Role of the Stationary Electric Power Sector in a Hydrogen Fuel Cell Vehicle Scenario

The U.S. stationary electric power system is composed of generating facilities that convert primary energy sources into electricity, transmit that electric power at high voltage over distances ranging from a few miles to hundreds of miles, and distribute it, at reduced voltages, to an array of customers ranging from residences to large, industrial complexes. The most important primary energy sources today are coal, oil, natural gas, nuclear fuels, solar, wind, and hydroelectric power.

Unlike hydrogen, which can be produced and stored, electricity must be produced instantaneously to meet the demand for electric power, because there are very limited viable methods for large-scale electrical energy storage. This difference may provide a useful mechanism for the production of hydrogen. Hydrogen and electricity do share an important characteristic—namely, both energy carriers are derived from other primary energy resources, another fact that may prove to be synergistic. Figure 5.1 shows schematically the various ways in which the stationary power sector can interact with the transportation sector.

In 2005 the nation’s electric power system, owned by hundreds of investor-owned, cooperative, and government utilities was composed of 978 gigawatts (GW) of generating capacity and produced 4,055 (TWh; terawatt-hours (billions of kilowatt-hours) of electricity) (EIA, 2007). Because of the typical daily load cycle of the generation, there is a meaningful fraction of generation capacity that is not used in the off-peak period. One could not fully utilize all of that unused

FIGURE 5.1 Stationary power and the transportation system. SOURCE: Beriesa (2007).

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5 role of the stationary electric Power sector in a hydrogen Fuel cell Vehicle scenario The U.S. stationary electric power system is composed production of hydrogen. Hydrogen and electricity do share of generating facilities that convert primary energy sources an important characteristic—namely, both energy carriers are into electricity, transmit that electric power at high voltage derived from other primary energy resources, another fact over distances ranging from a few miles to hundreds of miles, that may prove to be synergistic. Figure 5.1 shows schemati- and distribute it, at reduced voltages, to an array of custom- cally the various ways in which the stationary power sector ers ranging from residences to large, industrial complexes. can interact with the transportation sector. The most important primary energy sources today are coal, In 2005 the nation’s electric power system, owned by oil, natural gas, nuclear fuels, solar, wind, and hydroelectric hundreds of investor-owned, cooperative, and government power. utilities was composed of 978 gigawatts (GW) of generating Unlike hydrogen, which can be produced and stored, capacity and produced 4,055 (TWh; terawatt-hours (billions electricity must be produced instantaneously to meet the of kilowatt-hours) of electricity) (EIA, 2007). Because of the demand for electric power, because there are very limited typical daily load cycle of the generation, there is a mean- viable methods for large-scale electrical energy storage. ingful fraction of generation capacity that is not used in the This difference may provide a useful mechanism for the off-peak period. One could not fully utilize all of that unused FIGURE 5.1 Stationary power and the transportation system. SOURCE: Beriesa (2007).  Figure5-1.eps

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 TRANSITIONS TO ALTERNATIVE TRANSPORTATION TECHNOLOGIES—A FOCUS ON HyDROGEN capacity for other purposes. However, as a measure of poten- tial resource availability, off-peak capacity could in principle fuel more than a third of the light-duty fleet for a daily drive of 33 miles on average (Kintner-Meyer et al., 2006). In considering the current and future electric power sector, there are three ways in which it could be a significant factor in a hydrogen fuel cell vehicle (HFCV) future: (1) hydrogen production, either through electrolysis or co-production with electricity, (2) synergies between fuel cells for transportation and stationary applications, and (3) use of electric power for battery-powered vehicles. On this basis, three groups of questions emerge: 1. To increase the hydrogen available for transportation Figure5-2.eps by 2020 and/or 2035, what could be done in the stationary FIGURE 5.2 Energy source BITMAP consumption for electricity genera- power sector to accelerate hydrogen production? What are tion. Renewable energy includes hydroelectric power. SOURCE: the technological requirements? What incentives would EIA (2007). help? 2. How best can we develop and accelerate the use of hydrogen in the stationary power sector by 2020 and/or 2035? Again, what are the technological requirements and incentives? 