H2 Scale (Hydrogen at Scale): Determining Research, Development, and Demonstration (RD&D)

H2@Scale (Hydrogen at Scale): Determining Research, Development, and Demonstration (RD&D) Necessary for Clean Hydrogen Production to Enable Multisectoral Deep Decarbonization

(DE-FOA-0001655)

DATE POSTED:September 9, 2016

SUBJECT:H2@Scale (Hydrogen at Scale): Determining Research, Development, and Demonstration (RD&D) Necessary for Clean Hydrogen Production to Enable Multisectoral Deep Decarbonization

RESPONSE DUE DATE: November 4, 2016 at 5:00 PM Eastern Time

Description

The U.S. Department of Energy (DOE) seeks input on priority RD&D areas to enable deep decarbonization of industrial, transportation, and power generation sectors through wide-scale deployment of hydrogen. The potential of hydrogen to deeply decarbonize a multitude of sectors was identified by the DOE national laboratories in a proposal termed H2@Scale in 2016.[1] The preliminary analysis performed by the national laboratories on the H2@Scale concept indicated that nearly a 50% reduction in greenhouse gas emissionsis possible by 2050. Research in several relevant areas is currently addressed by many different DOE Offices, including the Offices of Nuclear Energy (NE), Energy Efficiency and Renewable Energy (EERE), Fossil Energy (FE), Electricity Delivery and Energy Reliability (OE), and Science (OS), along with the Advanced Research Projects Agency (ARPA-E). Given the broad scope of H2@Scale, and the need to engage many stakeholders to ensure the proposal’s success, the U.S. DOE is soliciting feedback on activities to advance the H2@Scale proposal in both the near and longer-term.

Background

Hydrogen is an ideal energy carrier to enable aggressive market penetration of renewables and deep decarbonization across multiple sectors. Hydrogen at scale is unique in its ability to cleanly and cheaply couple with multiple intermittent power generation inputs, while also servicing the energy demands of the transportation and industrial sectors and enabling increased resiliency, US energy security and manufacturing competitiveness. Hydrogen is currently a feedstock for numerous applications: petroleum refining, fertilizer production, metals industry, biofuels production, and others (plastics, cosmetics, food industry).Today, 10 million metric tons of hydrogen are produced in the US/year (95% of which is via centralized reforming of natural gas[2], usually without carbon capture and sequestration), creating the equivalent of 5% of today’s transportation sector carbon emissions.The transportation and industrial sectors each generate roughly 1/3 of US greenhouse gas (GHG) emissions. Steel production alone currently creates up to 7.6% of global GHG emissions. Switching to clean, low cost H2 across sectors is a paradigm shift, enabling use of renewables, taking advantage of increased natural gas supplies and technological advances in carbon capture and sequestration, and enabling truly zero emissions processes for diverse applications.

H2@Scale is an enabler and not a direct competitor to other options: It is the essential ingredient in converting CO2 to liquid fuels and upgrading biomass/crude oil; it can support higher penetrations of renewable generation resulting in greener battery charging for electric vehicles (EVs); it can provide clean power through H2 turbines/fuel cells either at scale or through distributed generation and combined heat and power (CHP); it can green numerous processes and the natural gas grid (e.g. H2 in gas pipelines as in Europe and town gas a century ago); it can provide ancillary services/frequency regulation, grid resiliency, and high capacity long-duration storage complementing current electricity storage systems (e.g., batteries); and it can serve as a fuel for transportation – all with zero carbon emissions when produced from renewable resources, nuclear resources, or from fossil fuels with carbon capture and sequestration. The key challenges are clean, low cost hydrogen production and efficient utilization/systems integration.

Figure 2 Hydrogen is an enabling of diverse feedstock and applications

The H2@Scale initiative will develop and enable the deployment of transformational technologies that produce and utilize green, low-cost hydrogen to achieve an economically competitive, deeply decarbonized future energy system across sectors. Outcomes include:

• Increased penetration of intermittent renewable power generation
• Low cost green hydrogen for use in liquid fuels production, fuel cells, turbines, and other applications
• A decarbonized industrial sector through utilization of low-emission hydrogen production processes
• Enable expanded use of nuclear energy, through small modular and/or hybridized reactors
• A strong domestic industry and enhanced energy security through utilization of domestic energy sources and development of new technologies
• Increased energy system resiliency and flexibility.

