Sustainable Development Business Case Report
Renewable Fuel — Hydrogen
SD Business Case™
Version 1 • November 2006
Renewable
Fuel
Energy Exploration
and Production
Electrolysis
Plasma
Dissociation
Power Generation
Hydrogen
Energy Utilization
Transportation
Autothermal
Reformation
Thermal Catalytic
Dry Reformation
Byproduct
Hydrogen Recovery
Steam Methane
Reformation
Agriculture
Forestry
Waste Management
BC_RFH_V7.12.1_EG_061123
Gasification and
Chemical Production
Hydrogen
Purification
Sustainable Development Business Case Report*
Renewable Fuel — Hydrogen
SD Business Case™ Version 1 • November 2006
Energy Exploration
and Production
Renewable
Fuel
Electrolysis
Plasma
Dissociation
Hydrogen
Autothermal
Reformation
Thermal Catalytic
Dry Reformation
* Copyright © 2006 by Canada Foundation for Sustainable Development Technology (“SDTC™”). All Copyright Reserved. Published in Canada by
SDTC™. No part of the SD Business CaseTM may be produced, reproduced,
modified, distributed, sold, published, broadcast, retransmitted, communicated
to the public by telecommunication or circulated in any form without the prior written consent of SDTC, except to the extent that such use is fair dealing
for the purpose of research or private study (unpublished, or an insubstantial
copy). To request consent please contact SDTC. All insubstantial copies for
research or private study must include this copyright notice.
The SD Business Case™ is provided “as is” without warranty or
representation of any kind. Use of the information provided in the SD
Business Case is at your own risk. SDTC does not make any representation
or warranty as to the quality, accuracy, reliability, completeness, or timeliness
of the information provided in the SD Business Case.
Sustainable Development Technology Canada™, SDTC™,
SD Business Case™ and SDTC STAR™ are trade marks of Canada
Foundation for Sustainable Development Technology.
Byproduct
Hydrogen Recovery
Steam Methane
Reformation
Gasification and
Chemical Production
Hydrogen
Purification
Table of Contents
1
Overview :  SD Business Case™ Plan and the SDTC STAR™ Process. ......................... 1
1.1
The SD Business Case™ PLAN........................................................................................................................................................... 1
1.1.1 Primary Audience......................................................................................................................................................................... 1
1.1.2 The SDTC STAR™ Tool.................................................................................................................................................................. 2
1.1.3 Sectors to be assessed by the SD Business Case™...................................................................................................... 2
Figure 1 :  SD Business Case Investment Roadmap . ........................................................................................................................................... 3
1.1.4 Investment Categories to be Analysed............................................................................................................................ 4
1.1.5 Conclusions Framework............................................................................................................................................................ 4
1.2
The SDTC STAR™ Process :  Data Collection and Analysis. ...................................................................................... 4
Figure 2 :  The SDTC STAR Process............................................................................................................................................................................. 5
1.2.1 Assessment Descriptions.......................................................................................................................................................... 6
Figure 3 :  SDTC Funding Support............................................................................................................................................................................. 7
1.2.2 Output Structure........................................................................................................................................................................... 8
Figure 4 :  Sample Technology Plot.......................................................................................................................................................................... 9
1.3
Conclusions and Investment Priorities................................................................................................................................ 11
2
Executive Summary : Hydrogen Production And Purification. ................................. 13
2.1
About Hydrogen. ..................................................................................................................................................................................... 13
2.1.1 The Hydrogen Market. ............................................................................................................................................................. 13
2.1.2 Sustainability and Risk. .......................................................................................................................................................... 13
2.2
A Vision For The Future...................................................................................................................................................................... 13
2.3
Investment Priorities. ......................................................................................................................................................................... 14
2.3.1 Near Term Priorities. ................................................................................................................................................................. 14
2.3.2 Long Term Priorities.................................................................................................................................................................. 15
2.4
National Strategy Implications.................................................................................................................................................. 15
Figure 5 :  Elements of a Hydrogen Energy System .............................................................................................................................................. 16
3
Industry Vision/Background....................................................................................................................................... 17
3.1
General Description.............................................................................................................................................................................. 17
Figure 6 :  Canadian Hydrogen Production by Segment........................................................................................................................................ 17
3.1.1 “Big” Hydrogen And “Small” Hydrogen ......................................................................................................................... 17
Figure 7 :  “Small” Hydrogen Production in Canada by Segment.......................................................................................................................... 18
3.2
Overview Of Hydrogen Products and Processes.......................................................................................................... 19
Table 1 :  Major Hydrogen Production Processes................................................................................................................................................... 19
3.2.1 Electrolysis...................................................................................................................................................................................... 20
3.2.2 Plasma Dissociation4. ............................................................................................................................................................... 20
3.2.3 Autothermal Reformation. ................................................................................................................................................... 20
3.2.4 Thermal Catalytic Dry Reformation................................................................................................................................. 20
3.2.5 Byproduct Hydrogen Recovery........................................................................................................................................... 20
3.2.6 Steam Methane Reformation . ........................................................................................................................................... 20
3.2.7 Gasification and Chemical Production........................................................................................................................... 21
3.2.8 Hydrogen Purification . ........................................................................................................................................................... 21
3.3
Hydrogen Vision . .................................................................................................................................................................................... 22
3.3.1 Industry Vision for Hydrogen Development in Canada........................................................................................ 23
3.3.2 SDTC Stakeholder Vision for Hydrogen Development in Canada.................................................................... 24
Table 2 :  Vision for Hydrogen Production in Canada............................................................................................................................................. 24
3.4
Hydrogen Market Identification10........................................................................................................................................... 25
3.5
Market Segmentation........................................................................................................................................................................ 25
Figure 8 :  Coal & Natural Gas Price Histories......................................................................................................................................................... 26
3.6
Customer Requirements. ................................................................................................................................................................. 27
3.6.1 Large Captive Industrial Hydrogen Market................................................................................................................. 28
3.6.2 Byproduct Hydrogen Market. .............................................................................................................................................. 29
3.6.3 Merchant Hydrogen Industrial Market.......................................................................................................................... 29
3.6.4 Non-Conventional Hydrogen Systems Market. ......................................................................................................... 29
Table 3 :  Fuelling Station Size and On-site Hydrogen Production Requirements*.............................................................................................. 30
Table 4 :  Summary of Major Fuel Constituents Impact on PEM/PEFC, AFC, PAFC, MCFC, and SOFC.................................................................. 30
3.7
Market Linkages To Hydrogen Production Technologies . .................................................................................. 31
Table 5 :  Linking Hydrogen Production Technology to Customer Requirements................................................................................................. 32
Table 6 :  Market Linkages to Production Technology............................................................................................................................................ 33
4
Needs Assessment And Analysis. .......................................................................................................................... 34
4.1
Technology-Based Needs................................................................................................................................................................. 34
Figure 9 :  Hydrogen Production Needs ­– Electrolysis from Conventional Sources.............................................................................................. 35
Figure 10 :  Hydrogen Production Needs – Electrolysis from Renewable Sources............................................................................................... 35
Figure 11 :  Hydrogen Production Needs ­– Plasma Dissociation.......................................................................................................................... 36
Figure 12 :  Hydrogen Production Needs ­– Autothermal Reformation................................................................................................................ 37
Figure 13 :  Hydrogen Production Needs ­– Thermal Catalytic Dry Reformation.................................................................................................. 37
Figure 14 :  Hydrogen Production Needs ­– By-product Hydrogen Recovery....................................................................................................... 38
Figure 15 :  Hydrogen Purification Needs............................................................................................................................................................... 38
4.1.1 Combined Hydrogen Technology Summary................................................................................................................ 39
Table 7 :  Combined Technology Survey................................................................................................................................................................. 39
4.2
Non-Technological Needs................................................................................................................................................................ 41
4.2.1 Issue :  Achieve cost‑effectiveness for on-site hydrogen production........................................................... 41
4.2.2 Issue :  Achieve reduction in carbon emissions by industrial processors.................................................... 42
4.2.3 Issue :  Achieve benefits by exploiting existing infrastructure and technology.................................... 42
4.2.4 Issue :  Achieve benefits in large-scale plants by exploiting small-scale technology.. ...................... 43
4.2.5 Issue :  Fast track technologies to align with pending initiatives/ regulations. .................................... 43
4.2.6 Issue :  Develop distribution infrastructures that support Hydrogen fueling solutions. .................. 44
4.2.7 Issue :  Achieving effective, efficient hydrogen production equipment/ processes............................ 44
4.3
Technology Assessment Summary.......................................................................................................................................... 45
4.3.1 Electrolysis...................................................................................................................................................................................... 45
4.3.2 Plasma Dissociation41. ............................................................................................................................................................. 46
4.3.3 Autothermal Reformation. ................................................................................................................................................... 46
4.3.4 Thermal Catalytic Dry Reformation................................................................................................................................. 46
4.3.5 Byproduct Hydrogen Recovery .......................................................................................................................................... 47
4.3.6 Hydrogen Purification. ............................................................................................................................................................ 47
4.4
Market Assessment Summary. ................................................................................................................................................... 48
4.4.1 Market Potential......................................................................................................................................................................... 48
4.4.2 The U.S. Hydrogen Market..................................................................................................................................................... 49
4.4.3 The Canadian Hydrogen Market........................................................................................................................................ 49
4.4.4 Canadian Market Potential................................................................................................................................................... 49
4.4.5 Time to Market and Economic Efficiency...................................................................................................................... 50
Table 8 :  Time to Market and Economic Efficiency Scores.................................................................................................................................... 50
4.5
Sustainability Assessment Summary. .................................................................................................................................. 50
4.5.1 Economic. ........................................................................................................................................................................................ 51
Figure 16 :  Costs of Production ($ per GJ H2 Produced), Various Technologies).................................................................................................. 51
Figure 17 :  Total Costs ($ per GJ H2 Produced, Valuing CO2 Emissions at $15/tonne) . ..................................................................................... 52
4.5.2 Economics of Development in Canada........................................................................................................................... 52
4.5.3 Environmental. ............................................................................................................................................................................ 52
Figure 18 :  Environmental Impact (kg CO2 per GJ H2 Produced), Various Technologies.................................................................................... 53
4.5.4 Economic and Environmental Comparison of H2 production in Canada. ................................................... 54
Figure 19 :  Current H2 Production Cost, Emissions, and Volume in Canada, Various Technologies...................................................................... 54
4.6
Business Assessment........................................................................................................................................................................... 55
4.6.1 Risk Factors. ................................................................................................................................................................................... 55
Figure 20 :  Overall Risk Rating............................................................................................................................................................................... 55
4.6.2 Market............................................................................................................................................................................................... 55
4.6.3 Financial. ......................................................................................................................................................................................... 55
4.7
Risk Mitigation. ........................................................................................................................................................................................ 56
4.7.1 Technological................................................................................................................................................................................ 56
4.8
SDTC Experience....................................................................................................................................................................................... 56
4.8.1 Statements of Interest Responses.................................................................................................................................... 56
Table 9 :  SOIs by Technology Category................................................................................................................................................................... 56
5
Investment Priorities............................................................................................................................................................. 59
5.1
Near-Term Technology Investments...................................................................................................................................... 59
5.1.1 The Near Term Market. ............................................................................................................................................................ 59
5.1.2 Near Term Investment Priorities. ...................................................................................................................................... 59
5.2
Long-Term Technology Investments. .................................................................................................................................... 60
5.2.1 The Long Term Market............................................................................................................................................................. 60
5.2.2 Long Term Investment Priorities....................................................................................................................................... 60
5.3
National Strategy Impacts. ............................................................................................................................................................ 61
6
Acknowledgements................................................................................................................................................................. 62
6.1
SDTC Thanks the Following Contributors........................................................................................................................... 62
7
Appendices. .......................................................................................................................................................................................... 63
7.1
Appendix A :  Market Identification Matrix...................................................................................................................... 63
Table 10 :  Market Identification Matrix.................................................................................................................................................................. 63
7.2
Appendix B :  Hydrogen Production Technologies – Estimate Of Costs And Emissions............. 64
Table 11 :  Hydrogen Production Technologies – Estimate of Costs and Emissions............................................................................................. 65
7.3 Appendix C :  Notes And References To Table 11.......................................................................................................... 66
Table 12 :  Steam Methane Reforming (Large Scale) ........................................................................................................................................... 66
Table 13 :  Steam Methane Reforming (Large Scale with Sequestration) . ......................................................................................................... 67
Table 14 :  Steam Methane Reforming (Small Scale) . ......................................................................................................................................... 67
Table 15 :  SMR Small Scale and Purification......................................................................................................................................................... 68
Table 16 :  Hydrocarbon Gasification...................................................................................................................................................................... 68
Table 17 :  Hydrocarbon Gasification with Sequestration...................................................................................................................................... 69
Table 18 :  Autothermal Reformation .................................................................................................................................................................... 69
Table 19 :  Autothermal Reformation (Small Scale and Purification)................................................................................................................... 70
Table 20 :  Electrolysis – Coal Thermal................................................................................................................................................................... 70
Table 21 :  Electrolysis – Nuclear – Notes and Reference..................................................................................................................................... 71
Table 22 :  Electrolysis –Grid Mix............................................................................................................................................................................ 71
Table 23 :  Electrolysis – Wind with Grid Mix Back-up......................................................................................................................................... 72
Table 24 :  Electrolysis – Wind Power Only............................................................................................................................................................ 72
Table 25 :  Electrolysis – Solar Power..................................................................................................................................................................... 73
Table 26 :  Solar Hydrogen Reforming (Small and Large Scale)............................................................................................................................ 73
Table 27 :  Cost of Production and Emissions from Solar Hydrogen Dry Fuel Reforming.................................................................................... 73
Table 28 :  Plasma Dissociation............................................................................................................................................................................... 74
Table 29 :  By-product Hydrogen Capture (Large Scale)....................................................................................................................................... 74
Table 30 :  By-product Hydrogen Capture (Small Scale)...................................................................................................................................... 75
8
Endnotes. ................................................................................................................................................................................................. 76
8.1
Comprehensive listing of note references........................................................................................................................ 76
1
Overview :  SD Business Case™ Plan and the SDTC STAR™ Process
Sustainable Development Technology Canada (SDTC) is a foundation created by the Government of Canada that operates a $550 million fund to support
the development and demonstration of clean technologies - solutions that address issues of climate change, clean air, clean water, and clean soil to deliver
environmental, economic and health benefits to Canadians.
SDTC is pleased to present this Hydrogen Production and Purification Investment Report, which is one in a series on the current state of
sustainable development and future investment priorities in Canada.  This report is the result of collaboration from a wide range of stakeholders.  It is
based on reports, studies, and research findings by various industry associations and government initiatives.  We hope you find the information useful, and
look forward to working with you as we further sustainability in Canada.
1.1
The SD Business Case™ PLAN
SDTC invests in areas where Canada has a strong capability, and where SDTC can provide the most value.  To that end, SDTC has developed a
comprehensive evaluation and decision-support process that investigates various technologies, their markets, the needs they address, and the barriers they
must overcome to achieve market success.
The SD Business Case is founded on the concept of creating a common vision of market potential, as described by those in the industry.  It incorporates
their ideas, expectations and knowledge into a single statement of purpose, so that the outcomes are relevant, pragmatic, and realizable.  There are
many different approaches that could be used to analyze individual technologies or economic sub-sectors.  Each stakeholder group has unique
challenges and expectations, which are expressed and analyzed to suit their own needs.  With this in mind, the SD Business Case has been developed
to provide a common benchmark for all participants, as well as a consistent and reliable means of comparing technologies in a number of diverse and
expanding areas. The SD Business Case serves as a guide to SDTC for future investment priorities as well as a means of collecting non-technology input
that may be useful in policy development.
Work on the SD Business Case could not have been done without the participation and guidance of opinion leaders and experts throughout the
country.  Our philosophy at SDTC is to work with and through others, and we thank all these individuals for their assistance to SDTC and contributions to
the success of the SD Business Case.
1.1.1 Primary Audience
The primary audiences for the SD Business Case include :
Industry Stakeholders – to help them identify key sectoral challenges and priority areas for potential future investment, and to assist in
partnering with SDTC.
Canadian Researchers – to assist in providing direction and focus for successful future endeavours including indicators of the key challenges to
be addressed in priority technology areas as they enter or exit the development and demonstration stages of the commercialization process.
Relevant Government Departments – to provide a comprehensive decision making framework to assist with technology investment
priorities to its key stakeholders and funders.  The SD Business Case may also be used to help identify and manage technological issues that are
beyond SDTC’s immediate mandate, as well as non-technical market barriers that can be addressed by other players, policies, funding sources, and
financial instruments.
Other Stakeholders – to provide a clear and consistent information base on relevant technology sectors, and an open dialogue on nontechnology issues facing companies in a number of Canadian economic sectors.
SDTC – to highlight areas of priority attention for future investment focus and investigation.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 1.1.2 The SDTC STAR™ Tool
The Sustainable Technology Assessment Roadmap (STAR) is an iterative analytical process that combines data, reports, stakeholder input, and
industry intelligence in a common information platform.  It uses a series of criteria selection screens to assess and sort relevant information from a variety
of sources.  The output is a series of Investment Reports that highlight key technology investment opportunities for each sector under study.
1.1.3 Sectors to be assessed by the SD Business Case™
The overall SD Business Case project focuses on seven of Canada’s primary economic sectors.1 An illustrated version of the full project and master
roadmap, Figure 1, is provided on p.3 to highlight the selected areas of study.
Energy Exploration & Production – including Clean Conventional (oil and gas) and Renewable Fuels (bio-fuels, hydrogen production and
purification).  Note that Renewable Electricity and Renewable Fuels are linked as they share a number of technological platforms.
Power Generation – including Clean Conventional and Renewable Electricity Generation (wind, solar PV, bio-electricity and stationary
fuel cells).
Energy Utilization – improving the effectiveness of the application of current end-use technologies in industrial, commercial and residential
sectors (i.e.  improving energy efficiency).
