H2POWER: Development of a methodology to calculate life cycle cost of small and medium-scale hydrogen systems

At this time, hydrogen-based power plants and large hydrogen production facilities are capital intensive and unable to compete financially against hydrocarbon-based energy production facilities. An option to overcome this problem and foster the introduction of hydrogen technology is to introduce small and medium-scale applications such as residential and community hydrogen refueling units. Such units could potentially be used to generate both electricity and heat for the home, as well as hydrogen fuel for the automobile. Cost modeling for the integration of these three forms of energy presents several methodological challenges. This is particularly true since the technology is still in the development phase and both the financial and the environmental cost must be calculated using mainly secondary sources. In order to address these issues and aid in the design of small and medium-scale hydrogen systems, this study presents a computer model to calculate financial and environmental costs of this technology using different hydrogen pathways. The model can design and compare hydrogen refueling units against hydrocarbon-based technologies, including the “gap” between financial and economic costs. Using the methodology, various penalties and incentives that can foster the introduction of hydrogen-based technologies can be added to the analysis to study their impact on financial cost.