Moving Toward Consistent Analysis in the HFC

1
Moving Toward Consistent Analysis in the HFCIT
Program H2A

• NREL Energy Analysis Seminar Series
• September 9, 2004
• Washington, D.C.

2
Preview

• H2A history and purpose
• H2A structure (technical teams)
• Central and forecourt analyses
• Financial approach
• Cash flow model
• Approach to Feedstock / fuels prices
• Delivery analysis
• Accomplishments
• Future plans

3
H2A Mission

• Improve the transparency and consistency of
  approach to analysis, improve the understanding
  of the differences among analyses, and seek
  better validation from industry.

4
History Where We Are Now

• First H2A meeting February 2003
• Primary goal bring consistency transparency to
  hydrogen analysis
• Current effort is not designed to pick winners
• RD portfolio analysis
• Tool for providing RD direction
• Current stage production delivery analysis -
  consistent cost methodology critical cost
  analyses

5
H2A Teams

• Central
• gt 50,000 kg/day H2, minimal storage, 300 psi
• Johanna Ivy (NREL), Maggie Mann (NREL), Dan Mears
  (Technology Insights), Mike Rutkowski (Parsons
  Engineering)
• Forecourt
• 100 and 1,500 kg/day H2
• Brian James (Directed Technologies, Inc.), Steve
  Lasher (TIAX), Matt Ringer (NREL)
• Delivery
• Components and delivery scenarios
• Marianne Mintz (ANL), Joan Ogden (UC Davis), Matt
  Ringer (NREL)
• Finance, feedstocks, and methodology
• Marylynn Placet (PNNL)
• Environmental assessment
• Michael Wang (ANL)

6
Approach for Production Analysis

• Cash flow analysis tool for Central Forecourt
  production
• Estimates levelized price of hydrogen for desired
  internal rate of return
• Take into account capital costs, construction
  time, taxes, depreciation, OM, inflation, and
  projected feedstock prices
• Production and delivery costs estimated
• Current, mid- (2015), and long-term (2030)
  production technologies
• Natural gas, coal, biomass, nuclear, electrolysis
• Current delivery components
• Data from published studies and industry designs
• Refined inputs and results based on peer review
  and input from key industrial collaborators (KIC)
• Identified key cost drivers using sensitivity
  analyses

7
KIC Companies

• AEP
• Air Products
• Areva
• BOC
• BP
• ChevronTexaco
• Conoco Phillips
• Eastman Chemical

• Entergy
• Exxon Mobil
• FERCO
• GE
• Praxair
• Shell
• Stuart Energy
• Thermochem

8
H2A Cash Flow Analysis Tool
9
H2A Tool Features

• Yes/no toggle switches to allow for user input or
  H2A standard input
• Inputs turn on/off based on yes/no toggle switch
• Error messages included to alert user when input
  errors are made
• Color-coded to facilitate user input

10
Key Financial ParametersForecourt and Central

• Reference year (2000 )
• Debt versus equity financing (100 equity)
• After-tax internal rate of return (10 real)
• Inflation rate (1.9)
• Effective total tax rate (38.9)
• Design capacity (varies)
• Capacity factor (90 for central (exc. wind) 70
  for forecourt)
• Length of construction period (0.5 3 years for
  central 0 for forecourt)
• Production ramp up schedule (varies according
  to case)
• Depreciation period and schedule (MACRS -- 20
  yrs for central 7 yrs for forecourt)
• Plant life and economic analysis period (40 yrs
  for central 20 yrs for forecourt)
• Cost of land (5,000/acre for central land is
  rented in forecourt)
• Burdened labor cost (50/hour central 15/hour
  forecourt)
• GA rate as of labor (20)

11
Feedstock and Utility Prices

• Issues
• Future prices of any fuel / feedstock will be
  dependent on market demand for that fuel /
  feedstock
• Demand for hydrogen may affect future fuel /
  feedstock prices
• Delivered prices vary significantly by sector
  (i.e., commercial, industrial, utility)
• Historically, volatility and risk have varied
  among fuels / feedstocks, and by location

12
Feedstock and Utility Prices, cont.

• Solution
• Develop reasonable price projections
• Use official base case EIA projections through
  2025 and extrapolate costs to 2070 using
  longer-term models (e.g., PNNLs Climate
  Assessment Model (M-CAM) and MARKAL)
• Inflate current market prices and apply
  professional judgment
• Use national averages to represent generic U.S.
  cases
• Conduct sensitivity runs
• Allow users to test their own assumptions

