Many plants use small to medium volumes of hydrogen for semiconductor manufacturing, materials processing, generator cooling, chemical production, and other applications. Hydrogen is highly valued for its extremely low density, high thermal conductivity and powerful chemical reducing properties. Until recently, small volume users had few supply options other than storing compressed or liquefied hydrogen. Technological advances now allow users to generate high purity hydrogen on-site economically as needed.
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In addition to its industrial uses, hydrogen is being considered as a fuel for vehicles, home electricity production and portable power applications,ranging from cell phones to portable generators. As a fuel, hydrogen is unique in that it can be processed in a fuel cell to make electricity without combustion, yielding only water vapor and a small amount of waste heat as byproducts. Fuel cells operate at about twice the efficiency of combustion devices (such as an engine generator) because they waste less energy as heat. Even when fueling a burner or internal combustion engine, hydrogen combustion yields no pollution other than part-per-billion levels of nitrogen oxides.
Hydrogen is the most abundant element in the universe, and the most abundant reservoir of terrestrial hydrogen is the oceans. The earliest hydrogen supply method,splitting water molecules electrolytically,makes highly pure hydrogen, at large or small scale, by using electricity from any source from nuclear to coal to solar photovoltaic to wind. Electrolysis directly from sunlight can position hydrogen as a possible motor fuel,a possibility for truly renewable energy. While it is highly valued for its simplicity, electrolysis has been a niche production technique.
Most of the hydrogen used by industry is not made from water, but from reacting the methane in natural gas with water vapor to produce hydrogen and carbon dioxide, which are then separated. The driving force for this reaction is heat generated by burning some of the natural gas. This technique has been favored over electrolysis for large industrial applications because it uses low-cost natural gas as the energy source instead of valuable and often expensive electricity.
Generally, only large chemical plants split natural gas to make hydrogen. Trucks or pipelines then transport the gas to users. The total cost of delivered hydrogen includes the costs of production, compression or liquefaction, and delivery. Historically, trucking hydrogen has been less expensive than making hydrogen on-site with electrolysis. The technology to produce small amounts of highly purified hydrogen cost-effectively onsite using a natural gas feedstock has not proved feasible because the required purification steps do not scale down in a cost-effective manner.
The use of natural gas as the primary hydrogen feedstock is being challenged by new circumstances. Some of these include:
- The rapidly changing deregulated electricity market, which is making electrical power more cost-effective for many users.
- Rapidly increasing distribution costs for trucked hydrogen because of fewer available drivers, crowded roads, limited customer delivery hours, and increased insurance costs.
- Hydrogen is a difficult product to transport cost-effectively. A 40,000-lb. trailer of the compressed gas contains only about 600 pounds of hydrogen. Even a trailer with 13,000 gallons of liquefied hydrogen transports less than 8,000 pounds of usable cargo.
- Heightened concerns about flammable gas storage and delivery of hazardous materials make it harder to store hydrogen inventory.
- Calls for reduced carbon dioxide emissions, which are significant with natural gas but potentially zero with electrolysis.
- Geographically isolated locations.
- When very high purity gas is required.
- Inexpensive electricity is available.
- Very small quantities of gas are required.
The cost of electrolysis is easily understood. It includes the cost of equipment purchase, installation (amortization plus interest), equipment maintenance, electricity and water. Because hydrogen is made on-site, there is no delivery cost. Even so, until recently, the total still exceeded the cost of delivered hydrogen.
Advances in standardization, simplification, and packaged design have made electrolysis a more cost-effective technique. Equipment is also more compact, easier to operate and virtually maintenance-free,which reduces the complexities of installation, operation and maintenance. These changes have made onsite electrolytic hydrogen generation an attractive option for the end-user.