Can the Modular Helium Reactor Compete in the Hydrogen Economy

In today’s energy economy, hydrogen is primarily used in the petroleum refining and petrochemical industries. The dominant technology for generating hydrogen is Steam Methane Reforming (SMR), which uses natural gas as both feedstock and fuel. In the much-discussed future hydrogen economy, hydrogen could become a major carrier of energy for distributed use, such as in fuel-cell vehicles. This paper compares the cost of hydrogen production using natural gas and SMR technology with the cost of nuclear-powered hydrogen production using a Modular Helium Reactor (MHR). A time series model of natural gas prices is estimated and used to simulate the cost of hydrogen from SMR to 2030: it is never above $11.80/GJ or $12.45/million BTU (in 2001 dollars). A cost engineering model of the General Atomics’ MHR shows a range of hydrogen production costs, none of which are below $11.80/GJ. For the MHR to be competitive in the pipeline hydrogen market, there must be an increase of 50-100% in the price of natural gas.