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System Flexibility - Factbook Hydrogen-Based Energy Conversion More than storage: system flexibility - FactBook Hydrogen-based energy conversion A.T. Kearney Energy Transition Institute February 2014 Hydrogen-Based Energy Conversion Compiled by the A.T. Kearney Energy Transition Institute Acknowledgements A.T. Kearney Energy Transition Institute wishes to acknowledge for their review of this FactBook: Amgad Elgowainy, principal energy systems analyst at Argonne National Laboratory; Marcel Weeda, manager hydrogen transitions and infrastructure at Energy Research Center of the Netherlands; Alexander Körner, lead author of the Hydrogen Technology Roadmap of the International Energy Agency (IEA). Their review does not imply that they endorse this FactBook or agree with any specific statements herein. The Energy Transition Institute expresses its gratitude to Kamel Bennaceur, former Board Member of the Institute, for his guidance and support throughout the study, and also gratefully acknowledges individuals, companies, research centers and industry associations interviewed during the preparatory phase of the study. Finally, the Institute also wishes to thank the authors of this FactBook for their contribution: Benoît Decourt, Bruno Lajoie, Romain Debarre and Olivier Soupa. About the FactBook – Hydrogen-Based Energy Conversion The FactBook provides an extensive technoeconomic analysis of the entire value chain, from power conversion to end-uses of hydrogen. The objective was to view the hydrogen industry through a technological prism, revealing barriers to progress and providing stakeholders – be they policy-makers, energy professionals, investors or students – with the tools needed to understand a complex and often misunderstood sector. In addition, the Energy Transition Institute summarizes and assesses nine business cases for hydrogen, based on academic literature and research. About the A.T. Kearney Energy Transition Institute The A.T. Kearney Energy Transition Institute is a nonprofit organization. It provides leading insights on global trends in energy transition, technologies, and strategic implications for private sector businesses and public sector institutions. The Institute is dedicated to combining objective technological insights with economical perspectives to define the consequences and opportunities for decision makers in a rapidly changing energy landscape. The independence of the Institute fosters unbiased primary insights and the ability to co-create new ideas with interested sponsors and relevant stakeholders. Hydrogen-based energy 2 Table of Contents Executive Summary................................................................................................................ ........................................................................................ 4 1. Making the case for hydrogen conversion: intermittency, flexibility & energy storage………………………………………………..................... 14 1.1 The intermittency challenge................................................................................................................................................................................... 17 1.2 The need for flexibility............................................................................................................................................................................................ 22 1.2 The new momentum of electricity storage….......................................................................................................................................................... 28 1.3 Making the case for hydrogen conversion solutions.............................................................................................................................................. 36 2. Techno-economic analysis of the value chain.......................................................................................................................................................... 45 2.1 Electron-to hydrogen: water electrolysis….…...........................................................................................................................................……….. 46 2.2 Hydrogen storage & transport…….….................................................................................................................................................................... 64 2.3 Hydrogen-to-electron…….…….…......................................................................................................................................................................... 84 2.4 Hydrogen-to-gas…….…........................................................................................................................................................................................ 101 2.5 Hydrogen-to-liquid fuels…..................................................................................................................................................................................... 125 2.6 Hydrogen-to-mobility …….…................................................................................................................................................................................. 136 2.7 Hydrogen-to-chemical ……………………….…...................................................................................................................................................... 152 2.8 Integrated hydrogen projects.................................................................................................................................................................................. 165 3. Business cases…………………………………………................................................................................................................................................... 176 3.1 Monetizing hydrogen conversion............................................................................................................................................................................ 177 3.2 Selected business cases........................................................................................................................................................................................ 188 4. Environmental impact, safety and social acceptance.............................................................................................................................................. 226 4.1 Environmental impact…………….…...................................................................................................................................................................... 229 4.2 Safety..................................................................................................................................................................................................................... 236 4.3 Social acceptance.………………….…................................................................................................................................................................... 246 5. Outlook……………………............................................................................................................................................................................................. 250 Appendix……….…............................................................................................................................................................................................................ 263 Hydrogen-based energy 3 The increasing share of wind and solar photovoltaic energy in the power mix is making the case for hydrogen-based energy conversion solutions The need for flexibility - Since the 2000s, onshore wind and solar photovoltaic [PV] technologies have grown exponentially. While wind and solar PV still represent a limited proportion of the global power mix (around 7% of installed capacity and 3% of power generated), their share in some regions is significant and deployment is expected to continue at a strong pace. Wind and solar PV are unique in the power-generation technology landscape because of the intermittent nature of their output. Their production is variable, largely uncontrollable and hard to predict, while the most favorable locations for generating variable renewables are often far from consumptions centers. They make demand-supply matching more difficult since they increase the need for flexibility within the system, but do not themselves contribute significantly to flexibility. Even if flexibility management can be optimized, for instance by refining the design of power systems, additional flexibility will be needed in the form of demand- side participation, better connections between markets, greater flexibility in baseload power supply and electricity storage. The new momentum of electricity storage - Electricity storage is not new. In 2012, an estimated 128 GW of storage power capacity was installed around the world. However, 99% of that was pumped hydro storage [PHS]. All other technologies are at earlier stages of development and still have to demonstrate their commercial potential. However, not all electricity storage technologies are in direct competition with each other, as they may be designed to provide different types of storage service. For bulk-storage applications, there are three main options: PHS, compressed air energy storage [CAES], and hydrogen-based energy storage. There are two reasons to store electricity: first, to provide back-up power for times when intermittent renewables are not producing energy; and second, to make use of surplus supply, reflected
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