Hydrogen Economy - Costs

Costs

When evaluating costs, fossil fuels are generally used as the reference. The energy content of these fuels is not a product of human effort and so has no cost assigned to it. Only the extraction, refining, transportation and production costs are considered. On the other hand, the energy content of a unit of hydrogen fuel must be manufactured, and so has a significant cost, on top of all the costs of refining, transportation, and distribution. Systems which use renewably generated electricity more directly, for example in trolleybuses, or in battery electric vehicles may have a significant economic advantage because there are fewer conversion processes required between primary energy source and point of use.

The barrier to lowering the price of high purity hydrogen is a cost of more than 35 kWh of electricity used to generate each kilogram of hydrogen gas.

Demonstrated advances in electrolyzer and fuel cell technology by ITM Power are claimed to have made significant in-roads into addressing the cost of electrolysing water to make hydrogen. Cost reduction would make hydrogen from off-grid renewable sources economic for refueling vehicles.

Hydrogen pipelines are more expensive than even long-distance electric lines. Hydrogen is about three times bulkier in volume than natural gas for the same enthalpy. Hydrogen accelerates the cracking of steel (hydrogen embrittlement), which increases maintenance costs, leakage rates, and material costs. The difference in cost is likely to expand with newer technology: wires suspended in air can use higher voltage with only marginally increased material costs, but higher pressure pipes require proportionally more material.

Setting up a hydrogen economy would require huge investments in the infrastructure to store and distribute hydrogen to vehicles. In contrast, battery electric vehicles, which are already publicly available, would not necessitate immediate expansion of the existing infrastructure for electricity transmission and distribution. Power plant capacity that now goes unused at night could be used for recharging electric vehicles. A study conducted by the Pacific Northwest National Laboratory for the US Department of Energy in December 2006 found that the idle off-peak grid capacity in the US would be sufficient to power 84% of all vehicles in the US if they all were immediately replaced with electric vehicles.

Different production methods each have differing associated investment and marginal costs. The energy and feedstock could originate from a multitude of sources i.e. natural gas, nuclear, solar, wind, biomass, coal, other fossil fuels, and geothermal.

Natural Gas at Small Scale

Uses steam reformation. Requires 15.9 million cubic feet (450,000 m3) of gas, which, if produced by small 500 kg/day reformers at the point of dispensing (i.e., the filling station), would equate to 777,000 reformers costing $1 trillion dollars and producing 150 million tons of hydrogen gas annually. Obviates the need for distribution infrastructure dedicated to hydrogen. $3.00 per GGE (Gallons of Gasoline Equivalent)

Nuclear

Provides energy for electrolysis of water. Would require 240,000 tons of unenriched uranium — that's 2,000 600-megawatt power plants, which would cost $840 billion, or about $2.50 per GGE.

Solar

Provides energy for electrolysis of water. Would require 2,500 kWh of sun per square meter, 113 million 40-kilowatt systems, which would cost $22 trillion, or about $9.50 per GGE.

Wind

Provides energy for electrolysis of water. At 7 meters per second average wind speed, it would require 1 million 2-MW wind turbines, which would cost $3 trillion dollars, or about $3.00 per GGE.

Biomass

Gasification plants would produce gas with steam reformation. 1.5 billion tons of dry biomass, 3,300 plants which would require 113.4 million acres (460,000 km²) of farm to produce the biomass. $565 billion dollars in cost, or about $1.90 per GGE

Coal

FutureGen plants use coal gasification then steam reformation. Requires 1 billion tons of coal or about 1,000 275-megawatt plants with a cost of about $500 billion, or about $1 per GGE.

• DOE Cost targets