USD)

1.0 V (1000

C)

42.69 EUR (53.37 USD) 33.62 EUR (42.03 USD) 4.8 EUR (6 USD) 4 EUR (5 USD)

0.63 V (1500

C)

35.37 EUR (44.21 USD) 28.13 EUR (35.16 USD) 4 EUR (5 USD) 3.2 EUR (4 USD)

Note: 1USD = 0.80 Euro


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 becarried 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

Unit Cryogenic Truck Tube Trailer

Load kg 4000 300

Net delivery kg 4000 250

Load / unload hr/trip 4 20

Boil-off rate % / day 0.3 N/A

Truck utilization rate % 80 80

Truck / Tube $ / module 450,000 100,000

Undercarriage $ 60,000 60,000


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Cab $ 90,000 90,000


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).

Mode of transport Cost ($ / kg)

Cryogenic liquid tankers 0.18

Gas tube trailers 2.09

Pipelines 2.94


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 H 2. Following figure shows the

dependence of cost of gaseous storage tubes on pressure.


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Dependence of cost of gaseous H2 storage tubes on pressureSource: 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:

10 kW system 200 kW system

Package costs [$/kW] 4700 3120

Total installed cost [$/kW] 5500 3800

Operating and maintenance cost [$/kWh] 0.033 0.023

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:

100 kW system


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Package costs [$/kW] 2850

Total installed cost [$/kW] 3620

Operating and maintenance cost [$/kWh] 0.024

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:

200 kW system




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)".

2000 kW system




According to the database of the Advanced Power and Energy program of the University of California thecosts 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.


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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: CostEstimate for Hydrogen Pathways - Scoping AnalysisNREL/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. VezirogluEstimates of the price of hydrogen as a medium for wind and solar sources

International Journal of Hydrogen Energy, Volume 32, Issue 12, August 2007


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