1. I-95 Hydrogen Corridor Hydrogen Delivery Tradeoff Study NHA Annual Conference 2008 Sacramento, CA March 31, 2008 Hydrogen Regional Infrastructure Program in Pennsylvania Paul L. Lemar, Resource Dynamics Corporation Eileen M. Schmura, Concurrent Technologies Corporation

2. Phase I Hydrogen Tradeoff Study Completed Objectives –Quantify tradeoffs between alternative hydrogen production and delivery approaches using DOE’s H2A model and other analytic methods –Investigate commercial and near commercial options –Use Pennsylvania as a case study Tradeoff Study Parameters –Assess demand at 1%, 10%, and 30% of light duty vehicle miles –Lowest delivered hydrogen cost based on life cycle cost analysis –State level feedstock costs

3. Phase I Pennsylvania Two Plant Option, 30 Percent Demand Scenario

4. Phase I Summary of Lowest Delivered Costs for Both Carbon Cases

5. Phase II: I-95 Corridor Hydrogen Tradeoff Study Objectives –Quantify tradeoffs between alternative hydrogen production and delivery approaches using DOE’s H2A model and other analytic methods –Investigate commercial and near commercial options –Use I-95 Corridor as a case study (DC to Boston) Tradeoff Study Parameters –Assess demand at 1%, 10%, and 30% of light duty vehicle miles –Analyze lowest delivered hydrogen cost based on life cycle cost –Use state level resources as a feedstock for hydrogen Key Tradeoffs Analyzed –Feedstocks (coal, natural gas, woody biomass) –Plant size (distributed vs. central station) –Delivery (truck, pipeline, etc.)

6. I-95 Corridor Population Statistics 6  13% of US population in less than 1% of land  15% of US light duty vehicles  Includes number 1, 5, 8, and 11th largest MSA’s in US (Source: U.S. Census Bureau, July 2006) Source: H2A Delivery Scenario Analysis Model Version 1.0 (HDSAM)

7. I-95 Corridor: Nearly Overlapping High Density Areas 7 Trenton, NJ New York, NY New Haven, CT Hartford, CT Providence, RI Boston, MA Philadelphia, PA Baltimore, MD Washington, DC Bridgeport, CT

8. I-95 Corridor State Hydrogen Incentives and Mandates To date, four states (NJ, NY, CT, MA) in the corridor have incentives or mandates for hydrogen vehicles, while only two (DC, NY) currently have hydrogen fueling stations

9. Proposed Stations Comprise At Least 15 Percent of Existing I-95 Corridor Stations Small (100 kg/day) stations from the 1 percent demand scenario would be upgraded to large (1,500 kg/day) stations until the demand is met, keeping the H2 to Gasoline fueling station ratio at around 15 percent. When more stations are required to meet the growing demand, additional 1,500 kg/day stations will be built.

10. Feedstock Pricing Along I-95 Corridor Favors Biomass and Coal Ranges of costs along I-95 Corridor (Source- EIA): Natural Gas: $8-13/MCF Biomass: $35-50/ton Coal: $35-70/ton

11. Initial Production Costs Emphasize Natural Gas 1% Demand Scenario For 1% demand scenario, only New York offers enough demand to surpass the 40,000 kg/day capacity level required by the H2A model to satisfy biomass/coal gasification minimum economies. Individual MSAsCombined MSAs

12. Without Carbon Constraints, Natural Gas Gives Way to Biomass, Biomass to Coal NG Biomass NG Biomass NG Biomass Coal Biomass Coal NG Production Cost ($/kg)

13. Effect of Carbon Constraints on Production Cost 30 Percent Demand Scenario: Increase in costs due to carbon constraints (Combined MSAs) 0-10 cents 11-20 cents 21-30 cents

14. For Hydrogen Delivery Over 10% Demand, Pipeline is Low Cost For 1% scenario, compressed trucks are low cost option (except New York, where liquid trucks favored). Pipeline becomes low cost option for most areas at 10%, unless MSAs are combined, then economies of scale favor truck delivery. At 30%, pipeline is low cost option for all areas, and combining MSAs is no longer beneficial.