3. Is there a plausible alternative use of the stationary power sector’s excess capacity and infrastructure that can result in a viable alternative to hydrogen use in transportation in 2020 and/or 2035? TechNoloGical readiNess It is useful first to examine the technological readiness of the systems mentioned earlier and the likelihood of their deployment in 2020 and 2035. hydrogen Production in the Power sector Producing hydrogen as a transportation fuel is somewhat FIGURE 5.3 Nationwide NOx and SO2 emissions from the power Figure5-3.eps similar to producing electricity for stationary use because BITMAP sector. SOURCE: Srivastava et al. (2005). both are energy carriers that require primary energy sources (mainly coal, nuclear, natural gas, and hydropower). About 40 percent of all energy used in the United States goes to and processes could extend electric power benefits into the producing electricity, which is the main form of energy in transportation sector, which is currently heavily oil depen- the residential and commercial sectors. Less than 3 percent dent, with attendant pollutant and GHG emissions. Toward of electricity is produced from oil as shown in Figure 5.2. this end, an ad hoc group, the Hydrogen Utility Group, was Furthermore, power plant emissions have declined sig- formed in 2005 by nine power companies with the support nificantly even though electricity demand continues to grow. of the Department of Energy/National Renewable Energy This is shown for nitrogen oxides (NOx) and sulfur dioxide Laboratory, Electric Power Research Institute and National (SO2) in Figure 5.3. In the future, expected pressures for Hydrogen Association to explore the potential synergies cleaner electricity production processes will continue the between electricity and hydrogen production. evolution toward low or zero emissions. In addition, the power industry is facing a significant challenge to reduce greenhouse gas (GHG) emissions in anticipation of a future Hydrogen Production in the Power Sector: Electrolysis carbon constraint. This has resulted in a move toward low (Near Term) or zero-carbon emitting technologies (i.e., renewable energy, As explained in Chapter 3, electrolysis (splitting water nuclear energy, and fossil energy with carbon capture and molecules to release hydrogen) is a proven, commercially storage). Tying hydrogen production to the industry’s assets

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 ROLE OF THE STATIONARy ELECTRIC POWER SECTOR IN A HyDROGEN FUEL CELL VEHICLE SCENARIO available technology. Electrolysis, although more expensive and this carries a significant “wear-and-tear” cost penalty than natural gas reformation, offers some unique features as from cycling them up and down. If that capacity could be an alternative method: used to produce hydrogen during the off-peak period, via electrolysis, power plants could minimize such cycling and • Since the infrastructure to deliver electricity exists in hence increase overall capacity factor and asset utilization. If every corner of the United States, hydrogen can be produced 10 percent of all light-duty vehicles were fueled with hydro- close to or at the point of distribution, thereby minimizing gen produced solely from electrolysis off-peak, the U.S. grid initial capital investments in hydrogen infrastructure. could realize an average of 8 percent increase in load factor. • Unlike the reformation process where natural gas is the However, the electrolyzer plant would operate only about sole primary energy source, the energy sources for electricity 50 percent of the time, and the increased capital charge per production are diverse, including fossil fuel such as coal and kilogram of hydrogen produced would to some extent offset natural gas; nuclear; and renewable energy, such as hydro, the reduced power cost. wind, solar and biomass. Today the electrolysis process is only moderately effi- • The cost of electricity has been and is expected to cient, which makes it applicable only in certain niche markets remain much more stable than natural gas prices due to fuel when high-purity hydrogen is required. However, it would be diversification in the power generation sector. (In specific beneficial to develop more efficient and cost-effective elec- regions, factors such as regulated-deregulated market and trolysis technology. Capital cost reduction and improvements marginal cost of power generation for electrolytic hydrogen in electrolysis efficiency would be very useful, potentially