Greenhouse gas emissions reduction by use of wind and solar energies for hydrogen and electricity production: Economic factors

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1 International Journal of Hydrogen Energy 32 (27) Greenhouse gas emissions reduction by use of wind and solar energies for hydrogen and electricity production: Economic factors Mikhail Granovskii, Ibrahim Dincer, Marc A. Rosen Faculty of Engineering and Applied Science, University of Ontario Institute of Technology, 2 Simcoe Street North, Oshawa, Ont., Canada LH 7K4 Available online 5 November 26 Abstract This study addresses economic aspects of introducing renewable technologies in place of fossil fuel ones to mitigate greenhouse gas emissions. Unlike for traditional fossil fuel technologies, greenhouse gas emissions from renewable technologies are associated mainly with plant construction and the magnitudes are significantly lower. The prospects are shown to be good for producing the environmentally clean fuel hydrogen via water electrolysis driven by renewable energy sources. Nonetheless, the cost of wind- and solar-based electricity is still higher than that of electricity generated in a natural gas power plant. With present costs of wind and solar electricity, it is shown that, when electricity from renewable sources replaces electricity from natural gas, the cost of greenhouse gas emissions abatement is about four times less than if hydrogen from renewable sources replaces hydrogen produced from natural gas. When renewable-based hydrogen is used in a fuel cell vehicle instead of gasoline in a IC engine vehicle, the cost of greenhouse gas emissions reduction approaches the same value as for renewable-based electricity only if the fuel cell vehicle efficiency exceeds significantly (i.e., by about two times) that of an internal combustion vehicle. It is also shown that when 6 wind turbines (Kenetech KVS-33) with a capacity of 35 kw and a capacity factor of 24% replace a 5-MW gas-fired power plant with an efficiency of 4%, annual greenhouse gas emissions are reduced by 2.3 megatons. The incremental additional annual cost is about $28 million (US). The results provide a useful approach to an optimal strategy for greenhouse gas emissions mitigation. Crown Copyright 26 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved. Keywords: Greenhouse gas emissions; Renewable energy; Hydrogen; Life cycle assessment. Introduction The main cause of global climate change is generally accepted to be growing emissions of greenhouse gases (GHGs) as a result of increased use of fossil fuels []. Rising concerns about the effects of global warming and declining fossil fuel stocks have led to increased interest in renewable energy sources such as wind and solar energies. Pehnt [2] applied a dynamic approach using life cycle assessment (LCA) of renewable energy technologies to show that, for all renewable energy chains, inputs of finite energy resources and emissions of GHGs are extremely low compared with conventional systems. The prospects for generating electricity, hydrogen or synthetic fuels by employing only renewable energy sources are good. In some ways, electricity generation technologies Corresponding author. Tel.: ; fax: addresses: mikhail.granovskiy@uoit.ca (M. Granovskii), ibrahim.dincer@uoit.ca (I. Dincer), marc.rosen@uoit.ca (M.A. Rosen). including wind turbines and photovoltaic cells are as developed as hydrogen production via water electrolysis. Pure hydrogen can be used as a fuel for fuel cell vehicles, which are rapidly improving nowadays, or converted into synthetic liquid fuels by means of such processes as Fischer Tropsch reactions [3]. Maack and Skulason [4] report that in an Icelandic community the use of renewable energy and tests with a clean domestic fuel are of great local interest, and most people refer to the clean fuel as the fuel of the future. The energy carrier used currently within the public transportation system in Reykjavik is hydrogen, produced by water electrolysis using hydroelectric power. An adequate evaluation of factors affecting the introduction of a renewable technology includes assessments of the environmental impacts and economics of the overall production and utilization life cycle (from cradle-to-grave ), including the construction and operation stages of the technology. LCA is a methodology for this type of assessment, and represents a systematic procedure for compiling and examining inputs and /$ - see front matter Crown Copyright 26 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved. doi:.6/j.ijhydene

