Forgetting Someone, Mr. Secretary?


The DOE's new hydrogen car initiative won't get very far without electric utilities.

Fortnightly Magazine - February 1 2002

It was a "classic" publicity event-long on vision, but short on substance. There he was, the Secretary of the Department of Energy (DOE), Spencer Abraham, standing toe-to-toe with each of the heads of the "Motown Three." The big announcement, on Jan. 9, was that the DOE and the nation's carmakers would create a public-private partnership to promote hydrogen as a primary fuel for cars and trucks, as part of America's effort to reduce its dependence on foreign oil. 

Beyond announcing this vision, he failed to mention how much his program would cost; he failed to say exactly how long it would take (except to say several decades); and, more importantly, he failed to define what infrastructure the government would develop to support hydrogen transportation. 

Of course, when we think infrastructure, we think electric transmission, and many fuel cell experts feel that our transmission infrastructure could serve as the backbone for hydrogen supply. To my knowledge no utility CEOs were present at the event, pledging their support to make available their transmission infrastructure to this initiative, nor were they invited. Notwithstanding, many utility execs are dreaming of the possibilities. 

Published in early November in a paper called, "National Energy Planning for the Century," Chauncey Starr, president emeritus at the Electrical Power Research Institute, calls for the creation of a Continental SuperGrid, which some have called the all-time "Holy Grail" of transmission. He envisions this grid delivering the much-needed hydrogen for stationary, as well as vehicular, fuel cells. 

"If terrorism remains a risk, all major parts of the system could be underground. If one adds the vision of electrified transportation (maglev) and fuel cell electric autos, a picture of a futuristic all-electric energy system takes shape," he writes. 

Like many of his contemporaries, Starr recognizes that hydrogen fuel stations that are connected to the grid could produce hydrogen and oxygen from water through the old art of electrolysis. "It fits well with our hydrogen-cooled energy corridor, which might support the environmental objective of hydrogen end-use systems," he says.

Yet, a Continental SuperGrid would be quite expensive, say $1 trillion at an average rate of $10 billion/year, including R&D, superconductor cables, and power plants. Of course, Starr points out that the super grid would be developed over the next century. 

Furthermore, if just hydrogen pipelines were developed, the DOE's Argonne National Laboratory has estimated that the cost for building production facilities and pipelines sufficient to meet U.S. energy needs could run as high as $300 billion, with distribution costing another $175 billion, coming to roughly $3 per gallon of gasoline equivalent. And that price doesn't account for operating the infrastructure, the cost of the feedstock itself (such as natural gas), or the cost of transporting and storing the hydrogen.

But, using the existing electric transmission network to connect gas stations with electrolytic hydrogen dispensers, assuming that the electric transmission network could manage the new loads, might cost as little as $20 billion, according to the World Watch Institute.

Certainly, it will be interesting to see how much the Bush administration allocates for this hydrogen initiative. Bear in mind that the entire 2001 budget for all DOE initiatives was $19.2 billion. That's a far cry from many of the estimates.

Yet, an electric transmission/hydrogen infrastructure is certainly not guaranteed, it would have competition from the gas/hydrogen pipelines. Once a specific length of pipeline is reached (around the 2,000-3,000 mile mark), it becomes cheaper to transport energy by hydrogen pipeline than by electrical cable. As many already know, this is because an electrical cable is subject to approximately 7.5 percent transmission losses along its length. 

However, a hydrogen infrastructure could be cheaper than what we have now. A study conducted by Virginia-based Directed Technologies, as part of the 2001 DOE Hydrogen Program Review, analyzed the costs and other attributes of three fuel infrastructures systems to support fuel cell vehicles: hydrogen, methanol, and gasoline. The review found that the costs of maintaining the existing gasoline infrastructure per vehicle supported are up to two times more expensive than the estimated costs of building and maintaining either a methanol or hydrogen fuel infrastructure. 

In fact, utilities are very familiar with the economics of hydrogen demand through electrolysis and the possibility of it being a growing source of load. 

In the early 1980s, EPRI conducted a number of studies examining hydrogen demand for industrial purposes in three northeastern utilities-PSEG, Niagara Mohawk, and Northeast Utilities. EPRI found that, at the time, electrolytic hydrogen would have limited success competing with bottled hydrogen, a reversal on what the institute previously believed. It found electrolytic hydrogen was more expensive because of the high cost of the electrolyzers, the high regional cost of electricity, and poor plant utilization in the Northeast. Since then, electrolyzer costs have come down, as have regional costs, and there has been improved plant utilization. Will utilities be able to provide the infrastructure of the future? 

The Environmental Question: Do Coal-Powered Fuel Cells Make Sense?

According to Directed Technologies-assuming that off-peak electricity could be purchased at 4 cents/kWh-electrolyzers could provide lower-cost hydrogen for small fuel cell automobile fleets or for public fueling stations during the early phases of fuel cell vehicle (FCV) penetration. 

The problem, according to the report, is that electrolytic hydrogen has one major barrier in the U.S.: over 55 percent of all U.S. electricity is generated from coal. 

Using electrolytic hydrogen would actually double greenhouse gas emissions compared with conventional gasoline operation, using the average marginal U.S. grid generation mix, the report says. 

"[Yet], as the electrical generation grid moves to increased use of renewable electricity and/or nuclear power, the FCV powered by electrolytic hydrogen will eventually be superior to even an FCV running on hydrogen from natural gas," says the report. Directed Technologies actually analyzed the grid generation mix that would result in greenhouse gas parity for the FCV running on electrolytic hydrogen compared to conventional gasoline operation.

But achieving this parity may take a long time. Directed Technologies points out that the DOE's Energy Information Administration does not project significant growth in renewables and nuclear until 2020. The company predicts it might not happen for at least three decades. Furthermore, the countries that would have a favorable generation mix for electrolysis would be Brazil, Canada, Norway and Sweden. Europe still uses considerable amounts of coal in its mix. All of the other nations would produce more greenhouse gas emissions with electrolysis than by burning gasoline in current vehicles. (See Fortnightly's upcoming Feb. 15 issue on energy technology for more info).

It would seem that gas executives will be at the hydrogen infrastructure table far sooner than their electric counterparts. Of course, the race to develop a hydrogen infrastructure hasn't even begun, and if Mr. Abraham doesn't offer a clear timeline, appropriate funding, or a realistic plan, we may never live to see the so-called hydrogen economy.