Hydrogen Economy- Distribution

Srikanth Narayan | December 18, 2020

APPP 506 – Master of Engineering Leadership Capstone Project, University of British Columbia

Abstract

Developing a hydrogen transmission and distribution infrastructure would be one of the challenges to be faced as we move toward a hydrogen economy. Initial uses of hydrogen are likely to involve a variety of transmission and distribution methods. Smaller users would probably use truck transport, with the hydrogen being in either the liquid or gaseous form. Larger users, however, would likely consider using pipelines. This option would require specially constructed pipelines and the associated infrastructure. This project looks into the costs involved and performs a sensitivity analysis to arrive at the most economically viable conditions in terms of pipeline distance and Hydrogen demand.

Background

Navius Research is a consultancy that specializes in climate and energy policy. Navius specializes in modelling the effect of climate and energy policy on the economy and environment and their services include Macroeconomic Simulations of Energy Policies, Technology Adoption Analysis, Electricity Modelling, Fuel Markets Modelling etc. Navius publishes consulting reports, peer-reviewed journal articles on a variety of energy, climate change and economic modelling topics. Navius uses energy-economy models that simulate policy impacts on GHG emissions, GDP, investments, jobs, and energy supply and demand. Their clients include provincial governments, the federal government, utilities, think tanks, and the private sector.

Many of Navius Research’s clients have recently shown interest in hydrogen as a potential decarbonization pathway. Subsequently, Navius Research conducted their first comprehensive hydrogen economy research and analysis last summer. The nature of their hydrogen projects was such that the analytical approach has been conservative. Hence, there are still multiple unanswered questions that can be grouped into two general categories:

Hydrogen Production challenges
Hydrogen Distribution considerations

This research project is an attempt at filling these information gaps. The scope of work is limited to pure hydrogen consumption in transport and the objective is to conduct a techno-economic analysis and provide parameters for the production and distribution questions. Parameters include: capital costs, operating costs and energy consumption for all alternatives. While fellow student Robin Watts worked on the Hydrogen Production part of the project, I , Srikanth Narayan worked on the Hydrogen distribution part.

Introduction

Canada is one of the largest hydrogen producers in the world. Canadian firms have developed the technologies to produce hydrogen cleanly and economically using fossil fuels, methanol, biomass, renewable energy sources such as solar, wind, hydroelectric or from industrial by-product waste hydrogen capture. To improve the use of renewable energy sources, Canadian-developed technology is using excess wind, solar or hydro power to produce hydrogen. The hydrogen may then power a fuel cell, when renewables are unavailable, or be fed into the natural gas grid for use beyond the generation site.

Assuming that the use of hydrogen will significantly increase in the future, there would be a corresponding need to transport this material. A variety of production technologies are available for making hydrogen, and there are equally varied raw materials. Potential raw materials include natural gas, coal, nuclear fuel, and renewables such as solar, wind, or wave energy. As these raw materials are not uniformly distributed throughout the country, it would be necessary to transport either the raw materials or the hydrogen long distances to the appropriate markets. While hydrogen may be transported in a number of possible forms, pipelines currently appear to be the most economical means of moving it in large quantities over great distances. One means of controlling hydrogen pipeline costs is to use common rights-of way (ROWs) whenever feasible. For that reason, information on hydrogen pipelines is the focus of this project. Many of the features of hydrogen pipelines are similar to those of natural gas pipelines. Furthermore, as hydrogen pipeline networks expand, many of the same construction and operating features of natural gas networks would be replicated. As a result, the description of hydrogen pipelines will be very similar to that of natural gas pipelines.

The hydrogen produced using steam methane reforming involves the production of carbon dioxide. The carbon footprint associated with Hydrogen production using fossil fuels can be reduced by employing carbon capture technology and then storing the captured carbon in storage reservoirs. However, if the storage reservoirs are far off, then this would involve transport of CO2 to these sites which would add to the cost of Hydrogen production and distribution. Therefore, in addition to the cost of Hydrogen pipeline transport, this project looks at the costs involved in transporting the captured CO2 via pipelines to storage sites and their variation with pipeline distance and Hydrogen demand. These results are then compared with that of the Hydrogen pipeline which will help us come to a conclusion arrive at the most economical location for setting up the Hydrogen production plant. The two options that has been analyzed here are:

Hydrogen production near a CO2 storage reservoir with pipeline transport of Hydrogen to urban distribution centers
Hydrogen production near an urban distribution center and pipeline transport of CO2 to remote storage reservoirs.

The costs for both Hydrogen and CO2 pipeline were calculated for small (200K population), medium (500K population) and large cities (2M population) through pipeline distances of 100Kms to 2000 Kms and the results were plotted for comparison.

Research Methods

Literary research to select models to calculate the Hydrogen and CO2 pipeline costs with a sensitivity analysis based on Hydrogen demand and pipeline distance.

Literary research to consider the levelized costs of Hydrogen compression, Hydrogen storage, CO2 capture and storage which are part of the Hydrogen distribution system.