production could impact such comparisons.) making the economics of electrolysis more competitive with • Hydrogen produced by electrolysis emits no harmful natural gas reformation. substances at the point of production, which would be benefi- cial in environmentally sensitive urban areas. CO2 emissions Hydrogen Production in the Power Sector: Co-production from power plants would be easier to capture and sequester (Long Term) than those from small natural gas reforming plants. • Continuing progress to clean up power plant criteria If HFCVs become widespread and hydrogen vehicle pen- and CO2 emissions will ensure that hydrogen produced from etration increases in the longer term, large central hydrogen electricity in the future will benefit from the increased clean- production facilities become more viable due to economies liness fossil fuel power generation. of scale. As described in Chapter 3, hydrogen production • As a side benefit, the electrolysis process also produces from coal with carbon capture and sequestration (CCS) could oxygen that may have a market value. become one plausible way to meet the larger demand. Integrated gasification-combined cycle (IGCC) power generation technology using coal is being developed, demon- As explained in Chapter 3, large electrolyzers using alka- strated, and commercialized. IGCC is more efficient in both line technology (producing more than 500 kg of hydrogen power generation and emission control and, hence, could per day (kg/d) constitute a proven, commercially available become the preferred alternative to pulverized coal power technology. Smaller electrolyzers, using proton exchange plants using a conventional combustion process. Further- membrane (PEM) technology, require more research, devel- more, capturing and storing carbon dioxide (CO2) produced opment, and demonstration (RD&D) to improve durability from the coal in geologic formations 5,000 to 10,000 feet and efficiency and to reduce capital cost. For example, the under the ground would reduce its impact on climate change, capital cost per unit of production of a 10 to 100 kg/d PEM if long-term burial with minimal leakage can be achieved. electrolyzer is four to seven times that of a 1,500 kg/d unit Essentially complete storage is guaranteed in depleted or (EPRI, 2007). These smaller PEM units, if successfully partially depleted oil and gas reservoirs, which have demon- developed, could provide an alternative or complementary strated long-term storage capability by the nature of their past approach to natural gas reformation for hydrogen production storage capacity. Storage in aquifers, deep coal beds, and during the early commercialization stage. other formations is likely but yet to be fully demonstrated. From the power industry’s perspective, the installed gen- Capturing CO2 involves adding a water-gas-shift reactor to eration capacity of any utility is built to meet peak power the IGCC process to convert the CO in the synthetic gas demand. Thus, a portion of this capacity sits idle during to CO2 and hydrogen. CO2 then would be separated from off-peak periods, such as during the night when demand hydrogen, compressed, and sent underground via a pipeline is reduced. This results in cycling of the power plants to for storage (sequestration), while the nearly pure hydrogen respond to time-varying demand. While some plants are stream could enter a combustion turbine for power genera- explicitly designed for peaking operations (e.g., combustion tion. The hydrogen produced in this process could be utilized turbines), others are designed for base load operation (e.g., for transportation fuel. This approach allows one to leverage coal, nuclear). To the extent that base load plants are not used a significantly higher upfront capital investment through the for base load operation, they must be cycled on a daily basis, co-production of electricity and hydrogen, thereby making

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8 TRANSITIONS TO ALTERNATIVE TRANSPORTATION TECHNOLOGIES—A FOCUS ON HyDROGEN FIGURE 5.4 FutureGen concept for co-production of power and hydrogen. Figure5-4.eps SOURCE: FutureGen Alliance (http://www.futuregenalliance.org/). BITMAP both products more competitive because of shared costs to consider the co-production of hydrogen with advanced for gasification and gas cleanup and operational flexibility high-temperature gas-cooled nuclear reactors, but the time (constant output of the syngas with swings between electric line for such development efforts is currently lagging the power and hydrogen production). A partnership between the IGCC-CCS efforts and is unlikely to be ready to serve the Department of Energy and several industrial companies