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Cost of Some

Hydrogen Fuel
Infrastructure
Options

Marianne Mintz Transportation Research Board


Stephen Folga January 16, 2002
John Molburg
Jerry Gillette
Argonne National Laboratory
Transportation Technology R&D Center
Focus of Presentation Is on:

• Cost modeling process


• Pathways
– Components
– Arrangement
– Key assumptions
• Hydrogen delivery volumes
• Illustrative component cost analyses
• Results

Argonne National Laboratory


Transportation Technology R&D Center
Cost Modeling Was Conducted Via a
Five-Step Process
• Define paths
– NG compression, storage and transport
– Hydrogen production
– H2 compression, storage and transport
– Hydrogen dispensing
• Determine “tank-in” fuel requirement
– HFCV market penetration & efficiency
• Size pathway components
• Estimate component costs
• Calculate pathway costs (NICC model)

Argonne National Laboratory


Transportation Technology R&D Center
Three Pathways
H Storage
Were Modeled H Transmission 2
2

Resource-
Centered H2
NA NG Production H2 Fuel
NG
Extraction Purification H2 Distribution Station

NG Market-
Transmission
Centered H2
Production Decentralized
NG Storage H2 Production
NG
NG Distribution Compressed
NNA NG NG Liquefaction Natural Gas
Extraction Purification Plant Regasification
Fischer-Tropsch
Plant Tanker Oil Pipeline Diesel Fuel Station
Transport
Methanol Plant Methanol Distribution Methanol Fuel Station
Argonne National Laboratory
Transportation Technology R&D Center
Steam Reforming Inputs Are Water
and Hydrocarbon Feedstock; Outputs
Are Hydrogen and Purge Gases

Argonne National Laboratory


Transportation Technology R&D Center
All Pathways Include Underground
Storage
At the end of 1998 there were 410 underground natural
gas storage sites in the U.S.

With 76 Bcf per day of Withdrawal


Capability and 3,933 Bcf of Working
Gas Capacity

Argonne National Laboratory


Transportation Technology R&D Center
All Pathways Require Additions to the
Existing Natural Gas Transmission
Infrastructure

The US has an extensive


in-place NG transmission
infrastructure …………..
Argonne National Laboratory
Transportation Technology R&D Center
And a Track Record of Continually
Expanding Transmission Capacity
• New pipelines

• Additional compression

• Looping

• All of the above

Argonne National Laboratory


Transportation Technology R&D Center
According to EIA, Nearly $5 bln Was
Spent on Pipeline Expansion in 2000
8,000 Completed Proposed

7,000

6,000
Millions of Dollars

4,876
(Estimated)
5,000

4,000

3,000 2,380 2,124


(Preliminary)
2,000 1,397

1,000 552

0
Source: EIA 2001 1996 1997 1998 1999 2000

Argonne National Laboratory


Transportation Technology R&D Center
Components of the Resource-
Centered Pathway H Storage 2

H2 Transmission
Resource-
Centered H2
Production H2 Distribution
H2 Fuel
NA NG NG Station
Extraction Purification Market-
Centered H2
NG
Production
Transmission

NG Storage Decentralized
H2 Production

NG
Distribution

Compressed
Natural Gas
Argonne National Laboratory
Transportation Technology R&D Center
Hydrogen Production Is Near Natural
Gas Supplies in the Resource-
Centered Pathway

Argonne National Laboratory


Transportation Technology R&D Center
Components of the Market-Centered
Pathway
H2 Storage
H2 Transmission
Resource-
Centered H2
Production
NA NG
Extraction
H2 H2 Fuel
NG Distribution
Purification Station
Market-
NG Centered H2
Transmission Production
Decentralized
H2 Production
NG Storage

NG
Distribution
Compressed
Natural Gas

Argonne National Laboratory


Transportation Technology R&D Center
Market-Centered and Resource-
Centered Paths Share H2 Distribution
Assumptions

Radius Diameter Length


Component
(mi) (in) (mi)

H2 Pipeline Connecting Pipeline Ring


N/A 12 15
with H2 Production Plant
H2 Pipeline Ring Encompassing
25 12 157
Community
H2 Pipeline Connecting H2 Refueling
N/A 3 900 a
Stations with H2 Pipeline Ring

a Assumes 180 refueling stations, a service pipeline unit length of 15 miles,


and 3 refueling stations per service pipeline.
Argonne National Laboratory
Transportation Technology R&D Center
Conceptual Representation of
Hydrogen Pipeline Loop Supporting
Local H2 Delivery
Regional H2
Production Plant

L1
L2 . H2 Refueling
Station

radius, r

H2 Refueling H2 Refueling
Station Station

H2 Refueling
Station

Argonne National Laboratory


Transportation Technology R&D Center
Components of the Decentralized
Pathway
H2 Storage

H2 Transmission
Resource-
Centered
H2
NA NG NG H2
Production H2
Extraction Purification Fueling
Distribution Station
Market-
Centered H2
NG
Production
Transmission

NG Storage Decentralized
H2 Production

NG
Distribution

Compressed
Natural Gas

Argonne National Laboratory


Transportation Technology R&D Center
Two Market Penetration Cases Were
Modeled
70%
New Sales
60%
50%
40% Total LDVs

30% New
Sales
20%
10%
Total LDVs
0%
2005 2010 2015 2020 2025 2030

Argonne National Laboratory


Transportation Technology R&D Center
Six Cumulative Delivery Volumes,
Functions of HFCV MPGE & Market
Penetration, Were Modeled
30% Market
MPGE Penetration 60% Market Penetration
60 6.9 bln GJ High Penetration
(6.6 Q) Low mpg
31.2 bln GJ (29.6 Q)