Transportation – including Systems Efficiency and Fuel Switching.  Also note that Fuel Switching and Renewable Fuels are linked as they share
a number of technological platforms.
Agriculture – addressing solid waste or Biomass conversion to Fuels and eliminating air and water contaminants produced by manure. 
Forestry and Wood Products – addressing development of wood waste recycling technologies to harness energy resource potential, reduce
emissions and improve productivity and profits.
Waste Management – addressing the various forms of waste management from municipal (residential and commercial) and primary and
secondary industrial sources.
Note:
Some of these sectors may be covered through work in other sectors. For example, many Agriculture and Forestry technologies are common to
Renewable Fuels in the Energy Exploration and Production Sector.
Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Figure 1 :  SD Business Case Investment Roadmap
Economic Sector
Technology Sub-sector
Segments
Energy
Exploration &
Production
Products & Processes
Electrolysis
Hydrogen
Power
Generation
Renewable
Fuel
Plasma
Dissociation
Bio Fuel
Autothermal
Reformation
Energy
Utilization
Thermal Catalytic
Dry Reformation
Transportation
Clean
Conventional
Fuel
Agriculture
Forestry
Byproduct
Hydrogen Recovery
Steam Methane
Reformation
Gasification and
Chemical Production
Hydrogen
Purification
Waste
Management
SD Business Case ™ is a trade mark of Canada Foundation for Sustainable Development Technology.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 1.1.4 Investment Categories to be Analysed
The SD Business Case provides conclusions in three primary categories of investment opportunities :
• Short Term Investment Priorities – These are investments that could be made within the next 3-5 years that could have a direct and
positive impact in the next 6-8 years.
• Long-Term Investment Priorities – These are early stage investments that could be made within the next 3-5 years but where the
environmental impacts are realized over the longer term (greater than 8 years).
• National Strategy Impacts – Although it is not in SDTC’s mandate to advance policy initiatives, over the course of developing the
SD Business Case a number of policy-related enablers and barriers to the development and implementation of sustainable technologies have
been identified.  A summary of these issues and their potential impact on Canada’s ability to meet its environmental goals is included in the
analysis.
1.1.5 Conclusions Framework
The SD Business Case provides a consistent and fully referenced set of recommendations and investment indicators that can be used by stakeholders
to support possible investment opportunities and priorities.  It does not produce a single number, answer or result as the range of technologies and
the interpretation of their future potential is too large and complex to simplify to a single solution.  The output should only be viewed, and can only be
understood, within the context of the information collected during the business case development process.  Contributors to the business case have made
every effort to be as objective, comprehensive and analytical as possible.  Although based on rigorous analysis of the best available information, the
SD Business Case serves only as a guide to future investment priorities; it is not to be used as a definitive tool to accept or reject individual projects or
technologies.  Final decisions on whether SDTC will invest will be made by taking into account all relevant conditions and requirements.
1.2
The SDTC STAR™ Process :  Data Collection and Analysis
The STAR process uses a “vision-based, needs-driven” approach : it begins with an industry vision of where the sector is anticipated to be at some
defined point in the future, and then identifies the most critical requirements that must be satisfied in order to achieve the stated vision.  By taking into
account the technological, economic, political, and societal forces that act upon a sector, the STAR process can create a reasonably accurate picture of the
market.  It can then assess the relative strengths, weaknesses and emerging opportunities of each market sector.  Finally, it calculates the gap between the
current state of the sector and the vision, and identifies the specific things that need to be done in order to fill the gap and achieve the vision.
The lists of needs are applied to each technology area, where they are rated against a set of economic (i.e.  cost relative to conventional sources at time of
market entry) and environmental criteria specific to SDTC’s mandate.  Since some of the issues surrounding the successful commercialization of emerging
technologies are non-technical in nature (i.e.  policy-related issues), the STAR process captures and prioritizes them to create a complete investment
picture for integration into the final Investment Report.
The above process is repeated for each area of study, until a complete picture of the market emerges to the satisfaction of SDTC and the key
market stakeholders.
Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Figure 2 :  The SDTC STAR Process
Information Input
Stakeholder Input
SDTC SOI’s
Market Data
Reports & Studies
Industry Vision
Needs Assessment
Government Depts. & Agencies
Industry
Entrepreneurs
NGO’s
Academia
Financial Community
Technical
Non-Technical
Detailed Analysis
Market
Sustainability
Technology
Investment Report
Market
Sustainability
1. Input :
The STAR process starts of with a “vision-based,
needs-driven” approach: it begins with an
industry vision of where the sector is anticipated
to be at some defined point in the future, and
then identifies the most critical requirements that
must be satisfied in order to achieve the
stated vision.
2. Assessment :
By taking into account the technological, economic,
political, and societal forces that act upon a sector, the
STAR process can create a reasonably accurate picture
of the market. It can then assess the relative strengths,
weaknesses and emerging opportunities of each
market sector. Finally, it calculates the gap between
the current state of the sector and the vision, and
identifies the specific things that need to be done in
order to fill the gap and achieve the vision.
3. Analysis :
The lists of needs are applied to each technology area,
where they are rated against a set of economic (i.e. cost
relative to conventional sources at time of market entry)
and environmental criteria specific to SDTC's mandate.
4. Report :
Since some of the issues surrounding the successful
commercialization of emerging technologies are non-technical
in nature (i.e. policy-related issues), the STAR process captures
and prioritizes them to create a complete investment picture for
integration into the final Investment Report.
Technology
The above process is repeated for each area of study, until a complete picture of the market emerges to the satisfaction of SDTC and the key market stakeholders.
SDTC STAR™ is a trade mark of Canada Foundation for Sustainable Development Technology.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 1.2.1 Assessment Descriptions
Once the market vision has been accepted, the economic sectors and their associated technologies are assessed through the following four screens :
1.2.1.1 Market
This focuses on the ability of the market to carry the emerging technologies that are currently at the development and demonstration stages.  It identifies
what needs to be done in order to maximize the application and acceptance of the technology, with a focus on financial and economic performance.
The main components of the assessment are;
• General Market Description – an overview of the sector under consideration, with a comparison to conventional or competing sectors.
• Market Potential – an indication of the immediate growth potential for the sector under consideration.  The data is drawn from industry
literature and stakeholder feedback, and shows the theoretical and realizable potential as well as equipment installed costs (where
available).  Using linear extrapolation, it then estimates the anticipated potential over the next three to five years.  Due to the rapidly evolving
nature of emerging markets, it is necessary to conduct this assessment a number of times as conditions change.  The primary purpose is to
understand the gap between today’s situation and the vision for each sub-sector.  This helps to determine the required rate of innovative
developments and the amount and timing of capital placements.
There are three Market Assessment criteria used in the STAR process;
• Stage of Investment – An assigned value (on a scale of 1-10) that takes into account market barriers, the amount of time expected for the
technology to achieve full commercialization, market infrastructure issues and impediments, and current state of codes, standards and regulations. 
• Economic Efficiency – An assigned value (on a scale of 1-10) that takes into account technology spin-off potential, product replicability and
scale-up potential, market size and dynamics, competitiveness, pricing and financing, and export potential.
• Emissions Reduction Potential – A calculated value of the difference in GHG emissions between conventional technologies and the alternative
technologies within the sub-sectors under consideration.  It is shown in megatonnes of carbon dioxide equivalent (MtCO2e) and is the amount of
CO2e expected to be reduced or displaced within the next three to five years as a consequence of commercializing the subject technologies.  Note
that GHG is a proxy used as a general indicator of emissions reductions as, for most technologies, there is a positive correlation between GHG and
other air emissions.  Exceptions (such as the inverse relationship with NOx associated with combustion-based technologies) are noted where
applicable.
The Market Assessment is conducted from the perspective of SDTC’s mandate, which is to support the development and demonstration of emerging
sustainable technologies in Canada at critical stages in the development cycle.  Specifically, SDTC is focused on those technologies that are between
prototype development and market-ready product stages.  The size and span of the blocks in Figure 3 are indicative of the relative timing and amount of
funding from various sources.
1.2.1.2 Technology
This concentrates on the technologies that need to be brought to market in order to achieve the stated vision.  There are 15 fundamental ranking criteria,
which are weighted and rolled up into two principal impact criteria :
Economic Impact : The developmental and financial issues related to a specific technology that can/will influence sector growth, technological
inter-dependencies, infrastructure improvement, and the cost of environmental improvement; and
Environmental Impact : The magnitude of the emissions reduction potential, reductions of regional environmental pollutants, the life cycle
emission returns, and the time at which these emissions reductions are most likely to occur. 
Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Figure 3 :  SDTC Funding Support
SDTC
R&D
Fundemental
Research
Product
Prototype
Development
COMMERCIALIZATION
Demonstration
Market-ready
Products
Governments
Market
Entry
Banks
Venture Capital
Industry
Angel Investors
SDTC BRIDGES THE
FUNDING GAP
SDTC’s Mandate :
The Market Assessment is conducted from the perspective of SDTC’s mandate, which is to support the development and demonstration of emerging
sustainable technologies in Canada at critical stages in the development cycle. Specifically, SDTC is focused on those technologies that are between
prototype development and market-ready product stages. The size and span of the above blocks are indicative of the relative timing and amount of
funding from various sources.
1.2.1.3 Sustainability
This section describes the impact that these technologies are likely to have on individuals, communities and regions. Each technology group is evaluated
in terms of its potential impact in three key areas :
Economic – current investment capital, company and job creation, productivity impacts;
Environmental – impacts on wildlife, air (GHG and regional pollution emissions), water and land; and
Societal – health and safety, training and education, and aesthetics and property value impacts.
1.2.1.4 Risk
This outlines the potential risks associated with the development and implementation of the technology, and are divided into three criteria :
Development Risk – will the technology work as intended?
Financial Risk – is there enough private capital to fully commercialize the technology and will it be financially viable once commercialized?
Market Risk – is there sufficient market demand and infrastructure to support the technology?
Copyright © 2006 by SDTC™
Sustainable Development Business Case 1.2.2 Output Structure
There are five categories in the output : Vision and Needs, Market Assessment, Technology Assessment, Sustainability Assessment, and Risk Assessment. 
The STAR process combines the results from these Assessments to develop the investment report conclusions.
1.2.2.1 Vision and Needs
Vision Statements are derived from the industry, typically through industry association-published statements. The statement is reviewed by key industry
stakeholders, who check for accuracy and realistic potential. The purpose is to provide focus for further discussions and analysis within the STAR process.
In the case of the upstream oil and gas industry, vision is production or output driven and measured in barrels/day or Nm3/day or MCF/day. In turn, this
production driven vision translates into environmental impacts such as GHG emissions, water and land usage under a “business as usual scenario”.
Typically, there are gaps between the actual current production capability and the envisioned target.  The magnitude of any such gaps is the primary
driver behind the analysis that follows.  For example, if the gap is very small, and the target easily achievable within the near term, then proportionally
fewer resources are applied to examine ways to bridge that gap.  If, however, the gap is very large (as is often the case), then a considerable amount of
time and resources are applied to help determine the best course of action to minimize the gap.  In these cases, therefore, the industry must consider and
apply more aggressive and/or effective means of achieving that target.  Emerging sustainable technologies are a part of the solution, and could assist
in achieving the targets set by the vision.  It is also notable from this example that, without efficiency or technology improvements, significant capital
investment would be required to achieve the target. 
1.2.2.2 Market Assessment
The Market Assessment output data is presented in a “Circle Chart,” with Stage of Investment on the X‑axis, Economic Efficiency on the Y‑axis, and
Emissions Reduction Potential on the Z-axis. 
Circle Location – In general, plots that show in the upper right-hand corner are considered attractive because they have high Economic Efficiency
and are at the optimum Stage of Investment from SDTC’s perspective.  Conversely, anything in the lower left-hand corner is considered less
attractive from an investment perspective.
Circle Size – The size of each circle represents the magnitude of the emissions difference between the base case and the alternative case.  Note
that Greenhouse Gases (expressed in CO2e) have been used as a proxy for all air-related emissions.  In instances where there is a negative
correlation amongst CO2e and other forms of emissions (for example NOx acts inversely to CO2e in many combustion processes), these will be
noted in the model or in the actual technology as it is evaluated.  The next point to note is the base case used for comparison.  The alternative can
produce more – or less – emissions than the conventional technology, depending on where in the value chain that the analysis is conducted.  For
example, the production of a new fuel can create more emissions than the production of the conventional fuel it is to replace, but the utilization
of that new fuel may create fewer emissions than the utilization of the conventional fuel.  As such, lifecycle analyses are conducted to help draw
appropriate investment conclusions.  When examining a new technology or process, the lifecycle analysis helps determine whether or not it is a
beneficial area of investment.  The individual process steps help determine where further improvements can best be made.
Circle Colour – In general, each circle represents a different sub-sector and is identified by a unique colour in order to distinguish them on
the plot.  The colour red is used exclusively to indicate negative reductions (i.e.  anything in red represents a net increase in emissions relative
to the baseline that it is being compared to).  This can occur when the emissions created by the production using the new technology, process,
or feedstock exceed the emissions created from the production using the baseline process or feedstock, resulting in a negative emission
reduction.  However, this condition may be reversed during the utilization phase  —  resulting in overall beneficial lifecycle emissions reductions.
Production vs. Utilization – In some cases, the STAR process includes two circle graphs or bar charts for each type of technology being
examined.  The inner circle (or first bar chart) represents production or upstream emissions, and is determined by calculating the difference
between the GHG emissions created through the production using the baseline technology or process and the production using the new
Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
technology.  The outer circle (or right-hand bar chart) represents utilization or downstream emissions, and is determined by calculating the
difference between the GHG emissions caused by the utilization of the baseline technology and the utilization of the new technology.  Although
utilization is not the focus of this report, it is included here in order to place the entire fuel life cycle into proper context.
Because of the variation in emission creation from one stage of the value chain to another, it is important to understand the exact location of the topic
under consideration in the value chain.
It is important to note that no investment can be placed without examining the full lifecycle cost and environmental impact, including how the inputs
may change over time, and how the production efficiency and technologies will change over time. 
By plotting the outcomes in this way it is possible to get an overall snapshot of the position and potential of each sub-sector relative to one another.
It should be noted that many of the emerging technologies have the capacity to also reduce regional pollutants (Clean Air) and other environmental
impacts (Clean Water and Land) : this information is captured within the tool, but is not illustrated separately on the market plot.  Separate plots can be
generated for these environmental aspects.
1.2.2.3 Technology Assessment
This assessment focuses on the technology plot position of each technology area.  The position of each plot is the result of the numerical ranking of
the individual technological assessments.  Each technology is mapped on a scatter graph, with Economic Impact on the X‑axis and Environmental
Impact on the Y‑axis. 
Figure 4 :  Sample Technology Plot
Environmental Impacts
HIGH
MEDIUM
LOW
MEDIUM
HIGH
Economic Impacts
Copyright © 2006 by SDTC™
Sustainable Development Business Case The closer a technology plots to the upper right hand corner, the greater it’s potential, relative to the other plotted technologies.  Technologies that are
considered a breakthrough or have a potentially disruptive impact1 are shown, in red, in the supporting scatter graph tables.  Since this is an iterative
process, the plot values change over time as new information becomes available, new technologies are developed, and renewable energy markets
continue to develop.
1.2.2.4 Sustainability Assessment
Sustainability is the cornerstone of all the assessments made in the SD Business Case.  The Sustainability Assessment extracts and highlights the
economic, environmental, and societal impacts of the emerging technologies.
Economic Impact
This is a broad set of impacts and is subdivided into :
Investment Capital : Defined as the amount of capital currently required for an investment in each technology, typically on a $CAD/installed
capacity basis.  This benchmark capital investment level is projected forward to estimate future investment level requirements.
SDTC acknowledges that future investments will be a function of economies of scale, the time value of money, and shifting investment priority
areas.  Nevertheless, this approach provides sufficient accuracy to establish relative values to conduct cost comparisons.  It also provides an estimate of the
overall magnitude of the capital investments on a national basis.
Company and Job Creation Impacts : There are two broad areas of potential employment within each sub-sector : direct employment from
equipment production, installation and operation, and indirect employment from upstream industries that may supply service and support
each sub-sector.  SDTC recognizes that job creation may not be the best indicator of economic performance, however, it is a convenient proxy for
company creation and growth.  For the purposes of simplicity, the SDTC Roadmap process focuses only on direct company/job creation.
Productivity Impacts : This is a general assessment of how successful market development of the sub-sector could affect Canadian productivity
as a whole.  This can be a significant consideration as the design and development of some sub-sectors in Canada could be labour-intensive
compared to others that rely on lower-cost imports.
Environmental Impact
There are a number of additional environmental considerations that must be taken into account beyond the immediate and visible climate change and
clean air impacts of the technologies employed.  Although some quantitative data is available, there are instances, e.g.  notably Bioelectricity, where SDTC
has been unable to locate or establish a definitive position on environmental footprint.  In the Bioelectricity example, there is ongoing debate on the most
appropriate use of biomass waste, such as, forest floor impacts, energy versus food crops, etc.  This will continue to be a challenge for the Roadmap process
moving forward, but new information is constantly emerging from both internal and external sources.  The future iterations of the process will continue to
track new findings surrounding the following areas :
Air Impacts : The potential beneficial air impacts are evaluated under GHG Emissions Reduction Potential and Clean Air Emissions
Reduction Potential.
•GHG Emissions Reduction Potential : The amount of greenhouse gases (measured as CO2e) that the technologies are expected to displace
or reduce. 
•
Clean Air Emissions Reduction Potential : The amount of air pollutants that the technologies are expected to displace or reduce.
Water Impacts : Requirements for base material provisioning, component fabrication, and production processes often mean that a significant
amount of water is stored, consumed or degraded (thermal and chemical contamination).  This section examines the technology impacts on water
quality and quantity.
10 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Land Impacts : Some technologies occupy significant amounts of land while others could use sizeable land resources.  This section examines land
use issues, and provides a brief comparison of each.
Wildlife Impacts : Sustainable technologies, while for the most part benign, could have some negative impacts on local wildlife.  Such impacts
are noted and compared where applicable.