has hydrogen demand by 2025-2030 when centralized hydro- been working to develop such a concept, FutureGen (Figure gen production facilities are needed. As a result, it is not 5.4).1 Success of a FutureGen-type power generation concept considered in this study. However, this does not diminish its would establish a plausible pathway for both clean power potential beyond the 2025-2030 time frame to compete with generation and hydrogen co-production. The question that or complement the IGCC-CCS technology. electric utilities (or independent power producers) will have to confront is to what extent utilities will be willing to invest Potential for synergy from large-scale stationary Fuel in co-production facilities. While utilities may not want to cells for stationary Power enter the “new” hydrogen market, their reluctance could be lessened by policy actions by their state public utility com- As discussed in Chapter 3, PEM is the technology being missions (PUCs) to provide incentives for them. developed by all major vehicle manufacturers for primary Nuclear power offers another alternative to support large- power in their prototype fuel cell vehicles. In addition, PEM scale hydrogen production to meet high market demand in fuel cell systems are currently being developed for stationary the long term. Nuclear power is receiving renewed interest applications, ranging from very small capacity backup power since it produces neither harmful air pollutants nor green- applications providing less than 1 kW to primary or stand- house gases (although minor amounts of CO2 are emitted alone power applications of several hundred kilowatts. To in the fuel fabrication process). DOE has an active program the best of the committee’s knowledge there are no PEM fuel cells systems currently in high-volume commercial produc- tion, although several companies have low rate commercial 1DOE announced restructuring of the FutureGen project on January 30, production and/or extensive field tests under way. 2008, citing cost escalation and technology advancement over the last 5 years since it was first announced in 2003. Under the restructuring plan, Many anticipated high-volume manufacturing target dates DOE intends to demonstrate the commercial viability of CCS technology for stationary power have been missed, and potential con- at multiple commercial power plant projects that are either under way or sumers are now somewhat wary. Furthermore, many devel- in the planning stage. DOE will fund 100 percent of the incremental cost opers’ initial product offerings target specialized, high-value, of the CCS portion of the projects if they are included in the plans, and it but relatively low-volume, market segments such as remote anticipates spending up to $1.3 billion (in as-spent dollars) between FY 2007 and FY 2020. These demonstrations should achieve the same technical telecommunications or data center backup. Taken together, specs as those of the original FutureGen plant with 90 percent CO2 capture these considerations make it unlikely that stationary PEM according the DOE’s Request for Information document and, therefore, will fuel cell systems will precede vehicle fuel cell systems into have the same opportunity for hydrogen co-production.

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 ROLE OF THE STATIONARy ELECTRIC POWER SECTOR IN A HyDROGEN FUEL CELL VEHICLE SCENARIO the market in large-scale, mass market production by more Beyond such basic stack activities, however, the picture is than a few years, if at all. murkier. The product requirements, and thus the overall sys- Significant synergies between stationary and transporta- tem designs, for the two applications are quite different. As tion PEM fuel cells during the time frame covered by this a result, it is more difficult to identify significant synergies report might be expected in the area of ongoing product between stationary and transportation PEM systems either in development, both in technology improvement and in detailed stack design or at the system level. manufacturing cost reduction. However, product require- ments for PEM fuel cells in stationary and light-duty trans- Long-term Potential for Synergy from Large-scale portation applications are not the same. The DOE (2007) Stationary Fuel Cells for Stationary Power states on its website that the fuel cell stack cost target to be competitive with conventional technology for automotive Large (utility)-scale stationary power production cur- is $30/kW, whereas cost targets for stationary applications rently accounts for about 38 percent (EIA, 2006) of the range from $450 to $700 per kilowatt for widespread com- carbon emissions in the United States. As fuel prices rise and