FIGURE 5.6 Fueling capacity for plug-in hybrid electric vehicles (PHEVs) in the U.S. power sector. SOURCE: Kintner-Meier et al. (2006).

plants if PHEVs and EVs were available, equivalent to what it could do for HFCVs via electrolysis. The Pacific Northwest National Laboratory (Kintner-Meier et al., 2006) found that if all light-duty vehicles were plug-in hybrids, 70 percent or more of them could be charged if 24-hour per day charging were carried out utilizing otherwise reserve power generation capability. This relationship is shown in Figure 5.6.

In the scenarios presented in Chapter 6, the continued introduction of hybrid electric vehicles (some of which could be PHEVs) has been considered as an alternative to the introduction of hydrogen vehicles and the contrasts in infrastructure requirements are factored in. The most important factors are the time horizons under consideration (both 2020 and 2035) since the rollout of stationary hydrogen production (electrolysis and co-production) and stationary applications for fuel cells require time for technology development, permitting or regulatory approvals, and development of an infrastructure to support any such effort.

The EV and PHEV alternatives have a more limited, but also challenging, technological requirement, namely, the development of a high capacity battery to make this option viable. However, the permitting or regulatory approvals and infrastructure needs are much smaller, especially for the early, transitional period. This is shown in Figure 5.6 as well as in the qualitative estimate from Toyota (Figure 5.7).

INCENTIVES FOR THE ELECTRIC POWER SECTOR

The regulatory regime for electricity is well known and evolving. That regime can be extended to the hydrogen production (and plug-in hybrid) market without major changes except, possibly, for an incentive tariff.

One question, then, is what regulatory mechanisms might be put into place to provide utilities with incentives to produce hydrogen at either distributed or central locations. It is clear that additional revenues from hydrogen business and carbon emission credits would be reasonable incentives to

FIGURE 5.7 Advanced vehicle market penetration. SOURCE: Kawai (2007).

make utilities consider branching out into hydrogen production, but would they be sufficient?

Let us start with the expected availability of the stationary electric power system to provide the power either for electrolysis (or PHEV charging) as well as the expected capacity for co-production of hydrogen and electricity by the new-generation options explained above.

In the stationary electric power sector, a variety of mechanisms have been used to encourage the introduction of new technologies or new approaches to doing business. These range from such federal approaches as production tax credits and carbon credits to state mechanisms such as rate structures and portfolio standards. The early introduction of such mechanisms would expedite action on the part of utilities to become players in this field sooner rather than later. This should be seriously considered, since utilities can be major players in the rollout of the systems described here.

The synergies for the use of stationary power for either hydrogen production and/or plug-in hybrids are quite significant. Improved asset utilization (increased capacity factors using electrolysis at distributed locations, i.e., substations and/or charging batteries) could (1) help increase generation capacity factors, (2) shave peak loads, (3) reduce wear and tear on cycling generation, and (4) provide hydrogen to transportation refueling stations or plug-in locations.

In the longer term, the co-production of electricity and hydrogen could leverage investments that would otherwise be required anyway, for electric power production. The coproduction of hydrogen and electricity using IGCC technology with carbon capture and storage (as in the FutureGen concept) represents a potentially significant opportunity. Such an approach would leverage the capital investment since the fossil fuel, in this case coal, would be required to go through the gasification process, producing hydrogen that can be combusted to create electricity as well as producing hydrogen for transportation use. Through this process, carbon would be captured and sequestered.



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