74 5.6 bln GJ 25.5 bln GJ


(5.4 Q) (24.2 Q)

80 Low Penetration High 23.4 bln GJ


mpg (22.2 Q)
5.2 bln GJ (4.9 Q)

Argonne National Laboratory


Transportation Technology R&D Center
The US Accounts for 20% of Global
Hydrogen Consumption , Approx. 1 Q
(1999, tcf)
Captive Users United States Total World1
- NH3 Producers 1.185 9.662
- Oil Refiners2 1.164 3.721
- MeOH Producers 0.303 1.428
- Other 0.128 0.489
Merchant Users 0.379 0.570
Total 3.160 15.872
1 Including US.
2 Excluding byproduct hydrogen.

Source: SRI Chemical & Health Business Services 2001.


Argonne National Laboratory
Transportation Technology R&D Center
Current SMR Plants Have Large
Economies of Scale
Capital Cost (mln $)

$1,000
y = 5.384E+00x6.405E-01
R2 = 0.9437
$100

$10

$1
0.1 1.0 10.0 100.0
Hydrogen Production Rate (tpd)

Argonne National Laboratory


Transportation Technology R&D Center
Compressor Costs Are a Function of
Power
y = 22877x 0.4561
$250,000
R2 = 0.9527
$200,000
Cost ($)

$150,000
$100,000
y = 34037x 0.3036
$50,000
R2 = 0.8655
$0
0 50 100 150 200 250 300
Pow er Required (kW)
M ult i- S t a g e S ing le - S t a g e

Argonne National Laboratory


Transportation Technology R&D Center
Unit Cost of NG & H2 Pipelines Vary
with Pipe Diameter & Installation
Technology

Capital Cost of Capital Cost of H2 Capital Cost of H2


Diameter
Natural Gas Pipeline, Cut/Cover Pipeline,
(inch)
Pipeline ($/mi) ($/mi) Trenchless ($/mi)

3 $200,000 $400,000 $300,000

9 $500,000 $900,000 $700,000

12 $600,000 $1,000,000 $900,000

14 $800,000 $1,400,000 $1,150,000

Argonne National Laboratory


Transportation Technology R&D Center
Least Cost Pathway Depends on H2
Volume; Reformers and Pipelines Are
Largest Components
$40
Market- Supply-
Decentralized
Centered Centered
Production
$35 Production Production

$30
Refueling
Unit Cost ($/GJ)

$25
Transp Savings
H2 Transport
$20
H2 Production
$15 NG Transport
NG Feedstock
$10

$5

$0
Low H2 Hi H2 Low H2 Hi H2 Low H2 Hi H2
Mkt, Hi Mkt, Mkt, Hi Mkt, Mkt, Hi Mkt,
Veh Eff Low Veh Eff Low Veh Eff Low
Veh Eff Veh Eff Veh Eff

Argonne National Laboratory


Transportation Technology R&D Center
H2 Infrastructure to Fuel 100 Million+
FCVs Could Cost $500 Billion or More
$800
Decentralized Market-Centered Resource-Centered
Total Investment ($billion)

Production Production Production


$700

$600
Refueling
$500
H2 Transport
$400 H2 Production
NG Transport
$300
NG Feedstock
$200

$100

$0
Low H2 Hi H2 Low H2 Hi H2 Low H2 Hi H2
Mkt, Hi Mkt, Low Mkt, Hi Mkt, Low Mkt, Hi Mkt, Low
Veh Eff Veh Eff Veh Eff Veh Eff Veh Eff Veh Eff

Argonne National Laboratory


Transportation Technology R&D Center
H2 Unit Cost Varies by Pathway and
Feedstock Price; Volume Matters for
Centralized Pathways
$40

$35

$30
Unit Cost ($/GJ)

$25

$20

$15

$10
Decentralized, $3/MMBtu Market-Centered, $3/MMBtu
$5 Resource-Centered, $3/MMBtu Decentralized, $9/MMBtu
Market-Centered, $9/MMBtu Resource-Centered, $9/MMBtu
$0
0.E+00 1.E+10 2.E+10 3.E+10 4.E+10
Cumulative Production (GJ)

Argonne National Laboratory


Transportation Technology R&D Center
Some Conclusions:

• With current technologies, on a well-to-tank basis, hydrogen


is likely to be at least twice as costly as gasoline.
• With current technologies, the hydrogen delivery
infrastructure to serve 40% of the light duty fleet is likely to
cost over $500 billion.
• For up to 7.5 bln GJ (7 Q) of cumulative hydrogen
production, the decentralized path is lowest cost.
• For more than 13.6 bln GJ (13 Q), of cumulative production,
the resource-centered path is lowest.

Argonne National Laboratory


Transportation Technology R&D Center
Conclusions (cont’d)

• With current technologies, scale economies are large for


centralized options; small for decentralized
• Of the central production options, the resource-centered
path is consistently lower cost (economies of scale).
• H2 transport and production are the largest cost
components of all paths examined, hence appropriate focus
for cost reduction.
• Pipeline costs may be overestimated in the literature due to
improvements in excavation/installation technologies.

Argonne National Laboratory


Transportation Technology R&D Center
Carbon Intensity of World Primary
Energy Has Been Declining Steadily

Argonne National Laboratory


Transportation Technology R&D Center
Marianne Mintz
mmintz@anl.gov

Argonne National Laboratory


Transportation Technology R&D Center