13
Central Technologies
14
Central Capacities (1,000 kg/day)
15
Central Technology Options- /kg Comparisons -
16
Mid Term Central Technology Options- /kg
Components -
/kg Hydrogen
17
IRR Sensitivitiesfor Mid Term Central Options
/kg Hydrogen
18
Sensitivity Results Natural Gas Reforming - 2015
Low
Base
High
-50
4.5
100
-10
475
30
95
90
80
-30
7.6
30
0
15
30
0
0
150
Base Case 1.16kg
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Sensitivity Results H2 From Coal Gasification -
2015
Low
Base
High
-10
1315
30
-40
25
60
95
90
80
-30
16.6
30
0
15
30
0
0
150
Base Case 1.15/kg
20
Sensitivity Results H2 From Biomass Gasif -
2015
Low
Base
High
1.2
2.5
3.6
-20
1,500
30
50
45
36
0.24
0.30
0.54
95
90
80
4.6
0
0
(steam, kg/kg H2)
Base Case 1.90/kg
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Sensitivity Results H2 From Wind Electrolysis
- 2015
Low
Base
High
-25
1935
50
-20
3065
20
74
71
64
100
0
0
10
15
20
Base Case 3.13/kg
22
Sensitivity Results H2 From Advanced Nuclear
(VHTR) Sulfur-Iodine Thermo-chemical Process -
2030
Low
Base
High
900
900
825
95
90
80
-10
1220
25
-10
865
25
Per Ongoing EPRI Project
20/MT
0
O
Base Case 2.25/kg

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Forecourt Station Capacities
Design Capacity
Average Fuel Demand
Average Cars Refueled
Type of Station
Small H2 Capacity
100 kg H2/day
70 kg H2/day
12 H2 cars/day
Large H2 Capacity
1,500 kg H2/day
1,050 kg H2/day
175 H2 cars/day
Average Gasoline Station
-
3,000 gal/day
375 conventional cars/day
Note Assumes 70 capacity factor and 6 kg/fill
for H2 capacity, and 8 gallons gasoline per fill
on average.

• Small and large H2 capacities are assumed to be
  integrated into existing gasoline stations with 8
  dispensers total
• Small station 1 cH2 dispenser
• Large station 3 cH2 dispensers

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Forecourt Cases
Small
Large
Type of Station
Current Technology / Design Assumptions
Delivered LH2 Tanker Truck
X
X
LH2 primary storage, 6250 psi LH2 cryo-pump and
evaporator cascade dispensing
Delivered cH2 Tube Trailer
X
Tube Trailer primary storage, 6250 psi
compression cascade dispensing
Delivered cH2 Pipeline
X
No primary storage, 6250 psi compression
cascade dispensing
Natural Gas Reformer
X
X
SR with PSA cleanup, 6250 psi compression,
cascade storage/dispensing
Methanol Reformer
Fall 04
Fall 04
TBD
Ethanol Reformer
Fall 04
Fall 04
TBD
Electrolyser
X
X
Alkaline electrolyser, 6250 psi compression,
cascade storage/dispensing
Note All cases include assessment of current,
mid-term, and long-term technologies.
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Summary of Cases Technology Parameters - Large
H2 Capacity
Equipment
Current
Mid-term
Long-term
LH2 Storage
No boil-off recovery 0.4/day losses
Boil-off recovery 0.2/day losses
Boil-off recovery 0.0/day losses
cH2 Storage
Steel tanks 818/kgH2 stored
Composite tanks 323/kgH2 stored
Composite tanks 296/kgH2 stored
cH2 Compression
Recip-piston type 65 ad. efficiency
Intensifier or other? 75 ad. efficiency
Advanced? 85 ad. efficiency
NG-based H2 Production Unit
SR with PSA 10 year life 69 LHV efficiency 1.2
MM (uninstalled)
Adv. Reformer and separation 15 year life 72
LHV efficiency 0.90 MM (uninstalled)
Compact and combined steps 20 yr life 73 LHV
eff. 0.82 MM (uninstalled)
Electrolyser
Alkaline 64 LHV efficiency 665/kWinput
Alkaline or PEM 71 LHV efficiency 400/kWinput
Adv. Alkaline/PEM 76 LHV efficiency 300/kWinput
Note Sensitivity analysis lower/upper bounds
incorporate affects of other technologies.
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Generic Site Plans
27
Base Case Results Mid-term Technology - Large H2
Capacity
Forecourt Station Costs Only
Note For side by side comparison, central plant
and delivery costs must be added to the Pipeline
and LH2 cases.
28
IRR Sensitivity Results Mid-term Technology -
Large H2 Capacity
Note For side by side comparison, central plant
and delivery costs must be added to the Pipeline
and LH2 cases.
29
Base Case Results Mid-term Technology Capacity
Comparison
Forecourt Station Costs Only
Note For side by side comparison, central plant
and delivery costs must be added to the Pipeline,
Tube Trailer, and LH2 cases.
30
Base Case Results Technology Improvements
1,500 kg/day
For side by side comparison, central plant and
delivery costs must be added to the Pipeline and
LH2 cases.
31
Sensitivity Results Mid-term Technology - Large
LH2
Low
Base
High
90
70
50
0.30
0.45
0.75
0.30
0.50
1.0
12
15
25
Forecourt Station Costs Only
5
10
30
Note For side by side comparison with the
on-site production options, central plant and
delivery costs must be added to the LH2 case.
32
Sensitivity Results Mid-term Technology - Large
NG SR
Low
Base
High
0.9
1.8
3.1
1.85
4.15
8.58
90
70
50
375
525
1,500
0.025
0.048
0.12
33
Sensitivity Results Mid-term Technology - Large
Electrolyser
Low
Base
High
0.025
0.048
0.12
1.1
2.2
3.7
90
70
50
375
525
1,500
74
71
64
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Approach for H2A Delivery Analysis

