Region Specific Merchant Hydrogen Market Assessment and

Techno-Economic Assessment of Electrolytic

Hydrogen Generation

PI: Noah Meeks, Southern Company Services

co-PIs: Uuganbayar Otgonbaatar, Exelon

Frank Novachek, Xcel Energy

Richard Boardman, INL

Mark Ruth, NREL

Amgad Elgowiny, ANL

H2@Scale CRADA Kickoff

This presentation does not contain any proprietary, confidential, or otherwise restricted information

2

• Tools and methods for assessment ofoptimization of regional natural resourcesand energy production

• Detailed capital investment pro-forma andlife-cycle assessments for hydrogenmarkets

• Market options for otherwise-curtailedelectricity

• Understanding interfaces for connectingvariable and baseload plants to industry inhybrid operation

• Project Start Date: 09/01/2018

• Project End Date: 05/30/2019

• Total Project Budget: $350,000

• Total Recipient Share: $200,000

• Total Federal Share: $100,000

• Total DOE Funds Spent*: $0

Timeline and Budget Barriers

CRADA Partners

Overview

• EERE- Fuel Cell Technology Office

DOE Sponsors• Southern Company

• Exelon Corporation

• Xcel Energy (cash-in)

• Idaho National Laboratory

• National Renewable Energy Laboratory

• Argonne National Laboratory

• Electricity markets vary by region

• Renewable energy growth varies by region

• Regional hydrogen markets depend on logistics of natural

resources, transportation systems, and other infrastructure

RelevanceThis project will analyze regional hydrogen market

opportunities (especially for low-CO2 hydrogen). It will

identify and characterize industrial demand for clean

hydrogen in the service territories of SCS (Southeast U.S.),

Exelon (Upper Midwest), and Xcel Energy (West-Central

Plains States). Based on the projected industrial utilization

markets, a cursory technical-economic assessment of large-

scale, centralized hydrogen generation plant will be

completed- considering existing nuclear plants and

renewables in each region.

1st Quarter

Identify, validate,

and rank regional

hydrogen markets

Evaluate electrolysis plant options

Characterize power, load

demand, and electricity

price profiles

Assess hydrogen

storage needs

Te

ch

nic

al

Eva

luatio

n R

ep

ort

2nd Quarter 3rd Quarter

Approach: 9 Month Activity

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• Collect historical grid price information relative to participating

CRADA partners

• Assess regional grid markets for each Utility/CRADA Partner

– Regulated vs Deregulated

– Vertically integrated Utility vs Merchant nuclear plants

– Renewable energy targets and trends

• Develop price duration curves pertinent to hydrogen

production plant

• Determine nuclear plant energy production costs

• Establish geographic locations of renewable energy

Methods: Electricity Prices

Regional hydrogen markets depend on logistics of

natural resources, transportation systems,

and other infrastructure

Nuclear plants can be provide energy directly to H2 plants

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• Survey of existing industries using hydrogen

