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HYDROGEN/
PRODUCTION COSTS
source: [www.energycooperation.org/PDF/
MovingtoaH2Economy-IEA.pdf]
[www.ases.org/hydrogen_forum03/
Forum_report_9_24_03.pdf]
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Renewable hydrogen is technically viable today and will become increasingly economically competitive from a diverse array of renewable energy technologies and distribution options…- there are several key reasons for seeking a renewable hydrogen future: energy security, environmental health, and economy for producing jobs locally. The first challenge to reaching this future is cost. The economics of a renewable hydrogen system involve several elements: resources, production, delivery, storage, and end-use of hydrogen;
- according to the International Agency of Energy (EIA), currently 98% of hydrogen is produced from hydrocarbons, with the production cost approximately 5 times the cost of the hydrocarbons used to produce hydrogen; (1)
- over the last 20 years, significant cost reductions have been made in renewable electricity generation technologies. Further cost reductions are projected for the next 20 years. By using these same technologies to produce hydrogen, we get to take advantage of the cost reductions that have taken place in the past and those expected to take place in the future;
- according to Yogi Goswami, ASES - Renewable Hydrogen Forum, the costs based on fossil fuels are going up and the costs based on renewable energy production are going down. In 2003, for instance, the cost for steam methane reformation in the United States has gone up within less than six months. The analysis presented by Goswami assumes that new developments in solar thermal power and photovoltaics will reduce their costs, and although not explicitly included, wind would be part of the mix right now; (2)
- this analysis does not include any environmental penalty for fossil fuels, although – as Goswami affirms - one could argue that there is about US$15 per gigajoule (GJ) in environmental costs when you use coal as a feed stock, about US$13/GJ when you use petroleum as feed stock, and about US$9/GJ when you use natural gas as feed stock; (2)
- still some people think that renewable hydrogen is too costly… It’s a myth! Renewables are becoming less expensive as rapidly as fossil fuels are becoming more expensive. The table below compares hydrogen generation’s costs by source between 1999 and early 2005;
- using present-day electrolysis technology, we can manufacture wind-powered hydrogen at prices less than US$4.00 per gasoline gallon equivalent (roughly a kilogram). The per-gallon cost of gasoline and the per-kilogram cost of renewable hydrogen are steadily approaching the same figure.
Hydrogen sources: fossil fuels vs. renewables
| Hydrogen/source | per/unit | 1999/US$ | 2005/US$ | Note | | natural gas | kg | 0.65 | 1.20 | | | gasoline | gallon | 1.00 | 2.00 | | | electricity from wind power | Kw/h | 0.10 | 0.04 | before subsidies |
Renewable hydrogen becomes even more valuable when the external costs associated with non-renewable fuels and the economic benefits of renewable energy are considered…- External factors associated with fossil fuels are costly. For example, eliminating chronic diseases such as asthma related to air pollution associated with fossil fuel combustion would save Americans US$12 billion/year in health costs;
- In the United States alone, roughly $100 billion is spent on importing oil. Military costs associated with foreign oil are now becoming obvious to us all. Imported liquefied natural gas also poses potential terrorists security problems as well as worsening our energy-related balance of payments deficit;
- developing a distributed approach to renewable hydrogen will create jobs locally, within each country. More jobs will be developed to make and distribute renewable hydrogen from solar, wind, wave, hydro, and biomass resources than is currently provided by the fossil fuel industry. These jobs will help define a new economy that is based on anti-inflationary production of renewable energy and materials instead of inflation due to depletion of finite resources;
Co-benefits make renewable hydrogen even more attractive and cost-competitive…- biomass gives an opportunity to sequester carbon by storing carbon in plants. Biomass also can produce a wide range of co-products for the chemicals and fuels markets. It is better to put carbon into products where it is not harmful, than fuel;
- desalination of ocean water is another possible by-product of renewable hydrogen;
- electricity also can be considered a co-product for wind or solar electric electrolysis. The oxygen by-product of electrolysis is valuable to nearby gasification plants, enhancing the value of hydrogen production from renewable sources like wind.
(1) International Agency of Energy (EIA), Standing group on long-term co-operation, “Moving to a Hydrogen Economy: Dreams And Realities”, 30-Jan-2003.
(2) American Solar Energy Society (ASES), “Renewable Hydrogen Forum - A Summary of Expert Opinion and Policy Recommendations”, Prepared by Paulette Middleton, Ron Larson, Mike Nicklas and Brad Collins; Washington, DC, October 1, 2003.
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