OXFORD Building the Hydrogen Economy

Slide1 : Building the Hydrogen Economy: Infrastructure Strategy Prospectus IPHE Implementing Liaison Committee Meeting Oxford, UK Dr. Robert K. Dixon Head, Energy Technology Policy Division International Energy Agency Paris, France © OECD/IEA 2006


Background : Background Large-scale, long-term R,D,D+D underway 400+ significant H2 + FC Demonstration Projects Handful of large infrastructure under consideration or beginning construction National R+D strategies/roadmaps have proven useful


Hydrogen Demonstration Project Atlas : Hydrogen Demonstration Project Atlas name of project, partners, project dates, type of fuel, … submission form for additional projects http://www.iphe.net/


Slide4 : Market Scenarios A - Weak CO2 policy and tech. development B - Strong CO2 policy in Kyoto countries and tech. development C - Strong CO2 policy in Kyoto countries and tech. lag D - Strong CO2 policy world wide and tech. development GLOBAL H2 USE 0 2 4 6 8 10 12 14 2000 2010 2020 2030 2040 2050 (EJ/y) H2 FC VEHICLES SHARE 0 5 10 15 20 25 30 35 2000 2010 2020 2030 2040 2050 (%) D C B A D C B A Up to 30% H2 fuel cell vehicles by 2050


Slide5 : Regional Markets Per capita H2 use in 2050 - (GJ H2/pc) 0 1 2 3 4 5 6 7 8 North America Europe OECD Pacific China Others Scenario B Scenario C Scenario D Scenario A Best scenario: 60% FC vehicles in China by 2050, 42% India and US, 36-48% Europe, 35% Canada, 22% Japan, 10% Australia Differences across regions due to discount rate, fuel taxes, infrastructure, consumers’ attitude for capital-intensive investment, mobility needs, car-mileage.


Energy Technology Perspectives 2006 : Energy Technology Perspectives 2006 ETP 2006 provides part of IEA’s “advice on scenarios and strategies” ETP 2006 presents a groundbreaking review of technologies across all sectors and assess how they together can make a difference


World Liquid Fuel Supply by Scenario 2003-2050 : World Liquid Fuel Supply by Scenario 2003-2050 Primary oil demand is below 2030 baseline level and is returned to about today’s level in TECH Plus.


Transport CO2 Emissions by Scenario : Transport CO2 Emissions by Scenario


Key ETP Policy & Technology Findings : Key ETP Policy & Technology Findings Power Generation, via CCS, energy efficiency, renewables + NE, can largely be de-carbonized by 2050 De-carbonizing the transport sector will take longer and we must start now A technology portfolio will be needed Collaboration between developing and developed countries essential


Now is the time to consider infrastructure investment & development strategies : Now is the time to consider infrastructure investment & development strategies


Project Objective : Project Objective Organize and convene public and private sector officials in an international strategic planning process to advance the orderly and efficient development of an infrastructure for the hydrogen economy.


Two Priority Tasks Proposed : Two Priority Tasks Proposed Convene up to three international meetings for public and private sector officials to consider and develop strategic partnerships and strategies for H2 economy infrastructure Employ global energy technology optimization analysis/models, such as the IEA Energy Technology Perspectives (ETP) Model, to analyze various infrastructure investment and hydrogen economy development scenarios


Strategy Meetings : Strategy Meetings 3 meetings: the Americas, Asia and Europe Participants energy, finance and construction communities, merchant H2 industry, transport community, distributed energy community, early investors, H2 highway and fueling station teams, fuel cell community, community planners, codes and standards community Approach facilitated small/large group discussions, back casting and forecasting exercises, critical path analysis exercise, scenarios and strategies exercise, lessons learned review, early investors perspectives, synthesis and reporting Scenarios & Strategies framed by technology optimization models Products build consensus & momentum, strategy document, advice to IPHE SC


Strategy Issues : Strategy Issues How fast can R&D and deployment programmes reduce the cost of a hydrogen infrastructure and hydrogen fuel cells vehicles? How much government funding would be needed in transition phase, and how can this funding be minimized and used as efficiently as possible? What would be the optimal balance between R&D and deployment programmes? How should this uncertainty in future hydrogen quality needs in terms of purity and pressure be dealt with infrastructure development? What are the true cost of hydrogen transmission and distribution system; can existing gas pipelines be used for hydrogen? Early decentralized production is either based on gas reforming or electrolysis. Electrolysis uses in fact a hydrogen fuel cell in reverse model. Could development of such electrolysis cells help to reduce cost for FCVs, and should they therefore be preferred over gas based supply systems?


