Techno-economic Analysis of Distributed Hydrogen Production from Natural Gas

Abstract It is well established that hydrogen has the potential to make a significant contribution to the world energy production. In U.S., majority of hydrogen production plants implement steam methane reforming (SMR) for centralized hydrogen production. However, there is a wide lack of agreement on the nascent stage of using hydrogen as fuel in vehicles industry because of the difficulty in delivery and storage. By performing technological and economic analysis, this work aims to establish the most feasible hydrogen production pathway for automotives in near future. From the evaluation, processes such as thermal cracking of ammonia and centralized hydrogen production followed by bulk delivery are eliminated while on-site steam reforming of methanol and natural gas are the most technologically feasible options. These two processes are further evaluated by comprehensive economic analysis. The results showed that the steam reforming (SR) of natural gas has a shorter payback time and a higher return on investment (ROI) and internal rate of return (IRR). Sensitivity analysis has also been constructed to evaluate the impact of variables like NG feedstock price, capital of investment and operating capacity factor on the overall production cost of hydrogen. Based on this study, natural gas is prompted to be the most economically and technologically available raw material for short-term hydrogen production before the transition to renewable energy source such as solar energy, biomass and wind power.

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