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Case Study on the Role of Fiscal Policy in Hydrogen Development

Baseline Report

Pembina Institute and the Canadian Energy Research Institute

May 10, 2004

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Hydrogen Pathways

Adding the hydrogen sector to an existing national energy model, as is needed in this analysis, requires that a discrete number of end-uses and corresponding energy pathways be prioritized. To define a list of hydrogen pathways for research, a comprehensive set of energy pathways was first established. These are presented in the figure below. An energy pathway comprises some combination of an energy source, energy converter, energy carrier, end-use technology and end-use. Thus, hydrogen, as an energy carrier, can be combined with any number of energy sources, energy converters, end use technologies and end-uses to form a hydrogen pathway.


Figure 1 Multiple Energy Pathways and Associated Components


As is demonstrated in the figure above, there are numerous hydrogen pathways upon which the role of fiscal policies could be evaluated. However, adding all such pathways to the energy model used in this study was not feasible within the scope of this project. The pathways thus needed to be limited to those pathways associated with well-developed technologies for which data was available. The pathways given further consideration in this analysis, shown in Table 2, were selected according to (1) their ability to reduce carbon emissions and (2) their stage of development.


Table 1: Hydrogen Pathways for Further Consideration

FUEL SOURCE
PRODUCTION
STORAGE
TRANSPORTATION
STORAGE
END-USE
Natural gas from pipeline         Fuel cells SOFC (residential, commercial)
Natural gas from pipeline         Fuel cells MCFC (residential, commercial)
Natural gas from pipeline         Fuel cells PEM (residential, commercial)
Natural gas from pipeline Decentralized SMR     Compressor and tanks at fueling stations Fuel cell LDV 7or fuel cell transit bus or ICE LDV
Electricity from grid or specific plant Decentralized electrolyzer     Compressor and tanks at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Natural gas from pipeline Centralized SMR Compressor and tanks or liquefier and cryogenic storage Pipeline or tube trailer or cryogenic tanker truck Compressor, tanks and possibly cryogenic storage at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Electricity from grid or specific plant Centralized electrolyzer Compressor and tanks or liquefier and cryogenic storage Pipeline or tube trailer or cryogenic tanker truck Compressor, tanks and possibly cryogenic storage at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Methanol from off-shore natural gas Decentralized methanol reformer     Compressor and tanks at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Gasoline8 Decentralized gasoline reformer     Compressor and tanks at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Methanol from off-shore natural gas         Methanol fuel cell LDV
Gasoline         Gasoline fuel cell LDV

Not all of the pathways presented above could be incorporated into the Energy 2020 model within the scope of this project. The pathways ultimately chosen for modelling thus include the most commercially advanced hydrogen production (steam methane reformers and electrolyzers) and end-use technologies (fuel cells and internal combustion engines), focusing on early market applications for vehicles (decentralized hydrogen production) that do not require a large hydrogen vehicle base. SOFC fuel cells were selected for use in the stationary sector by the NRTEE Project Scoping Group since, at the time of selection, they were considered the most likely technology for use in the defined applications within Canada. These pathways are summarized in Table 2. These pathways will be used to establish benchmarks for hydrogen technology penetration under fiscal policy stimulus. Those pathways that could not be modelled, summarized in Table 3, will be addressed qualitatively.

Table 2: Hydrogen Pathways for Incorporation into Energy 2020

FUEL SOURCE
PRODUCTION
STORAGE
TRANSPORTATION
STORAGE
END-USE
Natural gas from pipeline         Fuel cells SOFC (residential, commercial)
Natural gas from pipeline Decentralized SMR     Compressor and tanks at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Electricity from grid or specific plant Decentralized electrolyzer     Compressor and tanks at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV

Table 3 Hydrogen Pathways for Further Discussion

FUEL SOURCE
PRODUCTION
STORAGE
TRANSPORTATION
STORAGE
END-USE
Natural gas from pipeline         Fuel cells MCFC (residential, commercial)
Natural gas from pipeline         Fuel cells PEM (residential, commercial)
Natural gas from pipeline Centralized SMR Compressor and tanks or liquefier and cryogenic storage Pipeline or tube trailer or cryogenic tanker truck Compressor, tanks and possibly cryogenic storage at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Electricity from grid or specific plant Centralized electrolyzer Compressor and tanks or liquefier and cryogenic storage Pipeline or tube trailer or cryogenic tanker truck Compressor, tanks and possibly cryogenic storage at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Methanol from off-shore natural gas Decentralized methanol reformer     Compressor and tanks at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Gasoline Decentralized gasoline reformer     Compressor and tanks at fueling stations Fuel cell LDV or fuel cell transit bus or ICE LDV
Methanol from off-shore natural gas         Methanol fuel cell LDV
Gasoline         Gasoline fuel cell LDV

 

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