Wind-Hydrogen System: Overview of System Components

Transcription

1 1 Wind-Hydrogen System: Overview of System Components by Andreas C. Vikis, B.Sc. Ph.D. for Renewable Energy Technologies CETC-Ottawa Natural Resources Canada. February 2005

2 2 TABLE OF CONTENTS Executive Summary... 3 Introduction... 6 Wind Energy... 6 Hydrogen and the Hydrogen Economy... 8 Electrolysis Fuel Cells Internal Combustion Engines Microturbines Integrated Studies Experiments / Demonstrations Modeling Studies Canadian Perspective Conclusions Appendix Workshop Summary Appendix Battery Storage Flywheels References LIST OF FIGURES Fig.1. Renewable production of electricity and hydrogen for storage and distribution to various users Fig.2. Electrolysis Cell (schematic, courtesy of SES) Fig.3 Proton Exchange Membrane Fuel Cell Fig.4. The Utsira, Norway wind/hydrogen plant Fig.5. Hydrogen cost vs. electrolysis power and cost of electricity Fig.6 Optimum Electrolysis Power vs. Surplus Electricity and Capital Cost Fig.7. Canada s Remote Communities Fig.8. Specific Energy vs. Specific Power of Energy Storage Media Fig.9. Power Ratings vs. Discharge Time of Energy Storage Media... 31

3 3 Use of Wind Energy to Produce Hydrogen Executive Summary This document reviews national and international developments in wind energy and electrolytic hydrogen production, with a focus on the application of these technologies to diversify and maximize wind energy applications. Hydrogen production using electricity generated by wind energy enhances the application of wind energy through the production of a fuel, which can be used locally to generate electricity during periods of low wind or peak demand, used for other local energy needs or transported to the more energy demanding markets. This report also includes: an evaluation of the status of the technology and the economic feasibility of producing hydrogen from wind energy; identification of key players and existing or planned projects in this field; current trends and future potential of the process, from a Canadian perspective; and provides recommendations for future exploitation of wind-to-hydrogen conversion in Canada. In the last thirty years, driven by environmental concerns and the need for energy selfsufficiency, there have been some rather impressive developments in wind energy. Worldwide, the technology has improved tremendously, installed capacity has grown exponentially to about 46GW in 2004; and capital costs have fallen to $US/kW. Generation costs have fallen to 3-5 to US /kwh and, by 2010, are estimated to be in the range of 2-4 to 6-9 US /kwh. In Canada, despite the availability of cheap electricity, wind energy has been growing by about 60% on average annually in the last five years, to an installed capacity of 443MW in The recent decision by Hydro Quebec to accept proposals for 990 MW of wind power by 2011 is a very positive development for deployment of wind energy in Canada. Overall, wind energy is the most advanced renewable energy technology for generating electricity. A major drawback of wind energy is its intermittent availability, which affects both stand-alone and grid-connected applications. To overcome this problem, a number of wind energy storage devices have been used or considered. The wind/hydrogen option appears attractive for the following reasons. Alternative storage devices such as batteries are an expensive, short-term option. Diesel generators, used to produce electricity when wind is not available, depend on fuel and fuel transportation costs and emit greenhouse gases. Hydrogen appears to be an attractive energy storage option in many respects and, particularly, for stand-alone wind-power applications it can be used to stabilize the availability of electricity by converting wind into hydrogen during periods of surplus capacity and, during periods of low or no wind availability, the hydrogen can be used to generate electricity. Electrolysis, the technology used to break down water into hydrogen and oxygen, and hydrogen-fuelled internal combustion engines or fuel cells used to convert hydrogen back to electricity are relatively proven technologies. Canada is a world leader in electrolyser and fuel cell technologies. The hydrogen option is not only important in stand-alone applications, but also in grid- connected ones, particularly at high (>10%) wind-

4 4 electricity penetration. Of course, in the long anticipated hydrogen economy of the future, hydrogen would be the transportation fuel. It is in the latter context that a lot of research, development and demonstration on electrolysis and fuel cells are taking place. Hydrogen is an ideal fuel particularly when generated by environmentally sound, nonpolluting renewable (e.g. wind, photovoltaic) energy sources. Hydrogen is presently produced by steam/methane reforming. Its cost depends on the cost of natural gas and is presently at about 1350 US$/tonne (based on 7 $US/GJ for methane). Electrolytic production of hydrogen is presently uneconomic relative to steam/methane reforming. However, it all depends on the price of natural gas, the cost of electricity, cost of CO 2 avoidance, etc. Considering the most likely future scenarios, a reasonable target for electrolytic hydrogen is about 2000$US/tonne. Mega-watt size electrolysers, capable of producing up to 700 Nm 3 /h of hydrogen with overall energy efficiencies of about 80%(HHV), are now available. These units presently cost about $US/kW; however, as a result of R&D and economies of scale, costs are expected to drop to about 300 US$/kW within a decade or so. Produced hydrogen can be used in fuel cells or in internal combustion engine to produce electricity. Fuel cells are a technology under intense development for the same reasons as electrolysis and primarily for the development of electric vehicles fueled by hydrogen and other environmentally friendly fuels. Currently, fuel cells cost about 3000$US/kW to 5000$US/kW and have efficiencies in the range of 35-45%. Continuing R&D is expected to reduce the cost and increase the efficiency of fuel cells. Hydrogen fuelled internal combustion engines (ICEs) are a mature technology. They are about 30-40% efficient and relatively inexpensive, about 300$US/kW for sizes <200kW, but significantly more expensive for large scale applications. There have been several studies of the technology and economics of hydrogen production using renewable energy. An ongoing demonstration of a stand-alone application at the Institute of Hydrogen Research (IHR), University of Quebec, Trois-Rivieres, employs a 10kW wind and/or 1kW PV to generate electricity, which can be directed to a 5kW electrolyser to produce hydrogen. The hydrogen can then be used to fuel a 5kW fuel cell, which generates electricity. Also, the world s first stand-alone, full-scale application of wind/hydrogen was inaugurated in July 2004 at Utsira, an isolated island in Norway. The plant employs two 600kW wind turbines, a flywheel with a storage capacity of 5kW, a 48kW (10Nm 3 /h) electrolyser plus a 2400 Nm 3 hydrogen storage capacity, a 55kW hydrogen internal combustion engine and a 10kW fuel cell. The plant will supply all the energy needs of ten households at Utsira. The economics of hydrogen production by electrolysis of water have been the subject of several studies. Such studies conclude that the US DOE target price of 2000 $US/tonne of hydrogen can be met when the cost of electricity is below about 0.03 $US/kWh and electrolyser capital costs are below about 300 $US/kW. This target price would be even more challenging to achieve for wind-generated electricity, because of the lower availability of wind energy. Thus, hydrogen production is presently uneconomic, particularly when compared with steam-methane reforming. However, electrolytic production of hydrogen is environmentally sound and future technology developments,

5 5 anticipated natural gas price increases and possible CO 2 avoidance costs, appear promising to improve the economics of the process relative to steam methane reforming. Furthermore, credit for the co-production of oxygen and heavy water could also improve the economics of the electrolytic process. In conclusion hydrogen production is an attractive option for improving the availability of wind-generated electricity, especially so for stand-alone applications of wind energy. The associated technologies of electrolysis, fuel cells and hydrogen ICEs are well advanced and are benefiting from continuing research and development driven by environmental issues and the anticipated hydrogen economy. Continuing research and development, anticipated higher prices for natural gas, and possibly CO 2 abatement costs are expected to further improve the economics of the associated hydrogen technologies. Canada stands to benefit in the near-term from remote, stand-alone applications of wind/hydrogen and from increased use of wind-generated hydrogen in existing industrial applications; in the longer-term, from the distributed production of hydrogen and the application of these technologies to manage the availability of both hydrogen and electricity. This study recommends that: 1)Canada should sponsor research, development and demonstration on remote application of wind / hydrogen systems to evaluate their application in remote communities in the Canadian north. 2)With respect to existing enduse applications of hydrogen, Canada should identify and encourage suitable opportunities for early deployment of electrolytic hydrogen. 3)In order to maintain the present lead, Canada should continue and, preferably, accelerate research, development, and demonstration on electrolysers, fuel cells and, in general, wind/hydrogen integrated system development.

