ket today. The key to adapting this technology to meet energy-related applications in the future is cost reduction and performance enhancement. The Department of Energy has already identified several technology objectives relating to electrolytic hydrogen production.

Hydrogen can be made from renewable sources, enabling a perfectly sustainable energy path. The falling cost of renewable energy resources and the improving cost and efficiency outlook for electrolysis contribute to the prospect that renewably sourced electrolytic hydrogen may be competitive with other hydrogen supply in at least some instances.

Electrolyzers typically operate from grid-quality power, so a new variety of power control and conditioning equipment needs to be developed in order for electrolyzers to operate efficiently from renewable sources. The prospect exists for good efficiency in converting renewable power to hydrogen, insofar as electrolyzers require direct current and renewables generate direct current, so there are no losses associated with ac/dc conversion.



The production of hydrogen from renewable energy sources is often stated as the long-term goal of a mature hydrogen economy (Turner, 1999). As such the development of cost-effective renewable technologies should clearly be a priority in the hydrogen program, especially since considerable progress is required before these technologies reach the levels of productivity and economic viability needed to compete effectively with the traditional alternatives. Thus, basic renewables research needs to be expanded and the development of renewable hydrogen production systems accelerated.

Of all the renewables currently on the drawing boards, in the near to medium term, wind arguably has the highest potential as an excellent source for producing pollution-free hydrogen, using the electricity generated by the wind turbines to electrolyze water into hydrogen and oxygen. The issues for its successful development and deployment are threefold: (1) further reducing the cost of wind turbine technology and the cost of the electricity generated by wind, (2) reducing the cost of electrolyzers, and (3) optimizing the wind turbine-electrolyzer with hydrogen storage system. This section discusses current costs and projections for future costs of electricity produced by wind energy and then looks at the cost of producing hydrogen using an integrated wind turbine-electrolyzer system. (Discussion of electrolyzer technology is presented in the section “Hydrogen from Electrolysis.”) This section focuses on wind energy systems that would be deployed on a distributed scale.

Status of Wind Energy in the World Today

While wind energy has been one of humanity’s primary energy sources for transporting goods, milling grain, and pumping water for several millennia, its use as an energy source began to decline as industrialization took place in Europe and then in America. The decline was at first gradual as the use of petroleum and coal, both cheaper and more reliable energy sources, became widespread, and then it fell more sharply as power transmission lines were extended into most rural areas of industrialized countries. The oil crises of the 1970s, however, triggered renewed interest in wind energy technology for grid-connected electricity production, water pumping, and power supply in remote areas, promoting the industry’s rebirth. By 2002, grid-connected wind power in operation surpassed 31,000 MW worldwide (see Figure G-11).

In the early 1980s, the United States accounted for 95 percent of the world’s installed wind energy capacity (see Figure G-11). The U.S. share has since dropped to 15 percent in 2002. Other countries dramatically increased their capacity starting in the mid-1990s, while the U.S. capacity essentially stagnated until 1999, when more than 600 MW in new capacity were installed in a rush to beat an expiring production tax credit for utility-scale projects. This credit has since been extended through December 31, 2003. In 2001 and 2002, the total installed wind capacity doubled in the United States, and in 2003 it was expected to increase another 25 percent, to more than 6000 MW, with installations of 1400 to 1600 MW of new wind power (AWEA, 2003).

The decline in the U.S. capacity world share can be explained by a combination of economic factors and changes in government-sponsored support programs that impeded the development of new capacity. The U.S. wind industry was born in 1981 in the aftermath of the world oil crises of 1973–1974 and 1978–1979. Wind energy was not cost-competitive with fossil fuel energy, but federal legislation guaranteed a market for wind-generated power and offered generous tax credits to developers of wind energy. However, 1986 marked the beginning of the slowdown in U.S. wind energy development. The availability of relatively cheap oil and natural gas and improvements in gas generating technology, coupled with the expiration of federal tax credits at the end of 1985, meant that wind energy remained significantly more costly than fossil fuels. The tax credit incentives had been more effective in building capacity than in maintaining productivity, and as a consequence electricity generation from wind did not grow as rapidly as initially anticipated. This trend appears to have reversed itself in the past 5 years, with more than a 22 percent annual increase in installed generating capacity since 1998, despite the recent problems permeating the electric utility industry. This recent growth, coupled with progressive state policies—30 states have installed wind capacity—the continuing extension of the federal wind energy production tax credit, and maturing wind turbine technology, appears to have signaled a rebirth for the industry in the United States.

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