A key goal of the H2@Scale concept is to enable hydrogen production at $1/kg through advancements in electrolyzer technologies, use of low-cost electricity from the grid during off-peak times, and high-volume manufacturing of electrolyzers enabled by the use of hydrogen in a wide range of sectors (Figure 3).

The U.S. DOE seeks to identify research efforts that can enable the integration of hydrogen production with the electricity grid, as well as with process heat to enable deep decarbonization of end-use industries. This RFI builds upon H2@Scale stakeholder engagement efforts already pursued during the 2016 Annual Merit Review[3], 2016 Sustainable Transportation Summit[4], and 2016 Intermountain Energy Summit[5].

Purpose

The purpose of this RFI is to solicit feedback, project ideas, and other guidance on the topic areas described below and through responses to questions (as applicable). Note: stakeholders should feel free to respond only to those topics relevant to their expertise; it is not necessary to respond to all topics.Please ensure you read and follow the response guidelines at the end of this document.

1. Concept of H2@Scale
2. Integration of Hydrogen Production with the Electricity Grid, and with Storage and Pipeline Infrastructure
3. Integration of Hydrogen Production with Process Heat, such as from Nuclear Generation, Industrial Waste Heat Sources, or Concentrated Solar Power
4. Leveraging Stranded Renewables, and Value-Added Applications for Hydrogen
5. Hydrogen from Fossil Fuels
6. Other

1. Concept of H2@Scale

Given the broad range of industries that can benefit from the production or use of hydrogen gas, the U.S. DOE would like H2@Scale projects to be collaborative with utilities, end users, and/or other stakeholders. Previous workshops have indicated substantial stakeholder interest in the demonstration of viable, collaborative business cases for wide-scale hydrogen energy storage.[6] The U.S. DOE now seeks information to guide the development of collaborative RD&D projects.

I.1What are the main drivers for your interest in H2@Scale (e.g. storage, ancillary services, potential synergy with other end uses, power-to-gas, revenue, etc.)?

I.2Are you already engaged in work aligned with the H2@Scale concept? If so, please describe.

I.3Can you conceptualize a collaborative H2@Scale RD&D project that will help to address your needs? If so please describe what it would entail.

I.4In what applications (e.g. micro-grids) would a demonstration of fuel cell and/or electrolyzer integration with the grid be of interest?

I.5What would you like to see in a large-scale demonstration? What scale would be most appropriate? Is the scale of interest seasonal?

I.6If youwould like to see a large-scale demonstration, please specify what funding level would be appropriate. Please also include deliverables, metrics, and go/no go decision points.

I.7What are the main challenges/issues/gaps that must be addressed before conducting a demonstration?

I.8Do you see a value proposition for end uses of hydrogen in both the near-term and mid/long-term? If so, please describe. If not please articulate why not.

I.9Can you describe the cost at which a given application of hydrogen (e.g. power-to-gas) becomes attractive?

I.10Would you be willing to share data if DOE were to fund a demonstration project? If so, what specific data?

I.11What data is most important to assess feasibility and applicability of the H2@Scale concept?

I.12What do you see as the appropriate and optimum role for the multitude of stakeholders, and any others not listed here? Stakeholders include national laboratories, the various industries involved, universities, public utility commissions (PUCs), state/local government entities, etc.

I.13In addition to a technology demonstration, are there options to demonstrate innovative regulatory and/or policy ideas that would advance the H2@Scale concept? Please describe.

1. Integration ofHydrogen Production with the Electricity Grid, and with Storage and Pipeline Infrastructure

As the electricity grid in the U.S. is modernized to increase penetration of renewables,replace aging infrastructure, mitigate threats of outages and cyber-security, and increase customer engagement, technologies that can enable grid resilience during fluctuations in supply and demand are of great interest.[7] One approach to managing the variability of renewable generation is to store excess energy rather than curtailing it. As a result of expected increases in energy demand and the aforementioned grid challenges, the market for energy storage from utilities is expected to grow dramatically in the coming decade.[8] About 96% of energy storage today takes place in the form of pumped hydropower, and the remaining 4% is mainly in the form of compressed air, batteries, and flywheels.7While most growth in recent years has been in lithium ion batteries[9], batteries are still challenged by costs and scalability.6 If given additional R&D and regulatory support, hydrogen energy storage may offer a viable solution.

