Opportunities for Hydrogen-Based Energy Storage for Electric Utilities Todd Ramsden, Ben Kroposki, Johanna Levene National Renewable Energy Laboratory NHA Annual Conference 2008 March 31, 2008

Hydrogen Storage for Integrating Renewables Concept: Use hydrogen as energy storage to better integrate renewable solar and wind resources into the electric grid Analyze the cost of using hydrogen as an energy storage mechanism System elements: Electric Input Grid, Renewables Electrolyzer Hydrogen storage Tanks, geologic H2 conversion Fuel cells, H2 engine March 31, 2008 NHA 2008

Study Background Value of Hydrogen for Energy Storage Time shifting of available production capacity Increased demand response (i.e., spinning reserves) Time-shifting of wind energy to meet daily peak demand Analysis intended as a scoping study to assess whether hydrogen might hold promise as a means to store energy for electric utilities Not a cost study of a specific system design Study analyzes the cost of individual subsystem elements Cost projections based on DOE technology targets and DOE-sponsored models Forecasted Load Forecasted Wind 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Actual Wind March 31, 2008 NHA 2008

Study Framework Study assesses the cost of producing 50MW of electricity via storage for 6 peak hours each weekday (300 MWh/day) Study considers 3 basic storage system configurations, all using an electrolyzer system to produce hydrogen: Case 1: Steel tank storage, H2 ICE Case 2: Steel tank storage, fuel cell Case 3: Geologic storage, fuel cell 3 Timeframes considered: Near-term: Up to 2010 Mid-term: 2010-2020 Long-term: 2020-2030 Long-term case meant to represent best case scenario for hydrogen-based energy storage using stretch goals based on fully mature, optimized hydrogen technologies March 31, 2008 NHA 2008

Analysis Approach The study arrives at a $/kWh cost for using H2 for storage by analyzing a variety of costs including: Capital costs • Replacement costs O&M costs • Cost of input electricity Cost of land and labor • Indirect costs (e.g., permitting, siting) Cost and performance assumptions based on DOE’s technical targets for hydrogen and on major DOE hydrogen cost models, including: H2A Production analysis model H2A Delivery Components model The DOE Hydrogen, Fuel Cells & Infrastructure Technologies Program’s Multi-Year Program Plan DOE SECA program targets The analysis uses a nominal cost of off-peak, input electricity of 3.8¢/kWh, but also analyzes cases using 2.5¢/kWh and 4.9¢/kWh Analysis uses the HOMER model to evaluate possible system configurations and optimize system component selection to minimize resulting electricity price March 31, 2008 NHA 2008

Economic Assumptions 10% real internal rate of return assumed for all investment costs 40 year lifetime modeled, with subsystem components replaced on a schedule determined by their operating life Land costs of $50,000 Labor cost of $300,000 per year (not including maintenance labor, which is included as part of O&M for each subsystem component) G&A cost of $75,000 per year (G&A rate of 25% of the labor cost) Indirect capital costs of 25% of initial direct capital costs (representing costs for engineering design, permitting, site preparation, and project contingency) March 31, 2008 NHA 2008

Electrolyzer Assumptions Electrolyzer capital costs of $675/kW, $400/kW, and $300/kW in near-, mid-, and long-term (uninstalled) Electrolyzer input electricity requirements of 53, 47 and 44 kWh electricity per kg of H2, in near-, mid-, and long-term (efficiencies of 62%, 70%, 75% LHV) Lifetime is 10 years Replacement costs equal the electrolyzer cell stack at 30% of system cost Annual O&M costs equivalent to 3% of initial capital cost March 31, 2008 NHA 2008

Fuel Cell Assumptions Fuel cell capital costs of $750/kW, $400/kW, and $350/kW in near, mid and long term (uninstalled) Overall fuel cell system efficiencies: 60%, 70% and 75% in the near-, mid-, and long-term Stack lifetime is 10 years Replacement costs for the cell stack assumed to be 30% of the total system cost Annual O&M costs equivalent to 3% of initial capital cost March 31, 2008 NHA 2008

Hydrogen Internal Combustion Generator Assumptions Capital costs of $600/kW for the near- and mid-term, and $400/kW for the long-term (uninstalled) Assumed lifetime: 16,000 hours in the near-term (approx. 10 years for this study); 40,000 hours in the mid-term; and, 60,000 hours in the long-term Replacement cost = 100% of capital cost Conversion efficiencies of 35%, 48%, and 50% in the near-, mid-, and long-terms Annual O&M costs equivalent to 5% of the initial capital cost March 31, 2008 NHA 2008