mercial applications, with up to $1,000/kW for some specific emissions standards are tightened, power equipment manu- high-value, low-volume applications. The costs are higher facturers spend increasingly large sums to achieve small because durability requirements for stationary applications efficiency gains (1 percent or less) and to reduce emissions. are much higher; stationary fuel cells would operate for far Further improvements of such gas-steam turbine combined- more hours per year than those in automobiles. The DOE cycle systems (now a maximum of about 60 percent efficient) states that a 5,000-hour lifetime (approximately equivalent will be even more difficult to attain. to 150,000 miles) will be required for fuel cell technology to In the future, high-temperature fuel cells offer the pos- be acceptable in automotive applications, while as much as a sibility of further gains in efficiency and reductions of 40,000-hour lifetime may be required for widespread station- emissions, especially when operated in a hybrid mode with ary power applications to be economically viable. Similarly, a turbine bottoming cycle to recover additional energy from duty cycles, operational environment requirements, fuels, the high-temperature exhaust and residual fuel stream exiting and other key performance parameters are likely to be quite the fuel cell. Figure 5.5 shows a conceptual schematic for different for automotive and stationary applications. such a high-temperature hybrid fuel cell system. Theoretical Stationary and transportation PEM fuel cells do share fuel-to-electricity conversion for such systems approaches some common underlying development needs. The most 70 percent. important of these is reduction of installed costs. Estimates Efficiency and emissions benefits in this system result of anticipated costs for both stationary and transportation primarily from the direct conversion of approximately two- PEM fuel cell systems in volume production have been thirds of the chemical energy in the fuel to electricity in the carried out by Battelle and the National Renewable Energy fuel cell stack, thus avoiding the efficiency limits gas and Laboratory (Kintner-Meier et al., 2006; NREL, 2005; Stone, steam turbine and production of emissions associated with 2005). These analyses show that in each system, most of combustion processes. Further reduction of emissions also the cost of a fuel cell system comes from the fuel cell stack occurs due simply to the improved efficiency and resulting itself. Thus, although fuel cell stack cost reduction or per- reduction in fuel consumption. It should be noted that such formance improvement specific to one application may not high-temperature fuel cell systems do not readily provide be directly transferable to the other, it is likely that general co-production of hydrogen for other purposes. The high- benefits would still accrue to both applications. For example, temperature fuel cell stack is able to use higher-order hydro- if transportation lifetimes were easily met with more stable carbons (e.g., methane, natural gas) as fuel either directly long-life membranes developed for stationary applications, or with limited external pre-reformation of the fuel. Thus, the “excess” lifetime capability might be used to benefit the unlike the situation with low-temperature fuel cells (e.g., transportation system in some other way, such as reducing PEM), there is no place in the system where a ready source materials costs and/or improving performance by using a of pure hydrogen is available. thinner membrane. Several companies are pursuing such high-temperature Similarly, manufacturing process development for the fuel cell hybrid systems. However, significant technical PEM stack is likely to benefit both stationary and transpor- challenges remain for these systems, and in the judgment of tation applications. Some examples (not exhaustive) might this committee it is unlikely that any significant reductions include a better understanding of how to mold composite in oil imports or carbon dioxide emissions will result from bipolar plates and/or better processes for forming and passiv- widespread commercialization of these systems during the ating metal bipolar plates, improved processes for production time frame studied in this report. Nevertheless, these sys- of membrane electrode assemblies (MEAs; e.g., membrane tems do offer long-term potential for significant reductions handling, application of catalyst, etc.), better methods for in oil imports and CO2 emissions and should form part of pre-testing MEAs or cells, and better methods for assembling a portfolio of development activities that might potentially the stacks themselves. address these concerns.