Societal Impact
From a sustainability perspective, technologies must not only be environmentally benign but must also address the educational, job growth, and property
value needs that can arise as a result of their use.  Impact on individuals and communities are also assessed in the following areas :
Health & Safety Impacts : The health and safety of local residences could possibly be affected by emerging technologies.  While these impacts
are not expected to be large, they are nonetheless identified where applicable.
Training & Education Impacts : While there may be common training and education requirements across the sub-sectors analyzed, the design,
installation and operational complexity of each specific system would be assessed individually.
Aesthetics & Property Value Impacts : There are concerns (both perceived and real) that accompany the potential installation of some
technologies.  Where applicable, these issues are identified.
1.2.2.5 Risk Assessment
Each of the selected sub-sectors must manage various associated levels and types of risks throughout the course of becoming fully commercialized.  There
are two main types of risk considered :  the non-technology related risks which are dependent upon political, financial and regulatory issues that may
directly or indirectly influence the technology, and the technology-related risks that include developmental, financial, and market risks, as described below :
Developmental Risks : The probability that the technology will work as designed and as intended.  Developmental risk is highest in the earliest
stages of technology development.
Financial Risks : The probability that the technology will perform to the point where it is financially viable, and that there will be sufficient
private funding available to see it through to commercialization.
Market Risks : The probability that there is sufficient demand for the technology and that market infrastructure can support the introduction and
ongoing use of the technology.
1.3
Conclusions and Investment Priorities
The STAR process concludes by combining the results from the Vision and Needs, Market, Technology and Sustainability Assessments, and divides them
into short and long term priorities and strategic impacts.
Short-Term Investment Priorities
These are investments that could be made within the next three to five years that could have a direct and positive impact on the environment.
Long-Term Investment Priorities
These are early stage investments that could be made within the next three to five years but that would aid Canada in meeting its longer-term,
emissions-reductions objectives.  SDTC recognizes that the investments must be made now in order to produce results in the future.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 11
National Strategy Impacts
A summary is created outlining the potential impact that the investments may have on Canada’s national strategy to meet its climate change and
sustainable development commitments.
The successful emergence of sustainable technologies in Canada will be largely dependant upon the resolution of a range of non-technical
issues.  These issues, when combined with the technology issues and opportunities, could have a profound impact on the direction of Canada’s
national strategy.
Important Notes to the Reader:
While these conclusions indicate areas to place emphasis, SDTC recognizes that it is not possible to anticipate all new technologies and their
impacts, and new technologies in areas or sectors not on the list are not excluded from consideration.
The output of the Roadmap process is not a single digit, answer or result. It is a series of indicators that support a set of possible investment
opportunities, which can only be viewed within the context of the information provided. The final investment decision must still be made by
accounting for all possible and relevant conditions and requirements, as viewed by the final decision-maker. The contributors to the Roadmap
process have made every effort to be as objective, comprehensive and analytical as possible.
The numeric ratings used in the assessment process are relative; they are not absolute. For example, the Time to Market rating is based on a
scale of one to ten; it does not indicate the actual number of years to get to market. This approach is necessary to overcome the wide range of
qualifiers associated with each projection made by industry and government. The one to ten scale provides a common benchmark approach.
Unless otherwise stated, the term “market” refers to the set of sub sectors under examination as a direct result of a scoping exercise to determine
an appropriate breadth of coverage. It does not refer to an entire market.
Emerging Technologies that have not been included within any current sector assessment may be considered in future upgrades and published
releases. SDTC will receive and evaluate opportunities in all areas falling within the SDTC mandate. However, where there is insufficient material
or interest identified, no assessment priority will be assigned to the STAR tool.
12 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
2
Executive Summary : Hydrogen Production And Purification
Canada produces more hydrogen per capita than any country in the world, almost all of it from fossil fuel sources. While current production meets existing
requirements, demand is expected to increase dramatically as the world moves towards a new energy paradigm. This could place considerable strain on
an already declining feedstock. The use of fossil fuels to create hydrogen also raises concerns over the sustainability of such an approach, as global efforts
to mitigate the effects of greenhouse gases and regional pollutants become increasingly important. New sources of hydrogen production are beginning
to emerge, and Canada is in an ideal position to take full advantage of these developments. Through its vast natural resources and leading technological
innovation in this area, Canada is ideally situated to be a major global player in this segment of the Energy Exploration and Production economic sector.
2.1
About Hydrogen
Hydrogen is the most abundant substance on earth, and has the highest energy content per unit of weight of any known fuel. It is chemically active
and rarely exists alone as an element. It usually combines with other elements, such as oxygen in water, carbon in methane, or trace elements in organic
compounds. In order to be used as a fuel or chemical feedstock, hydrogen must first be separated from other elements through electrolysis (e.g. passing
an electrical current through water), gasification (high temperature heating in the absence of oxygen), or reforming (high temperature heating through a
catalyst).
The best feedstock for hydrogen production are water, and hydrocarbons (such as fossil fuels and biomass) that have a high ratio of hydrogen-to-carbon
(H/C ratio).
2.1.1 The Hydrogen Market
World hydrogen production is currently about 38 Mt/yr (5,000 PJ/yr), of which Canada produces approximately 3.4 Mt/yr (400 PJ/yr). Virtually all
of this hydrogen is produced from reforming natural gas or the gasification of heavy fossil fuels, and over 90% is used for heavy oil upgrading, oil
refining (general hydro-treating of fossil fuels), and ammonia and methanol production. Only a small portion is used as a fuel. Consequently, there is
a natural split in the Canadian market :  large hydrogen from industrial producers, and small hydrogen from specialty producers. The two are ultimately
interconnected, but the volumes considered and the technologies employed can be vastly different. Hydrogen is included in the SD Business Case as
a fuel because there are some existing fuel applications, and it is anticipated that there will be a greater demand for hydrogen as fuel cells enter the
transportation market.
2.1.2 Sustainability and Risk
Fossil-based hydrogen creates fewer lifecycle emissions than the production and use of fossil fuels alone, which makes it more appealing environmentally
(ref :  SD Business Case Oil & Gas Investment Report). This positive attribute is tempered, however, by existing inefficiencies in the hydrogen production
process. Large producers create more hydrogen than they consume, and discharge about 350-400 kt/yr (45-52 PJ/yr) to the atmosphere. This unused
hydrogen represents a large potential feedstock for smaller companies that require hydrogen in the development and use of new technologies.
From a risk management perspective, there are important differences between large and small production. The industrial production of large hydrogen for
use as a chemical feedstock is well developed in Canada, and has relatively few risks. Most of the developments in this area are expected to be through
incremental gains in efficiency. Small hydrogen, on the other hand, is just beginning to emerge, and has a higher level of technological risk.
2.2
A Vision For The Future
It is possible to increase the efficiency of large hydrogen production, and develop cleaner hydrogen from renewable sources. Through direct consultations
and group sessions in the SD Business Case process, the following collective industry vision for the small hydrogen market has been developed.
Vision :  Produce 650 kt/yr (85 PJ/yr) of hydrogen by the year 2015, through the use of the existing hydrogen surplus from large
industrial producers, and the development of new sources of renewable hydrogen.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 13
This vision represents about a 60% increase over the existing production of small hydrogen. But in order to achieve this vision, a number of
improvements must be made:
Use Existing Byproduct :  The small hydrogen industry can use excess hydrogen from large producers to help drive emerging technologies. By
using only one half of the hydrogen that is currently discharged from large producers, approximately 30% of the small hydrogen industry vision
can be realized. This hydrogen is difficult to access however, and is often not pure enough for the highly specialized uses in the small hydrogen
market.
Purify Hydrogen :  Hydrogen gas must be refined to about 99.999% purity in order to meet the stringent requirements of the fuel cell and
specialty chemical sectors. The techniques for purifying hydrogen include pressure swing adsorption (a cyclic pressurization /depressurization
process where adsorbent material produces a continuous stream of purified hydrogen), membrane separation (small semi-permeable membrane
separators), cryogenic separation (ultra-cold separation), liquid solvent separation (dissolving a hydrogen-bearing feedstock compound in liquid
solvent), or a combination of some of the above. These technologies could be improved and made more cost‑effective through efficiency gains.
Use Renewable Energy to Produce Hydrogen :  Renewable forms of electricity can be used to produce hydrogen through the electrolysis
process, but these sources are not currently in widespread use (ref :  SD Business Case Renewable Electricity Investment Report). By solving the
technological and market infrastructure problems associated with renewable electricity generation, hydrogen could be produced more sustainably.
Refine Thermal Dissociation and Reformation Technologies :  These technologies are in early stages of development but have significant
potential for the distributed production of hydrogen at point of use.
2.3 Investment Priorities
The SD Business Case analyzes current market and technological trends and identifies the most promising technology developments that can help
achieve the vision. These technology areas are divided into near- and longer-term priorities. The near-term priorities establish the necessary groundwork
and infrastructure required to meet the longer-term goals. The longer-term priorities help achieve the ultimate vision, but are based on the assumption
that the near-term investments have been made and that the necessary technologies are in place.
2.3.1 Near Term Priorities
The following technologies are expected to have the highest priority over the near term. They focus on the incremental improvements that can be made
to large hydrogen, which have a substantial downstream impact on small hydrogen.
Increase Byproduct Use :  Develop technologies that enable the capture and purification of byproduct hydrogen to displace conventional steam
methane reformation hydrogen production. These include more cost‑effective compression technologies and the recovery of lower concentrations
of byproduct hydrogen in applications where feasible (e.g. refineries).
Improve Hydrogen Purification :  Refine the purification requirements for the emerging sector, and develop more cost‑effective purification
processes such as advanced adsorbents and sealing materials, efficiency improvements to the pressure swing adsorption process, and the
development of real-time purity monitoring systems.
Advanced Autothermal Reformation Processes :  Testing of a wider range of fuels to offset or substitute the hydrogen currently produced
through steam reformation reforming techniques. This includes demonstrations of market applications where there is access to natural gas.
14 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
2.3.2 Long Term Priorities
The following areas are expected to have the highest priority over the longer term and focus on the improvements that can be made to small hydrogen
technologies. This attention will help ensure that this suite of production opportunities will remain viable until Canada has solidified its approach to the
management of its hydrogen resources.
Electrolysis from Renewable Sources :  Develop improved power control systems to manage hydrogen production and storage from renewable
power sources (e.g. wind/hydrogen systems).
Plasma :  Develop advanced technical capability in key system components, and byproduct carbon black as activated carbon suitable for
emissions control.
Thermal Catalytic (Dry) Reforming :  Construct pilot plants to demonstrate the commercial viability of the dry fuel reformation process, and
develop advanced technical capability in key system component areas (e.g. reactor and gas extraction systems).
2.4 National Strategy Implications
All of the stated technologies are considered to be equally important at this stage. Each one is expected to develop individually as the respective market
applications continue to evolve. For this reason, SDTC anticipates that it will adjust its priorities as these markets develop. From a national perspective,
there are three strategic development conclusions that can be drawn:
Develop High H/C Fuel Sources :  Canada should focus on improving the efficiency of hydrogen use in oil sands operations, and on increasing
the H/C ratio in hydrogen production from fossil sources. It is acknowledged that fossil-based hydrogen will produce more emissions on a per
unit basis than renewable sources, but it is lower than the emissions created from fossil fuels alone.
Develop Cleaner Fuels :  Canada should develop cleaner (i.e. low sulphur) fuels whether from fossil or renewable sources.
Pursue Renewable Sources :  Canada should actively explore renewable electricity options for the production of hydrogen. This links to the
renewable electricity generation strategy (ref :  SD Business Case Renewable Electricity Investment Report) which focuses on Canada’s overall
electricity production, but where the production of hydrogen can play a key strategic role.
In order to exploit this growing opportunity, and help Canada achieve its sustainability and innovation objectives, the industry feels there needs to be
massive investment in new hydrogen technologies and a concerted effort by industry and government to bring these technologies to market.
Document Roadmap
The purpose of this report is to consider the findings, conclusions, and recommendations arising from the assessment of particular methods of hydrogen
production and purification, including:
•
•
•
•
•
•
•
•
Electrolysis using both conventional and renewable electricity
Plasma dissociation
Autothermal reformation
Thermal catalytic dry reformation
Byproduct hydrogen recovery
Steam methane reformation
Gasification (and Chemical Production)
Hydrogen Purification
Copyright © 2006 by SDTC™
Sustainable Development Business Case 15
The focus of this report is on the current state of several different methods for hydrogen production and purification, and the market potential for each.
A hydrogen energy system can be conceptualized as shown in Figure 5. This figure highlights the Hydrogen Energy System and the relative position
of hydrogen production and purification in the overall supply chain. Included in this document are :  definitions and principles of operation for the
technology platforms addressed; identification of infrastructure and technology barriers and needs; and an assessment of these needs with respect to their
technology, market and sustainability attributes and impacts.
Figure 5 :  Elements of a Hydrogen Energy System
Energy Source
Or Energy Carrier
such as Electricity
Hydrogen
Production and
Purification
Delivery
Storage
Energy
Service
The production of hydrogen can produce significant greenhouse gas emissions. Section 5 covers environmental impacts of various methods of
hydrogen production. Carbon sequestration is covered in a separate SDTC report on Oil and Gas and the processing of biofuels is discussed in the SDTC
Biofuels Report.
Although the scope of this document is limited, it is necessary to consider that other methods of hydrogen production could merit greater attention in the
future. For example, the Biological Energy group in the U.S. is developing and using biological pathways and microbial metabolism to produce new fuels
with higher energy output in an environmentally sound fashion. The team uses microbes, microbial genomics, microbial pathways, and plants as potential
solutions to carbon sequestration and clean energy production. Current projects include the reengineering of the photosynthetic pathway to divert the
sun’s energy into more hydrogen production as well as reengineering cellulase pathways in certain bacteria to produce ethanol.
This document does not deal with the following issues:
Conversion technologies (e.g. fuel cells) or any other part of the hydrogen energy system or infrastructure.
• Centralized production versus de-centralized production of hydrogen (except for a brief mention in the Hydrogen Market Identification
section of this document).
• Transportation of hydrogen.
• Compression of hydrogen
Storage of hydrogen
Some of these issues will be dealt with in other SDTC reports.
16 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
3
Industry Vision/Background
The focus of this report is on the production of hydrogen in Canada. This section of the report concentrates on the hydrogen industry as a whole, briefly
examines Canada’s resource base and explores an industry vision. Industry background elements include: hydrogen production, technologies for hydrogen
production and purification, the hydrogen market and end use customer requirements. This discussion provides the necessary context for understanding
the technology needs pertaining to hydrogen production as part of a “Renewable Fuels” strategy, as expressed in the following sections of this report.
3.1
General Description
Hydrogen (H2) is the most abundant element in the biosphere but does not exist naturally in large quantities or high concentrations on earth. Instead,
hydrogen must be produced from other compounds such as water, biomass, or fossil fuels. Various methods exist for producing hydrogen (see Table 1:
Major Hydrogen Production Processes). Each method has unique needs in terms of energy sources, such as heat, electricity, and light, and generates
unique byproducts or emissions.
On a per capita basis, Canada is the world’s largest producer of hydrogen. Current H2 production in Canada is 3.4 megatonnes (Mt) annually (mainly
carbon-based) with a 270,000 tonnes surplus.2 The proportion of Canadian hydrogen production by segment is presented in Figure 6.
Figure 6 :  Canadian Hydrogen Production by Segment
Chemical Industry
32%
Chemical Industry By-product
15%
25%
Heavy Oil Upgrading
Merchant Gas
1%
27%
Oil Refining
* Hydrogen Systems Project Team (Canadian Hydrogen Association and Natural Resources Canada).“A Discussion Paper for Greenhouse Gas Reduction and Economic Growth”. May 15, 2005
3.1.1 “Big” Hydrogen And “Small” Hydrogen
For the purposes of this report, we have defined “big” hydrogen as the captive industrial hydrogen market, including heavy oil upgrading, oil refining
(general hydro-treating of fossil fuels), and chemical industry including ammonia and methanol production. Big hydrogen is hydrogen produced solely
for the purpose of feeding the process of the producer. Over 85% of the hydrogen produced in Canada is for large captive industrial use, as illustrated in
Figure 6.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 17
The principal commercial processes specific to big hydrogen include steam reformation, gasification, and partial oxidation. Due to recent price increases in
natural gas, the trend has been away from the use of steam reformation of natural gas and toward gasification of less expensive feedstock.
We have defined “small” hydrogen as the production and purification of hydrogen through a variety of means by small and medium sized companies.
Small hydrogen is available for uses outside that of process needs. This hydrogen is used in such applications as in the heat treatment of metals, glass
making, microelectronics fabrication, power generator cooling, and hydrogenation of food oils, as well as for existing and nascent fuel cell applications. The
greatest potential growth is in using hydrogen as a distributed fuel for the transportation sector.
The Western Region in Canada dominates the production of hydrogen for both big and small markets. The production of small hydrogen by segment is
illustrated in Figure 7. This figure does not include the Atlantic Region as hydrogen production for this area is primarily for big markets.
Figure 7 :  “Small” Hydrogen Production in Canada by Segment
500000
Atlantic Region
Eastern Region
Western Region
Hydrogen, t/yr
400000
300000
200000
100000
0
Chemical Process H2
By-product Production,
t/yr
Chemical Process H2
By-product Surplus,
t/yr
Merchant Gaseous H2
Production Sold,
t/yr
H2 Pipelines,
t/yr
SDTC has chosen to focus on small hydrogen, a sector that faces great technological needs while having access to relatively fewer resources than big
hydrogen companies. As such, the majority of this document focuses on small hydrogen. SDTC recognizes that big hydrogen can have a significant
impact on emissions, but the needs of these big producers may be beyond the current resources of SDTC. For example, Canada’s Hydrogen and Fuel Cell
Committee has indicated that industry has projected it will need over $1B in capital over the next decade. Nonetheless, developments in big hydrogen
could certainly impact or even eliminate some of the pathways for small hydrogen and SDTC recognizes this is an issue that will have to be carefully
assessed in the future. Where applicable some of these issues have been highlighted in this report, however more information on big hydrogen may be
found in the SDTC Oil and Gas Report.