2 928 M. Granovskii et al. / International Journal of Hydrogen Energy 32 (27) Nomenclature C electricity cost, US$ E el electrical energy, MJ GHG greenhouse gas ICE internal combustion engine LCA life cycle assessment P pressure, atm R universal gas constant, 8.34 J mol K T environment temperature (298 K) Greek symbols η ratio in efficiencies of fuel cell and internal combustion engine vehicles η cmp β compressor efficiency ratio in costs of electricity Subscripts atm atmospheric F fossil fuel GHG greenhouse gas max maximum ng natural gas R renewable s solar w wind outputs of materials and energy and the environmental impacts directly attributable to the functioning of a product or service system over its life cycle [5]. For example, Khan et al. [6] confirm that a system integrating a wind turbine and a fuel cell has zero emissions while in operation, but that there are significant GHG emissions during the production of the various system components (wind turbine, fuel cell and electrolyzer). However, the global warming potential (GWP) of this type of integrated system is far lower (at least by two orders of magnitude) than the conventional diesel system presently used in remote communities. The authors [7,8] previously performed LCAs of wind and solar technologies for electricity and hydrogen generation, as well as of hydrogen production from natural gas and gasoline from crude oil. By introducing a capital investment effectiveness indicator [8], it was shown that renewable hydrogen is less economically attractive (i.e., it has a higher cost) than hydrogen produced via reforming of natural gas. In this article we exploit the different costs of electricity and hydrogen, depending on the production technology used, together with GHG emissions data from our LCA studies, to evaluate the cost of mitigating GHG emissions by industrial-scale implementation of wind and solar energy systems. Such assessments are essential because, as pointed out earlier [9], inefficient energy pricing and demand-side market failures inhibit prospective consumers of solar photovoltaic systems. 2. Analysis Although wind and solar energies can be considered free, the quantity of construction materials consumed per unit of electricity or hydrogen produced for a renewable plant is often much higher than that for the more traditional technology for electricity and hydrogen production from natural gas [7,8]. Taking into account GHG emissions from the construction and operation stages of power or hydrogen generation plants, and their lifetimes and capacities, the indirect GHG emissions per unit of produced energy can be calculated. For fossil fuel technologies, GHG emissions for this part of the life cycle are negligible with respect to the direct emissions related to fuel combustion or removing carbon from natural gas (mainly methane) to produce hydrogen. For renewable technologies the indirect emissions are the only source of GHGs. The GHG emissions per MJ of produced electricity and hydrogen evaluated in previous LCA studies by the authors [7,8] are presented in Table. In order to transport hydrogen or use it in a fuel cell vehicle, it normally needs to be substantially compressed, so as to attain an appropriate volumetric energy density. For instance, the pressure of gaseous hydrogen in the tank of Honda s fuel cell car is about 35 atm []. Data in Table regarding hydrogen compression have been modified according to an assumption that electricity for renewable hydrogen compression comes from the same renewable energy sources, and electricity for compression of hydrogen from natural gas is generated in a natural gas power plant. By comparison, the typical pressure of hydrogen at the outlet of a natural gas reforming plant is about 2 atm [2]. The electrical energy E el required to compress mol of hydrogen is calculated according to the formula for isothermal compression with a compressor efficiency of η cmp =.65: E el = RT η cmp ln(p max /P atm ), () where the environment temperature T is 298 K, R is the universal gas constant, P max is the required pressure of hydrogen and the atmospheric pressure P atm is atm. The GHG emission from producing a unit of electricity from natural gas is calculated assuming that electricity is generated from natural gas with an average efficiency of 4% (which is reasonable since the efficiency of electricity production from natural gas varies from 33% for gas turbine units to 55% for combined-cycle power plants, with about 7% of the electricity dissipated during transmission). A positive environmental impact (i.e., a reduction in GHG emissions in the present case) as a result of the introduction of a renewable technology depends on the replaced technology. The effectiveness of such an introduction is reflected in part by the cost of GHG emissions reductions per kg (C GHG ), which

3 M. Granovskii et al. / International Journal of Hydrogen Energy 32 (27) Table Greenhouse gas emissions per megajoule of electricity, hydrogen and gasoline (LHVs) for various production technologies Technology GHG emissions (g/mj) Electricity from natural gas Electricity from natural gas with a thermal efficiency of 4% 49.9 Hydrogen from natural gas Natural gas pipeline transportation and reforming to produce hydrogen 75.7 Hydrogen compression 2 atm 35 atm. a 9.9 b Total Electricity and hydrogen from wind energy Electricity generation 4.34 Hydrogen production via electrolysis 2.5 Hydrogen compression 2 atm 35 atm.2.4 Total Electricity and hydrogen from solar energy Electricity generation.7 Hydrogen production via electrolysis 6.8 Hydrogen compression 2 atm 35 atm.5. Total Gasoline from crude oil Crude oil pipeline