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0 TRANSITIONS TO ALTERNATIVE TRANSPORTATION TECHNOLOGIES—A FOCUS ON HyDROGEN FIGURE 5.5 Schematic of high-temperature fuel cell hybrid system. SOURCE: General Electric Corporation, presentation to the committee. Figure5-5.eps BITMAP competitive Use of the electric Power system current hybrids but with a larger battery to allow some opera- for electric Vehicles or Plug-in hybrid electric Vehicles tion on just electric power though less than the AER. The use of off-peak power is particularly attractive. If The stationary power sector could serve the transportation off-peak power is available for $0.07/kWh, it is equivalent market in another way by providing electric power to charge to gasoline at $0.77 per gallon after taking into account the batteries. These could then power electric vehicles (EVs) differences in efficiency (Pratt et al., 2007).2 As this example or plug-in hybrid vehicles (PHEVs). In this case, electric demonstrates, time-of-day pricing would have to be available power, generally off peak at attractive prices, would be used to make off-peak power economical. This is an excellent to recharge batteries, normally at the vehicle’s long-term example of how an electric utility, with the approval of its “parked” location (home of a residential customer, garage state PUC, could help make electric vehicles financially for a fleet vehicle, etc.). PHEVs might have a range of about attractive. Similar incentives could be put in place for any 20-40 miles. When the battery charge is depleted, a regular plug-in or hydrogen-based concept. gasoline engine would start to operate the vehicle. PHEVs The near-term focus should be on the blended version are described in Chapter 4. since the AER approach essentially has the same problems as Either type of electric vehicle would be much easier full electric vehicles—namely, the need for a large, advanced to implement than HFCVs, especially the PHEV. Little battery and the need for rapid growth of charging stations. new infrastructure would be needed for the introduction In a blended PHEV, the advanced batteries will be closer in of PHEVs, although new generating capacity and possibly size to those found in today’s hybrid vehicles. With currently transmission lines would be needed eventually. Infrastructure envisioned technologies, it would take an AER PHEV up to and logistics are much bigger problems for the introduction 6.5 hours to recharge (at 110 V) for a 40-mile battery range, of HFCVs. EVs might require the construction of public whereas a blended PHEV would require only 2 hours (at charging stations to permit long-distance operation. The 110 V) for a 5-mile battery range (Kawai, 2007).3 It should viability of both EVs and PHEVs depends on significant be emphasized that the critical path developmental item for improvements in battery capability. PHEVs is the advanced battery (e.g., lithium ion) that either Two types of PHEVs are under consideration: the AER the AER or the blended version will require. (all-electric range) and the “blended” PHEV. The AER has a The stationary power sector itself could supply the needs large electric motor that provides all the traction power and a of about 40 percent of the current light-duty fleet for an aver- large battery to allow considerable all-electric vehicle opera- age 30+ miles/day using off-peak power from current power tion. It also has a small engine that acts as a range extender when the battery is depleted. The blended PHEV has a larger 2It should be noted that gasoline prices include federal and state gasoline engine and a smaller electric motor which operate in parallel taxes, which are used to build and maintain roads. to drive the wheels. The blended configuration is similar to 3At 220 V, the charging times would be much shorter.