At least seven[10],[11],[12]geologiccaverns are currently in use throughout the world for bulk storage of thousands of tonnes of hydrogen. Increased interest in hydrogen energy storage today is being driven by its potential to enhance grid stability, as well as to enable low-cost hydrogen production. High-volume storage would facilitate the integration of load-following electrolyzers with the grid, which could increase or decrease power demand whenever supply/demand/ramping constraints exist. Electrolysis that takes place when the wholesale or retail time-of-use (TOU) schedule cost of electricity is lowcould enable low-cost hydrogen generation while also enhancing grid stability.

Efforts to store energy as hydrogen are increasing worldwide. The world’s first demonstration of at-scale electrolyzer integration with the grid occurred in Germany in 2013 with the Thüga Group’s Power-to-Gas (P2G) plant[13]. The Thüga P2G plant uses a polymer electrolyte membrane (PEM) electrolyzer to balance load on the grid by generating hydrogen. The hydrogen gas is injected into a natural gas pipeline network at a concentration of about 2%.[14] The injection of low concentrations of hydrogen (<5-15% H2 by volume) in natural gas pipelines is currently thought to be feasible with existing infrastructure in the U.S. without substantial risk of damaging end-use applications.[15] In the long term, pipelines are expected to be another option for hydrogen energy storage, akin to line-packing in the natural gas industry.

Given interest in grid stability with increased penetration of renewables, and in hydrogen energy storage, DOE is interested in collecting stakeholder feedback on the following questions:

II.1.What scales of energy storage are of interest in the coming years, and where? How much of a need is there for seasonal energy storage? Do you foresee this becoming a valuable asset in the future?

II.2.What electrolyzer response time is needed to enable grid integration of renewables?

II.3.What advances in power electronics (e.g. rectifiers or inverters) are necessary to enable reliable integration of fuel cells and electrolyzers with the grid?

II.4.Do you have an interest in P2G (hydrogen injection in natural gas pipelines)? If so, what aspects of P2G would you be interested in better understanding? What would drive your interest in P2G over delivery of pure hydrogen, or pure natural gas?

II.5.What additional basic and/or applied R&D is needed to address Topic II?

Regarding the potential regulatory challenges for implementing H2@Scale:

II.6.What challenges do you foresee in leveraging low-cost electricity from the grid for hydrogen production? Specifically:

1. What regulatory barriers exist for utilities or independent power producers that operate solar or wind facilities to deploy electrolyzers?
2. What barriers exist to utilities interested in directly selling hydrogen generated from electrolyzers to end users (e.g. utility-run hydrogen fueling stations)?
3. Do you foresee the introduction of increasingly aggressive TOU rates that would be attractive for thoseproducing hydrogen from electricity purchased at retail rates?

II.7.What types of policies/incentives are and/or would be most effective in fostering growth in the deployment of H2@Scale?

Regarding the storage of hydrogen:

II.8.What gas storage technologies are most appropriate for H2@Scale? In addition to geologic storage and pipeline storage, are there other means of hydrogen storage that should be considered?

II.9.What challenges currently face caverns and line-packing as a form of energy storage (e.g. leakage, surface monitoring, wellbore integrity, etc.)?

1. Integration of High-Temperature Hydrogen Production with Process Heat, such as from Nuclear Generation,Industrial Waste Heat Sources, or Concentrated Solar Power

