Chemical Process Development 450/650 May 4, 2016 Session 14 Wind to H2 What If Exercise Update; Establish Scope of Exercise: Important assumptions: No transmission limits. Perfect storage during wind overproduction (wind output exceeds demand). Since ERCOT produced >10% of electricity from wind in 2014, we can expect that a ~10x size wind system would have produced enough electricity to meet demand given key assumptions above. We can play with excel data to learn the boundaries of such a system. Utilities commonly treat wind power as “negative load” due to its intermittent behavior. We see that there is great variation in output on a daily and seasonal timescale. This makes supplying 24/7 H2 customers very challenging. Utilities like to subtract wind output from the demand curve giving a “residual load” curve that the base load and dispatchable conventional generators must service. Graphics: AIChE Process Development Division http://www.pd-aiche.com/

Chemical Process Development 450/650 May 4, 2016 Session 14 Wind to H2 What If Exercise Update; Establish Scope of Exercise: As a quick trial, I multiplied the wind system output by 10x and 15x on spread sheet and summed the hourly load minus wind MWh’s. Already the 10x system shows a large negative value and at 15x a very large negative value. This is the excess wind energy available for storage or in our case H2 production. After looking at this data, I realized I could simply divide the total wind output into the total demand and get the exact multiplier under ideal conditions which came to 9.4. Another key simplifying assumption is to scale the given data and take that as valid. Somewhere between 10x and 15x we will have enough excess power capacity to meet out hydrogen demand. We need to make 1 kg H2/bbl refining capacity which is thus 5 million kg H2/d. Graphics: AIChE Process Development Division http://www.pd-aiche.com/

Chemical Process Development 450/650 April 28, 2016 Session 13

Chemical Process Development 450/650 April 28, 2016 Session 13

Chemical Process Development 450/650 April 28, 2016 Session 13 From: Argon Power Cycle Workshop University of California, Berkeley August 2, 2014

Chemical Process Development 450/650 May 4, 2016 Session 14 From: http://energy.gov/eere/fuelcells/hydrogen-production-pathways Graphics: AIChE Process Development Division http://www.pd-aiche.com/

Chemical Process Development 450/650 May 4, 2016 Session 14 Wind to H2 What If Exercise Update; Establish Scope of Exercise: So at 50kwh/kg from NREL paper we need 250 million kwh’s/d (or 250GWh’s/d) to make the necessary hydrogen. Refineries make some hydrogen as an internal byproduct so we won’t be able to displace that. Let’s say for now that the possible demand is 2.5 million kg H2/d thus the electrical draw is 125 GWh’s/d Our electrolyser need will be 2.5 million kg H2/d divide by 960 kg./d-2MW unit = ~2600 units minimum. NG methane is tough competition now at $3-5 MMBtu or 1000scfm which can give about 2.5 kg H2 as compared to $10 kg H2 from NREL wind H2 paper. Visit excel spreadsheet with ERCOT data. Graphics: AIChE Process Development Division http://www.pd-aiche.com/

Chemical Process Development 450/650 May 4, 2016 Session 14 Wind to H2 What If Exercise Update; Points to Consider As wind contribution approaches 100%, conventional generation will approach zero and yet will have to be capable of 100% load back up! Cost implications? If H2 demand is 2.5 million kg H2/d and the electrical draw is 125 GWh’s/d, then the continuous load increment is 125/24 = 5.2 GW. This is interestingly somewhat more that the current wind system is providing! The water electrolysis rate will have to float with the degree of excess wind generation capacity. Some electrolysis units can run under pressure and dissipate heat at 2x the normal design rate for some loss in efficiency. This type of unit would be preferred to better utilize the variable excess wind and reduce the excess capital otherwise needed to be able to electrolyze water at the highest excess wind generation output to avoid curtailment. TX does have underground salt dome H2 storage for 5 bcf (8 hr buffer) on a pipeline that could be useful to smooth H2 supply to refineries to avoid upsetting their sensitive process balances. Graphics: AIChE Process Development Division http://www.pd-aiche.com/

Chemical Process Development 450/650 May 4, 2016 Session 14 Wind to H2 What If Exercise Update; ERCOT 2014 Data Sample showing a few hours and 8760 hours totals. The rest of the year’s 8760 hours Our 125 GWhs/d average for electrolyzers is 45,625 GWh/yr. This is 1.26x of the current annual WS output. This goes on top of the 9.4x needed to meet ~100% of existing load. So our target WS output must be > (9.4 + 1.26) x 36,117 GWh/y = 385,125 GWh/y Graphics: AIChE Process Development Division http://www.pd-aiche.com/

Chemical Process Development 450/650 May 4, 2016 Session 14 Wind to H2 What If Exercise Update; Economic Perspectives: Current H2 business in USA is 10-12 million t/y worth about $115 billion. This indicates prices are in the $10/kg range. However the bulk of H2 that goes to refineries and ammonia plants from many sources seems to have production cost of about $2/kg and a dispensable cost about $4/kg. This means our electricity cost/value cannot exceed ~$2/kg-H2 to be competitive. At 50kwh/kg-H2 that limits our value to 4 cts/kwh. Is that enough better than zero for idling turbines during excess wind periods? The main capital burden to do this “Wind to H2” concept is for the 2600 electrolysers and the 1.26 x of the existing 12,500 MW WS nameplate fleet. The rest of the 9.4x WS up build is to meet the existing load under ideal conditions of ideal storage and no transmission losses. The total added WS name plate is 15,750 MW + (9.4-1) 12,500 = 120,750 MW! Graphics: AIChE Process Development Division http://www.pd-aiche.com/

Chemical Process Development 450/650 May 4, 2016 Session 14 Wind to H2 What If Exercise Update; Economic Perspectives: If the variable H2 output can be managed by storage (2.5 bcf cavern in TX) to provide steady delivery then at $4/kg-H2 our concept can make $10 million per day or $3.65 billion per year. The minimum capital will be about 2600 x $1.5 million = $3.9 billion for electrolyser cells + 15,750 x $1.5 million/MW = $23.6 billion for wind turbines for a total for this H2 train of $27.5 billion. However, this all hinges on a greatly expanded near 100% wind system still with ideal electricity storage and transmission. The total added WS turbine capital is $181 billion! Storage on this scale is not yet available let alone at a reasonable cost. Intermittency is a constant problem! There is much engineering that needs to be done to come up with an affordable reliable non carbon emitting electric power system. On paper it can be approached, but practicality is in question. Graphics: AIChE Process Development Division http://www.pd-aiche.com/