transportation and distillation to produce gasoline 2. Gasoline delivery to fuelling stations.9 Gasoline utilization in ICE vehicle c 7.7 Total 84. a Hydrogen is produced by natural gas reforming at the typical pressure 2 atm. b Includes compressed hydrogen distribution. c Taken from Walwijk et al. []. can be determined as C GHG = GHG F GHG R (C R C F ), (2) where GHG F and GHG R are GHG emissions (in grams per MJ of electricity or lower heating value (LHV) of hydrogen) produced using fossil fuel (natural gas) and renewable technologies, respectively, and C F and C R are the costs per MJ of electricity or hydrogen produced using fossil fuel and renewable technologies, respectively. Fig. shows the variations in the average prices in the USA of the major energy carriers for provided by the Energy Information Administration [3]. The present cost of fossil fuel-based electricity assumes that the electricity cost in Fig. is consistent with its generation from natural gas with an average efficiency of 4% (as for the GHG emissions evaluation). Data are not widely available for the cost of hydrogen, but according to one analysis [4] the cost of hydrogen on the basis of its LHV is about two times that of natural gas. In line with Fig., the cost of gasoline is about two times that of crude oil. The efficiency of producing gasoline from crude oil is slightly higher than that for hydrogen from natural gas [7]. As the US $/MJ crude oil electricity natural gas gasoline Years Fig.. Unit prices of selected energy carriers from 999 to 24 (data from EIA, 25 [3]). relative cost of natural gas is slightly lower than that of crude oil (see Fig. ), we assume here that the ratio of cost to LHV of hydrogen produced by natural gas reforming at a typical pressure (2 atm) is equal to that of gasoline. The average costs of natural gas, crude oil, gasoline, hydrogen and electricity for that are employed here are listed in Table 2. The economic efficiencies of introducing renewable instead of fossil fuel technologies to mitigate GHG emissions are

4 93 M. Granovskii et al. / International Journal of Hydrogen Energy 32 (27) Table 2 Average unit costs (in US$/MJ) of the main energy carriers for (from Fig. ) Electricity Hydrogen compressed (2 atm) Hydrogen compressed (35 atm) Natural gas Crude oil Gasoline Electricity Hydrogen (2 atm) Electricity Hydrogen compressed (2 atm) Hydrogen compressed (35 atm) β w Fig. 2. The cost of GHG emissions reduction (per kg) as a result of wind energy substitution for natural gas to produce electricity and compressed hydrogen, as a function of the ratio in electricity costs β w. The range of present ratios between production costs of wind and natural gas electricity is shown by dashed lines (according to Newton and Hopewell, 22 [5]). evaluated according to the ratio in the costs of electricity: β w = C w C ng, (3) β s = C s, (4) C ng where β w and β s are the ratios in costs of electricity produced from wind and solar energy sources to the costs of natural gas, respectively, C w and C s are the costs of electricity generated from wind and solar energy sources, respectively, and C ng is the cost of electricity produced from natural gas. The cost of natural gas-derived electricity is assumed to be equal to the cost of electricity shown in Fig.. 3. Results and discussion Figs. 2 and 3 present the cost per kilogram of reducing GHG emissions, by substituting wind and solar energies for natural gas to produce electricity and compressed hydrogen, as a function of the ratio in the costs of electricity from wind β w and solar β s energies to the cost of electricity from natural gas. Comparing Figs. 2 and 3, it can be observed that wind-derived electricity allows less expensive abatement of GHG emissions. Replacement of natural gas-derived electricity by renewablederived electricity is more favorable than the same replacement for hydrogen. Elevating pressure favors renewable technologies because the cost of hydrogen is also formed by the cost of electricity required for its compression. The ranges of contempo Fig. 3. The cost of GHG emissions reduction (per kg) as a result of solar energy substitution for natural gas to produce electricity and compressed hydrogen, as a function of the ratio in electricity costs β s. The range of present ratios between production costs of solar and natural gas electricity is shown by dashed lines (according to Newton and Hopewell, 22 [5]) β s Hydrogen (35 atm) from wind energy (β w =2.25) Hydrogen (35 atm) from solar energy (β s =5.25) η Fig. 4. The cost of GHG emissions reduction (per kg) as a result of hydrogen substitution for gasoline as a function of the ratio in efficiencies η of internal combustion (gasoline powered) and fuel cell (hydrogen powered) vehicles. rary ratios between production costs of renewable and natural gas-based electricity are shown in Figs. 2 and 3 (dashed lines), based on published data taken from Newton and Hopewell [5]. The cost of reducing GHG emissions by introducing renewable hydrogen as a fuel for a fuel cell vehicle instead of gasoline is evaluated using average values of β w = 2.25 and β s = 5.25 and a slightly modified form of Eq. (2): C GHG = GHG F GHG R /η ( CR η C F ). (5) Here, η is the ratio in efficiencies of fuel cell and internal combustion vehicles, C F and GHG F are the cost per MJ of gasoline and the corresponding GHG emissions, and C R and GHG R are the cost per MJ of compressed (35 atm) renewable hydrogen and the corresponding GHG emissions. The cost (per kilogram) of reducing GHG emissions as a result of gasoline substitution with hydrogen is presented in Fig. 4 as a function of the ratio in efficiencies η of fuel cell (hydrogen