15. At Lower Demands, Distributed Production Beats or Challenges Delivered Options 1% Demand Scenario: distributed production lowest cost for all areas 10% Demand Scenario: distributed production still ideal in most areas, but delivered H2 starting to compete Individual MSAs Combined MSAs

16. At 30 Percent Demand, Delivered Hydrogen is Less Costly Only outlier is New York, where carbon constraints would continue to favor distributed production. Also, in New Haven and Providence, biomass and coal are very competitive, so carbon constrained costs are roughly equal to costs without such constraints. Individual MSAs Combined MSAs

17. Review of Cost Components: Challenge of Reaching $3/kg Philadelphia’s Delivered Costs at the 30 Percent Demand Scenario After transportation costs were reduced when using the DOE composite pipeline cost targets, hydrogen production and forecourt are larger contributors to the total delivered cost.

18. Preliminary Conclusions and Issues for Report Distance is more important than production volume –Distributed production competitive through 10% demand levels –Multiple plants offer lower delivery cost at higher (30%) demands –Production economies matter less –Still short of DOE $3/kg cost target Reduction in feedstock cost and delivery infrastructure key to long term costs –As production volumes increase, coal offers lowest cost as reduced feedstock cost overcome high capital cost –As distribution volumes increase, dedicated pipelines offer lowest cost –Lower cost composite pipelines would drive down transport costs, but production and forecourt costs need improvement –Impact of carbon constraints deters coal with sequestration unless very high production volume Differences in production and delivery options define economic tradeoffs along I-95 corridor

19. I95 Hydrogen Corridor Plans Investigate the potential dual use options, developing a hydrogen infrastructure –Forklifts in warehouse, replacing battery usage –Premium power and backup power installations with hydrogen fuel cells providing the power –Transmission load pockets where hydrogen can provide local, reduce emission generation –Fleets as a first adopter of hydrogen vehicles –Airports, looking at hydrogen tugs and other hydrogen vehicles –Military installations and their possible need for hydrogen –Big box retailers Explore the indigenous energy with an emphasis on renewable feedstocks for hydrogen

20. Contact Information and Acknowledgements Concurrent Technologies CorporationResource Dynamics Corporation Eileen Schmura Paul Lemar Jr., President schmurae@ctc.com pll@rdcnet.com (412) 992-5367 703-356-1300 ext. 204 U. S. Department of Energy –Monterey Gardiner –Pete Devlin –Paul Bakke Air Products and Chemical Inc. Acknowledgement/Disclaimer This material is based on work supported by the Department of Energy under Award Number DE-FC36-04GO14229. This report was prepared as an account of work sponsored by an agency of the United Sates Government.

21. Backup Slides

22. Sensitivity: Using DOE 2015 Targets for Composite H2 Pipelines Targets: Transmission Lines no more expensive than $800K/mile, Distribution $200K/mile (total cost) 30 Percent Demand Scenario: Decreased Costs with Composite Pipeline (Combined MSAs) 0-25 cents 26-40 cents 41-50 cents

23. Composite Pipeline Lowers Delivered Costs at 30 Percent For the 30 Percent Scenario, if pipeline costs can be lowered to DOE’s 2015 composite pipeline targets, delivered costs would decrease by a significant margin, but still over $3.00/kg. Hydrogen production and forecourt (pipeline to gas station) costs still need to be lowered. Individual MSAs Combined MSAs

24. Production Costs (no carbon constraints)

25. Production Costs (with carbon constraints)

26. 10 Percent Composite Pipeline

27. 30 Percent Composite Pipeline

28. 10 & 30 Percent Results Using H2A Defaults

29. 10 & 30 Percent Results Using DOE Targets

30. 30 Note: Potential station locations color coded as follows: yellow=big box retailer blue=compressed natural gas stations green=biofuel stations white=highway service areas Potential Hydrogen Fueling Station Locations