Proposed Timeline : Proposed Timeline January 2007 Begin Analysis + Workshop organization March - June 2007 Convent three workshops: Asia, Europe, North America June - December 2007 ETP modeling and report writing January - February 2008 Peer review and report refinement June - August 2008 Final report & briefing at key venues* * Interim progress reports at appropriate IPHE and IEA meetings


Proposed Budget (Euros) : Proposed Budget (Euros) Workshops 3x 50 000 150 000 Modeling / Analysis 100 000 Publication, travel, 50 000 peer review 300 000


We seek endorsement of the project.Thank you! : We seek endorsement of the project. Thank you!


Energy Technology Perspectives Model : Energy Technology Perspectives Model MARKAL type model Developed and refined by the Energy Technology Systems Analysis Implementing Agreement during the past 25 years Long-term (2050) analysis of energy technology policy issues Least-cost decision making, ideal market Linear programming Full coverage of energy system (global, supply and demand side) Extensive technology database (1000 technologies) Calibrated to World Energy Outlook Reference Scenario


Slide19 : Reference Energy System (RES) Hydrogen production Industry Residential/ commercial Electricity production Refineries Transport Heating Cooling Power Moving etc. Gasoline Natural gas Electricity Coke Hydrogen Heat etc. Renewables Fossil fuels Nuclear Useful energy Primary energy Conversion sectors/processes Final energy Demand sectors/processes Coke ovens Heat production


15 ETP model regions : 15 ETP model regions


Transportation Module : Transportation Module Based on SMP/MoMo MoMo spreadsheet with ETP model input data Demand projections Efficiencies Many MoMo data are taken from ETP database 15 regions New technologies and fuels in ETP technology library Region specific multipliers Region specific discount rates


Value Added : Value Added Proven, validated modelling framework Captures technological change Accounts for competing resource use (e.g. biomass, CO2-free electricity) Accounts for competing technologies Endogenous fuel price response Carbon leakage effects Easy sensitivity and scenario analysis


ETP Technology Policy Modeling Studies : ETP Technology Policy Modeling Studies December 2005 December 2004


A typical MARKAL/ETP study : A typical MARKAL/ETP study 50% of resources for technology data collection and assessment 25% for model analysis 25% for reporting Good data are the key for all good modelling One accepted MoMo/ETP/WEO transportation technology database needed “Modelling for insights, not for numbers” Understanding what determines the results is a key issue Therefore sensitivity and scenario analysis are essential


Issues : Issues Doubling of oil demand in BAU scenario Oil transportation fuel supply concerns CO2 emissions Solutions Fuel Efficiency (advanced ICEs, Hybrids, Fuel Cells) Biofuels Hydrogen FCVs


Many Solutions to the Challenge : Many Solutions to the Challenge Emissions increase Low or None High Supply Security benefits Refinery products from ME oil Energy efficiency (e.g. hybrids, FCVs) Hydrogen from natural gas + CCS FT-biomass FT-coal + CCS Non-conventional oil + CCS CO2- EOR (+CCS) CNG vehicles FT-natural gas + CCS Bioethanol Enhanced oil recovery Low or no reduction Oil shale Heavy oil DME/MeOH natural gas + CCS Oil sands FT-natural gas DME/MeOH coal + CCS FT-coal DME/MeOH coal DME/MeOH natural gas FCV + H2 from coal (+CCS), nuclear or renewables Emissions reduction


Transportation fuel demand (model output) : Transportation fuel demand (model output)


Global Bioethanol Supply Curves : Global Bioethanol Supply Curves Prolongued high oil prices and new technology will result in lots of alternative fuels.


Slide29 : Market Scenarios A - Weak CO2 policy and tech. development B - Strong CO2 policy in Kyoto countries and tech. development C - Strong CO2 policy in Kyoto countries and tech. lag D - Strong CO2 policy world wide and tech. development GLOBAL H2 USE 0 2 4 6 8 10 12 14 2000 2010 2020 2030 2040 2050 (EJ/y) H2 FC VEHICLES SHARE 0 5 10 15 20 25 30 35 2000 2010 2020 2030 2040 2050 (%) D C B A D C B A Up to 30% H2 fuel cell vehicles by 2050