6 6 Use of Wind Energy to Produce Hydrogen Introduction This document reviews national and international developments in wind energy and electrolytic hydrogen production, as well as associated hydrogen technologies (fuel cells, etc.), with a focus on the application of these technologies to maximize the deployment of wind energy in Canada. Wind energy has been identified by Natural Resources Canada, CANMET Energy Technology Centre (CETC)-Ottawa, Renewable Energy Technology (RET), as one of the key technologies that must be advanced and commercialized in order to contribute towards the Federal Government s targets for emission reductions of greenhouse gases (GHG)[1]. Hydrogen production using electricity generated by wind energy enhances the application of wind energy through the production of a fuel, which can be used locally to generate electricity during periods of insufficient wind-electricity production, used for other local energy needs or transported from a potentially remote location to the more energy demanding markets. The main objectives of this study are to review current activities and knowledge regarding the production of hydrogen from wind energy and produce a report, which will summarize the findings of this review, including an evaluation of the status of the technology and the economic feasibility of producing hydrogen from wind energy; identification of key players and existing or planned projects in this field; current trends and future potential of the process, from a Canadian perspective; and provide recommendations for future exploitation of wind to hydrogen conversion in Canada. In carrying out this study, the literature and national programs of leading countries have been reviewed and national/international experts on the subject have been consulted. A workshop was also held on 2004 October 16 th, in association with the Canadian Wind Energy Association conference, in Montreal, P.Q., in order to brief Canadian stakeholders on the subject and seek their input. A summary of the workshop proceedings is appended to this report (Appendix 1). Wind Energy Wind energy is an established technology. In the last thirty years, driven by the rising cost of conventional hydrocarbon fuels, environmental concerns and the need for energy self-sufficiency, there have been some rather impressive developments in the renewable energy field, particularly in wind energy[2-4]. Worldwide, the technology has improved tremendously, installed capacity has grown exponentially to about 46GW in 2004; capital costs have fallen to $US/kW and by the end of this decade they are expected to be in the range of $US/kW (range of values depending on costs of investment: low-high) [3]. Generation costs have fallen to 3-5 to US /kwh and, by 2010, are estimated to be in the range of 2-4 to 6-9 US/kWh. Overall, except for hydroelectric, wind energy is the most advanced renewable energy technology for generating electricity.

7 7 In Canada, wind energy is largely driven by the rising costs of hydrocarbon fuels, remote applications and GHG emissions reduction. Despite the availability of cheap electricity, wind energy has been growing by about 60% on average annually in the last five years [5,6]]. Installed capacity in 2004 amounted to 443MW, of which 275MW was in Alberta and 113MW in Quebec. Hydro Quebec s recent acceptance of bids from Cartier Wind Energy Inc. and Northland Power Inc./Northland Power Income Fund, for a total of 990 MW by 2011, an overall investment of 1.9$Cdn billion, attest to the vitality of wind energy in Canada [7]. The wind farms and wind turbines, all based on GE Wind Inc. technology, will be located in the regional county municipality of Matane and in Gaspésie Îles-de-la-Madeleine. The suppliers guaranteed an annual energy volume of 3.2 TWh, at an average cost of 6.5 Cdn/kWh. Government incentives, electricity deregulation, buy-back options are contributing to wind energy growth in Canada. The federal government s Wind Power Production Incentives (WPPI) program, a 260$Cdn million incentives program, provides subsidies of 0.012$Cdn/kWh (declining to 0.008$Cdn/kWh by the fifth year) for the first ten years of operation of wind power installations, up to a maximum of 1000MW, commissioned between 2002 March 31 and 2007 April 1. A major constraint of wind energy is its intermittent availability, which affects both stand-alone and grid-connected applications [8, 9]. In stand-alone applications, either an energy storage system (e.g. batteries) or an alternative power supply system (e.g. diesel generators) are required to ensure uninterrupted supply of electricity. This adds to wind power costs and defeats some of the advantages of a renewable energy source. In grid connected applications, particularly at high penetration levels, the intermittent nature of wind energy poses a variety of operational problems for the electric system and lessens its economic value. Factors which may contribute to a low average price of the surplus electricity in a high wind penetration scenario include curtailments enforced by the system operator due to operational limits or transmission constraints, penalties for imbalance in a liberalized market, and a high price differential between off-peak and on-peak electricity. In certain cases the wind resource is located in remote locations, where a weak grid limits transmission of excess electricity to the more populated regions, where the power is needed. These problems intensify at wind-power penetration levels beyond about 10%. According to a Danish study cited by Gonzalez et al. [8], compared to the wind-power value at 10% penetration, it declines steeply to about 60% and 6% for 30% and 50% penetration levels, respectively. To overcome these problems, a number of wind energy storage devices have been used or considered. Needless to say, the round-trip efficiency (electricity storage electricity) of all storage options is further reduced during the recovery of electricity from the storage medium and that in itself is an important barrier to consider. Energy storage devices such as batteries and flywheels are discussed in Appendix 2, including the range over which these devices are effective. Hydrogen as an energy storage medium appears attractive for the following reasons. First of all, alternative storage devices such as batteries are an expensive, short-term option and diesel generators, used to produce electricity when wind is not available, depend on fuel and fuel transportation costs and emit greenhouse gases. In both stand alone and grid-connected wind-power

8 8 applications hydrogen can be used to stabilize the availability of electricity by storing wind energy during periods of surplus capacity. In a stand-alone application the stored hydrogen can be used to generate electricity, during periods of low or no wind availability. In grid-connected applications hydrogen storage can be used to manage the supply of electricity to the grid to optimize value. Of course, in the long anticipated hydrogen economy of the future, hydrogen would be the main heating and transportation fuel. It is in the latter context that a lot of research, development and demonstration on electrolysis and fuel cells are taking place. Hydrogen is an ideal fuel particularly when generated by environmentally sound, non-polluting, renewable (wind, photovoltaics). Electrolysis, the technology used to break down water into hydrogen and oxygen, and hydrogen-fuelled internal combustion engines or fuel cells used to convert hydrogen back to electricity are reviewed below Hydrogen and the Hydrogen Economy There is an almost universal optimism that within this century, faced with diminishing hydrocarbon resources, insecurity of conventional hydrocarbon supplies and environmental issues associated with carbon-based fuels, the world will gradually switch from carbon-based fuels to hydrogen fuel, the Hydrogen Economy [10-13]. According to Rifkin [13], the answer to the depleting hydrocarbon resources, the threat to existing oil reserves in the Middle East, and the specter of global warming, is to embrace hydrogen, a new fuel that is just now gaining public attention. This abundant element, present in water, can be transformed into a potentially limitless form of a clean-burning fuel, using sustainable methods. Rifkin urges that we must act now to create the necessary global infrastructure and reinvent the global economy as one in which an inexpensive energy grid provides affordable, efficient hydrogen fuel for virtually everyone on earth, before the problems brought on by oil overtake us. Of course, not everyone shares Rifkin s enthusiasm. A recent book by Romm [14], a senior energy official during the Clinton Administration, warns that hydrogen is not a quick fix for our energy, pollution, and global- warming woes; and that it will take several decades for hydrogen to start having a significant impact in reducing greenhouse gas emissions. In his view, greenhouse gas emissions could be more easily reduced in the near term by tougher fuel economy standards, more hybrid vehicles, and a variety of stationary power options. He believes that large technical and economic barriers confront automotive fuel cells and the hydrogen infrastructure. He also notes that hydrogen makes sense as a climate-friendly fuel, only when it is produced from low- or zero-carbon energy sources, such as renewable fuels or fossil fuels with carbon sequestration. Most likely, the transition to a hydrogen era will be a gradual one, much like that of presently conventional fuels, and following the gradual depletion of the latter as published by the International Institute for Applied Systems Analysis [15]. Hydrogen can be produced as a storable, clean fuel from sustainable non-fossil primary energy sources, such as solar energy, wind energy, hydropower, or nuclear. It can assist the development of renewable and sustainable energy sources by providing an effective

