FALL/WINTER 2005-06 — Systems Assessment

Analyzing Hydrogen Demand, Production, and Cost by Region to 2050

Issues Requiring Further Analysis

Resource potential of H2 resource fuels
Development of regional H2 supply curves
Inter-regional production and transport of H2
Rural travel requirements
Nature of rural interstate travel
Potential changes in rural or non-metropolitan travel
Magnitude of FCV refueling infrastructure in non-metropolitan areas
Number of gasoline-refueling facilities
Status of non-metropolitan interstate refueling locations
Travel distances to refuel
Distributed production in nonmetropolitan areas in low-H2-demand scenarios
Alternative assumptions for provision of H2 to non-metropolitan areas
Reasonable upper bound on distributed production
Phase-in of FCVs by U.S. Census Division
Distributed H2 production in metropolitan areas
Various issues related to H2 pathway cost estimates

CTR researchers recently analyzed potential hydrogen (H2) demand, production, and cost by region (i.e., U.S. Census Division) to 2050. (Hydrogen cost estimates are essentially the costs to produce and deliver H2, but exclude taxes.) The analysis was conducted to:

Address the Energy Information Administration's (EIA's) request for regional H2 cost estimates that will be input to its energy modeling system, and
Identify key regional issues associated with the use of H2 that need further study.

Hydrogen costs may vary substantially by region. Many feedstocks may be used to produce H2, and the use of these feedstocks is likely to vary by region. For the same feedstock, regional variation exists in capital and energy costs. Furthermore, delivery costs are likely to vary by region. Some regions are more rural than others, and so delivery costs will be higher. However, efforts to comprehensively and consistently estimate future costs have not yet assessed regional variation in these costs.

The researchers developed a H2 demand scenario (called "Go Your Own Way" [GYOW]) that reflects fuel cell vehicle (FCV) market success to 2050 and allocated H2 demand by region and within regions by metropolitan versus non-metropolitan areas.

They used an Excel spreadsheet model (the Regional H2 Model, version 1.0) to develop the final production scenario and cost estimates. Other H2 demand scenarios can be input to the model and alternative costs estimated.

The result of the analysis demonstrates that there may be substantial variation in H2 costs between regions: as much as $2.04/gallon gasoline equivalent (GGE) by the time FCVs make up one-half of all light-vehicle sales in the GYOW scenario (2035-2040) and $1.85/GGE by 2050 (excluding Alaska). Given the assumptions made, the analysis also shows that there could be as much as a $4.82/GGE difference in H2 cost between metropolitan and non-metropolitan areas by 2050 (national average). The national average cost estimate by 2050 is $3.68/GGE, but the average H2 cost in metropolitan areas in that year is $2.55/GGE; that in non-metropolitan areas is $7.37/GGE. For these estimates, CTR researchers assumed that the use of natural gas to produce H2 is phased out to eliminate reliance on natural gas for H2 production.


Final Delivered H₂ Cost in GYOW: U.S. Summary by Metropolitan versus Non-Metropolitan Areas

Researchers also identified a number of issues that need to be further addressed to develop reliable and improved estimates of regional H2 demand, production, and cost.

The full report on these findings, Hydrogen Demand, Production, and Cost by Region to 2050 (1.5Mb pdf) is available.

Sponsor

U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy

Contact

Margaret Singh

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