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 ROLE OF THE STATIONARy ELECTRIC POWER SECTOR IN A HyDROGEN FUEL CELL VEHICLE SCENARIO Figure5-6.eps FIGURE 5.6 Fueling capacity for plug-in hybrid electric vehicles FIGURE 5.7 Advanced vehicle market penetration. SOURCE: BITMAP Figure5-7.eps (PHEVs) in the U.S. power sector. SOURCE: Kintner-Meier et al. Kawai (2007). BITMAP (2006). plants if PHEVs and EVs were available, equivalent to what make utilities consider branching out into hydrogen produc- it could do for HFCVs via electrolysis. The Pacific Northwest tion, but would they be sufficient? National Laboratory (Kintner-Meier et al., 2006) found that Let us start with the expected availability of the station- if all light-duty vehicles were plug-in hybrids, 70 percent or ary electric power system to provide the power either for more of them could be charged if 24-hour per day charging electrolysis (or PHEV charging) as well as the expected were carried out utilizing otherwise reserve power generation capacity for co-production of hydrogen and electricity by capability. This relationship is shown in Figure 5.6. the new-generation options explained above. In the scenarios presented in Chapter 6, the continued In the stationary electric power sector, a variety of mecha- introduction of hybrid electric vehicles (some of which nisms have been used to encourage the introduction of new could be PHEVs) has been considered as an alternative to the technologies or new approaches to doing business. These introduction of hydrogen vehicles and the contrasts in infra- range from such federal approaches as production tax credits structure requirements are factored in. The most important and carbon credits to state mechanisms such as rate struc- factors are the time horizons under consideration (both 2020 tures and portfolio standards. The early introduction of such and 2035) since the rollout of stationary hydrogen production mechanisms would expedite action on the part of utilities (electrolysis and co-production) and stationary applications to become players in this field sooner rather than later. This for fuel cells require time for technology development, should be seriously considered, since utilities can be major permitting or regulatory approvals, and development of an players in the rollout of the systems described here. infrastructure to support any such effort. The synergies for the use of stationary power for either The EV and PHEV alternatives have a more limited, but hydrogen production and/or plug-in hybrids are quite signifi- also challenging, technological requirement, namely, the cant. Improved asset utilization (increased capacity factors development of a high capacity battery to make this option using electrolysis at distributed locations, i.e., substations viable. However, the permitting or regulatory approvals and and/or charging batteries) could (1) help increase genera- infrastructure needs are much smaller, especially for the tion capacity factors, (2) shave peak loads, (3) reduce wear early, transitional period. This is shown in Figure 5.6 as well and tear on cycling generation, and (4) provide hydrogen to as in the qualitative estimate from Toyota (Figure 5.7). transportation refueling stations or plug-in locations. In the longer term, the co-production of electricity and hydrogen could leverage investments that would otherwise iNceNTiVes For The elecTric PoWer secTor be required anyway, for electric power production. The co- The regulatory regime for electricity is well known and production of hydrogen and electricity using IGCC technol- evolving. That regime can be extended to the hydrogen pro- ogy with carbon capture and storage (as in the FutureGen duction (and plug-in hybrid) market without major changes concept) represents a potentially significant opportunity. except, possibly, for an incentive tariff. Such an approach would leverage the capital investment One question, then, is what regulatory mechanisms might since the fossil fuel, in this case coal, would be required to be put into place to provide utilities with incentives to pro- go through the gasification process, producing hydrogen that duce hydrogen at either distributed or central locations. It is can be combusted to create electricity as well as producing clear that additional revenues from hydrogen business and hydrogen for transportation use. Through this process, car- carbon emission credits would be reasonable incentives to bon would be captured and sequestered.