One approach to lowering the overall energy requirement for a hydrogen production system is to use high-temperature process heat to perform steam electrolysis or thermochemical water splitting at high temperatures. Higher temperature operations improve the overall efficiency of a hydrogen production system. In steam electrolysis,heating the electrolyzer feedstock water reduces the specific electricity consumption required for water splitting. Integration of high-temperature electrolysis with nuclear power generation from high temperature reactors (HTRs) is currently of interest worldwide[16]due to the high value process heat from HTRs, which is about 750-800°C.[17] High volume hydrogen production via solid oxide electrolysis leveraging high-temperature process heat is currently projected to cost about $4-5/kg; two-thirds of the cost is due to the electricity feedstock.[18],[19]Thermochemical and hybrid thermochemical-electrolysis systems are also being investigated that can take advantage of high-temperature process heat from HTRs or concentrated solar power. The first demonstration of hydrogen production from nuclear process heat is anticipated to occur in Japan in the 2020 timeframe in conjunction with the high temperature engineering test reactor (HTTR) project.[20] However, many RD&D challenges remain with both the deployment of HTRs and their integration with hydrogen production at large scales. For example, the behavior of steels at the temperatures and pressures faced by the reactor and integration components, such as valves, must be better understood. Heat exchanger designs that can withstand the temperatures from HTRs must also be developed.

DOE would like feedback on aspects of high-temperature nuclear power generation that would benefit from greater RD&D:

III.1.What are the key RD&D areas that need to be addressed for the integration of nuclear process heat with high-temperature hydrogen production?

III.2.What are priority focus areas for materials development to enable durable operation of valves and heat exchangers at 750-800°C?

III.3.What heat exchanger technologies have the most potential for durable operation with high-temperature air and steam from HTRs? What are the manufacturing challenges associated with these heat exchangers?

Additional RD&D challenges must be addressed in the durability and scale-up of high-temperaturehydrogen production. Steam electrolyzer degradation rates are reported to be about 1-4% per 1,000 hours, with some causes of degradation being due to the migration of chromium from bipolar plates, corrosion of metallic components, catalyst degradation, and electrode delamination.[21],[22] The causes of some of these failure modesand prevention techniques are not yet well-understood, though there is some indication that the degradation rate increases at higher current density operation.[23] While the theoretical thermodynamics and kinetics of numerous thermochemical hydrogen production cycles are fairly well understood, issues related to operating equipment scale-up and component durability have proven to be barriers to larger scale demonstrations. DOE would like feedback on aspects of high-temperature hydrogen production that would benefit from greater RD&D:

III.4.What degradation modes of high-temperature electrolysis materials and catalysts are currently known?

III.5.What are observed degradation behaviors in high-temperature electrolysis that are not yet well-understood? What cell/stack operating conditions exacerbate degradation? Is this an area that needs further study?

III.6.Would the use or development of specialized manufacturing technologies, such as additive manufacturing, be beneficial in addressing durability or scale-up challenges of high temperature hydrogen production components(e.g., over-sintering of electrodes, ceramic component fabrication, etc.)? If so, what are some examples of manufacturing challenges that must be addressed?

III.7.What material properties of components (electrodes, cell plates, electrolyzer membranes, catalysts, acid decomposers, etc.) should be optimized to improve the durability of high-temperature electrolysis?

III.8.What additional basic and/or applied R&D is needed to address Topic III?

1. Leveraging Stranded Renewables, and Value-Added Applications for Hydrogen
   

Fully achieving the environmental benefits of hydrogen will require its production to be driven by water splitting fromclean sources of power[24], or fossil feedstock (such as natural gas) with carbon capture and sequestration. The two largest uses of hydrogen in the world today are petroleum refining and ammonia production[25], both of which are likely to see substantial growth in the coming decades. These industries can be significantly decarbonized if they leverage hydrogen produced from water electrolysis, or steam methane reforming in conjunction with carbon capture and sequestration. In 2013, the University of Minnesota West Central Research and Outreach Center demonstrated this potential by integrating an electrolyzer with a wind plant in Minnesota to produce hydrogen. The hydrogen was then leveraged in the production ofanhydrous ammonia to supply the region’s agricultural demand.[26],[27] Widespread use of electrolysis is currently inhibited by the technology’s capital cost. In areas of the country with stranded, intermittent sources of wind and solar power, however, the low cost of electricity can improve the business case for electrolyzers.[28] Conversely, base load sources of power, such as geothermal, can serve as a cost-effective approach to hydrogen production in niche markets where geothermal reserves have already been developed and have unused capacity;[29]development of new geothermal power plants is currently inhibited byupfront capital costs and risk.[30],[31]