Basic Research Needs for Solar Energy Utilization - Office of ...
Basic Research Needs for Solar Energy Utilization - Office of ...
Basic Research Needs for Solar Energy Utilization - Office of ...
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Costs <strong>of</strong> Hydrogen Production with Carbon-based Fuels<br />
Other carbon-based fuels can be trans<strong>for</strong>med into hydrogen <strong>for</strong> use in the niche markets that<br />
have been mentioned previously. Electrical power serves as the intermediary between the two,<br />
with the energy losses inherent in the trans<strong>for</strong>mation contained within the resulting electrical<br />
power cost. Estimates <strong>of</strong> the cost <strong>of</strong> production <strong>of</strong> hydrogen through electrolysis are<br />
straight<strong>for</strong>ward to make, although there are a series <strong>of</strong> assumptions that are involved. An<br />
example is given here (Ivy 2004) <strong>for</strong> three systems designed <strong>for</strong> different output levels: a small<br />
20 kg/day output, a larger 100 kg/day level, and a very large 1,000 kg/day production. These<br />
systems span the range from a neighborhood, four cars per day output to a 1,000 kg/day fueling<br />
system servicing a couple <strong>of</strong> hundred cars per day.<br />
The cost breakdown <strong>for</strong> hydrogen production in these scenarios is given in Figure 71 in 2005<br />
dollars (Ivy 2004). All three levels have been derived using the same financial analysis <strong>for</strong> a<br />
40-year system lifetime, which includes, among other considerations, a 7-year depreciation<br />
schedule, a common tax treatment, siting and labor costing, and maintenance, contingency,<br />
decommissioning, and insurance costs, much <strong>of</strong> which are proportionate to the total capital cost<br />
<strong>of</strong> the electrolyzer unit. Electrolyzer lifetimes range from 7 to 10 years be<strong>for</strong>e replacement. A<br />
final assumption is an industrial electricity cost <strong>of</strong> 4.83 cents/kWh, which is decidedly unrealistic<br />
<strong>for</strong> small-volume production, and is unlikely even at the 1,000 kg/day level.<br />
The analysis reveals a cost that ranges from $4.15/kg to $19.01/kg. A similar National Academy<br />
<strong>of</strong> Engineering (NAE) analysis derives a cost <strong>of</strong> $6.56 <strong>for</strong> a 480 kg/day unit (NRC and NAE<br />
2004). The cost <strong>of</strong> electricity is a driving factor in all three cases, with the capital costs <strong>of</strong> the<br />
small production units <strong>for</strong>ming the major cost. If properly designed, the overhead and<br />
$/kg Hydrogen<br />
20.00<br />
18.00<br />
16.00<br />
14.00<br />
12.00<br />
10.00<br />
8.00<br />
6.00<br />
4.00<br />
2.00<br />
0.00<br />
Overhead and Maintenance<br />
Capital Cost<br />
Water and Electricity Cost<br />
0.37<br />
1.32<br />
2.41<br />
$4.15/kg<br />
1000 kg/day<br />
207<br />
0.80<br />
4.43<br />
2.80<br />
$8.09/kg<br />
100 kg/day<br />
Hydrogen Market<br />
1.93<br />
13.90<br />
3.15<br />
$19.01/kg<br />
20 kg/day<br />
Figure 71 Hydrogen selling costs <strong>for</strong> carbon-based power (assumes price <strong>of</strong> $.0483/kWh)