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 TRANSITIONS TO ALTERNATIVE TRANSPORTATION TECHNOLOGIES—A FOCUS ON HyDROGEN coNclUsioNs 6. Plug-in hybrid vehicles could help reduce reliance on imported oil (and natural gas). The reductions in overall CONCLUSION: With appropriate policies or market CO2 production will be a function of the reliance on fossil conditions in place, potential synergies between the fuels for electricity production and the success of CCS tech- transportation sector and the electric power sector could nologies. The introduction of PHEVs depends on the timely accelerate the potential for reduced oil use and decreased introduction of advanced batteries. CO2 emissions as benefits from the use of hydrogen in 7. The power industry could be of further assistance by both sectors. In the near term, electrolysis of water at providing a special electricity rate structure to support the refueling sites using off-peak power, and in the longer early implementation of electrolysis. This is particularly term (after 2025), cogeneration of low-carbon hydrogen important during the hydrogen market transition period. (See and electricity in gasification-based energy plants, are Chapter 3 for detailed discussions of the impact of the cost potential options that offer additional synergies. See of electricity on the hydrogen production cost.) Utilities, Chapter 5. working with their regulatory commissions could provide economic incentives to hydrogen producers to lessen the cost More specifically, in response to the three framing ques- burden of the electrolysis process. tions posed at the beginning of this chapter, the committee reached the following conclusions: reFereNces 1. In the near term (until 2020), existing electric power Bereisa, J. 2007. Energy Diversity: The Time Is Now. Presentation to the facilities (generation, transmission, substations, etc.) could committee, June 25. produce hydrogen for transportation fuel purposes. In par- DOE (Department of Energy). 2007. Fuel Cell Technology Challenges. Available at http://www1.eere.energy.gov/hydrogenandfuelcells/ ticular, small-scale electrolyzer plants, when successfully fuelcells/printable_versions/fc_challenges.html. developed to meet more competitive cost and performance EIA (Energy Information Administration). 2006. Emissions of Green- standards, at or near the points of distribution, could be house Gases. Available at http://tonto.eia.doe.gov/FTPROOT/ important during the transition when the cost burdens of environment/057306.pdf. larger-scale reformation plants would be a potential barrier. EIA. 2007. Annual Energy Review. Available at http://www.eia.doe.gov/ emeu/aer/contents.html. 2. In the longer term (2035), the successful demonstration EPRI (Electric Power Research Institute). 2007. Electrolyzer Competitive of one or more technologies could result in the widespread Benchmarking: Pathways to Electrolysis-Powered Hydrogen Fueling deployment of “co-production plants.” One benefit from this Stations. Palo Alto, Calif.: 1014877. approach would be the reduction in the use of natural gas Kawai, T. 2007. Sustainable Mobility and the Development of Advanced that will increasingly have to be imported and is a source of Technology Vehicles. Presentation to the committee, June 26. Kintner-Meyer, M., K. Schneider, and R. Pratt. 2006. Impacts Assessment greenhouse gases. of Plug-in Hybrid Vehicles on Electric Utilities and Regional U.S. Power 3. Incentives are likely to be necessary for full involve- Grids. Part 1: Technical Analysis. Richland, Wash: Pacific Northwest ment of electric power companies. Mechanisms such as National Laboratory. Available at http://www.pnl.gov/energy/eed/etd/ production tax credits, rate adjustments, carbon credits, and pdfs/phev_feasibility_analysis_combined.pdf. Accessed September so forth, would be options for near-term action. 2008. NREL (National Renewable Energy Laboratory). 2005. Cost Analysis of 4. PEM fuel cell systems, whether for transportation or PEM Fuel Cell Systems for Transportation. NREL Subcontract Report stationary systems, still require significant cost, reliability, NREL/SR-560-39104. December. and lifetime improvements to be truly competitive in the Pratt, R., M. Kintner-Meyer, K. Schneider, M. Scott, D. Elliott, and M. market. In many basic technology and product development Warwick. 2007. Potential Impacts of High Penetration of Plug-in issues, and basic manufacturing process development for the Hybrid Vehicles on the U.S. Power Grid. Richland, Wash.: Pacific Northwest National Laboratory. Available at http://www1.eere.energy. PEM stack, synergies between stationary electric power and gov/vehiclesandfuels/avta/pdfs/phev/pratt_phev_workshop.pdf. Ac- transportation fuel cells might be realized. cessed June 2008. 5. The introduction of high-temperature fuel cells (solid Srivastava, R., N. Hutson, and F. Princiotta. 2005. Reduction of Mercury oxide fuel cells or molten carbonate fuel cells) does not from Coal-fired Electric Utility Boilers. Presentation at the DOE/NETL enhance the production of hydrogen since one advantage of Mercury Control Technology R&D Program Review, Pittsburgh, Pa., July 12, 2005. these technologies is their ability to use a variety of feed- Stone, H.J. 2005. Economic Analysis of Stationary PEM Fuel Cell Systems. stocks with an internal reformer. Battelle Memorial Institute, Project ID # FC 48.