Hydrogen

Should we just burn hydrogen for electricity?

A recent Department of Energy H2@Scale project white paper from the University of Texas at Austin and IdeaSmiths LLC sought to assess if there were any economic use cases for hydrogen that leveraged already deployed infrastructure and technologies.
Should we just burn hydrogen for electricity?
(Source: Meed.com).

By Joshua D. Rhodes, PhD

The University of Texas at Austin and IdeaSmiths LLC

A growing list of hydrogen project announcements, on both the production and consumption side, appears to be indicating that interest in the universes’ most abundant molecule is growing fast. While hydrogen is best known for fueling fusion reactions in the heart of stars, there are some that are also trying to use hydrogen to make and move energy, perhaps in a more down-to-earth way.

Multiple studies have derived deep decarbonization pathways by integrating large amounts of hydrogen into many sectors of the economy. These studies generally require large amounts of new capital expenditures and a significant reworking of the energy and transportation sectors to achieve their goals.

A recent Department of Energy H2@Scale project white paper from the University of Texas at Austin and IdeaSmiths LLC sought to assess if there were any economic use cases for hydrogen that did not require a major reworking of the economy, but leveraged already deployed infrastructure and technologies. In particular, we looked at the economic and emissions value of blending low levels of hydrogen into the fuel streams of existing power plants.

Hydrogen is currently widely used, but mostly in oil refining and as a feedstock for fertilizer production. But hydrogen is also one of the few fuels that burns without producing carbon dioxide, our most common greenhouse gas. Thus, hydrogen is also a potential solution to help decarbonize the economy, including electricity.

Significant strides have been made in the development of new power plants, particularly natural gas turbines and combined cycle systems, that have the ability to utilize hydrogen fuel blends. For example, the proposed 1.2 GW Orange County Advanced Power Station in Texas is planned to have the ability to blend up to 30% hydrogen. In addition, El Paso Electric is planning to install a similar unit to support its energy grid as part of its decarbonization efforts. Other projects include the Intermountain Power Project in Utah and the Magnolia Project under development in Louisiana.

While these projects are promising, power plant fleet turnover is on the order of decades and carbon reduction goals are shorter. There are currently about 464 GW of natural gas turbine-driven power plants in the US, most if not all without the ability to burn high hydrogen fuel blends.

The Texas Gulf Coast

The Texas Gulf Coast is currently home to the largest hydrogen hub in the US. The region currently consumes about 9 million kg of hydrogen per day, or about 1/3 of the total US consumption. The region is also home to the most extensive hydrogen pipeline network in the country, with over 715 km (~440 miles) of pipelines (in Texas) moving hydrogen throughout the region including to and from Louisiana. Almost all this hydrogen is produced via steam methane reforming (SMR), converting natural gas to hydrogen and emitting the carbon dioxide as a waste product.

Figure 1: Figure showing the location of Texas Gulf Coast hydrogen pipelines (orange lines), natural gas power plants within 5 kilometers (green squares) of the hydrogen pipelines, and other natural gas power plants in the region that are located greater than 5 km from existing hydrogen pipelines (dark green circles). Note that there are a small number of hydrogen pipelines and natural gas power plants within the same limit in other parts of the state but are not shown here to allow for more local detail to be shown.

In trying to match these currently independent infrastructures, this analysis found that there are 43 (18 GW) natural gas power plants located close (within 5 km or ~3 miles) to exiting hydrogen pipelines.

The analysis also found that, if the hydrogen is clean enough, that is, if the carbon intensity of the process to produce the hydrogen is clean, burning low (5%-10%) blends of hydrogen with the natural gas fuel can result in lower carbon emissions for the electricity generated. We found that the carbon intensity of hydrogen needed to be at or below 6 kg-CO2 per kg-H2 for the overall power plant emissions to be lower than burning 100% natural gas. If the carbon intensity of the hydrogen is higher, it will result in higher overall emissions for the power plant. The current base-case technology for SMR hydrogen results in an emissions intensity of about 9 kg-CO2 per kg-H2 or higher, so only lower carbon-intensive forms of hydrogen generation, such as electrolysis or SMR with carbon capture, work from an emissions perspective.

Infrastructure and costs

Given uncertainty around the ability of the current natural gas pipeline network to convey hydrogen blends, this analysis only considered feeding hydrogen to power plants that were located close to the existing hydrogen pipeline network via dedicated hydrogen spur lines. Building off of previous work for the same DOE project we estimated that it would cost about $1.86M/km for a new hydrogen pipeline.

Since the average “close” natural gas power plant was located about 1.3 km from a hydrogen pipeline, we estimated that it would cost about $2.5M each, on average, to connect the power plants to the existing hydrogen pipeline system. Amortizing these costs over 20 years results in a pipeline cost of about $0.23 per kg of delivered hydrogen to the power plant, assuming a 5% blending by volume.

Thus, we estimated that including delivery costs and an overall 20% contingency, results in an average delivered cost of hydrogen for SMR of $1.32/kg, SMR with 90% carbon capture (CCS) of $2.14/kg, and electrolysis of $2.55/kg. However, a power plant might not want to consume hydrogen if it costs more than natural gas, which, is currently the case.

Assuming a natural gas cost about $3.50/MMBTU, the average break even cost for hydrogen consumption at a power plant is about $0.40/kg, about $1-$2 less than what we estimate that it could be delivered for. However, as natural gas prices rise, so does the break-even cost that power plants might be willing to pay for hydrogen.

Thus, on a purely economic basis, power plants are not incentivized to burn hydrogen fuel blends. However, current federal policy discussions around a clean hydrogen tax credit of $3/kg could bridge that gap. This tax credit would only apply to hydrogen that is at least 40% cleaner than the current industry standard SMR hydrogen production.

The long-term use of hydrogen in the economy, including in the power sector, will likely depend on the future costs of critical pathways and competing technologies. We find that there might be a near-term, low-disruption pathway for the increased use of hydrogen at existing power plants that are co-located with existing hydrogen infrastructure and that it is likely that the clean hydrogen tax credit currently under consideration would be both necessary and sufficient to make it happen.



Joshua D. Rhodes, Ph.D. is a Research Associate at The University of Texas at Austin, a non-Resident Fellow at Columbia University, a Founding partner of IdeaSmiths LLC, and a freelance energy journalist.

He holds a double bachelors in Mathematics and Economics from Stephen F. Austin State University, a masters in Computational Mathematics from Texas A&M University, a masters in Architectural Engineering from The University of Texas at Austin and a Ph.D. in Civil Engineering from The University of Texas at Austin. He enjoys mountain biking, rock climbing, and a good cup of coffee.

H2@Scale is a U.S. Department of Energy (DOE) initiative led by the Hydrogen and Fuel Cell Technologies Office within Energy Efficiency and Renewable Energy Office to enable affordable hydrogen production, storage, distribution, and utilization across multiple sectors in the economy. It includes DOE funded projects and national laboratory-industry co-funded activities to accelerate research, development, and demonstration of hydrogen technologies and advance the H2@Scale vision. For more information, visit www.energy.gov/eere/fuelcells/h2scale.