18 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
3.2
Overview Of Hydrogen Products and Processes
Hydrogen may be produced from a variety of feedstock (e.g., natural gas, biomass, water) and through using several technologies (e.g., reforming,
gasification, electrolysis) – see Table 1.
Table 1 :  Major Hydrogen Production Processes
Primary Method
Process
Thermal
Steam Reformation
Gasification
Autothermal
Reformation (Partial
Oxidation)
Catalytic Reforming
Pyrolysis
Electrochemical
Raw Feedstock
Options
Natural gas, other
gaseous or light
hydrocarbons
Coal Heavy
Hydrocarbons
Natural gas, Other
gaseous or light
hydrocarbons
Napthas from oil
refining
Biomass
Thermochemical
Water Splitting
Water
Electrolysis
Water
Electrolysis
Water
Thermal Catalytic
Dry Reformation
Methane, landfill
gas, water
Plasma Dissociation
Biomass, Natural
Gas
(No specific
feedstock for
hydrogen
production)
Water and algae
strains
Biomass
Byproduct
Recovery
Recover H2 from
another Process
Biological
Photobiological
Anaerobic Digestion
Fermentive
Microorganisms
Big Hydrogen
Copyright © 2006 by SDTC™
Biomass
Small Hydrogen
Energy Required
High temperature steam
Steam & oxygen at high
temperature & pressure
Steam - generated by heat
from the exothermic process
Catalyst
Required
Yes
No
No
Heat from the oil refining
Yes
process
Moderately high temperature
No
steam
High temperature heat (e.g.
No
from gas cooled nuclear
reactor)
Electricity from renewable
Depends on
sources
Technology
Used
Electricity from fossil fuel
Depends on
sources
Technology
Used
Heat ((solar energy or other
Yes
heat source)
Scale / Load
Emissions
Medium to Large/ Steady load
(small systems have been
demonstrated)
Large/Steady load
GHG and other
emissions
Small to medium/Steady load
(small systems have been
demonstrated)
Large/Variable load
Medium/Steady load
GHG and other
emissions
GHG and other
emissions
GHG and other
emissions
GHG emissions
Large/Steady load
No emissions during
electrolysis process.
Small/ Variable load
No emissions during
electrolysis process.
Small/ Variable load
GHG and other
emissions from fossil
fuel sources.
Small to medium/ Variable load GHG emissions
(depending on
feedstock)
Small/ Variable load
No emissions
Electricity (plasma
discharge)
Incremental energy required
for gas clean-up and
possible compression
No
No
Small to medium/ Steady load
(matched to main production
process)
No emissions from
collection of hydrogen
Direct sunlight
No
No emissions
High temperature
steam :  methane produced
by process must be
converted to hydrogen by
another process (e.g. SMR)
High temperature
steam :  methane produced
by process must be
converted to hydrogen by
another process (e.g. SMR)
Yes
Small/ Load matched to
availability of sunlight
Medium/Steady load
Yes
Medium/Steady load
GHG and other
emissions
GHG and other
emissions
Not included in this report
Sustainable Development Business Case 19
Product/ Process methods reviewed in this module
Specific commercial and near-commercial technologies briefly reviewed include electrolysis using both conventional and renewable electricity, plasma
dissociation, autothermal reformation, thermal catalytic dry reformation3, byproduct hydrogen recovery, steam methane reformation, gasification and
chemical production, as well as hydrogen purification. Other methods of hydrogen production are outside the scope of this document, as they fall outside
the investment time frame for this analysis (to 2015).
3.2.1 Electrolysis
Electrolysis works by passing an electric current through water and splitting the water into hydrogen and oxygen. Emissions from the process are
nil, but on a full cycle basis depend on the source of the electricity. Electricity can be sourced from conventional electricity (which then reflects the
average electricity profile of the jurisdiction), or from renewable electricity such as wind and solar power. As electrolysers have high up front costs and
conventional production of renewable electricity can also incur high costs, this latter option can have significant cost barriers.
3.2.2 Plasma Dissociation4
Plasma dissociation involves converting methane derived from natural gas, municipal solid waste, or biomass through the application of a low
temperature electronically induced plasma discharge. Outputs, including a solid carbon black and hydrogen, are dependent on temperature, duration of
the reaction, and the feedstock. The carbon can be collected for resale as a commodity chemical and the hydrogen used in a variety of alternative energy
and transportation devices.
3.2.3 Autothermal Reformation
This method uses a mixture of steam and oxygen or air as an oxidant. The heat released from the exothermic partial oxidation drives the endothermic
steam reformation. Autothermal reformation (ATR) is applied on a smaller scale than SMR. When air is used, the large amount of N2 in the product
affects purification efficiency. If pure O2 is used, the cost of O2 affects overall economics.5
3.2.4 Thermal Catalytic Dry Reformation
Thermal catalytic dry reformation relies on a thermal-catalytic cycle that requires heat as an input. Solar thermal dissociation is a variant of this
technology that uses concentrated sunlight as the heat input, and is the only example of this production method discussed in this document.
3.2.5 Byproduct Hydrogen Recovery
Producing sodium chlorate requires a substantial amount of electricity6, i.e. from sodium chlorate or chlor-alkali plants). As part of this process, a large
amount of hydrogen gas is formed during electrolysis of the brine (NaCl-H2O or salt water) used as the basic material. This “waste” hydrogen is often
vented into the atmosphere, but may be captured and burned in boilers or dryers on site, or sold to another company for a similar purpose or for resale.
3.2.6 Steam Methane Reformation
The most common method of hydrogen production is steam methane reforming (SMR). Steam methane reforming is essentially a catalytic process in
which natural gas or other light hydrocarbons react with steam over a catalyst (usually nickel) to produce a mixture of hydrogen and carbon dioxide. This
method is the most energy efficient commercialized technology currently available, and is most cost‑effective when applied to large, constant loads.7
Reforming other fossil fuels is possible, but less developed, and more costly and polluting.
Methane reforming requires a water gas shift reaction to maximize the efficiency of hydrogen production (minimizing CO in the exhaust gas stream).
Depending on the fuel use application, an additional clean up system may be required to separate the hydrogen from other gases (CO and CO2) prior
to use.
20 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
3.2.7 Gasification and Chemical Production
Gasification is a thermal chemical conversion process that uses steam and a carbonaceous fuel to produce a synthesis gas containing primarily (over 70%)
carbon monoxide and hydrogen with lesser amounts of carbon dioxide, water, methane, argon, and nitrogen.
The heart of gasification-based systems is the gasifier. A gasifier differs from a combustor in that the amount of air or oxygen available inside the gasifier
is carefully controlled so that only a relatively small portion of the fuel burns completely. This “partial oxidation” process provides the heat. Rather than
burning, most of the carbon-containing feedstock is chemically broken apart by the gasifier’s heat and pressure, setting into motion chemical reactions
that produce “syngas.” The proportions of hydrogen, carbon monoxide, and other gaseous constituents in the syngas vary depending upon the conditions
in the gasifier and the type of feedstock. The gas can be used in place of natural gas to generate electricity, or as a basic raw material to produce
chemicals and liquid fuels.8
Although small systems exist, systems based on this technology are usually quite large (in order to achieve economies of scale in operating costs) and
favour continuous operation.
3.2.8 Hydrogen Purification
There are five major methods of hydrogen purification :  pressure swing adsorption (PSA), membrane separation, cryogenic separation, amine separation
and other liquid solvent processes, and combined PSA and membrane purification. The application of each technology depends to a great extent upon
the nature of the trace components in the syngas being purified and the purity of hydrogen required. The degree of hydrogen product gas clean-up ranges
from modest drying to remove water and some trace gases from electrolytic sourced hydrogen, to complex purification in the case of fossil fuel-based
processes.
The sensitivity to contaminants varies depending on the production technology, as well as the end-use employed. For electrolysis, feedstock contaminant
sensitivity is high, as water purification is required to de-ionize the water and remove solids that would otherwise accumulate in the electrolytic cell.
Further, electrolyser systems have additional impurities from devices and processes downstream of the cells themselves (i.e. water vapour and oxygen).
For SMR and ATR, sulphur occurring naturally or added as odorant must be removed to prevent catalyst poisoning. For hydrogen production based on
plasma dissociation, contaminant in feedstock sensitivity is low.
In end-use applications such as fuel cells, hydrogen purification is generally needed to reduce carbon monoxide (poison to catalyst used in “low
temperature” PEMFC and PAFC) and CO2 (for transportation applications). These considerations are discussed in greater detail later in this chapter.
This document concentrates on the following two purification methods :  Pressure Swing Adsorption and Membrane Separation.9 When applicable, other
technologies have been considered.
3.2.8.1 Pressure swing adsorption
Pressure swing adsorption is the most widely used separation technique. Separation is achieved by the selective adsorption of the syngas components in
a chamber filled with engineered adsorbent. Under pressure phase all gaseous molecules are adsorbed except hydrogen. Typical large PSA systems have
a separating efficiency of about 85%, and routinely achieve 99.999% purity hydrogen output. PSA systems generally keep the desired product (output)
gas at close to the input pressure and thereby save on recompression costs if the product is required at elevated pressure. An important characteristic of
PSA systems is that all undesirable materials are removed. As the concentration levels of non-hydrogen compounds increase, the effectiveness of PSA
systems drop dramatically. PSA systems are usually used on gases with more than 70% hydrogen by volume because the amount of material to be
removed is so great.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 21
3.2.8.2 Membrane separation
Two classes of membranes are used for hydrogen separation:
Molecular exclusion, which restricts any non-hydrogen compounds from passing through the membrane into the product (hydrogen) gas
exiting the membrane, i.e. anything smaller than the pore size {e.g. hydrogen} can pass through.
Metallic membranes, which catalytically cause hydrogen molecules to turn into hydrogen atoms that can pass through the solid material. The
atoms recombine on the product side into molecular hydrogen. If the membrane is leak-free, absolutely nothing but hydrogen can permeate the
material.
Polymeric (and other exclusion based materials) have not reached broad acceptance due primarily to the failure-mode (catastrophic). Membrane
separation of hydrogen increases with pressure so this technique is typically used when the feed gas is already at high pressure (such as refinery off-gases
at 35 bar or 500 psig). The purified hydrogen exits at low pressure and must be re-compressed for most applications. Membrane separation efficiency is
relatively low, in the range of 80% for a purity of 96%. Purity levels are well below that required for many applications. It is difficult to achieve high purity
hydrogen utilizing polymeric membranes if single pass separation is required and/or the impure gas stream is at temperature.
Metallic membranes are usually palladium-based. This purification technique is completely independent of input, and is capable of producing ultra-high
purity hydrogen. Palladium based purifiers achieve 99.99999% and better purity.
3.2.8.3 Combined PSA and membrane purification
Another method of purifying hydrogen in syngas streams is similar to PSA systems in that contaminants are extracted. In this technique, the CO2 is
extracted from the gas stream through a CO2 selective membrane. 3.2.8.4 Cryogenic separation
The hydrogen-rich syngas stream is compressed, and through controlled expansion of the contaminant gases, the temperature is reduced, and the
contaminant gases liquefy and separate from the hydrogen. Hydrogen liquefies at 20°K (20 degrees above absolute 0). The only gas that liquefies at
lower temperature is helium, due to its inert nature and low atomic number. Thus, all other elements liquefy before hydrogen, which permits high purity
separation. From a thermodynamic perspective, cryogenic separation is the most efficient method for hydrogen purification; however, capital cost is
disproportionately high for all but the largest applications. Cryogenic separation becomes competitive for extremely large process applications where high
purity is required. Like PSA, cryogenic hydrogen has the virtue of a product pressure essentially equal to the feed pressure.
3.2.8.5 Amine separation and other liquid solvent processes
Liquid amine takes the CO2 into solution leaving the hydrogen gas. Amine treatment is relatively more expensive than PSA as the saturated amine needs
to be regenerated with heat to drive out the CO2. The efficiency of amine systems is in the order of 98% CO2 removal. The CO2 and virtually all moisture
in the syngas are driven out when the solvent is regenerated. Solvent treatments are usually used when purifying a hydrogen-based gas that has
impurities such as heavier hydrocarbons or sulphur compounds that can contaminate standard PSA systems.
3.3
Hydrogen Vision
The diversity of hydrogen in terms of the variety of sources, methods of production, volume of production, and the current and potential uses, makes it
difficult to identify a single comprehensive vision that applies to all sectors of the Canadian economy. Further, most goals that have been articulated are
primarily qualitative as opposed to quantitative in nature. A snapshot of current “vision” statements identified in the literature is provided below.
22 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
3.3.1 Industry Vision for Hydrogen Development in Canada
Forward-looking hydrogen industry statements articulated by various industry representatives or research groups such as Canada’s Hydrogen and Fuel Cell
Committee, the Hydrogen Systems Project Team, and studies by Dalcor et al., include the following mission statements:
To strengthen and enhance Canada’s leadership position in hydrogen and fuel cell technologies, maximizing their social, economic and
environmental benefits for all Canadians (Canada’s Hydrogen and Fuel Cell Committee)
To deploy sustainable hydrogen based energy systems enabling Canada to meet its GHG reduction targets under the Kyoto initiative. Building
on its energy resource base and its leading expertise in hydrogen technologies, Canada will maintain its leadership in hydrogen technology
development, deployment and the export of hydrogen services technologies (Hydrogen Systems Project Team)
In the longer-term, such mission statements embed visionary goals such as:
•
The use of fossil fuels for services (i.e. gasoline) will no longer grow
•
Hydrogen systems will become a core technology for developing energy sources
•
Hydrogen and electricity will become the dominant energy currencies
•
Green hydrogen will be used and a power generation system free of carbon emissions will be in place
•
Canada will be an exporter of hydrogen via pipeline or grid
•
Canadian industrial processors will build hydrogen infrastructures that use CO2 sequestration and non-fossil hydrogen production to achieve
carbon emissions reductions
Supporting objectives containing some form of quantitative measure include:
•
By 2010, become the first nation to commercialize end-user and consumer products based on hydrogen and fuel cell technologies
•
By 2012, become one of the top three countries, on a per-capita basis, to utilize hydrogen and fuel cell applications
Although comprehensive in scope and effort, Canadian efforts in this area have thus far not placed specific targets for Canadian hydrogen production
although Dalcor et al. have provided a scenario-based analysis that predicted estimated demand for hydrogen. This study articulated that by 2020,
hydrogen will be in all markets but at different rates, depending upon whether the Canadian economy follows a Business as Usual (6.9 Mt of hydrogen
demand) or a Carbon Conscious trajectory (5.9 Mt per yr of hydrogen demand). This discrepancy is due to a difference in demand for petroleum products
and heavy oil upgrading which is offset in the hydrogen priority scenario by the demands of a growing fleet of hydrogen vehicles.
Similar work underway by the United States Department of Energy (DOE) has coupled one set of qualitative statements (a vision) with the quantitative
means to reach these goals – both in terms of objectives and targets. The US DOE vision will help to inform and direct Canadian developments and is
thus important to touch on briefly. The primary tenets of this strategy are as follows:
Vision :  “Hydrogen… will be produced cleanly, with near-zero net carbon emissions and it will be transported and used safely. America’s hydrogen energy industries will be the world’s leaders in hydrogen-related equipment, products, and services”
Key requirements to achieve the DOE Vision have been explicitly outlined and include:
Infrastructure :  The development of an energy infrastructure that can support the expanded production, delivery, storage, and use of
hydrogen energy.
Technology :  Hydrogen storage weight and volume reductions, mass production of fuel cells, construction of the necessary infrastructure, and
expanded use of portable and distributed power generation devices will sustain the momentum towards a hydrogen economy.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 23
Partnerships :  A strong public-private partnership will be a key feature of this evolutionary process [and] will facilitate appropriate research,
development and demonstration programs; educate the public; and develop codes and standards.
The DOE estimates that approximately 40 million tons of hydrogen will be required to meet certain objectives (i.e. as in 100 million fuel-cell powered cars
or for electricity to 25 million homes), and has investigated various scenarios that could produce this amount of hydrogen. These include :  (1) distributed
generation through electrolysis and small reformers, (2) centralized production through coal/biomass gasification, nuclear water splitting, and oil/natural
gas refineries, and/or (3) “a production mosaic” pathway, which represents the combination of distributed and centralized opportunities.
3.3.2 SDTC Stakeholder Vision for Hydrogen Development in Canada
It is both possible and desirable to increase the efficiency of large hydrogen production and develop cleaner hydrogen from renewable sources. Through
direct consultations, expert interviews, and group sessions in the SDTC Business case process, the following collective industry vision for the small
hydrogen market has been developed (Table 2).
This work was undertaken to enable SDTC to work constructively with a numerical vision and supporting objectives in order to best serve its mandate
and concurrently the needs of the industry operating in the post-R&D, pre-commercial area. The paucity of information on numerical projections – and
particularly for small hydrogen – made it essential to articulate emerging consensus on targets for this area and to specify the type of obstacles that need
to be overcome to achieve such targets.
This exercise is very complementary to work ongoing by the Hydrogen and Fuel Cell Committee, which states that presently there is no concerted national
R&D strategy for the industry, and that as a country, Canada needs to decide what level of investment and which key areas will help achieve our goals.
SDTC offers the following initial targets for the small hydrogen segment and supporting technology objectives for consideration.
Vision :  Canada must seek to produce 650 kt/yr (85 PJ/yr) of hydrogen by the year 2015 through the use of existing hydrogen surplus
and the development of new sources of renewable hydrogen.
This vision represents an approximate 60% increase in the existing production of small hydrogen.
