Analysis of Combined Hydrogen, Heat, and Power as a Bridge to a Hydrogen Transition.

Abstract

Combined hydrogen, heat, and power (CHHP) technology is envisioned as a means to providing heat and electricity, generated on-site, to large end users, such as hospitals, hotels, and distribution centers, while simultaneously producing hydrogen as a by-product. The hydrogen can be stored for later conversion to electricity, used on-site (e.g., in forklifts), or dispensed to hydrogen-powered vehicles. Argonne has developed a complex-adaptive-system model, H2CAS, to simulate how vehicles and infrastructure can evolve in a transition to hydrogen. This study applies the H2CAS model to examine how CHHP technology can be used to aid the transition to hydrogen. It does not attempt to predict the future or provide one forecast of system development. Rather, the purpose of the model is to understand how the system works. The model uses a 50- by 100-mile rectangular grid of 1-square-mile cells centered on the Los Angeles metropolitan area. The major expressways are incorporated into the model, and local streets are considered to be ubiquitous, except where there are natural barriers. The model has two types of agents. Driver agents are characterized by a number of parameters: home and job locations, income, various types of 'personalities' reflective of marketing distinctions (e.g., innovators, early adopters), willingness to spend extra money on 'green' vehicles, etc. At the beginning of the simulations, almost all driver agents own conventional vehicles. They drive around the metropolitan area, commuting to and from work and traveling to various other destinations. As they do so, they observe the presence or absence of facilities selling hydrogen. If they find such facilities conveniently located along their routes, they are motivated to purchase a hydrogen-powered vehicle when it becomes time to replace their present vehicle. Conversely, if they find that they would be inconvenienced by having to purchase hydrogen earlier than necessary or if they become worried that they would run out of fuel before encountering a facility, their motivation to purchase a hydrogen-powered vehicle decreases. At vehicle purchase time, they weigh this experience, as well as other factors such as social influence by their peers, fuel cost, and capital cost of a hydrogen vehicle. Investor agents build full-service hydrogen fueling stations (HFSs) at different locations along the highway network. They base their decision to build or not build a station on their (imperfect) estimates of the sales the station would immediately generate (based on hydrogen-powered vehicle traffic past the location and other factors), as well as the growth in hydrogen sales they could expect throughout their investment horizon. The interaction between driver and investor agents provides the basis for growth in both the number of hydrogen vehicles and number of hydrogen stations. For the present report, we have added to this mix smaller, 'bare-bones' hydrogen dispensing facilities (HDFs) of the type that owners of CHHP facilities could provide to the public. The locations of these stations were chosen to match existing facilities that might reasonably incorporate CHHP plants in the future. Unlike the larger commercial stations, these facilities are built according to exogenously supplied timetables, and no attempt has been made to model the financial basis for the facilities. Rather, our objective is to understand how the presence of these additional stations might facilitate the petroleum-to-hydrogen transition. We discuss a base case in which the HDFs are not present, and then investigate the effects of introducing HDFs in various numbers; according to different timetables; with various production capacities; and with hydrogen selling at prices above, equal to, and below the commercial stations selling price. We conclude that HDFs can indeed be helpful in accelerating a petroleum-to-hydrogen transition. Placed in areas where investors might not be willing to install large for-profit HFSs, HDFs can serve as a bridge until demand for hydrogen increases to the point where larger stations are viable. For drivers to use them, however, HDFs must sell hydrogen at a price competitive with that of the larger HFSs. Because the marginal cost of producing hydrogen is expected to be higher for small capacities, HDFs may be uncompetitive without (possibly substantial) subsidies or other means to allow them to sell hydrogen at a price below the actual cost to produce and distribute it. Fortunately, HDFs do not need to be subsidized for very long. In our model, installing HDFs only as the demand for hydrogen increased was effective; then closing down all HDFs after five years into the transition made virtually no difference to the resultant accelerated outcome. Even installing much smaller numbers of HDFs only in the second and third years of the simulation and then closing them at the end of the fifth year was helpful

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