Hydrogen - Energy Policy Analysis: A Conceptual Framework - page 202

Waste Heat Disposal
Any hydrogen production or utilization technology that has a potential cogeneration use generates
significant heat that is not consumed directly in that process. This can be a benefit, unless there is
no convenient use of the heat, in which case it becomes waste and must be dealt with appropriately
using cooling towers or some other cooling mechanism. Merely venting heat to the atmosphere is
not acceptable under air quality regulations in effect in the United States today. This issue affects
only a few of the technologies described above and would normally be taken into consideration
during selection of the production or utilization technology for a particular end use.
A group of researchers at California Institute of Technology in 2003 suggested future hydrogen
emissions produced by increased use of fuel cell technology could substantially damage the ozone
layer. In a large-scale hydrogen production and utilization system, approximately 10 to 20 percent
of the hydrogen would escape into the atmosphere. If hydrogen fuel cells replaced all of today's
oil- and gas-based combustion technologies, such losses would double or even triple the total
hydrogen emitted into the atmosphere at the earth's surface. Hydrogen would be oxidized when
it reached the stratosphere, cooling it and creating more clouds. This cooling would make holes
in the ozone layer larger and longer lasting. The extra hydrogen would lead to a 5 to 8 percent
rise in ozone depletion at the North Pole and between 3 and 7 percent at the South Pole (Tromp et
al. 2003). However, although it may be possible to produce enough hydrogen to reduce imports
of foreign oil and perhaps even the influence of foreign countries on world oil supplies, it seems
unlikely it will ever be feasible to produce enough hydrogen to replace total daily U.S. gasoline
demand (Armaroli and Balzani 2011, 282, 284).
Dollar Costs of Utilizing Hydrogen Technologies
The market cost at $17 to $21 per kilogram for 20.1 million metric tons of hydrogen energy deliv-
ered to consumers in calendar year 2010 is estimated at $342.1 to $422.5 billion (calculated from
Lipman 2011, 12, and USDOE 2012). Market cost to consumers is difficult to estimate because
the U.S. Department of Energy does not regularly publish consumption, price, or cost data for
hydrogen, and about 95 percent of total demand is captive; that is, hydrogen is produced at the site
of consumption either by the consumer or by contractors producing it directly for the consumer.
The remainder is produced as “merchant” hydrogen for resale, and price data is proprietary for
almost all of it. Federal subsidies and tax expenditures for hydrogen energy not used to gener-
ate electricity were estimated at $230 million for FY2007 (USEIA 2008a, xviii). To reduce the
costs of producing hydrogen, efforts are being made to reduce capital equipment, operations, and
maintenance costs and to improve the efficiency of hydrogen production technologies. Related
efforts include developing new hydrogen delivery methods and infrastructure, improving carbon
sequestration technology to ensure that coal-based hydrogen production releases almost no green-
house gas emissions, and improving biomass growth, harvesting, and handling to reduce the cost
of biomass resources used in hydrogen production (USDOE 2006).
The greatest challenge to hydrogen production is cost reduction. For cost-competitive transpor-
tation, hydrogen must be comparable to conventional fuels and technologies on a per-mile basis
in order to succeed in the commercial marketplace. This means that the cost of hydrogen, includ-
ing the cost of delivery—regardless of the production technology—must be in the range of $2 to
$4 per gallon gasoline equivalent, not counting taxes. The appropriate match between a fuel cell
technology and the intended application depends on the magnitude and duration of power needed;
the cost, performance, and durability of fuel cells; and operating temperature range.