CONCLUSION: With appropriate policies or market conditions in place, potential synergies between the transportation sector and the electric power sector could accelerate the potential for reduced oil use and decreased CO2emissions as benefits from the use of hydrogen in both sectors. In the near term, electrolysis of water at refueling sites using off-peak power, and in the longer term (after 2025), cogeneration of low-carbon hydrogen and electricity in gasification-based energy plants, are potential options that offer additional synergies. See Chapter 5.
More specifically, in response to the three framing questions posed at the beginning of this chapter, the committee reached the following conclusions:
In the near term (until 2020), existing electric power facilities (generation, transmission, substations, etc.) could produce hydrogen for transportation fuel purposes. In particular, small-scale electrolyzer plants, when successfully developed to meet more competitive cost and performance standards, at or near the points of distribution, could be important during the transition when the cost burdens of larger-scale reformation plants would be a potential barrier.
In the longer term (2035), the successful demonstration of one or more technologies could result in the widespread deployment of “co-production plants.” One benefit from this approach would be the reduction in the use of natural gas that will increasingly have to be imported and is a source of greenhouse gases.
Incentives are likely to be necessary for full involvement of electric power companies. Mechanisms such as production tax credits, rate adjustments, carbon credits, and so forth, would be options for near-term action.
PEM fuel cell systems, whether for transportation or stationary systems, still require significant cost, reliability, and lifetime improvements to be truly competitive in the market. In many basic technology and product development issues, and basic manufacturing process development for the PEM stack, synergies between stationary electric power and transportation fuel cells might be realized.
The introduction of high-temperature fuel cells (solid oxide fuel cells or molten carbonate fuel cells) does not enhance the production of hydrogen since one advantage of these technologies is their ability to use a variety of feedstocks with an internal reformer.
Plug-in hybrid vehicles could help reduce reliance on imported oil (and natural gas). The reductions in overall CO2 production will be a function of the reliance on fossil fuels for electricity production and the success of CCS technologies. The introduction of PHEVs depends on the timely introduction of advanced batteries.
The power industry could be of further assistance by providing a special electricity rate structure to support the early implementation of electrolysis. This is particularly important during the hydrogen market transition period. (See Chapter 3 for detailed discussions of the impact of the cost of electricity on the hydrogen production cost.) Utilities, working with their regulatory commissions could provide economic incentives to hydrogen producers to lessen the cost burden of the electrolysis process.
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