Finding 5-2. With the possible future technology advances, hydrogen generated by central station nuclear energy, distributed natural gas steam reforming, and distributed electrolysis using wind-turbine-generated electricity could have costs within about $1.00 per kilogram of gasoline costs on a gasoline-efficiency-adjusted basis.
Finding 5-3. Even with the possible technology advances, hydrogen from distributed electrolysis using photovoltaics or grid-supplied electricity, or hydrogen using gasification of biomass would have gasoline-efficiency-adjusted costs significantly higher than the gasoline cost. Thus, technological breakthroughs, even beyond the optimistic assumptions of the committee, would be needed to make these technologies competitive.
Finding 5-4. Distribution and dispensing costs will continue to be a significant component of total hydrogen supply chain costs for all production pathways except those based on distributed generation. Ignoring these costs would significantly underestimate total supply chain costs for hydrogen.
Finding 5-5. Using estimated carbon dioxide disposal costs of $10 per tonne of carbon dioxide, and the carbon imputed cost of $50 per tonne of carbon released into the atmosphere, these two costs of carbon management would have only a small impact on the relative costs of the various technologies.
Finding 5-6. Whether distributed electrolysis becomes economically viable will depend critically on the cost of the electricity used in the electrolysis. Therefore, the price of electricity purchased from the grid and the costs of generating electricity using photovoltaics or wind turbines will be extremely important factors in determining the economic competitiveness of distributed electrolysis.
Finding 5-7. Hydrogen can be produced by electrolysis using wind turbines as the source of the electricity. Whether this technology would be competitive on a gasoline-efficiency-adjusted basis with gasoline depends critically on whether the capital cost of the proton exchange membrane electrolyzers declines by the 90 percent assumed by the committee. With very low cost of electrolyzers, installation of very large electrolyzer units could fully compensate for the intermittent nature of wind-produced electricity. Costs of wind-produced electricity include the full capital costs of wind turbines, even though the wind turbine would produce electricity only some of the time.