Calculation Methodology

Hydrogen production near CO2 storage reservoir

Hydrogen production to cater to small (200K population), medium (500K population) and large cities (2M population) was considered.
Population of Canada and the respective cities were extracted from the government of Canada website.
Gasoline and diesel consumption in Canada for transport data was extracted from the natural resources Canada website.
Gasoline and diesel consumption in the transport sector for the particular city was estimated equating the population of the city with that of Canada.
Energy content of 1Kg of Hydrogen was found to be 33KWH (source: https://www.idealhy.eu/index.php?page=lh2_outline)
Target percentage of the city’s vehicles that would switch to Hydrogen fuel was assumed to be 30%.
Amount of hydrogen required to meet the city’s transportation fuel needs (30%) was calculated.
Distance between the Hydrogen production facility and city distribution centre was assumed to be 100Kms.
In this case the transport of captured CO2 for storage was not considered. It is assumed that the production and CO2 storage locations are close by.
Levelized cost for Hydrogen storage was found to be 0.27$/Kg. This includes the cost for compression. (Parks, Boyd, Cornish, & Remick, 2014)
For this calculation, a typical pipeline diameter was assumed to be 10 inches.
The pipeline material, labour, miscellaneous and right of way costs were calculated using equations based on the length and diameter of the pipeline (Parker, 2003)
Typical CO2 emission during Hydrogen production was found to be 9.3Kg/KgH2 (Rapier, 2020)
CO2 emission for the production of required Hydrogen was estimated.
Cost of Carbon Capture was found to be 39$/tCO2 (Herzog & Smekens, 2002)
Typical Carbon Capture efficiency of 90% was considered and total captured carbon was calculated.
The total cost of capturing CO2 emitted due to H2 production was calculated.
Cost of geological storage of Carbon was found to be 4$/tCO2. (Herzog & Smekens, 2002)
Cost of storage for total captured CO2 was calculated.
All cost was adjusted for inflation using formulae discussed in Section XX.
All costs incurred were summed and divided by the hydrogen requirement of the city to arrive at the per KgH2 cost of transporting Hydrogen via pipeline.
The per Kg H2 cost for various pipeline lengths ranging from 100 to 2000 Kms was calculated and plotted.
The calculations were repeated with the equations in ( Baufume´ et al., 2012) to validate the results.They also showed a similar trend.

Hydrogen production near urban distribution centre

In this case the cost for the pipeline transmission of CO2 captured was calculated.
The transport of Hydrogen from the production center to the distribution center has not been considered here. It is assumed that the production and distribution centers are close by.
Here in addition to the calculations carried out for the first case, the CO2 pipeline material, labour, miscellaneous and right of way costs were calculated using equations based on the length and diameter of the pipeline. (Knoope, Ramírez, & Faaij, 2013)
A typical O & M cost of 3% was considered based on (Knoope, Ramírez, & Faaij, 2013)
The same pipeline size as that of Hydrogen was considered (10 inch).
All cost was adjusted for inflation using the formulae mentioned in section XX
CO2 compression cost for pipeline transport is considered in the Carbon capture cost.
CO2 compression cost for storage is considered in the CO2 storage cost
All costs incurred were summed and divided by the hydrogen requirement of the city to arrive at the per Kg H2 cost of transporting captured CO2 via pipeline for storage.
The per Kg H2 cost for various pipeline lengths ranging from 100 to 2000 Kms was calculated and plotted.

Results

Hydrogen Pipeline

The two major costs involved in Hydrogen distribution was found to be the pipeline cost and the Hydrogen compression cost
The pipeline cost overtakes the compression costs considerably as the pipeline distance increases, especially for small and medium cities.
For small cities pipeline transport is economically viable only for small distances, around 100Kms.
For medium cities pipeline transport could be viable up to around 500Kms
Pipeline transport is best suited for large cities through 100 to 2000 Kms.

CO2 Pipeline

For small cities CO2 pipeline transport is economically viable only for small distances, around 100Kms.
For medium cities pipeline transport could be viable up to around 500Kms
Pipeline transport is best suited for large cities through 100 to 2000 Kms.

Hydrogen pipeline Vs CO2 pipeline

For small cities, the cost of H2 and CO2 pipeline are almost the same till 200 Kms.
For small cities, as the pipeline distance exceeds 200 Kms, the CO2 pipeline becomes costlier than the H2 pipeline
For medium cities, the cost of H2 pipeline is slightly more than the CO2 pipeline until 500Kms.
For medium cities, as the pipeline distance exceeds 500 Kms, the CO2 pipeline becomes costlier than the H2 pipeline
For large cities, the cost of H2 pipeline is more than that of the CO2 pipeline throughout the pipeline distance of 100 to 2000Kms.

Discussion and Conclusions

The analysis confirms the IEA report which says :

‘For example, if 100 tonnes per day (tpd), roughly the amount of hydrogen that would be required by a single 200 MW hydrogen power plant, are required at a location 500 km away from the point of import, then the use of trucks would be cheaper than constructing a pipeline; if 500 tpd are required, then a pipeline would have lower unit costs.’

Pipeline transport is best suited for large cities with a Hydrogen demand of more than 500 tpd.

The cost of Hydrogen pipeline is more than that of the CO2 pipeline for large cities with the difference in costs decreasing as the pipeline distance increases.

Contact

srikanth.nrn@gmail.com

Linkedin : https://www.linkedin.com/in/srikanth-narayan-a6903072/

References

The major references used for this project were:

Herzog, H., & Smekens, K. (2002). Cost and economic potential.
Knoope, M., Ramírez, A., & Faaij, A. (2013). A state-of-the-art review of techno-economic models predicting the costs of CO2.
Parker, N. (2003). Using Natural Gas Transmission Pipeline Costs to Estimate Hydrogen Pipeline costs. California: University of California.
Parks, G., Boyd, R., Cornish, J., & Remick, R. (2014). Hydrogen station compression, storage and Dispensing Technical status and cost. NREL.
Rapier, R. (2020, June 6). Estimating The Carbon Footprint Of Hydrogen Production. Retrieved from Forbes: https://www.forbes.com/sites/rrapier/2020/06/06/estimating-the-carbon-footprint-of-hydrogen-production/?sh=16cbdac924bd

Baufume´, S., Gruger, F., Grube, T., Krieg, D., Linssen, J., Weber, M., . . . Stolten, D. (2013). GIS-based scenario calculations for a nationwide German hydrogen pipeline infrastructure. Science Direct.