(393a) Consistent Economic Analysis of Hydrogen Production Pathways

A key benefit of hydrogen as an energy carrier is that is can be produced from a diverse set of primary energy resources by means of a variety of process technologies. Energy resources span fossil, renewable, and nuclear energy; process technologies include thermochemical, photolytic, and biological processes. Market readiness ranges from systems that require long-term research to systems ready for engineering to market-ready processes. Comparing the status of these options for hydrogen production requires analysis tools that can be used in a transparent consistent manner. The H2A model was developed and used to evaluate the cost and energy conversion efficiency of several hydrogen production pathways.

H2A, which stands for Hydrogen Analysis, was formed in 2003 to better leverage the combined talents and capabilities of analysts working on hydrogen systems, and to establish a consistent set of financial parameters and methodology for cost analyses. The objectives of H2A are to improve the transparency and consistency of analysis, improve the understanding of the differences among analyses, and seek better validation of analysis studies by industry.

The H2A team has developed a modeling tool to assess the minimum hydrogen selling price for central and forecourt (filling station) hydrogen production technologies. This tool requests the user to define several characteristics of the process being studied, including process design, capacity, capacity factor, efficiency, and feedstock requirements. While the tool includes agreed-upon H2A reference values for several financial parameters, the user is also given the opportunity to vary parameters such as internal rate of return, plant life, feedstock costs, and tax rate, to examine the technology using their own basis. The calculation part of the tool uses a standard discounted cash flow rate of return analysis methodology to determine the hydrogen selling price for the desired internal rate of return.

The following hydrogen production pathways were analyzed: • Central coal gasification with and without CO2 sequestration • Central biomass gasification • Central electrolysis using wind energy • Central steam methane reforming • Central nuclear thermochemical • Distributed steam methane reforming • Distributed electrolysis • Distributed methanol reforming • Distributed ethanol reforming