9 9 means of energy storage, distribution, and conversion, and it can be used for a wide variety of end-use applications including fuel for transportation and utility applications. Fig. 1 illustrates some of the future options [16]. Because all countries possess some form of sustainable primary energy sources, hydrogen offers an important alternative to the fossil fuel energy supply, thus it contributes to energy security, diversity, and flexibility. Advances in renewable energy technologies and hydrogen systems, including progress in addressing hydrogen production, storage and transportation are removing technical and economic barriers to a broader market penetration in the future. Fig.1. Renewable production of electricity and hydrogen for storage and distribution to various users. However, it should be noted that to achieve widespread use of hydrogen, significant technical, economic, safety and public acceptance barriers must be overcome. On the technology front, R&D will need to develop efficient, economic, safe, and environmentally sound hydrogen production, storage and transportation technologies; and demonstrate integrated hydrogen systems. Governments must facilitate the transition from fossil fuel energy systems to sustainable hydrogen-based energy systems and provide resources for converting intermittent and seasonal renewables to base-load, loadfollowing, or peak-load power supplies. They must also encourage industry participation in the development and demonstration of associated hydrogen technologies; facilitate the development of associated codes and standards, and related infrastructure; and promote public acceptance of sustainable and environmentally sound energy alternatives. A number of countries have already made significant commitments along this front [17]. Canada has a long history in hydrogen and fuel cell technologies and is recognized around the world as a leader in these fields. Companies such as Stuart Energy Systems, Ballard Power Systems, Dynetek, and Hydrogenics are known world-wide for their hydrogen-energy products. Over a hundred Canadian companies were involved in this sector in 2003 employing approximately 2500 people, spending about 280$Cdn million

10 10 in R&D and generating revenues of 188$Cdn million [18]. In the 2003 federal budget, 215$Cdn million was allocated to the development and implementation of hydrogen and fuel cell technologies. The US is spending 1.7 US$ billion over a five year period to develop hydrogen infrastructure, fuel cells, and hybrid vehicle technologies. The European Union has committed up to two billion euros over five years on renewable and hydrogen energy R&D. The United Kingdom, Japan, Australia, Italy, and several other countries have programs to develop hydrogen technologies. Hydrogen is presently used mainly in the manufacture of ammonia based fertilizers (50%), in upgrading fossil-fuels (25%), in the manufacture of methanol, and in the food industry [18,19]. The world hydrogen production amounts to about 43 million tonnes per year and is growing at an annual rate of about 10% per year. Canada s hydrogen production rate amounts to 3.1 million tonnes per year, most of which is produced in Western Canada. About 50% of hydrogen is produced by the steam methane reforming (SMR) process which reacts natural gas with water steam to produce carbon dioxide and hydrogen. The SMR process is highly efficient (~80%) and the economics favour large installations [20]. The cost of hydrogen depends on the cost of methane and is presently at about 1350$US/tonne for a methane cost of 7 $US/GJ. CH 4 +2H 2 O CO 2 + 4H 2 Other commercial hydrogen production methods include partial oxidation of hydrocarbon fuels, which is competitive to the SMR process, if a cheap source of oxygen is available; coal and biomass gasification, and direct thermal dissociation of methane to form hydrogen and carbon (graphite). There is also R&D on a number of alternative processes for producing hydrogen, including a variety of electrochemical and photochemical methods, biological photosynthesis, and fermentation [17, 21]. Nevertheless, electrolysis of water to produce hydrogen and oxygen is the most mature of these technologies and has captured most of the attention, because it uses an abundant resource and produces no greenhouse gas emissions, when electricity from renewable sources (wind, solar) or nuclear is used. The economics of hydrogen production by electrolysis of water using electricity from wind, photovoltaics, and other sources have been the subject of several studies (see section on integrated studies). Most economic studies conclude that the US DOE target price of 2000$US/tonne of hydrogen can be met when the cost of electricity is below about 0.03$US/kWh (lower end of wind-generated electricity) and electrolyser capital costs are below about 300$US/kW (a projected future cost). This target price would be even more challenging to meet using wind-generated electricity, because of the lower availability of wind energy. Even in the absence of any capital or operating costs associated with the electrolyser, at an electricity cost of 0.03$US/kWh, the cost of hydrogen produced by electrolysis would be about 1670$US/tonne. The latter value includes a credit of 130$US/tonne of hydrogen for co-produced oxygen at a price of 16$US/tonne of oxygen. Thus, hydrogen production is presently uneconomic, particularly when compared with steam-methane reforming. However, considering the

11 11 issues discussed above, electrolytic production of hydrogen makes sense and future technology developments, anticipated natural gas price increases and possible CO 2 avoidance costs, appear promising to improve the economics of the process relative to steam methane reforming. In the foregoing electrolysis and other technologies (fuel cells, internal combustion engines, microturbines) associated with widespread application of hydrogen and renewable energy sources are discussed in detail. Electrolysis Electrolysis, the technology used to break down water into hydrogen and oxygen, is a proven technology. In water electrolysis an electric current is passed through an electrolyte solution to split water into hydrogen and oxygen (Fig.2). Fig.2. Electrolysis Cell (schematic, courtesy of SES) The electrochemical reactions leading to the production of hydrogen at the cathode and oxygen at the anode are listed below: Cathode: Hydrogen Evolution 2H2O + 2 e- = H2 + 2OH- Anode: Oxygen Evolution 2OH- = 1/2O2 + H2O + 2 e- Cell: Overall Reaction H2O = H2 + 1/2O2 The cathode and anode compartments are separated by a diaphragm which permits the migration of the electrolyte, but separates the hydrogen and oxygen gases from mixing. The hydrogen and oxygen gases are diverted to separate compartments for storage.