Table 2 :  Vision for Hydrogen Production in Canada
Vision Statement for Hydrogen Production:
The vision for Hydrogen Production in Canada is 634,100 tonnes by the year 2013 available for uses other than direct use by the producer
Vision 1
(tonnes/yr)
Target
Date
(yr)
Estimated
Investment
Required to
Achieve
Realizable Target
1 Installed Capacity
in Canada as of
2003
Capacity
Gap
(tonnes/yr)
Required
Annual
Growth
Rate
Actual
Annual
Growth
Rate 1
(tonnes/yr)
(tonnes/yr)
Rate Gap
(tonnes/yr)
($ Millions CDN)
By-product Hydrogen
611,210
2013
0
537,700
73,510
7,350
7,351
0
Merchant Hydrogen
22,940
2013
0
16,700
6,240
620
624
0
Oil Refining
1,081,240
2013
0
857,630
223,610
22,360
N/A
N/A
Heavy Oil Upgrading
1,860,000
2013
0
770,000
1,090,000
109,000
N/A
N/A
Chemical Industry
1,381,940
2013
0
1,145,500
236,450
23,650
N/A
N/A
Legend:
Hydrogen available for other uses
Hydrogen consumed internally
Sources: 1 CANADIAN HYDROGEN CURRENT STATUS & FUTURE PROSPECTS: A Study Conducted for Natural Resources Canada
At the current growth rate of 7,970 tonnes/yr, Canada will have installed 79,750 new tonnes by the year 2013
24 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
3.4
Hydrogen Market Identification10
This section provides a market analysis of hydrogen production technologies included in this project. This information is presented to frame the context for
the technology priorities identified in the next chapter, and includes the following:
•
An assessment of the various end use applications and markets for hydrogen, as well as end use customer requirements, based on the Canadian
Hydrogen Systems Discussion Paper, interviews, and other studies; and,
•
The determination of linkages between hydrogen end use applications and the hydrogen production technologies of interest in the SDTC
Hydrogen production business case.
A matrix was prepared to identify technologies and linkages, and to provide a framework for the discussion. This matrix is included in Appendix A.
3.5
Market Segmentation
Total hydrogen production in Canada amounted to 3,403,000 tonnes in 2004.11 For the purposes of this analysis the hydrogen market is segmented into
four parts:
The captive industrial hydrogen market, including heavy oil upgrading, oil refining (general hydro-treating of fossil fuels), ammonia
production, and methanol production.
The byproduct hydrogen market, produced principally in chlor-alkali-chlorate processes, methanol and ethylene production.
The merchant hydrogen market, including heat treatment of metals, glass making, microelectronics fabrication, power generator cooling, and
hydrogenation of food oils.
The non-conventional hydrogen system market, which is primarily, based on hydrogen energy applications. Customer requirements and
market solutions yet remain a “moving target” as technology, in many cases, is still at the R&D phase.
The segmentation above corresponds with the framework in Appendix A as follows:
Large captive market
large conventional production systems
• Byproduct industrial market
large conventional and small conventional production systems
• Merchant hydrogen market
small conventional production systems
• Non-conventional Hydrogen markets
non-conventional hydrogen systems
•
Each of these market segments differs in terms of its general profile and supporting production technologies which are briefly detailed in the following.
The captive industrial market is the largest market segment in terms of tonnes produced, accounting for over 90% of hydrogen production. In captive
industrial applications, hydrogen production facilities are usually highly integrated with the industrial process they serve. For example in some cases the
hydrogen production process provides heat or fuel gas to the industrial process while in other cases synthesis gas (CO) is supplied as a chemical feedstock.
Captive production can be “user owned and operated” or operated by a third party “over the fence”. About 50% of the hydrogen produced for these users
is by Steam Methane Reforming (SMR) of natural gas12. Alternative large-scale hydrogen production is now being sought due to natural gas prices
tripling over the last five years 13(see Figure 8) and expected to go higher14.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 25
Figure 8 :  Coal & Natural Gas Price Histories
7
$US per MMBtu
6
5
Coal
4
3
Natural Gas
2
1
0
198
8
199
0
199
2
199
4
199
6
199
8
200
0
200
2
200
4
200
6
Year
* D. du Plessis,“The Future of Coal Gasification and Implications for Canada’s Energy Sector”, Canadian Institute Clean Coal Symposium, Toronto, April 27-28, 2005
The second market segment is byproduct hydrogen production. Some byproduct hydrogen is sold to merchant hydrogen markets, refineries and as a
chemical feedstock for processes such as hydrogen peroxide production. The hydrogen that is unsold is surplus, and is either vented or used as a heating
fuel. In 2004 there was 272,000 tonnes of surplus hydrogen in Canada15, enough to fuel 1.4 million light duty fuel cell vehicles.16 Byproduct hydrogen
production is in many cases stranded because of where it is produced and the cost of moving it to market. The individual sources of surplus hydrogen are
quite large, some being 10,000 t/y or larger.17
The third segment is the merchant market, which can be further segmented according to different gas qualities. Typically the gas is provided in a
packaged form delivered to the customer as gaseous hydrogen in cylinders or by tube trailer or as a liquid or as gaseous hydrogen produced by small
on-site production units. Purification and compression is added as required. Site limitations can impact storage options, for example clearances by code
and site occupation will determine if liquid hydrogen can be permitted, and in the case of gaseous hydrogen, it can limit the amount that can be stored at
one location.
The merchant gas and byproduct hydrogen markets are closely related since most of the merchant hydrogen is derived from byproduct sources. These
two markets are segmented in this report because the byproduct inventory that is unused (or burned as a fuel gas for heating etc.) is large and presents a
distinct opportunity with distinct market requirements.
For the fourth segment, the non-conventional hydrogen system market, customer requirements and market solutions are evolving as key application
technologies are under development and potential products are defined. Future hydrogen production technologies will be shaped by environmental
concerns and the availability of energy sources to produce hydrogen. In terms of hydrogen delivery, the merchant market and energy market share many
characteristics as far as customer requirements. A key difference between these segments is that consumer energy applications are contemplated for nonconventional hydrogen systems, and so systems must be developed that can supply hydrogen as readily as gasoline and natural gas are supplied today.
This means that storage systems for the non-conventional hydrogen systems will be different as well. Higher-pressure gaseous storage will be used in
order to reflect the needs of transportation applications (i.e. 350-900 bar, versus the 200 bar in normal merchant gaseous systems). Further, in order to
reduce the weight of storage, lighter weight materials will be needed. Metal hydride storage will likely be used by some non-conventional hydrogen
systems, which will result in special purity and hydrogen delivery requirements.
26 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Presently the industry is developing two modes of hydrogen production and delivery in order to develop a comprehensive infrastructure for fuelling
hydrogen vehicles and other hydrogen energy services. Acting alone or together these modes could form the basis of the required hydrogen supply
infrastructure.18 They are : 
The central production model, which would rely on a liquid hydrogen or gaseous-hydrogen-pipeline distribution system feeding a number of
fuel supply outlets; and,
The distributed hydrogen supply network model, which would be based on on-site hydrogen production systems (also called
“forecourt production”).19
On-site production (the distributed hydrogen supply model) is considered to be the most likely in the nascent stages of market development of nonconventional hydrogen systems. A distributed system or network of these fuelling systems could provide a cost effective and user-friendly fuel supply
infrastructure. Such an infrastructure would be built on the basis of meeting environmental and economic objectives, however as these objectives are still
evolving, it is difficult to identify a “winning” solution at this point. The distributed network of small fuelling stations provides the possibility of drawing on
local resources, renewable electricity, fossil fuels (with local CO2 sequestration), and biomass and heat sources such as thermal power plants. A number of
candidate solutions for on-site hydrogen production are being developed.
Currently, demonstration hydrogen fuelling stations are operating in British Columbia :  NRC Innovation Centre Vancouver, Ballard Vancouver, and Powertech
Labs Surrey and in Ontario :  Purolator Toronto, Fed Ex Toronto and CNE Toronto. These stations are predominantly based on on-site hydrogen production by
water electrolysis except Ballard Vancouver, which is a liquid hydrogen station supplied by a central reformer.
3.6
Customer Requirements
Hydrogen customer requirements have the following dimensions:
•
Quantity required – i.e. at what rate is hydrogen consumed and is the rate constant?
•
Storage state – i.e. will this be liquid or gaseous?
•
Pressure – i.e. what pressure is needed for gaseous storage, downstream conditioning, and feeding to chemical process?
•
Purity – i.e. what are the specific impurity limits based on storage and requirements of process?
•
Reliability of supply – i.e. are storage or redundant units needed?
•
Availability of utilities – i.e. is natural gas, heat, and/or electricity available?
•
Emissions – i.e. what are the local air quality requirements/emission regulations? On a full cycle basis, what are the global emission implications?
Are capture and sequestration options available for CO2 emissions?
•
Operating characteristics – i.e. are these continuous or intermittent? Is there the ability to turndown output?
•
Siting – i.e. what codes and regulations will impact permitting and approvals?
Although greenhouse gas emissions from hydrogen production are not a factor in today’s markets they will likely become significant in the long term,
meaning that emission avoidance could become a deciding factor in the value proposition for non-conventional hydrogen systems.20 The greenhouse
gases emitted from hydrogen production are estimated to exceed 30 million tonnes of CO2 per year (estimate based on SMR emissions of 10 kg CO2 per
kg of H2 produced). Some CO2 is recovered and used as an industrial gas but most is vented. CO2 from hydrogen production is a particularly attractive
candidate for CO2 capture and sequestration relative to other emission sources because of its high purity which lowers capture costs, and due to the
proximity of western hydrogen plants to favourable geological formations. CO2 can also be used to enhance oil and gas recovery.21
Copyright © 2006 by SDTC™
Sustainable Development Business Case 27
Customer requirements by market segment are listed below. For liquid hydrogen, the liquefaction process imposes a size limitation on the production
unit. The minimum economic capacity of liquefiers is in the size range of 5 – 10 tonnes per day (1500-5000 tonnes per year).
3.6.1 Large Captive Industrial Hydrogen Market
The major customers for this market are ammonia producers, methanol producers, and oil upgrading and refining industries. Each of these customers has
particular needs varying from the amount of hydrogen required to purity specifications.
Ammonia:
Ammonia plants today are in the range of 1500-2000 tonnes per day. Plant sizes are expected to increase to 4000-5000 tonnes per day, which
corresponds to an annual hydrogen production rate of 100,000-400,000 t/y22.
The basic ammonia synthesis reaction is:
N2 + 3H2
2NH3
A typical specification for the synthesis gas would be23:
N2:H2 1:3
CO, CO2 < 30 ppmv
Sulphur < 1ppmv
Chlorine <0.1 ppmv
Inerts < 2%
Typical pressures in the synthesis reactor are 130-150 bar. In most cases hydrogen is produced by SMR, with the nitrogen needed for the reaction
coming from an air separation unit (or oxygen plant if available).
Methanol:
Typical methanol plants are in the range of 2000-3000 tonnes per day with future designs calling for up to 5000 tonnes per day, which
corresponds to a hydrogen production rate of 100,000- 200,000 t/y24.
The basic methanol synthesis reactions are : 
CO + 2H2
CO2 + 3H2
CH3OH
CH3OH + H2O
And a typical synthesis gas composition is25 : 
CO2 7 mole %
CO 17 mole %
H2 72 mole %
CH4 2.7 mole%
Inerts < .5%
S < 0. 1 ppmv
The pressure in the methanol reactor is typically 50 bar. In most cases SMR is used, where the SMR process is adjusted to produce hydrogen
and syngas (CO).
28 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Oil Upgrading:
Heavy oil upgrading can take up to 3-5 kg H2 per bbl depending if upgrading is by hydrogen addition or carbon rejection.26
Hydrogen plants for this application are typically in the range of 50,000 to 500,000 t/y with hydrogen produced by SMR or partial
oxidation of residuals.
The Opti-Nexen project27 will install the first hydrogen priority gasifier in Canada, based on the Shell entrained-flow type gasifier
design. The unit will have a production capacity of 60,000 t per year and will use the asphaltene residuals from the oil upgrader at
Long Lake Alberta.
Oil Refining:
Hydrogen is used in hydro-treating oil to remove sulphur, a process requiring 0.25 to 2 kg H2 per bbl. Depending on the type of oil,
hydro-cracking is used to raise the hydrogen to carbon ratio of the heavy ends. This step takes up to 4 kg of H2 per bbl.28 Typical
capacities for hydrogen plants in these applications range between 10,000-50,000 t/y
Catalytic reforming of naphtha or partial oxidation of residuals produces most of the hydrogen used in Canadian refineries.29
3.6.2 Byproduct Hydrogen Market
In the case of Byproduct Gas Recovery, two issues impact the economics of capturing and using a surplus hydrogen stream. The first is geographical
location, which has a significant impact on cost of delivered product. The second issue is gas purity. Typical impurities for salt electrolysis chemical
processes are chlorine and hydrochloric acid, which can appear in levels up to 1%.30
Further, as the hydrogen is produced in aqueous cells, it is also saturated to atmospheric pressure and requires compression and drying if it is to be
stored. For ethylene processes gas compositions are typically 85-90% H2 and 10-15% methane with trace amounts of hydro-carbon and CO. Typically the
ethylene off-gas is at a pressure of 6 bar.
Recovering hydrogen from tail gases emitted by hydrogen production systems is also an option, which, given the development of low cost and efficient
gas separators, could result in higher hydrogen recovery and a net increase in hydrogen supply. Tail gas hydrogen purities typically lie in the range 1550%31 H2, the balance being made up of CO2, N2 and CO.
3.6.3 Merchant Hydrogen Industrial Market
The customer base in the merchant industrial market is diverse. Gas purity requirements can be demanding, for example semi-conductor fabrication
plants need ultra-high purity hydrogen (typically 99.999%) and so are often supplied by liquid hydrogen. Fibre optic fabrication runs around 99.9%,
whereas generator cooling and metal heat treatment processes require less stringent hydrogen purity requirements. Small quantities up to 50 kg per day
can be supplied by gaseous hydrogen with most customer processes receiving gas at low pressure (< 7 bar).
Gas in this form (packaged gas) is usually delivered by tube trailer or in discrete cylinders where the containers are exchanged at the customer’s site
(pressure typically 200 bar). Larger quantities may be supplied by liquid or by an on-site hydrogen system.
3.6.4 Non-Conventional Hydrogen Systems Market
Non-conventional applications are those nominally associated with the development of hydrogen as an energy carrier, which would evolve in the
marketplace as a fuel transition from current conventional fuel and systems to increasingly higher hydrogen fuel content and new conversion systems
employing hydrogen fuel, and include the following:
Fuel supply for hydrogen-natural gas combustion engines
• Fuel supply for hydrogen combustion engines :  stationary (back up power) and mobile
•
Copyright © 2006 by SDTC™
Sustainable Development Business Case 29
Fuel supply for proton exchange membrane (PEM) fuel cell systems :  portable and mobile
• Fuel supply for other types of fuel cells :  alkaline, SOFC etc.
• Peak shaving at power plant (assuming that high efficiency conversion devices such as fuel cells are available to maximise the use of this
energetically valuable fuel).
•
Although current quantities required per site are small (typically less than 1 tonne-per-year-per-application), demand is expected to grow rapidly as
hydrogen vehicle technology is commercialized. Projected hydrogen vehicle refuelling station sizes are presented on Table 3. These values are based on
a study by Ford Motor Company and the US Department of Energy.32 As even the largest public fuelling outlets will be less than 1000 tons per year,
it is likely stations will adopt the distributed network model for fuel production and are thus classified into the “small to medium” range of hydrogen
production options.
Table 3 :  Fuelling Station Size and On-site Hydrogen Production Requirements*
Number of Cars Per Day
Hydrogen required per day
1 car
1.5 kg
100 car fleet
150 kg
375 cars public filling station
250 kg
3750 cars public filling station
2500 kg
200 Fuel Cell Buses
5600 kg
* “Hydrogen Infrastructure Report” C.E. Thomas, B.D. James, I.F. Kuhn, F.D. Lomax, G.N. Baum, prepared for Ford Motor Co. Under contract DE-AC02-94CE50389
Gas purity requirements are determined by the nature of the energy conversion process and the storage system. It is important at this point to touch on
the needs of hydrogen fuel cells that will likely characterize the transport market, and in particular the impacts of fuel constituents (‘poisons’) on fuel cell
operation, and also storage requirements for different fuel cells. The following presents a snapshot of the current state of developments in regulations
around these issues and some of the technical needs small hydrogen producers need to consider when it comes to end-use.
Table 4 :  Summary of Major Fuel Constituents Impact on PEM/PEFC, AFC, PAFC, MCFC, and SOFC
Gas Species
PEM / PEFC
AFC
PAFC
MCFC
SOFC
H2
Fuel
Fuel
Fuel
Fuel
Fuel
CO
Poison (reversible) (50 ppm per stack)
Poison
Poison (<0.5%)
Fuel a
Fuel
Fuel a
CH4
Diluent
Poison
Diluent
Diluent b
CO2 & H2O
Diluent
Poison
Diluent
Diluent
Diluent
S as (H2S & COS) c
Poison
Poison
Poison (<50 ppm)
Poison (<0.5 ppm)
Poison
a. In reality, CO, with H2O, shifts to H2 and CO2, and CH4, with H2O, reforms to H2 and CO faster than reacting as a fuel at the electrode.
b. A fuel in the internal reforming MCFC.
c. The experience to date with SOFC has been that S degrades performance of the fuel cell by plugging electrode pore spaces, and can be reversed by running the cell in an oxygen rich mode to “burn” off the S.
Low temperature fuel cells are not able to do this without damaging the cells. S is a reactant with the molten carbonate in MCFCs so can truly be considered a poison in this case.
The following acronyms are used in the table:
PEM - Proton Exchange Membrane Fuel Cell, PEFC - Proton Exchange Fuel Cell, AFC - Alkaline Fuel Cell, PAFC - Phosphoric Acid Fuel Cell, MCFC - Molten Carbonate Fuel Cell, SOFC - Solid Oxide Fuel Cell
30 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Table 4 identifies poisons associated with fuels for different fuel cell types.33 With the exception of the PEM and AFC the other fuel cells have integrated
fuel processors, and do not require hydrogen and so are not hydrogen fuel cells per se. These fuel cells thus fall outside the scope of this report. For
Alkaline fuel cells purity requirements are more demanding because of limitations placed on CO2, which can react with the alkaline electrolyte (KOH) to
form potassium carbonate. This limitation is imposed on both fuel (hydrogen) and oxidant.