Steel Tank Storage Assumptions Hydrogen is stored at 2,500 psi Capital costs include both the storage tubes and the associated compressor system Steel tanks have cost of $900/kg, $575/kg, and $345/kg in the near-, mid-, and long-term Capital costs are not linear, due to the compressor system cost component Cost curves for the Homer model were built using several storage sizes consistent with the storage needs for the three cases modeled Total capital costs of $31M, $20M, and $12M for a 28,600kg storage system, for the near-, mid-, and long-term Assumed lifetime of 10 years, after which the entire compressor subsystem is replaced Compressor subsystem requires 1.2 kWh per kg of hydrogen stored March 31, 2008 NHA 2008

Geologic Storage Assumptions Capital costs include cost include both the cavern and the necessary compressor system Maximum cavern pressure of 1,800 psi (125 atm) Capital costs are not linear, due to the compressor system cost component Cost curves for the Homer model were built using several storage sizes consistent with the storage needs for the three cases modeled Total capital costs of $8M, $7M, and $6M for a 28,600kg storage system, for the near-, mid-, and long-term Assumed lifetime of 10 years, after which the entire compressor subsystem is replaced Compressor subsystem requires 1.1 kWh per kg of hydrogen stored March 31, 2008 NHA 2008

Results - Overview Lowest on-peak electricity costs are under Case 3 (geologic storage, fuel cell conversion) Costs using steel tank storage with fuel cell conversion (Case 2) are similar to Case 3 in the mid- and long-term Systems using H2 ICE generators do not appear to be competitive On-peak electricity produced from fuel-cell based hydrogen storage systems may be cost competitive in the mid- and long-terms: Near-term: $0.28/kWh Mid-term: $0.19/kWh Long-term: $0.16/kWh March 31, 2008 NHA 2008

Details on Optimized Systems 3.8¢/kWh electricity input cost Case Description Time-frame Cost of Electricity via stored Hydrogen ($/kWh) Capital Replace-ment O&M Round-trip Efficiency Case 1 H2 ICE, steel tank storage Near-Term 0.51 177 34 42 21% Mid-Term 0.29 97 8 29 32% Long-Term 0.23 68 4 24 36% Case 2 H2 fuel cell, steel tank storage 0.33 131 13 0.22 75 9 19 44% 0.17 52 7 15 50% Case 3 H2 fuel cell, geologic storage 0.28 95 27 0.19 56 18 0.16 43 Conventional NG Combustion Turbine Advanced NG Combustion Turbine Reciprocating Engine 0.150 0.200 0.165 Costs (Million $) Based on an analysis of electricity production costs developed by Xcel Energy March 31, 2008 NHA 2008

Cost of Hydrogen-Based Electricity Storage 3 Cost of Hydrogen-Based Electricity Storage 3.8¢/kWh electricity input cost Typical current peak electricity production costs using natural gas combustion turbines March 31, 2008 NHA 2008

Impact of Different Input Electricity Costs 3 Impact of Different Input Electricity Costs 3.8¢/kWh base electricity input cost, with range of 2.5¢/kWh to 4.9¢/kWh March 31, 2008 NHA 2008

Effect of Input Electricity Costs on Case 3 Storage Costs (Input electricity costs of 3.8¢/kWh, 4.9¢/kWh, and 2.5¢/kWh) March 31, 2008 NHA 2008

Capital Costs per Installed kW of Storage Capacity March 31, 2008 NHA 2008

Summary of Findings Fuel-cell based hydrogen energy storage systems appear to be the most promising, including systems using steel tanks for hydrogen storage and systems using geologic hydrogen storage Fuel-cell based hydrogen energy storage systems can store electricity for 16¢/kWh in the long term This appears competitive with current peak electricity production costs using NG gas turbines, at 15 to 20 ¢/kWh Installed capital costs of hydrogen energy storage systems in the mid- and long-terms are in the range of $900-1500 per kW capacity Round trip storage efficiencies of hydrogen systems are fairly low, ranging from 34% in the near-term to 50% in the long-term March 31, 2008 NHA 2008

Conclusions If the transportation market for hydrogen can drive down the cost of hydrogen technologies while improving performance, more market opportunities for hydrogen might be available To fully compare hydrogen-based storage to other storage technologies and to other production technologies, analyses of these competing technologies will need to be performed, especially for the mid- and long-term when hydrogen-based storage appears most promising March 31, 2008 NHA 2008

Acknowledgements Thank You! Any Questions? We would like to thank the DOE Hydrogen, Fuel Cells, and Infrastructure Technologies Program, and in particular Roxanne Garland, Fred Joseck, and Jamie Holladay Thank You! Any Questions? March 31, 2008 NHA 2008

Example System Optimization Electrolyzer: 20,000 kW system Fuel Cell: 55,000 kW system Hydrogen Storage: 29,000 kg March 31, 2008 NHA 2008