12 12 The technology is fairly well established and, as noted earlier, largely as a result of environmental concerns and the anticipated hydrogen economy, is benefiting from continuing research and development. Canada is already playing a leading role in this respect, as Stuart Energy Systems (SES) and Hydrogenics Corporation are world leaders in electrolysis technology. Both companies manufacture electrolysers capable of producing directly high purity hydrogen at pressures up to 25 bar and rates of several Nm 3 /h of hydrogen. According to SES literature, the electrical consumption of their Vandenborre IMET Technology electrolysers, including auxiliaries, amounts to 4.8 kwh per Nm 3 of hydrogen produced. Hydrogenics manufactures the HyLYSER TM electrolyser, which is based on proprietary technology, similar to a proton-exchangemembrane fuel-cell (PEMFC) operating in reverse i.e. using electricity to split water into hydrogen and oxygen, instead of recombining them to produce electricity. Modular construction of electrolysers enables the assembly of units of several hundred kilowatts. In practice electrolysers consume more energy than the theoretical equivalent, in order to overcome resistance in the electrolyte and over-voltages at the electrodes. At room temperature their electrical efficiency (referenced to the higher heating value (HHV) for hydrogen) is about 80%. However, the overall efficiency is lower, because electrolysers require direct current input, pumps to circulate the electrolyte, heat exchangers to remove excess heat, and a water purification system. The latter is particularly important as impurities are often responsible for deposition on electrode surfaces and poisoning of the reaction. The output gases are passed through scrubbers to remove entrained water vapour and electrolyte impurities, compressed (if the electrolyser operates at lower pressures) and stored in gas bottles. Electrolysers presently cost about $US/kW; however, as a result of R&D and economies of scale, costs are expected to drop to about 300$US/kW within a decade or so. Fuel Cells Fuel cells [12, 22-26] are electrochemical systems which convert the energy of a fuel such as hydrogen directly into electric power. A fuel cell is based on three key components: the anode, to which the fuel is supplied; the cathode, to which the oxidant is supplied; and the electrolyte, which permits the flow of ions (but no electrons and reactants) from anode to cathode. The fuel is oxidized at the anode, liberating electrons which flow via an external circuit to the cathode. The circuit is completed by a flow of ions across the electrolyte that separates the fuel and oxidant streams. A proton exchange membrane fuel cell (PEMFC) schematic is shown in Fig 3 [27]. In this case, at the anode, with the aid of the platinum catalyst, the hydrogen molecules give up electrons and form hydrogen ions. The electrons travel to the cathode through an external circuit producing electrical work. The hydrogen ions migrate through the proton exchange membrane to the cathode, where they combine with oxygen and with the electrons from the external circuit, to form water molecules. Water is the only byproduct of he overall reaction.

13 13 Anode reaction: 2H 2 4H + +4e- Cathode reaction: 4H + + 4e- + O 2 2H 2 O Overall reaction: 2H 2 + O 2 2H 2 O Fig.3 Proton Exchange Membrane Fuel Cell A fuel cell typically generates a voltage of around V and a power output of a few tens or hundreds of watts. Individual cells are assembled into modules (stacks) and connected electrically to provide a larger voltage and output. Energy not converted into electricity is liberated as heat, which makes fuel cells operating at high temperatures suitable for combined heat and power generation (CHP) for buildings and industry. The different fuel cell types are listed in Table 1. They operate at different temperatures and are generally distinguished by their electrolytes. Fuel cells is a technology under intense development to improve performance, cost, and lifetime, which do not yet meet market expectations. The status of development differs widely for each type. The most common types of fuel cells are the alkaline (AFC), phosphoric acid (PAFC), solid oxide

14 14 (SOFC), molten carbonate (MCFC), and proton exchange membrane (PEMFC), also known as solid polymer (SPFC) types. Most fuel cell activity is focusing on the development of PEMFCs and the two high temperature cells, SOFCs and MCFCs, as well as the demonstration of PAFCs. Apart from AFCs, most fuel cell technology is still at the development or demonstration stage, and there are still technical issues to be resolved, including cell stack lifetime, presently about five years; long-term reliability, except for PAFCs; performance and efficiency; and optimization of balance of plant (BOP) components, such as compressors and high temperature heat exchangers. In addition, high production costs, are making them less competitive with established technologies, e.g. diesel motors for CHP applications less than 5MW th and gas turbines for applications more than 5MW th. Fuel Cell / Temp.( o C) Advantages Disadvantages Application Electrolyte AFC / alkaline 60 High current and power density, high efficiency Carbon dioxide intolerance, corrosive liquid Space and terrestrial power, military PEMFC / High current and High current and Transportation, perfluorinated power density power density, polymer membrane water mngment, cogeneration PAFC / phosphoric acid MCFC / molten carbonate salts SOFC / solid oxide ceramic 200 Technologically well advanced 650 High grade waste heat 1000 High grade waste heat, long operating life expensive catalyst Low efficiency, limited lifetime, expensive catalyst Electrolyte instability, short lifetime Table 1. Summary of common fuel cell characteristics [25]. High operating temperature, low specific power Combined heat and power plants Power production, cogeneration Power production, cogeneration Currently, fuel cells cost about 3000$US/kW to 5000$US/kW and have efficiencies in the range of 35-45%. Continuing R&D is expected to reduce cost to about 1000$US/kW to 1500$US/kW, in the near-term, and increase their efficiency. It is estimated that for fuel cell powered sources to become competitive with internal combustion their costs must be reduced to about 500$US/kW for CHP applications and about 50$US/kW for transportation [25]. Besides mobile applications, stationary applications comprise small-scale, on-site, nonutility power generation (3kW-1MW); commercial CHP (up to 1MW); distributed power generation (1-30MW); and centralized power generation (>100MW). In this sector, fuel cells will be in competition with current technologies such as gas turbines, steam turbines, combined cycles and diesel engines. Initial markets are expected to be in small-

15 15 scale applications like on-site generation and combined heat and power (CHP) applications, and small district heating systems. The tendency towards decentralized electricity production, increased energy efficiency, and deregulation are expected to contribute to fuel cells role in this sector. The application areas differ for the various fuel cell types. The market for low temperature fuel cells (PEMFC) is in transportation, as well as the small scale stationary CHP and decentralized areas. High temperature fuel cells can be used for centralized power generation because these types of fuel cells reject their heat at temperatures suitable for a steam bottoming cycle. Industrial CHP could be an important application area for high temperature fuel cells (SOFC and MCFC), as there are a relatively large number of companies with a steam demand between 10 to 30 tonnes/hour. Presently, gas turbines are the prime mover; however, this market area could well be served with fuel cell CHP systems with electrical capacities in the range of 6 to 20 MW. The main advantages of fuel cells in centralized power production are high efficiency, favourable environmental impacts, and lower capital risk through smaller installed capacity additions. Nevertheless, the use of fuel cells for centralized electricity generation is unlikely to materialize within the next ten years. However, it is expected that beyond 2015 the USA, Europe, and particularly Japan, where power generation costs are high, could all have significant installed capacity. Internal Combustion Engines Internal combustion engines (ICEs) [26] convert the energy contained in a fuel into mechanical power, which is used to turn a shaft. In power generation, a generator is attached to convert the rotational motion into electrical power. There are two methods for igniting the fuel: Spark ignition (SI) for fast-burning fuels, like gasoline and natural gas, and compression ignition (CI) for slow-burning fuels, like diesel. ICEs are also classified as high-speed, medium-speed, or low-speed: High-speed units ( rpm) are derived from automotive or truck engines, generate the most output per unit of displacement, have the lowest capital costs, and the poorest efficiency. Medium-speed engines ( rpm) are derived from locomotive and small marine engines, have higher capital costs and better efficiency. Low-speed units ( rpm) are derived from large ship propulsion engines and are designed to burn low-quality residual fuels. ICEs are the most commonly used technology for distributed generation. They are a mature technology, inexpensive, and are manufactured in large quantities. ICE generators for distributed power applications ( gensets )are made in sizes from about 5 kw to 7 MW. Gensets are frequently used as a backup power supply in residential, commercial, and industrial applications. Large ICE generators are also used as base load, grid support, or peak-shaving devices. With proper maintenance, large ICEs can last for years, while smaller engines (<1 MW) tend to have shorter lifetimes. Efficiencies range from 25% to 45%, with diesel engines being more efficient than natural gas ones. Ongoing R&D, such as the US

