Hydrogen production processes can be classified generally as those using fossil or renewable (biomass) feedstocks and electricity. The technology options for fossil fuels include reforming, primarily of natural gas in “on-purpose” hydrogen production plants, and production of hydrogen as a byproduct in the petroleum refining process. Electrolysis processes using grid or dedicated energy sources, including some advanced techniques that have not yet been proven, also can be used.
On-Purpose Hydrogen Production Technologies
The on-purpose hydrogen production technologies are reforming, partial oxidation (including gasification), and electrolysis. Each process has its own advantages and disadvantages with respect to capital costs, efficiency, life-cycle emissions, and technological progress.
Electrolysis, or water splitting, uses energy to split water molecules into their basic constituents of hydrogen and oxygen. The energy for the electrolysis reaction can be supplied in the form of either heat or electricity. Large-scale electrolysis of brine (saltwater) has been commercialized for chemical applications. Some small-scale electrolysis systems also supply hydrogen for high-purity chemical applications, although for most medium- and small-scale applications of hydrogen fuels, electrolysis is cost-prohibitive.
One drawback with all hydrogen production processes is that there is a net energy loss associated with hydrogen production, with the losses from electrolysis technologies being among the largest. The laws of energy conservation dictate that the total amount of energy recovered from the recombination of hydrogen and oxygen must always be less than the amount of energy required to split the original water molecule. For electrolysis, the efficiency of converting electricity to hydrogen is 60 to 63 percent. To the extent that electricity production itself involves large transformation losses, however, the efficiency of hydrogen production through electrolysis relative to the primary energy content of the fuel input to generation would be significantly lower.
Economics of Hydrogen Production Technologies
The economics of hydrogen production depend on the underlying efficiency of the technology employed, the current state of its development (i.e., early stage, developmental, mature, etc.), the scale of the plant, its annual utilization, and the cost of its feedstock.
Electrolysis technologies suffer from a combination of higher capital costs, lower conversion efficiency, and a generally higher feedstock cost when the required electricity input is considered. A distributed electrolysis unit using grid-supplied electricity is estimated to have a production cost of $6.77 per kilogram of hydrogen when the assumed 70-percent capacity factor is considered. A central electrolysis unit operating at 90-percent capacity factor, with 30 percent of the power requirements coming from wind and 70 percent from the grid, is estimated to have a production cost roughly 15 percent higher than that of a distributed SMR plant.
Because electrolysis technologies generally have higher capital and operating and maintenance costs, the implied price for electricity would have to be lower to achieve cost parity with a fossil or biomass feedstock.
Source: U.S. Energy Information Administration