In the case of PEM fuel cells, the specification for hydrogen purity is evolving in various forums including the Society of Automotive Engineers, (SAE)
J271934, ISO TC 197/WG 12, ISO 14687 “Hydrogen Fuel-Product Specification” with a number of Industry Association and Government Task Groups
feeding into this process: i.e. the USFCC H2 Quality Task Force; DOE Fuel Quality Working Group; the California Fuel Cell Partnership Interoperability Working
Group; and finally the Canadian Transportation Codes and Standards H2QA Task Group.35
The California Fuel Cell Partnership has a guideline which is widely used (see Appendix A), which specifies a purity of 99.999% and specific limits
on CO, S, total hydrocarbons, and CO2 (which can be found in hydrogen produced from hydrocarbons); and oxygen, ammonia, sodium and potassium
(impurities which are typical in hydrogen produced by water electrolysis). In the case of combustion systems, requirements are significantly less stringent
and gas impurities are governed by the storage system.
A second set of requirements of fuel cells is determined by the storage system. Moisture levels are critical in pressurized gaseous storage systems since
condensing water vapour can combine with other impurities such as CO2 in the gas to corrode tank linings. The moisture levels in compressed hydrogen
systems are guided by SAE J1616, the standard for compressed natural gas vehicles, which recommends the local dew point of the gas at pressure be
5.6°C lower than the 99% winter design dry bulb temperature. For hydrogen systems in Canadian winter climates (-40°C) this amounts to reducing
water to 2 ppm or less. Results from cold weather tests in Manitoba 36 indicate there are still gaps to close regarding design of fuelling systems operating
at these temperatures.
Gas pressures required to fill gaseous storage systems depend on the system. In the case of compressed gaseous storage on vehicles, storage pressures
are currently 350 bar with some indications that systems will migrate towards 700 bar. To fast fuel these vehicles, fuelling stations are looking into ground
storage systems at 450 bar and 900 bar. These pressures are typically specified under standard conditions (15.5°C and 1 atmosphere pressure) and so
fuel storage pressures at temperature need to be corrected for temperature so as to not exceed the specification. For metal hydrides, gas pressures are
lower, typically less than 20 bar. A further dimension is fuelling rate, which in the case of compressed gaseous storage depends on the maximum allowed
temperature rise in the tank, and in the case of metal hydrides is dependant on the reaction kinetics of the hydrogen-hydride reaction.
Another key issue is the treatment of hydrogen by regulators and approval authorities (e.g. Transport Canada) as either a “Dangerous Good” or as “Fuel”. In
order to meet “Dangerous Goods” requirements, the costs to design a suitable storage tank for transportation or portable applications may be prohibitively
high.
3.7 Market Linkages To Hydrogen Production Technologies
The linkages between the production technologies identified and the customer requirements discussed in this chapter are presented in Table 5.
The capacity classification follows the following definition.
Large :  > 1,000 tonnes/year
Medium :  10 ton to 1,000 tonnes/year
Small :  < 10 tonnes/year
The deciding factor for prioritizing technologies according to capacity is the economic scale of production for the process. For example, large scale
production, which fits the central production model of hydrogen infrastructure, favours SMR and gasification, whereas distributed production would favour
less complicated processes and designs which could be “skid assembled” – such as the packaged hydrogen plants offered by Hydrogenics/Stuart.37 Note
that smaller production units produce gaseous hydrogen at less than 20 bar which means the hydrogen must be then dried, purified and compressed to
350-700 bar for gaseous storage; and for metal hydrides, typically 20 bar or less.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 31
Nonconventional Applications
Merchant Industrial
Large Industrial
Table 5 :  Linking Hydrogen Production Technology to Customer Requirements
Hydrogen
Production
Technology
Size
Storage
State
Utilities
Required
Emissions
per kg of H2
Major
Gas
Impurities
Operating
Characteristic
Gasification
Large
Gaseous or
liquid
Carbonaceous material, coal,
refinery residue etc, oxygen,
electricity, water
Approx. 15 kg CO2
CO, S
Continuous
SMR
Medium to
large
Gaseous or
liquid
Natural Gas, electricity, water
10 kg CO2
CO,S
Continuous
By-Product
Hydrogen Recovery
Small to
large
Gaseous
Hydrogen source
0 based on marginal rate of
emission
Cl, HCl,
Intermittent &
turndown
Electrolysis a) Grid
connected
Small to
medium
Gaseous
Electricity, water
Depends on electricity supply
O2, H2O
Intermittent &
turndown
Electrolysis b)
Renewable
Small to
medium
Gaseous
Renewable electricity, water
0
O2, H2O
Intermittent &
turndown
Auto-thermal
Small to
medium
Gaseous
Natural Gas, electricity
10 kg of CO2
CO, S
Turndown
Plasma Dissociation
Small to
medium
Gaseous
Natural Gas, electricity
CO2 can be CO, S Intermittent
captured as carbon black in
Carbon-saver™
CO, S
Intermittent
Thermal Dissociation
Small to
medium
Gaseous
Solar energy, land fill gas
(water in future)
Using landfill gas (SHEC process)
converts methane to CO2 for
GHG credit
CO, S
Intermittent
H2O
This table illustrates the relationship of market segments to the preferred mechanism for hydrogen production and related requirements or considerations,
such as emissions, major gas impurities, and operating characteristics. For example, for reforming and gasification technologies the purification process
is focused on the removal of CO and S using PSA and membrane purification technologies, whereas purifiers for electrolysis based systems are focused
on the removal of O2 and H2O using de-oxy-catalysts and desiccant bed type dryers. The currently specified stringent requirements of PEM fuel cells, due
to their intolerance to S and CO in particular, currently favour on-site electrolysis. Depending on the application and the range requirements of fuel cell
vehicles, the requirement may be for compressed hydrogen (small scale fuelling and shorter range applications) or liquid hydrogen (larger scale fuelling
and longer range applications).
It is important to note here that impurities resulting from production processes and their removal are a major consideration when it comes to long term
strategies for hydrogen deployment. Although SDTC has focused on hydrogen production as opposed to end-use in this module, SDTC recognizes that
exclusive attention on any one method of production will limit the range of end-use options available. For example, focusing on big hydrogen (and
therefore SMR and gasification hydrogen production technologies) may negatively impact the opportunity for use of PEM fuel cells, as currently supported
by small hydrogen production technologies such as electrolysis.
SDTC’s focus on small hydrogen production will thus help ensure that the suite of end-use technologies will remain viable until Canada has solidified its
approach to the management of its hydrogen resources.
32 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Table 6 :  Market Linkages to Production Technology
Production Technology
Large Captive
Industrial
Medium Industrial
(Merchant)
Small Industrial
(Merchant)
Steam Methane
Reformation
Fuel Supply Distributed
Production
(non-conventional)
Fuel Supply Central
Production
(non-conventional)
*
Plasma Dissociation
Autothermal Reformer
Electrolysis
a) Grid Connected
b) Renewable
Thermal Catalytic Dry Reformation
Gasification
*
Byproduct Hydrogen Recovery
Based on Purification and
Gas Separation Technology
* With C02 capture and sequestration.
Earlier in this chapter, SDTC articulated the following vision:
Vision :  Canada must seek to produce 650 kt/yr (85 PJ/yr) of hydrogen by the year 2015 through the use of existing hydrogen surplus
and the development of new sources of renewable hydrogen.
This vision represents an approximate 60% increase in the existing production of small hydrogen. In context of achieving this vision and the technology
characteristics, market segments and end-user requirements outlined in this document, SDTC has determined that focus – in terms of improvements and
technological developments – must be placed in the following areas:
• The use of existing byproduct
• Hydrogen purification
• The use of renewable energy to produce hydrogen
• Refining of thermal dissociation and reformation technologies
Byproduct capture and hydrogen purification fit well with short-term priorities expressed by the Hydrogen and Fuel Cell Committee, which state that
waste hydrogen capture and purification from waste streams offer near-term opportunities for infrastructure development. Electrolytic hydrogen
production has also been identified as a near-term opportunity for infrastructure development by the Hydrogen and Fuel Cell Committee. Although not
explicitly discussed in either of the hydrogen visions espoused in Canada to date, refining and reformation technologies also hold much promise to expand
into various markets.
By focusing its resources on these areas SDTC will be applying its resources most-effectively to provide leverage for the industry and concurrently meet its
sustainability mandate. The broad technology objectives stated herein provide the framework for the selection of hydrogen production priorities provided
in the next chapter.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 33
4
Needs Assessment And Analysis
In the previous chapter, SDTC put forth the following vision:
Vision :  Canada must seek to produce 650 kt/yr (85 PJ/yr) of hydrogen by the year 2015 through the use of existing hydrogen surplus
and the development of new sources of renewable hydrogen.
This vision represents an approximate 60% increase in the existing production of small hydrogen. In order to achieve this vision and in light of the market
analysis performed through the SD Business Case, SDTC has determined focus – in terms of improvements and technological developments – must be
placed in the following areas:
Use of Existing Byproduct :  The small hydrogen industry can use excess hydrogen from large producers to help drive the emerging
technologies. By using only one half of the hydrogen that is currently discharged from large producers, approximately 30% of the small hydrogen
industry vision can be realized.
Purify Hydrogen :  Hydrogen gas must be refined to about 99.999% purity in order to meet the stringent requirements of the fuel cell and
specialty chemical sectors. The techniques for purifying hydrogen are varied and include pressure swing adsorption, membrane separation,
cryogenic separation, liquid solvent separation, or a combination of some of the above. These technologies could be improved and made more
cost‑effective through efficiency gains.
Use Renewable Energy to Produce Hydrogen :  Renewable forms of electricity can be used to produce hydrogen through the electrolysis
process, but these sources are not currently in widespread use. By solving the technological and market infrastructure problems associated with
renewable electricity generation, hydrogen could be produced more sustainably.
Refine Thermal Dissociation and Reformation Technologies :  These technologies are in early stages of development but have significant
potential for the distributed production of hydrogen at the point of use.
These areas provide the broad framework for the selection of hydrogen production priorities provided in the following sections.
4.1
Technology-Based Needs
The following figures show the weighted scores of three or four needs for each method of hydrogen production, plus five needs for purification. The
charts were developed taking into account the comments from stakeholders at two different stakeholder meetings as well as the assessment from the
Hydrogen Model and the context described in previous sections.
The figures show the top needs in each technology area, distinguished by colour. Each need is rated against the two principal impact criteria of
Economic Impact and Environmental Impact. Note that the vertical and horizontal scales are used only for relative comparisons within the set of
technologies analyzed.
34 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Figure 9 :  Hydrogen Production Needs ­– Electrolysis from Conventional Sources
Weighted Scores: Hydrogen Production - Electrolysis from Conventional Sources
Environmental Impacts
HIGH
MEDIUM
LOW
MEDIUM
HIGH
Economic Impacts
Improved catalyst
deposition technology
Proton exchange
membranes that
can tolerate significantly
higher temperatures
Reduce the ionic
resistance of
the membrane
Process improvements to
address upstream &
downstream inefficiencies
Figure 10 :  Hydrogen Production Needs – Electrolysis from Renewable Sources
Weighted Scores: Hydrogen Production - Electrolysis from Renewable Sources
Environmental Impacts
HIGH
MEDIUM
LOW
MEDIUM
HIGH
Economic Impacts
Electrolysis - expand renewable electricity
production sources for green hydrogen production
Copyright © 2006 by SDTC™
Electrolysis - develop better power control systems to
manage hydrogen production and storage with renewable
power supplies (eg wind/hydrogen systems)
Sustainable Development Business Case 35
The needs for Electrolysis from Renewable Sources deal only with issues related to the renewable source and/or integration with the electrolysis.
Figure 11 :  Hydrogen Production Needs ­– Plasma Dissociation
Weighted Scores: Hydrogen Production - Plasma Dissociation
Environmental Impacts
HIGH
MEDIUM
LOW
MEDIUM
HIGH
Economic Impacts
Plasma - Need a barrier
discharge material that can
support continuous electron
bombardment; and that have a
high dielectric component
Plasma - development of
advanced technical capability
in key system components
36 Renewable Fuels — Hydrogen Production and Purification
Plasma - Detailed studies on
feedstocks and resulting
efficiency and emissions
Plasma - development of
byproduct carbon black as
activated carbon suitable for
emissions control
Copyright © 2006 by SDTC™
Figure 12 :  Hydrogen Production Needs ­– Autothermal Reformation
Weighted Scores: Hydrogen Production - Autothermal Reformation
Environmental Impacts
HIGH
MEDIUM
LOW
MEDIUM
HIGH
Economic Impacts
ATR - Demonstrations of
market applications at locations
with access to natural gas
ATR - testing of wider range of
fuels to offset/susbstitute for
hydrogen produced via SMR
ATR - development of
cost reduced purification
ATR - Several companies offer
small ATR systems suitable for
use in service station sized
applications
Figure 13 :  Hydrogen Production Needs ­– Thermal Catalytic Dry Reformation
Weighted Scores: Hydrogen Production - Thermal Catalytic Dry Reformation
Environmental Impacts
HIGH
MEDIUM
LOW
MEDIUM
HIGH
Economic Impacts
Thermal Catalytic Dry Reforming pilot plantconstruction and
demonstration of the dry fuel
reformation process
Copyright © 2006 by SDTC™
Thermal Catalytic Dry Reforming Need to develop technology to
manufacture palladium of consistently
uniform thickness (~12 microns)
Thermal Catalytic Dry Reforming pilot plant construction and
demonstration of the dry fuel
reformation process
Thermal Catalytic Dry
Reforming - Solar thermal
dissociation: the process heat
is free
Sustainable Development Business Case 37
Figure 14 :  Hydrogen Production Needs ­– By-product Hydrogen Recovery
Weighted Scores: Hydrogen Production - Byproduct Hydrogen Recovery
Environmental Impacts
HIGH
MEDIUM
LOW
MEDIUM
HIGH
Economic Impacts
Byproduct Hydrogen - technologies which
enable the capture and purification of byproduct
hydrogen to displace conventional SMR
hydrogen production
Byproduct Hydrogen - Available waste stream H2 could
produce enough to power close to 1 million vehicles,
representing 26 million GJ a year of hydrogen
Byproduct Hydrogen characterization
and recovery of lower concentrations
of byproduct hydrogen in applications
wherefeasible (eg. refineries)
Byproduct Hydrogen
improve (less costly)
compression technologies
Figure 15 :  Hydrogen Purification Needs
Weighted Scores: Hydrogen Purification
Environmental Impacts
HIGH
MEDIUM
LOW
MEDIUM
HIGH
Economic Impacts
Purification - development of better
,adsorbents, sealing materials,
components and system design and
manufacturing -timeprove PSA more
efficient and cost effective
Purification - real-time
purity monitoring systems to
ensure hydrogen produced
at the purity and pressures
required
Purification - validating
purity needs against
customer requirements
38 Renewable Fuels — Hydrogen Production and Purification
Purification - Cryogenic separation is
the most efficient method for hydrogen
purification - becomes competitive for
large process applications with pressure
from the hydrogen source over 25 bar
where purity is high
Purification - Amine
separation is often selected
when trace gases such as
hydrogen sulfide and
mercaptans are present
Copyright © 2006 by SDTC™
4.1.1 Combined Hydrogen Technology Summary
The following table lists the high priority technologies ranked on a priority basis (from the Needs Assessment in the Hydrogen Model).
Table 7 :  Combined Technology Survey
High Priority Techonologies
Weighted Weighted Weighted
Score
Score
Score
(Econ)
(Env)
(Total)
Disruptive Priority
Potential
Byproduct Hydrogen - technologies which enable the capture and purification of byproduct hydrogen to displace
conventional SMR hyrdogen production
1.53
0.66
2.19
Yes
1
Byproduct Hydrogen - improved (less costly) compression technologies
1.58
0.58
2.16
Yes
2
Purification - validating purity needs against customer requirements
1.50
0.58
2.08
No
3
ATR - Demonstrations of market applications at locations with access to natural gas
1.48
0.36
1.84
No
4
Electrolysis - develop better power control systems to manage hydrogen production and storage with renewable
power supplies (eg. wind/hydrogen systems)
1.58
0.80
2.38
No
5
Plasma - development of advanced technical capability in key system components
1.46
0.69
2.15
No
6
Plasma - development of byproduct carbon black as activated carbon suitable for emissions control
1.46
0.62
2.08
No
7
ATR - testing of wider range of fuels to offset/substitute for hydrogen produced via SMR
1.33
0.50
1.83
No
8
ATR - development of cost-reduced purification
1.26
0.43
1.69
No
9
Byproduct Hydrogen - characterization and recovery of lower concentrations of byproduct hydrogen in applications 1.46
where feasible (eg. refineries)
0.59
2.05
Yes
10
Purification - real-time purity monitoring systems to ensure hydrogen produced at the purities and pressures
required
1.53
0.65
2.18
No
11
Electrolysis - expand renewable electricity production sources for “green” hydrogen production
1.42
0.47
1.89
No
12
Purification - development of better adsorbents, sealing materials, components, and system design and
manufacturing to make PSA more efficient and cost-effective
1.42
0.58
2.00
No
13
Thermal Catalytic (Dry) Reforming - pilot plant construction and demonstration of the dry fuel reformation process 1.54
0.80
2.34
Yes
14
Thermal Catalytic (Dry) Reforming - development of advanced technical capability in key system components
1.38
0.58
1.96
No
15
Improved catalyst deposition technology
1.38
0.43
1.81
No
Proton exchange membranes that can tolerate significantly higher temperatures
1.23
0.36
1.59
No
Reduce the ionic resistance of the membrane
1.22
0.36
1.58
No
Process improvements to address upstream & downstream inefficiencies
1.30
0.37
1.67
No
Need a barrier discharge material that can support continuous electron bombardment; and that have a high
dielectric component
1.28
0.62
1.90
No
Detailed studies on feedstocks and resulting efficiency and emissions
1.45
0.58
2.03
No
Several companies offer small ATR systems suitable for use in service station sized applications
1.61
0.57
2.18
No
Need to develop technology to manufacture palladium of consistently uniform (~12 microns) thickness
1.46
0.51
1.97
No
Solar thermal dissociation (SHEC labs): the process heat is free
1.58
0.59
2.17
Yes
Available waste stream H2 in Canada amounts to approximately 26 million GJ a year of hydrogen, and offers
significant potential for use as a transportation fuel
1.60
0.59
2.19
No
Cryogenic separation is the most efficient method for hydrogen purification -- becomes competitive for large
process applications where pressure from the hydrogen source is over 25 bar and high purity is required
1.16
0.51
1.67
No
Amine separation is often selected when trace gases such as hydrogen sulfide and mercaptans are present
1.40
0.58
1.98
No
Legend:
ELECTROLYSIS:
Conventional
Energy
ELECTROLYSIS:
Renewable
Energy
Off‑Peak
Copyright © 2006 by SDTC™
PLASMA
DISSOCIATION
AUTOTHERMAL THERMAL
BYPRODUCT
REFORMATION CATALYTIC DRY HYDROGEN
REFORMATION RECOVERY
STEAM
METHANE
REFORMATION
GASIFICATION HYDROGEN
AND CHEMICAL PURIFICATION
PRODUCTION
Sustainable Development Business Case 39
The high priority technologies listed in Table 7 have been ranked against current market and technological trends to identify the most promising
developments that can help meet the hydrogen vision expressed by stakeholders.