16 16 Advanced Reciprocating Engine Systems and the Advanced Reciprocating Internal Combustion Engines programs, aims to achieve shaft efficiencies of up to 50-55% in large engines (>1 MW) by Other objectives of ongoing R&D include emissions and cost reduction, fuel flexibility, and improved reliability and maintainability. ICEs emit NOx, NO, and hydrocarbons in varying amounts depending on fuel, engine type, and manufacturer. Various catalytic systems are used to reduce such emissions. Other performance-related characteristics of reciprocating engines include: Startup times range between 0.5 and 15 minutes; reciprocating engines have a high tolerance for starts and stops; compared with combustion turbines, a lower amount of waste heat can be recovered; ICE heads and blocks can be rebuilt after about 8,000 hours of operation; regular oil and filter changes are required for every hours of operation. In general, maintenance costs of gas and diesel ICEs range between $US/kWh and $US/kWh, respectively. The capital cost of basic gas-fueled generator sets range from $US/kW, depending on size, fuel and engine type. In general, engine cost per kilowatt increases with size. Additional costs include balance of plant (BOP) equipment, installation fees, engineering fees, etc. which can add % more to the cost of the engine itself. For example, a 550kW natural gas ICE has an installed cost of about 1075$US/kW, of which only about 55% is associated with the engine itself. There are a large number of companies worldwide that manufacture reciprocating engines and/or complete generator sets for various applications, e.g. Aircogen Ltd, Caterpillar, Cummins, Deutz Corporation, Generac Power Systems, Hess Microgen, Honda Power Equipment, Pacific Power Solutions, Kohler, and Waukesha Engine. Microturbines Microturbines [26] are combustion turbines which produce both heat and electricity on a relatively small scale, in the power range of 25 kw to 500 kw. The combined thermal electrical efficiencies of microturbines in cogeneration applications can be as high as 85%, while the electrical efficiencies are in the range of 20 to 30%. Microturbines are usually single-stage, radial flow devices with high rotating speeds of 90,000 to 120,000 rpm. They burn natural gas, propane, hydrogen or diesel fuels and have low emissions (9-50ppm NO x ). Microturbines are in the early stages of commercialization and many are still undergoing field tests or large-scale demonstrations. Most have systems which recover heat from the exhaust gas in order to boost the temperature of the air stream supplied to the combustor. Additional exhaust heat recovery can be used in a cogeneration configuration. Microturbines can be used for stand-by power, peak shaving, and cogeneration applications. They are well-suited for small commercial building establishments such as: restaurants, hotels/motels, small offices, retail stores, and many others. Also, because microturbines are being developed to utilize a variety of fuels, they are being used for resource recovery and landfill gas applications. Microturbine technology for

17 17 transportation applications is also under development and focuses on light weight and efficient fossil-fuel-based engines for hybrid electric vehicles, especially buses. Microturbine capital costs range from 700$US/kW for larger units to about 1,100$US/kW for smaller ones. The addition of a heat recovery system adds between $US/kW. Future market expansion and sales volume increases are expected to drive microturbine capital costs below 650$US/kW. It is also expected that, with fewer moving parts, microturbines will be more reliable and require less maintenance (every hours) than conventional engine generators. Development is ongoing in a variety of areas, including heat recovery/cogeneration, fuel flexibility, vehicle applications, and hybrid systems with fuel cells and flywheels. Several development, test and demonstration projects, funded by utilities, governments and industry, are under way and are expected to lead to improved designs, higher efficiencies, and lower capital and operating costs. Integrated Studies Experiments / Demonstrations There have been several demonstrations of electrolytic hydrogen production using conventional and renewable energy technology, most of them using photovoltaic / hydrogen systems [28-35]. The PHOEBUS facility at Julich, Germany, has been in operation since 1993 [28]. It is one of the early demonstrations of renewable energy (photovoltaic) integration with an electrolyser, a fuel cell, and batteries to supply electricity to a number of offices at the Central Library of the Forschungszentrum Julich. Operational experience acquired and simulation studies contributed to improvements of a number of system components and led to the development of advanced versions of the PHOEBUS design for application in combined wind/solar home and village systems, and future grid-connected operations. Dutton et al.[29] studied autonomous wind-powered hydrogen production systems. Their findings with respect to intermittent electrolyser operation showed that power fluctuations had no significant effect on the overall stability of the electrolyser; gas purity was affected by power fluctuations on a scale of a few minutes rather than a few seconds; the higher the magnitude of the fluctuation the more it affected the purity of the product gases; and variable load factor operation reduced efficiency by a few per cent. Overall, the study concluded that, based on their limited data and operational experience, there were no insurmountable technical problems associated with hydrogen production from wind-powered electrolysis. In addition, the authors noted the importance of safety regulations associated with hydrogen devices and the high frequency of alarm occurrences experienced during this study because of hydrogen safety regulations. In addition, Dutton et al.[29] have addressed aspects pertaining to the wind speed and sizing of the electrolyser relative to the wind turbine. Using a computer model they

18 18 concluded that when the wind turbine rated power was equal to that of the electrolyser, at low wind speeds the electrolyser was underutilized, because it had to be shut down and vented due to H 2 impurities in O 2, more than the imposed safety limit of 2.0 vol.%. Furthermore, increasing the annual mean wind speed to 10 m/s from 4 m/s increased the electrical energy generated by a factor of 6.2 and the volume of hydrogen generated by a factor of 7.4. Over-sizing the wind turbine improved electrolyser utilization; however, in the absence of storage, the excess power had to be utilized elsewhere. A stand-alone renewable energy (RE) system based on hydrogen production from wind and solar energy has been operating at the Hydrogen Research Institute (HRI) of the University of Quebec at Trois Rivieres[33]. The system consists of a 10 kw wind turbine generator and a 1 kw (peak) solar photovoltaic array as primary energy sources, a 5kW electrolyser, a 5kW fuel cell, as well as short-term (batteries) and long-term (hydrogen) energy storage devices. The renewable electricity that is produced in excess of the load demand is stored as hydrogen, produced using the electrolyser. The hydrogen is stored and later used to produce electricity with the fuel cell when there is insufficient wind and solar energy to meet the demand. Autonomous operation of the system is achieved with a sophisticated power control system designed to maximize the direct energy flow from the RE sources to the electrolyser and the load in order to avoid draining the batteries. When no energy is available from the RE sources, due to local climatic conditions, a 10 kw programmable power source is used to simulate typical RE patterns. The RE system performance was recorded for long-term operation from 3 December 2001 to 17 April 2002 for daily operation of six hours. In a recent publication [34] the HRI group use the above system to measure round-trip efficiencies (electricity hydrogen by electrolysis electricity by a fuel cell). They measured round-trip efficiencies of 13.5%, when compressed air was used as an oxidant, and 18%, when electrolytic oxygen was recovered and used as an oxidant in the fuel cell instead of compressed air. The ideal round-trip efficiencies calculated by the authors amounted to 26% without and 38% with oxygen recovery. The authors conclude that, because of electrochemical irreversibility and the gas handling aspects of such a system, round-trip efficiencies of hydrogen storage without oxygen recovery are likely to remain below about 30%. The world s first stand-alone, full-scale application of wind/hydrogen was inaugurated in July 2004 at Utsira, an isolated island in Norway [36]. The Utsira project, shown in Fig. 4, involves a partnership between Hydro, a hydroelectric power producer in Norway, and Enercon, a German wind turbine producer, and was supported by public funding. The Utsira project will supply energy to ten households, whose entire energy demand will be exclusively provided by renewable sources. It is powered by two 600kW wind turbines which operate at wind speeds in the range of m/s, which at optimum performance provide more than enough energy to supply the Utsira community. The hydrogen

