WE-NET Home Page/Summary of Annual Reports 1997

3.3 National-level energy estimation and assessment

3.3.1 R&D Goals

Hydrogen energy is expected to play an important role in a future energy system when many technologies related to hydrogen energy are combined effectively to constitute "hydrogen economy." This suggests that system analysis from an energy system point of view is indispensable to get plausible perspectives on commercialization of the technologies under development in the WE-NET project. The goal of this study is to draw a country-level perspective on production, transportation, and consumption of hydrogen energy. To achieve the goal, simulation studies on future energy systems are to be executed to assess their potential economic and environmental impacts.

The target of the research in fiscal year 1997 is to gain perspectives of hydrogen economy that is consistent with the results of "Global Network Study" conducted until the last year. The effects of external factors such as energy price, environmental constraints and characteristics of hydrogen utilization technologies on potential market penetration of hydrogen are examined through simulation studies with the MARKAL.

3.3.2 Results in fiscal year 1997

(1) Results of the Preceding Years

The study depends on the MARKAL (MARKet ALlocation) model, which has been developed by Brookhaven National Laboratory in the USA and the other organizations under an international research project. The model optimizes energy flow of a country taking into account competition among various energy sources and energy technologies; its input data are energy demand, available primary energy, performance and expected life of energy technologies, etc. The modifications -- e.g., extension the planning horizon, incorporation of hydrogen related technologies -- have been made on the model to facilitate the study on WE-NET.

Simulation studies were conducted on the input data obtained by extending the data of IEA/ETSAP (Energy Technology Systems Analysis Programme) Annex VI over the 21st century. Sensitivity analyses were also carried out on the parameters as hydrogen cost, price of fossil fuel, nuclear power capacity, and reduction measures for carbon dioxide emission (including carbon tax).

The study revealed that cut-down of hydrogen cost was indispensable to promote wide use of imported hydrogen. The study also showed that measures for reducing carbon dioxide emission gave fair influence on the market penetration of hydrogen although the influence was less significant than that of hydrogen cost.

(2) Results In Fiscal Year 1997

a) Major assumptions for the study

Energy flow in an energy system and market penetration of imported hydrogen are examined for the input data that are consistent with the results of "Global Network Study". Although the input data basically resorts to the assumptions in IEA/ETSAP, the followings are modified in accordance with the results of "Global Network Study":

Two kinds of hydrogen -- that is, hydrogen produced with hydraulic power and photovoltaic power in foreign countries -- are considered. Hydraulic and solar hydrogen is assumed to become available in the years 2024 and 2050, respectively. The reference price of hydraulic and solar hydrogen is $29.6/GJ (14yen/103kcal) and $56.5/GJ (27yen/103kcal), respectively; the price depends on the results of a conceptual design. Available amount of hydrogen is also assumed considering the results of "Global Network Study."
Since "Global Network Study" gives results on international flow of fossil fuel and its price, input data on the price is consistently assumed in this study.
Market penetration, breakeven cost, and construction of hydrogen demand are discussed in the following.

b) Potential market penetration of hydrogen

Future supply-and-demand balance of energy sources including hydrogen is analyzed through simulation studies for a variety of scenarios. Many future scenarios are studied because much uncertainty is inevitable in this kind of a long-term study. The scenarios assume variations in the external factors such as fossil fuel price, nuclear power capacity, reduction measure of carbon dioxide, and hydrogen price as shown in table 3-3-1.

Figure 3-3-1 exhibits the variations of the amount of imported hydrogen in the low hydrogen price scenario and low nuclear capacity scenario; both scenarios are selected as a representative in which much hydrogen is imported. Figure 3-3-2 shows the results for varying reduction measures of carbon dioxide. These figures reveal:

If hydrogen price is expected to get lower enough, imported hydrogen has potential to be introduced in the twenty twenties and to be increasingly utilized in the succeeding years.
If supply-demand-balance is tighter due to, for example, severer constraint on nuclear power capacity, the amount of imported hydrogen is to be expanded irrespective of hydrogen price.
Figure 3-3-2 shows that the reduction measures for carbon dioxide assumed here affect market penetration of hydrogen less than hydrogen price does.
The study reveals that market penetration of hydrogen is also increased if forecasted price of fossil fuel gets higher.
Fig. 3-3-3 Breakeven price of hydrogen.

c) Breakeven cost of hydrogen

Figure 3-3-3 depicts breakeven cost of hydrogen obtained by examining the above-mentioned simulation studies. The figure shows:

Hydrogen price has to be put down from its conceptual design value in order to compete with other energy sources.
If hydrogen price reaches less than $15/GJ in the year from 2030 to 2050, market penetration expands in many scenarios such as those assuming strict policy on carbon dioxide emission, severe constraint on nuclear power expansion, etc.
If study horizon extends to the end of the coming century, market penetration of hydrogen has a possibility to get large even if the price exceeds $20/GJ .

d) Construction of hydrogen demand

The computational results reveal:

Promising technologies for hydrogen utilization are hydrogen turbine, mixture to town gas (hythane), and hydrogen vehicles. In particular, hydrogen turbine and hythane are introduced in many scenarios.
Hydrogen vehicles are introduced in a relatively small number of scenarios because of keen competition with the other types of automobiles. However, hydrogen vehicle also has a potential to be introduced earlier than the other hydrogen utilization technologies because of possible shortage of transportation fuel in the future; achieving competitive performance of the hydrogen vehicles is prerequisite to the introduction.
Concerning hydrogen turbine and hythane, characteristics (efficiency and cost) make small influence on their market penetration if hydrogen energy remains economical compared with the other competing energy sources. On the other hand, assumptions on the characteristics of hydrogen vehicles make larger impact on its penetration.
Sensitivity of changes in assumed characteristics of hydrogen turbine, hythane, and hydrogen automobiles are shown in Table 3-3-2, respectively.

3.3.3 Reseach plan for fiscal year 1998

Market penetration, breakeven price, and construction of hydrogen demand will be examined through additional simulation studies on the scenarios considering recent changes in energy circumstances caused by COP III, etc. Comprehensive summary of the study results will be also pursued.