To reiterate, this vision looks to:
•
•
•
•
•
Increase the amount of small hydrogen produced from hydrogen surplus and from new sources of renewable hydrogen;
Use existing byproduct;
Achieve better – and more cost‑effective – purity of hydrogen;
Use renewable energy to produce hydrogen; and,
Refine thermal dissociation and reformation technologies.
Consequently, the technologies in Table 7 have been categorized into near and long-term investment priorities to help meet these goals.
Near Term Priorities
In the near term, technologies addressing the following priorities are expected to play a central role in hydrogen development, particularly in terms of
incremental improvement of technologies relating to large hydrogen.
Increase Byproduct Use :  The industry should look to optimize the capture and purification of byproduct hydrogen to displace conventional
SMR production. This includes technology opportunities as in:
Technologies which enable byproduct capture and purification
• Improved and less costly compression technologies
• Characterization and recovery of lower concentrations of byproduct hydrogen (>50% and <100% hydrogen) in applications (where
feasible)
•
Improve Hydrogen Purification :  Industry needs to refine purification requirements for the emerging sector. Recommended technology and
research areas include:
• Validating purity needs against customer requirements
• Real-time purity monitoring systems (to ensure hydrogen is produced at the purities and pressures required)
• Development of better adsorbents, sealing materials, components, and systems design and manufacture to make PSA more efficient and
cost‑effective
Advanced Autothermal Reformation Processes :  This involves testing a wider range of fuels to offset or substitute hydrogen currently
produced via SMR. Recommended technology opportunities include:
Demonstrations of market applications at locations with access to natural gas
• Testing and demonstration of a wider range of fuels to offset/substitute for hydrogen produced via SMR
• Development of cost-reduced purification applicable to ATR processes
•
Long Term Priorities
In the longer term, improvements in the following priority areas will have a bearing on the robust development of both the large and small
hydrogen market.
40 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Electrolysis from Renewable Sources :  Industry needs to develop means to improve the technological and economic efficiency of electrolysis
from such sources. Technology opportunities can be found in:
The development of better power control systems to manage hydrogen production and storage from renewable power supplies (i.e.
wind/hydrogen systems)
• The expansion of renewable electricity production sources for “green” hydrogen production
•
Plasma dissociation :  This is an emerging area of development. Suggested technology opportunities include:
Development of advanced technical capability in key system components
• Development of byproduct carbon black as activated carbon suitable for emissions control
•
Thermal Catalytic (Dry) Reforming :  This is an emerging area where Canada is seeing some research expertise accumulate. Potential
technology focus could be brought to:
Pilot plant construction and demonstration of the dry fuel reformation process
• Development of advanced technical capability in key system components (i.e. reactor and gas extraction systems)
•
4.2
Non-Technological Needs
The SDTC Investment Business Case Hydrogen Model also identified several non-technology issues that need to be addressed in order for the hydrogen
market to develop in a comprehensive and robust fashion. The list of non-technical issues presented take into account stakeholder comments from two
separate stakeholder meetings convened by SDTC as well as the assessment provided by the Hydrogen Model.
Where possible, these issues have been ranked against technology priorities from Table 7 to show where advancements in such technologies will have
bearing on the resolution of identified issues. As many of these issues are systemic to the hydrogen industry, their resolution in whole or in part will help
ensure that current barriers are being adequately addressed.
This is an important step to emphasize as it provides an outline of how the needs being expressed by the marketplace can be met by
appropriate technologies.
4.2.1 Issue :  Achieve cost‑effectiveness for on-site hydrogen production.
Achieving cost-effectiveness for on-site hydrogen production through addressing current barriers to infrastructure development in this area (i.e. through
addressing specialized requirements for delivery, storage, transportation, etc).
Needs:
Accelerate product development
• Development of radical step-change technologies
• Accelerate product demonstration
•
Supporting Technology Priorities Identified:
ATR
• Demonstrations of market applications at locations with natural gas
• Testing of wider range of fuels to offset/substitute hydrogen produced via SMR
• Development of cost-reduced purification
Copyright © 2006 by SDTC™
Sustainable Development Business Case 41
Thermocatalytic Reforming • Pilot plant construction and demonstration of the dry fuel reformation process
• Development of advanced technical capability in key system components (i.e. reactor and gas extraction systems)
Purification
• Validating purity needs against customer requirements
4.2.2 Issue :  Achieve reduction in carbon emissions by industrial processors
Canadian industrial processors, such as oil and gas producers, could achieve substantial reductions in carbon emissions by building hydrogen
infrastructures that use sequestrations of CO2 emissions and non-fossil hydrogen production. Canada could lead the world in development of CO2
sequestration technology.
Needs:
• Hydrogen infrastructures that use sequestration of CO2 emissions
• Non-fossil hydrogen production
• Acceleration of product demonstration
Supporting Technology Priorities Identified:
Byproduct Hydrogen • Technologies which enable byproduct hydrogen capture and purification
• Characterization and recovery of lower concentrations of byproduct hydrogen (>50% and <100% hydrogen) in applications where feasible
Electrolysis
• The expansion of renewable electricity production sources for “green” hydrogen production
Thermocatalytic reforming
• Development of advanced technical capability in key system components
Purification
• Development of better adsorbents, sealing materials, components, and systems design and manufacture to make PSA more efficient and
cost‑effective
4.2.3 Issue :  Achieve benefits by exploiting existing infrastructure and technology
The use of fossil fuels to produce hydrogen does not promise zero emissions, but reformation, coupled with fuel technology, can exploit existing fuel
infrastructure and will offer significant environmental improvements over traditional internal combustion systems.
Needs:
• Combine fuel technology and existing infrastructure to make best use of reformation possibilities.
Supporting Technology Priorities Identified:
Byproduct Hydrogen • Technologies that enable the capture and purification of byproduct hydrogen to displace conventional SMR
42 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
ATR
• Development of cost-reduced purification
Purification
• Validating purity needs against customer requirements
• Real-time purity monitoring systems to ensure hydrogen is produced at the purities and pressures required
4.2.4 Issue :  Achieve benefits in large-scale plants by exploiting small-scale technology.
Improved technologies developed for small-scale applications may also be applicable to large-scale plants, which are necessary in the long-term.
Needs:
• Support and development of small-scale opportunities that can be leveraged on a broader level.
Supporting Technology Priorities Identified:
ATR
• Demonstrations of market applications at locations with natural gas
• Testing of wide-range of fuels to offset/substitute for hydrogen produced via SMR
Electrolysis
• The expansion of renewable electricity production sources for “green” hydrogen production
Plasma dissociation
• Development of advanced technical capability in key system components
4.2.5 Issue :  Fast track technologies to align with pending initiatives/ regulations
Emerging regulations such as those seen in California will create the need and requirement for mechanisms such as hydrogen to produce low sulfur diesel.
Canadian regulations could and will likely follow international developments in this area.
Needs:
• The development of technologies that can help move toward the domestic production of low sulfur diesel, in anticipation of pending
regulatory environments.
Supporting Technology Priorities Identified:
Plasma dissociation
• Development of byproduct carbon black as activated carbon suitable for emissions control. Note :  Emissions regulations create both a market
for cleaner fuels and for carbon. This latter aspect would encourage the development of technologies such as plasma dissociation which would
physically remove the carbon from the exhaust of this particular hydrogen production methodology
Purification
• Validating purity needs against customer requirements
Copyright © 2006 by SDTC™
Sustainable Development Business Case 43
4.2.6 Issue :  Develop distribution infrastructures that support Hydrogen fueling solutions
The sound development of fuel infrastructures that support and can demonstrate fueling solutions based on hydrogen.
Needs:
• The development of infrastructure and/or fueling projects.
Supporting Technology Priorities Identified:
Byproduct Hydrogen • Technologies that enable the capture and purification of byproduct hydrogen to displace conventional SMR
• Improved, or less costly, compression technologies
ATR
• Demonstrations of market applications at locations with natural gas
• Development of cost-reduced purification
Electrolysis
• Development of better power control systems to manage hydrogen production and storage with renewable power supplies (i.e. wind/hydrogen
systems)
• The expansion of renewable electricity production sources for “green” hydrogen production
Plasma dissociation
• Development of advanced technical capability in key system components
Purification
• Validating purity needs against customer requirements
• Development of real time purity monitoring systems to ensure that hydrogen is produced at the purities and pressures required
4.2.7 Issue :  Achieving effective, efficient hydrogen production equipment/ processes.
Finances can be best spent in the theoretic design of the equipment that focuses on how to make equipment cheaper and more energy efficient. Design
testing is needed on a broad level to make hydrogen production more efficient and more cost‑effective.
Needs:
• Production equipment testing designs
• Optimization of the theoretic design of equipment to reduce costs and increase efficiency
Supporting Technology Priorities Identified:
ATR
• Testing of wide-range of fuels to offset/substitute for hydrogen produced via SMR
• Development of cost-reduced purification
Electrolysis
• Development of better power control systems to manage hydrogen production and storage with renewable power supplies (i.e. wind/hydrogen
systems)
Plasma dissociation
• Development of advanced technical capability in key system components
44 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Thermo catalytic Reforming • Pilot plant construction and demonstration of the dry fuel reformation process
• Development of advanced technical capability in key system components (i.e. reactor and gas extraction systems)
Purification
• Development of real time purity monitoring systems to ensure that hydrogen is produced at the purities and pressures required
• Development of better adsorbents, sealing materials, components, and systems design and manufacture to make PSA more efficient and
cost‑effective
4.3
Technology Assessment Summary
In this section, the various technologies and required developments for commercial viability are reviewed. This review considers the scope of the
investment time frame (present to 2015) and the priority ordering as determined through this analysis – focusing on the six top investment priorities as
identified by the needs analysis.
In the near term, efforts to maximize the efficiency of current hydrogen production processes, including recovery of byproduct hydrogen (where
economically feasible) should be pursued. Gas separation and purification technologies are important related areas, and also support the separation and
sequestration of CO2 from exhaust of current hydrogen production methods.
Development work on autothermal reforming is an important next technology step, as it downscales hydrogen production techniques for distributed,
small hydrogen applications and loads, while simultaneously expands available feedstock for hydrogen production to include biofuels (as well as fossil
fuels). In the longer term as renewable electricity supplies become cheaper and more abundant and demand based on fuel cell vehicles increases,
improvements in electrolytic hydrogen production will be required.
Finally, new methods of producing hydrogen which are at an earlier stage of development, such as hydrogen from fossil or biofuel by means of Plasma
Dissociation or directly from water utilizing Thermal Catalytic Dry reformation, are important to pursue for application in the long term.
4.3.1 Electrolysis
The technology argument for electrolysis in the near term focuses on improving the efficiency of this technology for conventional energy feedstock, and in
the longer term centres on lowering the costs and assuring the integration of electrolysis technology with renewable electricity supplies.
Presently in Canada, electrolysis is not cost competitive with SMR in bulk hydrogen production unless very inexpensive electricity is available. A significant
amount of electricity is required to produce usable amounts of hydrogen, thereby increasing electrical power demand. Depending on the regional
generation mix, this may result in increased dependence on fossil-fuel electricity as hydrogen use expands. This method is not yet as efficient as steam
methane reforming and gasification, however it opens up possibilities for distributed hydrogen generation in that hydrogen can be made on-site, or near
the point of end-use.38 A ready supply of good quality water is required.
With regards to hydrogen produced via electrolysis from conventional sources, the following technology priorities are important :  advances that improve
the deposition of catalysts, general process improvements to increase efficiencies, and opportunities to enhance the robustness of membranes (resistance
to higher temperatures, reduction of membrane resistance).
In the long term, cheaper renewable electricity will help drive the production of hydrogen from renewable resources. Electrolytic hydrogen production
from renewables is currently not cost-competitive in large-scale applications, due to the high up-front investment in the electrolyser and the higher cost
(currently) of renewable electricity relative to conventional production methods. For example, the annual capital costs of a photovoltaic (PV) system could
be as much as 85% of the hydrogen price.39
Copyright © 2006 by SDTC™
Sustainable Development Business Case 45
By solving the technological and market infrastructure problems associated with renewable electricity generation, hydrogen could be produced more
sustainably. Therefore, technologies that focus on the development of improved power control systems to manage hydrogen production and storage from
renewable power sources (e.g. wind/hydrogen systems) are important.
In summary, electrolysis is a relatively mature and efficient process, but is constrained in terms of application on a large scale. Although incremental
improvements in the technology are expected, these are limited—success primarily requires methods of low cost electricity production as well as
collaboration between energy source and electrolyser organizations to develop well-packaged and cost‑effective systems. Stuart Energy, AECL, and large
multi-national players such as GE should be able to identify economies of R&D scale that will result in productive joint activities.40
4.3.2 Plasma Dissociation41
For plasma dissociation, two trends are important to support :  one being market-related in terms of capitalizing on the drivers that can boost the
successful development of this means of hydrogen production, and the other centred on technology in terms of developing better materials, components
and systems.
Priorities have been assigned based on both these areas. Business issues such as finding partners to develop the technology and suppliers to support
component technology have been identified as high priority opportunities. Developers are still refining their understanding of which markets this
technology will best serve, and SDTC therefore considers the market and business analysis at this early stage. The development of this technology could
also benefit from evolving environmental legislation, which could promote the use of carbon black produced by this process as a product in emissions
control systems required to meet these new regulations. In the long term, developers that can provide advanced technical capability in various system
components are valuable.
Atlantic Hydrogen (AH2), formerly PrecisionH2, of Montreal has been spearheading development in this area in Canada. This company has developed
a hydrogen fuel delivery system (the CarbonSaver™) for use in hythane™ systems, stationary fuel cells, and roadside refuelling applications. AH2’s
CarbonSaver™ system helps eliminate greenhouse gas emissions by virtue of its unique “pre-sequestration” of solid carbon. While the low temperature
process extracts the hydrogen from natural gas, saleable carbon black is co-produced in a solid form (rather than releasing CO2 into the atmosphere).
The technology is highly suited for mass production. It enables small affordable distributed units to be created and connected to natural gas streams in
order to produce hydrogen for fuel cells, vehicle refuellers, and other generating systems. Depending on the degree of dissociation of carbon from the
methane and the fuel use requirements, additional gas separation (H2 from CH4) may be required for some applications.
Systems are being developed to produce early market products for hydrogen fuel content enrichment of gaseous fuels (including hythane™), and
eventually for delivery of pure hydrogen. The CarbonSaver is being designed for mass-production, and is expected to have competitive operating and
capital costs compared with existing hydrogen processes. It will operate at lower temperatures than steam-based processes, giving the advantage of fast
start/load. Demonstration systems are projected to begin operation in 2007.
4.3.3 Autothermal Reformation
ATR processes offer an opportunity to expand hydrogen production from other, renewable sources such as biofuels. Depending on the fuel use application,
an additional clean up system may be required to separate the hydrogen from other gases (CO and CO2) prior to use. There are several companies
that currently offer small ATR systems geared toward service station sized applications. The most important near-term priority for this technology is to
demonstrate this process at small scale operating on natural gas as this will provide the necessary entry point to displace SMR, prove the ATR technology
and drive technology development. Following the proving of the process on natural gas, markets can be expanded to other feedstock, such as biofuels.
4.3.4 Thermal Catalytic Dry Reformation
Thermal reforming uses similar catalysts to SMR however the differences between the technologies lie in the source of the heat used to support
the reforming reaction. At this stage, thermocatalytic reformation in Canada is focused on demonstrating concepts at a pilot scale. Plants that can
demonstrate the commercial viability of the dry fuel reformation process are a high priority in the near term. In the long term, advanced technical
46 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
capability in key system component areas (e.g. reactor and gas extraction systems, reactor chamber designs, and mechanisms to manufacture palladium
of consistently uniform thickness) will be required to advance this technology.
Currently, Solar Hydrogen Energy Corporation (SHEC Labs) in Saskatoon is developing a catalytic process that uses sunlight and water to produce hydrogen.
Instead of burning fossil fuels to create the necessary process heat (and generating greenhouse gases in the process), mirrors are used to focus sunlight
onto a chemical reactor. The SHEC labs process can produce hydrogen from water at temperatures significantly lower than 1000°C. (In comparison, direct
thermal water splitting normally requires temperatures of 2000°C to begin the reaction and 5000°C to optimize the reaction.) The SHEC labs process, on
the other hand, has operated as low as 400° C. Material problems associated with higher temperatures are minimized and radiant energy losses are thus
dramatically reduced.