• Develop delivery component cost and performance
  database
• Develop delivery scenarios for major markets and
  demand levels
• Determine the cost of H2 delivery for those
  scenarios
• Fixed charge rate
• Assumptions consistent with H2A production
  analysis
• Three delivery modes
• Compressed gas truck
• Liquid truck
• Gas pipeline
• Future mixed modes

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Delivery Scenarios
Delivery costs are based on component
combinations that meet the demands of the market
36
Delivery Cost AnalysisPopulation Density gt
Household Vehicle Density gt H2 Demand

• Population density consistently peaks in 10-20
  of urbanized area
• Shape of density function (rate of decline)
  reflects compactness vs. sprawl
• Vehicle density rises from lt0.5/capita in core to
  1.16/capita in outer zones

I
II
III
IV
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A Generic Large City with Four Population Density
Zones Requires Two Interconnected Mains Service
Lines

• Flow rates (daily demand) determine required
  diameter of inner and outer mains. Inner main can
  be smaller diameter pipe if pressure drop is not
  a problem
• Circuity factor applied to distribution mains
  corrects for noncircular layout
• Pressure at mainline inlet 800 psi
• Minimum pressure at service station pipe inlet gt
  200 psi

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Fuel Stations Are Uniformly Distributed in Zones.
Total Stations Are Based on Density of H2 Demand

• Rout radius of outer distribution main ring
• RIII, RIV radii of 3rd and 4th annular zones
• Rc radius of zone centerline. Since stations
  are uniformly distributed around the centerline,
  station centroid ring avg length of service
  lines
• Circuity factor applied to service lines corrects
  for grid layout

39
A Generic Small City Requires a Single Main
Service Lines
(Central fossil or renewable plant)
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Delivery Components Modeled

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Determining Delivery Costs
Delivery Scenario Generator
H2 Demand Model
Equipment Requirements Model
H2A Delivery Analysis
Delivery Component Model
Hydrogen delivery costs, /kg
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What Weve Accomplished

• Developed central and forecourt standard
  reporting spreadsheets
• Documents assumptions, inputs, and results
• Completed base cases with sensitivity analysis
  for current, mid-term, and long-term technologies
• Natural gas reforming central and forecourt
• Coal central
• Biomass central
• Nuclear central
• Central wind / electrolysis
• Distributed electroysis
• Worked with key industry collaborators (KIC) to
  establish parameters, process designs, and
  technology assumptions
• Demonstrated ability to calculate levelized
  hydrogen price and document a consistent set of
  assumptions
• Results are not meant to select one technology
  over another, but to provide RD guidance
• Developed set of delivery cost models including
  scenarios and component cost database

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Immediate Next Steps

• Use H2A for updating multi-year RDD plan
• Website with spreadsheet tool, results, and
  detailed documentation (October 2004)
• Peer-reviewed paper (Fall 2004)
• Combine production delivery scenarios
• Plan for next phase of H2A

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Many Many Thanks

• Mark Paster, Pete Devlin, Roxanne Danz DOE
• Key Industrial Collaborators
• H2A team and their organizations