5 M. Granovskii et al. / International Journal of Hydrogen Energy 32 (27) powered) and internal combustion (gasoline powered) vehicles. It can be seen from this figure that when renewable hydrogen is used instead of gasoline, the cost of GHG emissions abatement approaches the same for renewable electricity only if the efficiency of the fuel cell vehicle significantly (about two times) exceeds that of an internal combustion engine. The applications of the present results can be significant. Canada needs to reduce its GHG emissions by approximately 27 megatons annually during the period to meet its Kyoto commitments. It can be observed using practical data that when 6 wind turbines (Kenetech KVS-33), with a capacity of 35 kw and a capacity factor 24%, replace a 5 MW gas-fired power generation plant with a 4% efficiency for electricity generation, annual GHG emissions are reduced by 2.3 megatons at an additional annual cost (at an average β w =2.25) of about $28 million US. According to Canada s per capita electricity consumption this amount of electricity corresponds to the needs of 28, Canadians. 4. Conclusions Introducing wind and solar renewable energy sources in place of natural gas to produce electricity and hydrogen leads to a reduction of GHG emissions. Implementing wind- and solarbased electricity is less costly for GHG emissions mitigation than introducing wind- and solar-based hydrogen. Introducing renewable hydrogen as a fuel for fuel cell vehicles instead of gasoline can lead to an economically effective reduction of GHG emissions only if the efficiency of the fuel cell vehicle is more than two times higher than that of an internal combustion vehicle. The results can help Canada meet its Kyoto commitments. The analysis shows that the substitution of a typical 5 MW gas-fired power generation plant with 6 modern wind turbines allows annual GHG emissions to be reduced by 2.3 megatons, at an additional cost (at an average β w = 2.25) of about $28 million US per year. This amount of electricity corresponds to the needs of 28, Canadians, so by extrapolation it can be seen that such substitution can contribute to reducing Canada s GHG emissions significantly (an emissions reduction of 27 megatons annually is needed during the period for Canada to meet its Kyoto commitments). The results provide a useful approach to an optimal strategy for GHGs mitigation. Acknowledgments The financial support of an Ontario Premier s Research Excellence Award, the AUTO 2 Network of Centres of Excellence (NCE) and the Natural Sciences and Engineering Research Council of Canada is gratefully acknowledged. References [] Wuebbles DJ, Atul KJ. Concerns about climate change and the role of fossil fuel use. Fuel Process Technol 2;7:99 9. [2] Pehnt M. Dynamic life cycle assessment (LCA) of renewable energy technologies. Renewable Energy 26;3:55 7. [3] Dry M. Fisher-Tropsch reactions and the environment. Appl Catal A General 999;89:85 9. [4] Maack MH, Skulason JB. Implementing the hydrogen economy. J Cleaner Prod 26;4: [5] ISO 44: Environmental management-life cycle assessment-principles and framework; 997. [6] Khan FI, Hawboldt K, Iqbal MT. Life cycle analysis of wind fuel cell integrated system. Renewable Energy 25;3: [7] Granovskii M, Dincer I, Rosen MA. Life cycle assessment of hydrogen fuel cell and gasoline vehicles. Int J Hydrogen Energy 26;3: [8] Granovskii M, Dincer I, Rosen MA. Environmental and economic aspects of hydrogen production and utilization in fuel cell vehicles. J Power Sources 26;57:4 2. [9] Duke R, Williams R, Payne A. Accelerating residential PV expansion: demand analysis for competitive electricity markets. Energy Policy 25;33: [] Walwijk M, Buckman M, Troelstra W, Elam N. Automotive fuels for the future: the search for alternatives, Report, International Energy Agency; 999. [] Wilson G. Preview: Honda FCX fuel cell car. Canadian Driver. Canada s Online Auto Magazine. July 3, 22. Via com/previews/fcx-v4.htm. Accessed on May 2; 25. [2] Spath P, Mann M. Life cycle assessment of hydrogen production via natural gas steam reforming. Report No NREL/TP , National Renewable Energy Laboratory, U.S. Department of Energy; 2. [3] EIA. 25. Official energy statistics from the U.S. Government. Energy Information Administration. Via pricepage.htm. Accessed on June 5; 25. [4] Padro C, Putsche V. Survey of the economics of hydrogen technologies. Report No. NREL/TP , National Renewable Energy Laboratory, U.S. Department of Energy; 999. [5] Newton M, Hopewell P. Costs of sustainable electricity generation. Eng Sci Educ J 22;April:49 55.