• Projections for hydrogen demand growth

– Fuel Cell Vehicles

– Near-term hydrogen customers; for example ammonia

plants

– Potential long-term hydrogen users; for example Synthetic

fuels

• Develop geographical map of hydrogen use customers

Methods: Hydrogen Demand

Leverage H2@Scale Analysis Team studies for

county-by-county hydrogen demand opportunities

Develop local demand curves vs price of hydrogen

7

• Use H2A model for hydrogen production costs

• Large centralized H2 plants vs Distributed H2 plants

• Steam electrolysis based on Dominion Engineering design

• Aspen model for balance of plant to derive balance of plant

capital and operative costs

• Compare to natural gas reforming relative to regional natural

gas price projects

– DOE-AEO Natural Gas Projection: Reference Case, High Cost, Low Cost

• Independent H2A cost calculations review

Methods: Hydrogen Production

Leverage H2A model development by DOE-NE

program for high temperature steam electrolysis

Develop hydrogen supply curve costs

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-200

-150

-100

-50

0

50

100

150

200

0 1000 2000 3000 4000 5000 6000 7000 8000$/M

Wh

Hours

LMP $/MWh

Number of Hours

>$50 385

>$45 542

>$40 764

>$35 1175

>$30 2026

>$25 3902

>$20 7042

>$15 8313

>$10 8513

>$5 8587

>$0 8639

<$0 121

Progress: Grid LMP Profiles & Trends

Northern Illinois Hub 2017 Price Duration Curve

The maximum LMP value reached 600 $/MWh

Progress: Grid LMP Profiles & Trends

-50.00

-30.00

-10.00

10.00

30.00

50.00

70.00

90.00

110.00

130.00

150.00

0 1000 2000 3000 4000 5000 6000 7000 8000

$/M

Wh

Hours

LMP 2017 LMP 2025 LMP 2025 Modified

Aligning Xcel Energy Projected PDC with 2017 Volatility

(SPP-South PDC)

Progress: Potential Hydrogen Demand,

Future (2030)

15

Refineries

Ammonia production

Synfuel production (Ethanol plants)

Synfuel production (H2 plants)

Synfuel production (Ammonia plants)

0

5

10

15

0 200 400 600 800 1,000

H2

Dem

and

, kilo

ton

nes

Distance, miles

Syngas: EtOH

Syngas: H2 SMR

Syngas: Ammonia

Refineries, 2030

Ammonia, 2021

Refineries, 2017

Ammonia 2017

Progress: H2 Demand near the Farly

Generating Station

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2.16

2.42

2.67

3.18

3.69

1.23

1.48

1.73

2.24

2.75

0.87

1.07

1.27

1.66

2.06

34.4, 1.44

28.8, 2.61

24.2, 1.44

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

15 20 25 30 35 40 45 50 55

Hyd

rog

en

pro

du

cti

on

co

st

($/k

g H

2)

Electricity price ($/MWh)

SMR, high NG price ($8.0/MMBtu) LTE, avg. stack price, 50MWe

SMR, avg. NG price ($5.4/MMBtu) LTE, avg. stack price, 1191MWe

SMR, low NG price ($4.2/MMBtu) HTE, avg. stack price, 1191MWe

2018 price data

LTE (small scale)50 MWe

23.9 tons/day H2

97% OCF

$329/kWe (DC power input)

TCI of $15.3 M

LWR/LTE (large scale)1191 MWe

569 tons/day H2

90% OCF

$329/kWe (DC power input)

TCI of $365 M

LWR/HTE (large scale)1191 MWe

755 tons/day H2

84.7% OCF

$403/kWe (DC power input)

TCI of $434 M

Progress: H2 Production Cost Results

PEM

AE,

PEM

PEM

Steam

Electrolysis

PEMPEM

Distributed Water

Electrolysis Plants

Central

Hydrogen

Plant

Refinery /

Petrochemical

Plant

Ammonia-Based

Fertilizers PlantDirect Reduced

Iron / Electric Arc

Mini Steel Plant

Clean Transportation

Fleet

Central Clean

Chemical &

Fuels Synthesis

Regional

Ethanol Plants

Biodigester

Plants

By-Product

CO2

PipelineLight-Water Reactor

Power PlantsThermal

Energy

H2

H2

H2

O2

H2

SynfuelsLight-Water

Reactor

Power

Plant

Wind

Solar

Hydro, Geo.

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Overview of Primary and Emerging H2 Markets

Future Work

Summary

This CRADA addresses hydrogen merchant markets in three different

regions

Electricity market price duration characteristics for the different regions

have been obtained and are being used to calculate hydrogen costs

Hydrogen markets have been evaluated for each Exelon

H2A model revisions were completed to compare distributed and

centralized hydrogen plants with steam methane reforming in the

Upper Midwest

1. Wrap up hydrogen market opportunities for Xcel Energy2. Determine hydrogen production costs for Xcel Energy and Southern

Company Services regions3. Evaluate region-specific hydrogen storage needs and costs4. Provide project report