19 19 Fig.4. The Utsira, Norway wind/hydrogen plant produced by a 48kW, 10 Nm3/h electrolyser is compressed and stored in a container that can hold up to 2400 Nm3 of hydrogen gas, sufficient for two full days of energy supply to Utsira. The stored hydrogen is used to produce power by a 10 kw fuel cell and a 55 kw hydrogen ICE, when there is insufficient wind energy. A flywheel with a storage capacity of 5 kwh, in combination with additional grid stabilizing equipment, maintains a stable power supply (smooths out short-term fluctuations / interruptions) from the plant to the grid. Future projects of the Utsira magnitude and above, include [20]: In Australia, there are plans to link the existing 900kW wind power capacity at the Mawson Station in Antarctica to an electrolysis unit to produce hydrogen for filling meteorological balloons and, eventually, to install hydrogen fuel cells to replace the current diesel generators. In the UK, Wind Hydrogen Ltd is planning a 25 MW wind farm, linked to a 4 MW electrolysis system for hydrogen storage to be used for regenerating electricity with hydrogen ICE generators with a capacity of up to 10 MW. In Norway, Statkraft plans to operate a 300 kw electrolysis plant in conjunction with its Smola 40 MW Phase I wind farm. The latter will be used initially to produce hydrogen and oxygen for a local fish farm, but future plans include the installation of a fuel cell for back-up power and grid support. Modeling Studies There have been many more studies modeling the performance and economics of renewable / hydrogen systems [29,37-46]. Some of the main ones are summarized below.

20 20 Dutton et al.[29] investigated the cost of hydrogen production as a function of the size of the electrolyser relative to the wind turbine, wind speed, and other parameters using an economic assessment model. In general, the economics of hydrogen production by water electrolysis using renewable energy were shown to depend strongly on the capital cost of the electrolyser and the delivery cost of electricity from the renewable energy source. As the per kw capital costs of both the wind turbine and the electrolyser decrease with increasing size, due to economies of scale, the cost of hydrogen generated by large installations becomes more competitive with conventional sources. However, even under the most favourable conditions, the authors concluded that the costs of hydrogen from renewable energy sources are currently uncompetitive with hydrogen derived from fossil fuels, or, indeed, with grid-connected electrolysers operated at constant current. The authors concluded that hydrogen derived from renewable sources will likely be used first in niche markets where conventional fossil fuels are expensive (e.g. remote areas, such as islands, and decentralized electricity supply systems) or where high purity gases are required on site. At current energy prices, hydrogen is only likely to be produced from wind power if excess electricity is available, such as might occur when a weak grid limits the amount of electricity to be transmitted. Gonzalez et al. [8] have emphasized the different factors that may contribute to the cost of hydrogen produced by electrolysis, beginning with the cost of electricity. In a high wind penetration scenario, they cite as the dominant factors curtailments enforced by the system operator due to operational limits or transmission constraints, penalties due to supply/demand imbalances, and high differential between off-peak and on-peak prices. In order to assess the potential benefit of hydrogen storage and determine the scale of future deployment, these authors adopted a simplified approach based on an average energy price for the surplus electricity produced and noted that in a real scenario prices will vary throughout the day. The rest of the assumed parameters are listed in Table 2. Installed capacity 100 MW Power output GWh/a Electrical Demand GWh/a Surplus energy GWh Electrolyser efficiency 79% to 87% Capital cost of electrolyser and BOP medium-term scenario:1100 /kw (cell replacement cost of 700 /kw) long-term scenario: 600 /kw (cell replacement cost of 400 /kw) Facility lifetime 20 years Electrolysis cell lifetime 10 years Annual maintenance cost 33 /kw (3% of capital cost) Interest rate 5% Table 2. Assumed Parameters, Gonzalez et.al. [8]

21 21 Fig.5 shows the calculated cost of hydrogen as a function of the size of the electrolysis plant for three different average prices of surplus electricity. Also shown in Fig. 5 is the remaining surplus electricity that cannot be absorbed either by the load or the H2 Costs(ε/GJ) or %Surplus % Surplus 0 /kwh 0.02 /kwh 0.04 /kwh Electrolysis Power, MW Fig.5. Hydrogen cost vs. electrolysis power and cost of electricity electrolyser. At 0 /kwh the hydrogen costs are only those associated with the capital and maintenance costs of the electrolyser and BOP. As the electrolyser power increases, the marginal wind electricity surplus it absorbs decreases and so does the electrolyser s capacity factor, hence resulting in growing hydrogen costs. The optimum electrolysis plant size (Fig. 6) depends on the hydrogen market price, which, along with the surplus electricity value, will determine the profit of hydrogen production. This is shown in Fig. 6 for two hydrogen prices, 22 and 34 /GJ, and two different capital costs, the mediumterm scenario used in Fig.5 and red and the long-term scenario which assumes a further reduction of the initial capital costs to 600 /kw, plus 400 /kw for the stack replacement. To convert to hydrogen costs per tonne costs per GJ should be multiplied by a factor of (derived using the high heating value for hydrogen). Thus, assuming 1 =1$US, the US DOE target price for electrolytic hydrogen of 2000$US/tonne amounts to 14 /GJ.

22 22 Electrolysis Power (MW) Electricity Cost ( /kwh) 34 /GJ, #1 22 /GJ, #1 34 /GJ, #2 22 /GJ, #2 Fig.6 Optimum Electrolysis Power vs. Surplus Electricity and Capital Cost (#1 is based on the medium-term scenario and #2 on the long-term scenario; see text) Miller et al. [44] modeled the production of electrolytic hydrogen at an assumed location where the electricity is generated by nuclear, by wind, or by a combination of the two, using the actual variable prices of electricity paid by the Alberta Power Pool in 2002 and 2003 and by the Ontario Grid in Their analysis shows that by optimizing the co-production of hydrogen and electricity (referred to as the H2/e process) the cost for hydrogen can easily meet the US Department of Energy's target of 2000$US/tonne, in the cases of using nuclear or a combination of wind and nuclear, but not in the case of using wind-generated electricity alone, because of its lower availability factor of wind energy. Some of the main assumptions used were: electricity generation costs can be much lower than the average value of 3 US/kWh likely available from either wind or advanced nuclear; a 1MW electrolysis unit, available at a cost of 300 $US/kW; and hydrogen storage costs of 400$US/tonne. The H2/e process exploits the value variation to sell electricity when grid price is high and to produce H2 when the grid price is low. By applying to actual hourly electricity price data and minimizing the cost of H2 production while maintaining assured hydrogen supply by optimizing the size of the electrolysis installation and the size of storage, they calculate: For the pure nuclear case (90% capacity factor) in Ontario in with 50% sales as electricity and 50% H2, the cost of hydrogen is 1516$US/tonne consisting of 126$US for storage, 670$US for the electrolysis component, and 720$US for the cost of electricity. In the pure wind scenario, the corresponding numbers are: 2767US$/tonne of hydrogen, consisting of 324$US for storage, 1723$US for electrolysis, and 720$US for electricity. Clearly, the capital costs of an electrolyser underutilized by 39% relative to pure nuclear are the major factor for the higher costs in the case of pure wind. In the blended wind/nuclear scenario, when wind is added to the extent preferred by the optimizer, the hydrogen cost is 1502$US /tonne consisting of 131$US for storage, 481$US for electrolysis, and 891$US for electricity.

23 23 Electrolytic production of hydrogen is an ideal way of also producing heavy water (D2O) used in the CANDU reactor to sustain nuclear fission with un-enriched uranium [47]. Deuterium is present in water at natural isotopic abundances ranging from 0.013% to 0.016%. AECL s Combined Electrolysis Catalytic Exchange (CECE) process depends on the availability of electrolytic hydrogen and employs a wet-proofed catalyst to facilitate the transfer of deuterium from hydrogen to liquid water to produce D2O. The process is economic at an electrolysis scale of about 100MW and beyond and, according to Duffey et al. [33] could produce about 1kg D2O/Mg H2. The latter authors assume a present D2O market price of 250$US/kg; however, in a scenario of significant nuclear growth the price of heavy water could more than double, largely as a result of depletion of current reserves and the abandonment of the traditional Girdler-Sulphide plants for producing heavy water. Thus, in addition to oxygen, a D2O byproduct of electrolysis could contribute to making electrolytic hydrogen production more economic. Researchers at GE Global Research also examined the wind/hydrogen economics [16,43]. The latter conclude that the DOE target of $US2000/tonne of hydrogen can be met with 1.5MW electrolyser and BOP components (hydrogen compressor, storage, power conditioning unit,, etc.) valued at a total of $US600/kW, powered by a 3.75MW wind farm generating electricity at 40% capacity and a cost of $US0.033/kWh. The costs of energy and the electrolyser, as well as the electrolyser efficiency were identified as the most sensitive parameters affecting the wind/hydrogen production economics. The author [16] concludes that hydrogen production and distribution are technically feasible, but current technologies are immature or costly. New technologies are required for MWscale, high efficiency and low cost ($US300/kW-$US500/kW) electrolysers with variable power capability; electrolyser integration and optimization with wind turbine generator; large-scale, high density/pressure, low cost hydrogen storage; energy efficient and cost effective compression and liquefaction processes; reliable, low cost hydrogen energy delivery systems and pipelines; electricity transmission with distributed H2 production; fuel flexible IC & GT engines capable of utilizing hydrogen and other fuels. Canadian Perspective Considering the current state of wind/hydrogen technology, Canada stands to benefit in the near-term from stand-alone remote applications of wind/hydrogen and, possibly, from increased use of wind-generated electrolytic hydrogen in existing industrial applications of hydrogen; in the longer-term from a broader application of associated technologies to manage the flow of electricity. Canada has over 300 communities, with a total of ~200,000 people, located in remote regions (Fig.7) [48]. They are classified as remote using the criteria that they are not presently connected to the North-American electrical grid or to a piped natural gas network; and they are permanent or long-term (5 years or more) settlements with at least ten permanent residences. Many of these communities depend heavily on imported fuel and pay high energy costs. In most of these communities, diesel generators are used for producing more than 200MW of electricity. Estimates for bulk delivered diesel and retail

24 24 heating oil prices vary from $Cdn /liter, depending on the mode of fuel transport, resulting in electricity prices in the range of $Cdn /kwh. Many of these communities, particularly those in coastal areas and the Canadian North, have access to good wind energy resources which could be used for generating electricity and hydrogen to meet local needs and save several million dollars a year. In this respect, the feasibility and benefits of hydrogen assisted renewable power (HARP), to replace diesel used to supply electricity to off-grid communities, have being explored in a recent study [42]. HARP assessed the major elements of a plant required to integrate electrical generation using a renewable energy system, electrolytic production of hydrogen, hydrogen storage, and electricity production using hydrogen. A simulation model was developed by this study to assist in selecting, integrating, and evaluating various configurations and operational scenarios. Fig.7. Canada s Remote Communities However, there are potential problems associated with the above proposed Canadian application that need closer examination. First, many of these potential applications may be too small in scale to be economical in terms of both wind turbine and associated hydrogen hardware, whose cost per kw rises with diminishing scale. Second, equipment servicing may be a problem in these remote locations, particularly for the more sophisticated hydrogen hardware and associated integration systems, which may also be affected by the harsh climactic conditions of the Canadian North. Thus, Canada needs to sponsor research, development and demonstration on remote application of wind / hydrogen systems to evaluate their application in remote communities in the Canadian north. Electrolytic hydrogen, produced by wind energy, is also likely to find early application in established end-use technologies, such as in the production of chemicals (ammonia, methanol, etc.), refining and upgrading of heavy oils, the reduction of ores and in general

25 25 metallurgical operations, catalyst regeneration, the electronics industry, etc., well before ultimately becoming the power and transportation fuel of the future [49]. Hydrogen used in existing applications is currently produced primarily by steam-methane reforming. Thus, both economic (rising natural gas prices) and environmental (CO 2 emissions) pressures are and will be making the use of electrolytic hydrogen more competitive. Canada, as a major producer of industrial hydrogen (3 million tonnes per year), used mainly in petrochemical and ammonia operations in the western provinces, stands to benefit from electrolytic hydrogen, especially when produced by wind energy. Four plants in Alberta alone produce about tonnes of hydrogen annually, while upgrading of heavy oil from the Alberta oil sands is Canada s fastest-growing hydrogen demand sector, with annual production expected to rise to 2.8 Mt per year by 2020 [49]. With respect to existing end-use applications of hydrogen, Canada needs to identify and encourage suitable opportunities for early deployment of electrolytic hydrogen. Contrary to steam/methane reforming which is favoured by economies of scale, electrolytic hydrogen production is increasingly competitive as plant size decreases, because the modular construction of electrolytic plants results in a substantially linear change in capital cost with scale [49]. Thus, an electrolysis plant would be more applicable to supply local industry requirements, particularly where gas is not available or the need for a large hydrogen plant is not warranted. In the absence of an early deployment of a hydrogen economy, use of wind/hydrogen systems to co-produce electricity and hydrogen as a means of managing the flow of electricity to the grid, for optimum value to the producer, appears to be the next most likely application. As noted earlier, Canadian companies and institutions are already leading in the technologies associated with hydrogen and Canada stands to benefit not only from the application of these technologies at home, but also from sales abroad to a worldwide market already in the billions and forecast to grow substantially in the first half of this century. In 2003, the Federal Government allocated $215 million to the development and implementation of hydrogen and fuel cell technologies [11]. In order to maintain the present lead, Canada needs to continue and, preferably accelerate research, development, and demonstration on electrolysers, fuel cells and, in general, wind/hydrogen integrated system development. Conclusions Wind energy is an established technology, which has seen some rather impressive developments in the last thirty years, as a result of environmental concerns and the need for energy self-sufficiency. Worldwide, the technology has improved tremendously, installed capacity has grown exponentially to about 46GW in In Canada, despite the availability of cheap electricity, wind energy has been growing annually about 60% on average in the last five years to an installed capacity of 443MW in Overall, wind energy is the most advanced renewable energy technology for generating electricity. The wind/hydrogen alternative appears to be an attractive storage option for overcoming a major drawback, the intermittent availability of wind energy, which affects both stand-

26 26 alone and grid-connected applications. In stand-alone wind-power applications it can be used to stabilize the availability of electricity by converting wind into hydrogen during periods of surplus capacity and, during periods of low or no wind availability, the hydrogen can be used to generate electricity. The hydrogen option is also important in grid-connected applications, particularly at high (>10%) wind-electricity penetration, where it can be used to manage the flow of electricity to the grid. Of course, in the long anticipated hydrogen economy of the future, hydrogen would be the transportation fuel. Hydrogen is an ideal fuel particularly when generated by environmentally sound, nonpolluting renewable (e.g. wind, photovoltaic) energy sources. The technologies associated with hydrogen production, storage and distribution are fairly well established and, largely as a result of environmental concerns and the anticipated hydrogen economy, are benefiting from continuing research and development. In fact, Canada is a world leader in both electrolyser and fuel cell technologies. The recent joint cooperation agreement between Stuart Energy Systems, a Canadian company, and Statkraft of Norway and EHN of Spain to assess, develop and demonstrate hydrogen production using renewable energy sources attests to Canadian leadership on this front. Demonstrations of associated wind/hydrogen technologies in isolation, as well as in integrated systems, have generated a wealth of experimental data and, more important, have demonstrated that there are no insurmountable problems with the use of wind power to produce hydrogen by the electrolysis of water. The world s first stand-alone, full-scale application of wind/hydrogen was inaugurated in July 2004 at Utsira, an isolated island in Norway. The Utsira plant will supply all the energy needs of ten households at Utsira. Plans are in progress for more demonstrations of this kind. The economics of hydrogen production by electrolysis of water have been the subject of several studies. Such studies conclude that the US DOE target price of 2000 US$/tonne of hydrogen can be met when the cost of electricity is below about 0.03 US$/kWh and electrolyser capital costs are below about 300 US$/kW This target is even more challenging for wind-generated electricity, because of the lower availability of wind energy. Thus, hydrogen production is presently uneconomic, particularly when compared with steam-methane reforming. However, electrolytic production of hydrogen is environmentally sound and future technology developments, anticipated natural gas price increases and possible CO 2 avoidance costs, appear promising to improve the economics of the process relative to steam methane reforming. Furthermore, credit for the co-production of oxygen and heavy water could also improve the economics of the electrolytic process. Thus, one can conclude that hydrogen production is an attractive option for improving the availability of wind-generated electricity, especially so for stand-alone applications of wind energy. The associated technologies are well advanced and are benefiting from continuing research, development and demonstration driven by environmental issues and the anticipated hydrogen economy. In the near-term, Canada stands to benefit from remote, stand-alone applications of wind/hydrogen and by increased use of windgenerated hydrogen in existing industrial applications; in the longer-term, from the

27 27 distributed production of hydrogen and the application of these technologies to manage the availability of both hydrogen and electricity. Therefore, this study recommends that Canada should sponsor research, development and demonstration on remote application of wind / hydrogen systems to evaluate their application in remote communities in the Canadian north. With respect to existing end-use applications of hydrogen, Canada should identify and encourage suitable opportunities for early deployment of electrolytic hydrogen. In order to maintain the present lead, Canada should continue and, preferably, accelerate research, development, and demonstration on electrolysers, fuel cells and, in general, wind/hydrogen integrated system development.

28 28 Appendix 1 NRCAN WORKSHOP ON USE OF WIND ENERGY TO PRODUCE HYDROGEN 2004 October 16, 1:15 pm-5:30 pm Mt-Royal Conference Room Hilton Montreal Bonaventure 900 de la Gauchetière West, Montréal, Québec Workshop Summary The workshop began with the following presentations, copies of which are attached: Background Review of National/International Activities on Wind/Hydrogen, by Andreas C. Vikis Hydrogen from Wind-powered Electrolysis, by Rene Mandeville - Stuart Energy Systems Integrated Wind/Hydrogen Systems, by Kodjo Agbossou - Université du Québec à Trois-Rivières Following the presentations, there was a discussion / brainstorming session on the various aspects and issues associated with the use of wind to produce hydrogen, as summarized below. Remote applications are the most likely deployment of wind/hydrogen in Canada in the near-term (next 5 years), but maintenance capabilities for relatively sophisticated components (i.e. fuel cells) may be a problem. Instead of fuel cells, hydrogen ICEs are more like diesel generators and could gradually replace diesel generators. However, demonstration projects close to populated areas, where skills is not a problem and the demonstration is more visible, were recommended. It was noted that for any significant wind/hydrogen penetration, there was a need to first prove technical feasibility and reliability, economics, safety aspects and education of the public, and system optimization models (i.e. how much electricity, hydrogen for electricity back up, hydrogen for various other purposes, etc.) had to be developed. Use of hydrogen as a reducing agent, to replace coke in steel mills, was suggested as a possible near term application; but was received with some skepticism. On likely parameters that could affect electrolyzer performance, it was noted that nine out of ten problems are associated with poor quality water. Also, fuel cells are problem prone, so use of hydrogen ICEs, a more mature technology, was recommended for now. The latter are also more like diesel generators, hence maintenance at remote locations won t be as much of a problem. Wind energy intermittency is presently not a problem in Canadian applications, because of low wind penetration. However, some concerns have been noted in Alberta, because

29 29 of grid limitations in localized wind-farm areas. Problems with wind intermittency also depend on the nature of base load capacity (nuclear, hydro, gas), i.e. whether the energy source is interruptible. Safety issues and public perceptions was noted as a subject not addressed in the workshop presentations and requiring further attention. The picture of the exploding Hinderburg is to hydrogen very much like the mushroom cloud for nuclear energy. Public education is necessary for any large-scale deployment of hydrogen. In response to a request for possible recommendations to Government(s) the participants suggested the following: Institute wind/hydrogen production credits, buy back schemes, etc. Mandate a certain percentage of green power Identify suitable applications; perhaps its time to consider a demonstration in Canada. This could be a TEAM or SDTC project, provided that the right partnership is created and an NRCan champion sees the project through. Be more visible in promoting renewables; promote public education Impose tax on GHG emissions and use funds for more R,D&D to develop sustainable renewable technologies, give tax credits to producer and consumer of renewable energy Develop coherent/consistent policies on aspects relating to energy efficiency, environmental issues, energy security and economics Facilitate utility interface, especially at the inter-provincial level. In general, there was a lot of discussion on first applications and best markets for initial demonstration and deployment. It was noted that the timeframe for first deployment would depend on government support, because of the high risk and investment of such a project. Although there was no consensus, most participants seem to think that the remote community or micro-grid applications could be developed first. The participants were conscious that small or medium size turbines would be used in this setting and that would lead to costlier electricity and therefore costlier hydrogen. Clearly, in a remote community application one could expect an even greater proportion going to the production of electricity. They were also aware of previous difficulties encountered in trying to deploy wind turbines in this market. Climate, distance, and absence of local expertise being foremost among them. There was also some discussion on off-grid, stand-alone applications and on-grid connected applications, but there was no clear understanding of the advantages and disadvantages of each market; however, everyone appreciated the long term storage offered by hydrogen. Another theme discussed was the interfacing issue and the effect on electrolysers arising from the rapid variation in the output of wind systems. Frequency control and control systems and strategies in general were discussed along with impedance issues. In terms

30 of the planned report on the use of wind to produce hydrogen, it was concluded that it should include a discussion on the three market applications, on the typical size of systems suitable for each and on the technical characteristics and cost distribution for typical future applications in each of these markets. There seems to be a need for some technical and economic modeling of these systems and scenarios. The report should include a discussion of the following issues: What are the interfacing options? Advantages and disadvantages of each? What are the consequences of rapid variations? Are there any electrolysis poisoning effects? What are the best control strategies? Are there any hydrogen storage issues? 30

31 31 Appendix 2 Energy Storage Technologies Key characteristics (specific energy and power, power, discharge time) of hydrogen relative to other energy storage media are compared in Fig 8 [49]and Fig.9 [50]. Fig.8. Specific Energy vs. Specific Power of Energy Storage Media H2 Fig.9. Power Ratings vs. Discharge Time of Energy Storage Media