SHEC Labs has also developed an advanced 18-inch diameter “high ratio” solar concentrator capable of concentrating the power of the sun by 5,000
times, and have achieved operating temperatures in excess of 750°C. These high concentration levels allow for the efficient and economical collection of
solar energy which can then be used in a host of applications such as heating, distillation, air conditioning, power generation, hydrogen production and
other applications.42
4.3.5 Byproduct Hydrogen Recovery
The technology argument for byproduct hydrogen is based on using hydrogen that is already produced within a strategy to displace SMR hydrogen in
the short term and provide vehicle fuel in the longer term. Capturing large sources of waste hydrogen, (as per the chemical industry, i.e. from sodium
chlorate or chlor-alkali plants) could provide a “big hit” in terms of offering attractive environmental benefits by displacing hydrogen presently produced
through SMR processes. Smaller, secondary, but nonetheless significant markets such as chloralkali and sodium chlorate plants also offer important offset
opportunities. SDTC’s near-term focus is on those technologies that enable the capture and purification of byproduct hydrogen to displace conventional
steam methane reformation hydrogen production.
In the long term the opportunity to use hydrogen as a vehicle fuel will require that the appropriate sources of hydrogen are identified and that recovery
can be augmented to its practical limit. Issues in clean up, storage and compression for offsite use will need to be addressed for this latter market.
Today, approximately 15 sodium chlorate plants are in operation in Canada, a third of which are capturing hydrogen and burning it in boilers. This has
been primarily limited to in-facility usage largely because no use for the hydrogen exists close by.43 However, applications of technologies such as those
by QuestAir and Sacré-Davey Engineering would allow this opportunity to be exploited where a hydrogen load can be created.
Similarly, there are 20 small chlor-alkali plants scattered across Canada that offer opportunities for providing a conventional local supply of hydrogen to
complementary industries such as hydrogen peroxide or hydrochloric acid production. These small sources of relatively high purity could also supply early
needs for hydrogen fuel. Other potential sources of such feedstock include mining, smelting, and pulp and paper processes.
As an example, Eka Chimie Canada Inc. in Québec, manufacturers of sodium chlorate used in the pulp and paper industry, has succeeded in reducing their
plant energy costs by using waste hydrogen from the manufacturing process as an energy source for drying the sodium chlorate.44 The company recovers
around 250 metric tonnes of hydrogen per year, reduces electricity consumption by 6,400 MWh per year, and expects to reduce its annual electricity bill
by CAD $225,000 through this project. The payback period is 1.3 years. Such a displacement of another fuel with hydrogen can reduce GHG emissions.
4.3.6 Hydrogen Purification
Hydrogen purification advancements are required in order to increase the use of byproduct hydrogen, and are furthermore applicable to some of the
conventional and new production technologies employed with biofuels such as landfill gas. Hydrogen purification technologies also support efforts to
separate gases at large scale to enable sequestration of CO2 from “big hydrogen” production methods (refer to the SD Business Case report on Oil and
Gas).
Copyright © 2006 by SDTC™
Sustainable Development Business Case 47
In this area, it is critical to determine whether the right quality of hydrogen is being produced for the application requirement. This underlines the need
for real-time monitoring advances – a high, near-term technology priority. Identification of actual purity needs and technology improvements for PSA
and other gas separation and purification methods is also needed. Although PSA is the core technology for separating major gas components, other
options such as amine separation are important when trace gases such as hydrogen sulphide or mercaptans are present. As load materializes, increased
demand for hydrogen will create a market for approaches such as cryogenic separation; however significant volume is needed in order to justify the
capital expense associated with such a process.
Presently, a number of Canadian companies offer hydrogen purification systems. Some technologies that have been developed to meet anticipated
demand for small-scale systems show promise for scale-up. In the early years of fuel cell vehicle (FCV) introduction there will be considerable demand
for smaller-scale, high purity hydrogen purification.
There are no Canadian development organizations with established technology having capacity in the range from 50,000 Nm3/hr and greater.45 Some
companies do have technologies that offer incremental or step-jump improvements in separation of hydrogen from other gases. QuestAir Technologies
has a number of commercial small-scale hydrogen purifier designs. Membrane Reactor Technology (MRT), with technology in the design concepts,
expects to have a module capacity of hydrogen production and purification about 1/10 of this scale. MRT projects that the potential for lower unit costs
will enable multiple units to be assembled, allowing hydrogen to be delivered in a modular fashion to meet industrial volume and cost requirements.
Both MRT’s and QuestAir’s technologies reflect proprietary changes to conventional processes that achieve significant process intensification. Both
processes can achieve upwards of 10 times the productivity of the conventional technology on which they are based. Thus both companies are able to
consider a wider range of catalyst or adsorbents that may, at higher cost, offer improved performance. The relatively low catalyst or adsorbent inventory
enables the processes to deliver superior performance using materials that conventional systems could not afford to use. Development opportunities for
dedicated materials exist for each of these companies.
Current work at several Canadian universities in the field of catalysis and adsorbents has a reasonable prospect of developing materials that will improve
the performance of existing large scale SMRs, gasifiers and pressure swing adsorption purifiers. Canadian expertise in this field is well recognized,
and research work is being carried out for a number of multi-national companies offering large hydrogen systems. The National Centre for Upgrading
Technology at the Devon Energy Research Centre is also a leader in hydrogen use and catalysis.
The University of Ottawa, the University of Regina, and the University of Alberta have internationally recognized scientists working in the catalysis and
adsorbent fields. The University of Regina’s entity HTC Hydrogen Thermochem is actively developing and improving hydrogen production processes from
natural gas and other fossil fuels. The company’s focus is on SMR processes, catalysts, and associated gas clean up by membrane separation.
4.4
Market Assessment Summary
4.4.1 Market Potential
Today, the world produces about 38 Mt/yr (5,000 PJ/yr) of hydrogen annually – this hydrogen has a market value of roughly $60 billion. Over 92% of
production is used in refining and desulphurization of oil in refineries and production of ammonia and methanol.46 The remainder is used principally in
industrial processes, chemical manufacturing, and food preparation.
Over the next decade, hydrogen demand for current uses is expected to grow at significant rates. A great deal of this growth will stem from the need for
more hydrogen to refine the increasingly heavier, higher sulphur crude oils and oil sands being processed today. Refineries will also need more hydrogen
to meet regulations that require lower levels of sulphur in gasoline and diesel fuel. Demand for hydrogen will increase exponentially when this fuel
begins to replace oil in the transportation sector. In illustration, 66% of all oil used in the United States is for transportation.47
48 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
4.4.2 The U.S. Hydrogen Market
The United States currently produces approximately 11 million tons of hydrogen per year, primarily through steam methane reforming (95%).48 This
hydrogen is mainly used for chemical production, petroleum refining, metals treating, and electrical applications and is enough hydrogen to fuel 2030 million hydrogen-fuelled cars or to power five to eight million homes.
Once applications for hydrogen as an energy carrier have become well established, the US will require much more hydrogen than it now produces.
An estimated 40 million tons of hydrogen would be required to fuel about 100 million fuel cell-powered cars or to provide electricity to about
25 million homes.
4.4.3 The Canadian Hydrogen Market
Canada is the largest per capita producer and user of hydrogen in the OECD. Canada’s present production and consumption are 3.4 and 2.97 million
tonnes per year, respectively.49 Most of the current hydrogen production in Canada (about 59%) is from natural gas and largely used in heavy oil
upgrading and by the chemical industry in the west. About 25% of hydrogen production is from refinery in-process gas that is re-used within the
refinery. A smaller amount, about 15%, is produced as a chemical industry byproduct.50
As the major fossil fuel producer, western Canada dominates Canadian hydrogen production. The hydrogen produced is required for oil upgrading, oil and
gas desulphurization, and producing plastics and other chemical products. The upgrading of heavy oil from the energy intensive oil sand development in
Alberta is the fastest growing area for hydrogen demand and is expected to remain so for the next 20-50 years.51 Refineries in Eastern Canada focus on
the use of products nearer to market.
Surplus capacity is approximately 270,000 tonnes per year. The current surplus of hydrogen is either used to supplement furnace fuel requirements in the
vicinity of production or is vented to the atmosphere. Sixty percent of this surplus is in Alberta, and the remaining forty percent is scattered throughout
Canada (in 14 other process chemical and chlor-alkali plants).
A 200,000-ton surplus of H2 equates to the fuel requirements of approximately 900,000 vehicles (based on an average usage rate of 0.230 t/y of
hydrogen for a fuel cell vehicle). Presently, there is no significant demand for the existing 200,000 tonne surplus or a ready H2 market for the surplus.
Further, the location of the H2 surplus may not always be at the place where it is best utilized. Nonetheless, the waste hydrogen resource in Canada is
said to represent approximately 26 million GJ a year of hydrogen potential.
Current H2 production of 3.4 Mt could be significantly augmented if the use of hydrogen throughout the whole energy and industrial system were to be
optimized. For example, Dalcor52 estimates that some 350-400 thousand t/y of hydrogen is lost annually in Canada from process inefficiencies associated
with incomplete reformation of methane and separation losses from pressure swing adsorption, to name two sources. A one percent improvement
in process efficiency of the nearly 2.3 million t/y currently produced by SMR, PSA, and similar systems would represent about 23,000 tonnes a year of
additional hydrogen. These sources are in addition to the surplus hydrogen produced annually.
4.4.4 Canadian Market Potential
Given that (1) conventional oil and gas reserves may have peaked, (2) Canada is uniquely endowed with large hydroelectric and wind potential as well as
coal and oil reserves in bitumen and, and (3) nuclear power has seen a possible resurgence as an electricity source for hydrogen production, it has been
suggested that now would be a good time to capitalize on the potential that hydrogen offers. Potential near-term strategies for building a hydrogen
infrastructure include the cogeneration of hydrogen and electricity using existing grid energy distribution and localized hydrogen generators. For
transportation, supporting developments in hydrogen-fuelled ICE hybrid electric vehicles and compressed hydrogen storage would be a natural precursor
to exploring hydrides and other alternatives.53
The US will be focusing on SMR, multi-fuel gasification, and electrolysis as a means for hydrogen production. Canada’s strengths lie with its strong
hydrogen community54 and its significant indigenous resources. Hydrogen streams are presently underutilized in that Canada has many carbon dioxide
Copyright © 2006 by SDTC™
Sustainable Development Business Case 49
sequestration sites, which are key to achieving substantial hydrogen volumes through sequestration, capture, and disposal. Production at these latter
sites is about 3 Mt/yr, but they have the potential to achieve 30 Mt/yr emission reduction benefit.55 Furthermore, the application of Canada’s expertise in
various energy production technologies holds promise for producing significant amounts of hydrogen through electrolysis at much lower costs.56
4.4.5 Time to Market and Economic Efficiency
The Time-to-Market and Economic Efficiency analyses consider a number of factors described in this and previous sections, and are summarized in Table 8.
The scores are based on a scale of 1 to 10. A high score indicates a fit within the time frame of four to five years and a high likelihood of widespread
market implementation.
The hydrogen economy will take a considerable amount of time to develop as incumbent technologies and fuel sources are firmly rooted. The
major current use (i.e. for heavy oil production and gasoline upgrading) will increase in the near term as need grows for petroleum feedstock and
low‑sulphur fuels.
The hydrogen economy will be driven by the need to reduce GHG emissions and to replace fossil fuel energy sources as these sources mature. Major
investments in production, purification, compression, and transportation, as well as in end uses, will produce business and export opportunities, jobs, and
technology spin‑offs. Canada has already been the beneficiary of some of these benefits.
Table 8 represents the state of the technologies at the development and demonstration stage for this industry. Economic efficiency represents the relative
attractiveness of these technology compared with the conventional alternatives. Time to Market shows where the technology is positioned relative
to its state of development or nearness to market. This is a relative scale that focuses on SDTC’s stage of investing; technologies at the Research and
Development stage and those that are already commercialized are not included.
Table 8 :  Time to Market and Economic Efficiency Scores
Hydrogen Production Market Summary
Indicator
Elements
Score
Time to Market (Average Score)
Years to Market
4.17
Market Barriers
Infrastructure Issues
Codes and Regulations
Economic Efficiency (Average Score)
Technology Spinoffs
5.14
Market Size and Dynamics
Market Demand
Competitiveness & Alternatives
Replicability / Dissemination / Export Market
Pricing and Financing
4.5
Sustainability Assessment Summary
It is important to note when reading this section that SMR, electrolysis, and byproduct hydrogen recovery (called waste hydrogen capture in the following
figures) are available today; all other technologies, including hydrogen purification, are under development. This fact will help distinguish between real,
well-known costs of currently available technologies, versus (likely) optimistic claims on costs by proponents of new technologies.
50 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
4.5.1 Economic
The current costs of producing hydrogen using the various methods of production included in this assessment are presented on a base of cost per unit
energy ($/GJ), and are shown in Figure 16.
It is apparent that SMR is in the vanguard of production technologies except for byproduct hydrogen capture. It should be noted that accurate data
could not be obtained for plasma dissociation. Also, this analysis does not include an allowance for compression and transportation, which can have a
significant impact on the cost of hydrogen delivered to market.
Figure 16 :  Costs of Production ($ per GJ H2 Produced), Various Technologies)
SMR - Large
SMR - Small
SMR - Small (PSA)
SMR - Small (membrane)
SMR - Large (sequestration)
Gasification Large (coal)**
Gasification Large (coal, sequestration)**
ATR - Med**
ATR - Small (PSA)**
ATR - Small (membrane)**
Electrolysis (coal
Electrolysis (nuclear)
Electrolysis (grid mix)
Electrolysis (wind & grid)
Electrolysis (wind)
Electrolysis (solar)
Solar Hydrogen Reforming - Small*
Solar Hydrogen Reforming - Large*
Waste Hydrogen Capture Large
Waste Hydrogen Capture - Small
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
* Assumes CH4 source
** Under development technology/process
Copyright © 2006 by SDTC™
Sustainable Development Business Case 51
Figure 17 :  Total Costs ($ per GJ H2 Produced, Valuing CO2 Emissions at $15/tonne)
SMR - Large
SMR - Small
SMR - Small (PSA)
SMR - Small (membrane)
SMR - Large (sequestration)
Gasification Large (coal)**
Gasification Large (coal, sequestration)**
ATR - Med**
ATR - Small (PSA)**
ATR - Small (membrane)**
Electrolysis (coal
Electrolysis (nuclear)
Electrolysis (grid mix)
Electrolysis (wind & grid)
Electrolysis (wind)
Electrolysis (solar)
Solar Hydrogen Reforming - Small*
Solar Hydrogen Reforming - Large*
Waste Hydrogen Capture Large
Waste Hydrogen Capture - Small
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
* Assumes CH4 source
** Under development technology/process
4.5.2 Economics of Development in Canada
Over the period 1995 to 2002, the federal government of Canada invested over $1.7 billion in initiatives related to climate change, and in the Federal
Budget 2003 a further $2 billion, of which $215 million was allocated to the development and implementation of hydrogen and fuel cell technologies.57
On April 1, 2004, the federal government also announced its support for a Hydrogen Highway from Vancouver to Whistler, B.C., with plans for full
implementation of this infrastructure by the 2010 Olympics. This endeavour would result in the development of at least seven fuelling demonstration
sites and related technological advancements.58
The private sector is also spending large sums of investor money on research and development – in 2001 for example, Canadian industry spent
$170 million compared to revenues of $96.9 million. In comparison, between 1982 and 2002 Canadian government grants, contributions, and loans
totalled $179 million.59 60
4.5.3 Environmental
The total GHG emissions associated with the various methods of production are presented in Figure 18. Production from fossil fuels has considerable
emissions, while production from electrolysis using electricity from nuclear, renewable and other non-emitting sources yield no emissions.
52 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
The negative emissions for byproduct hydrogen capture, both large and small, have been evaluated on the assumption that electricity will be generated
from the hydrogen that will displace electricity otherwise generated by sources producing GHG emissions at the average national rate.
See Appendix C for notes and references on the charts in this section.
Figure 18 :  Environmental Impact (kg CO2 per GJ H2 Produced), Various Technologies
SMR - Large
SMR - Small
SMR - Small (PSA)
SMR - Small (membrane)
SMR - Large (sequestration)
Gasification Large (coal)**
Gasification Large (coal, sequestration)**
ATR - Med**
ATR - Small (PSA)**
ATR - Small (membrane)**
Electrolysis (coal
Electrolysis (nuclear)
Electrolysis (grid mix)
Electrolysis (wind & grid)
Electrolysis (wind)
Electrolysis (solar)
Solar Hydrogen Reforming - Small*
Solar Hydrogen Reforming - Large*
Waste Hydrogen Capture Large
Waste Hydrogen Capture - Small
-100
-50
0
50
100
150
200
250
300
350
400
* Assumes CH4 source
** Under development technology/process
With regard to hydrogen produced for fuel cell vehicles, the Pembina Institute reached the following conclusions:
• Fuel cell vehicles fuelled with hydrogen from renewable energy-based electrolysis show the greatest opportunity for minimizing negative
environmental and social impacts of vehicle / fuel supply systems. However, at the current level of technology maturity, fuel costs are estimated to
be higher for electrolysis-based systems than for conventional vehicles.
Where renewable energy is not available, steam methane reforming (SMR) technology is the next most environmentally benign source of hydrogen,
although distribution logistics for centralized plants and the operational issues of decentralized plants remain as hurdles. SMR-based FCV systems are
also estimated to have fuel costs comparable to fuel costs for gasoline light-duty vehicles, but higher than diesel bus fuel costs at the current level of
technology maturity.61
Copyright © 2006 by SDTC™
Sustainable Development Business Case 53
4.5.4 Economic and Environmental Comparison of H2 production in Canada
In Figure 19, the position of the bubble indicates the level of emissions per kilogram of hydrogen produced and the cost per kilogram of hydrogen. The
size of the bubble indicates the relative volume of current production of hydrogen in Canada.
Figure 19 :  Current H2 Production Cost, