1. Lawrence Livermore National Laboratory Richard G. White, Noah Goldstein and Sonia Yeh NHA Annual Hydrogen Conference UCRL-XXXX-12345 Lawrence Livermore National Laboratory, P. O. Box 808, Livermore, CA 94551 This work performed under the auspices of the U.S. Department of Energy by Lawrence Livermore National Laboratory under Contract DE-AC52-07NA27344 Finding the Value of Water in a Hydrogen Economy March 31, 2008

2. 2 Lawrence Livermore National Laboratory Overview  Project Overview  The Hydrogen-Water Connection  Hydrogen – Water Tradeoffs  H2-W Regional Scorecards  Conclusions

3. 3 Lawrence Livermore National Laboratory Our Objective: Understanding the value of water in a hydrogen economy  Water source reliability  Quality of source water  Demographic changes  Environmental and climate constraints  Quantity and quality  Capital cost  O&M cost  Water intensity  New technology Inside the plant gateOutside the plant gate Characterize the water components for hydrogen production Establish a framework for evaluating potential water- related obstacles to the adoption of hydrogen at large scale

4. 4 Lawrence Livermore National Laboratory  Water planning and infrastructure assumed low-cost energy  Energy infrastructure and industry processes assumed water would be available  Recent studies have examined this coupling: DOE’s Multi-lab effort CEC EPRI H 2 -Water (H2-W) impact study funded by DOE-EERE: Hydrogen Fuel Cells and Infrastructure Technologies Program Existing energy and water systems were created in an earlier “climate”

5. 5 Lawrence Livermore National Laboratory Water shortages have surprised many

6. 6 Lawrence Livermore National Laboratory Water Requirements are both Internal and External to the H2 Production Process Hydro Power plant water intensity (kg H2O / kWh) Regional Electricity Generation Mix: Embedded Water Use, Electricity Price $.15/kWh $.02/kWh $.05/kWh Wind Power water intensity (kg H2O / kWh) Coal Power water intensity (kg H2O / kWh) ELECTROLYZER Cooling In 1,111 L/kg H 2 @ 8¢/1000 gal O2O2 H2H2 Cooling Out 1,111 L/kg H 2 Feedstock H 2 0 12.6 L/kg H 2 @ $5/1000 gal Electricity 52 kWh/kg H 2 Hydrogen Production Facility: Multiple Water Needs, Electricity Demand

7. 7 Lawrence Livermore National Laboratory Use Process Knowledge to Build Decision Tree: Anticipate The Use of Alternative Technologies Electrolysis Renewable Production ProcessFuel TypeIntegral Water Intensity Liquid Gas Low Medium High Liquid Gas Low Medium High Coal Gasification Biomass Gasification Electrolysis Central Grid Electrolysis Forecourt Grid SMR Central SMR Forecourt

8. 8 Lawrence Livermore National Laboratory Water intensity varies widely with technology choices Source: Energy Demands on Water Resources: Report to Congress on Interdependency of Energy and Water 2006: NREL Hydrogen Supply: Costs Estimate for Hydrogen Pathways - Scoping Analysis, 2002 Water withdrawals used in the hydrogen production chain Water Intensity (kg H 2 0/kg H 2 )

9. 9 Lawrence Livermore National Laboratory Water use, embedded in electricity generation, can significantly impact WTW hydrogen production intensity Source: Southern Illinois University. Water Use Benchmarks for Thermoelectric Plants. 2006 Current average of U.S. withdrawal Typical withdrawal rates for new plants Water intensity has been dramatically reduced with adoption of new power plant cooling technologies

10. 10 Lawrence Livermore National Laboratory Water Cost : Management and water treatment Source: EPRI Use of Degraded Water Sources as Cooling Water in Power Plants. 2003

11. 11 Lawrence Livermore National Laboratory No single number captures the value of water: There are several constituencies and stakeholders UN Department of Economic and Social Analysis, 2003 Industry operates here Water managers operate here Judges operate here

12. 12 Lawrence Livermore National Laboratory Framework for Hydrogen-Water (H2-W) impacts: Scorecards for regional assessments Scorecard for each region : A rank ordering of preferred technologies based on regional conditions Score attributes are quantitative values built specifically around regional factors, addressing the issues associated with potential changes.

13. 13 Lawrence Livermore National Laboratory Measures for ranking alternatives are derived from hydrogen market economics and regional economics Marginal Cost of Recycling water (i.e. Cost to upgrade plant to lower water intensity) Shadow price of water (i.e. Willingness to pay for incremental increase in water consumption at a given production level) Operational EfficiencyMarket Efficiency Regional Impacts Opportunity cost of water for hydrogen production vs. personal, environmental, and social uses Reliable Water Changes in water quantity and quality across seasons, years, decades. Direct Cost Indirect Cost Inside the PlantOutside the Plant

14. 14 Lawrence Livermore National Laboratory Water cost curves could add insight into when to make transition to centralized H2 production? Saline Water (Qij,Pij) Contaminated ground water (Qij,Pij) Municipal Water (Qij,Pij) Agricultural return water (Qij,Pij) Degraded water (Qij,Pij) i = region j = year Saline Water Contaminated ground water Municipal Water– Agricultural return water For each I and j Q P ForecourtCentralized Degraded water

15. 15 Lawrence Livermore National Laboratory Conclusions: Adoption of hydrogen as fuel could potentially have significant impact on water resources Choice of technologies can have big impact on water impacts Current trend in water intensity in electric power industry is downward Adoption rates of hydrogen economy may be biased by regional water constraints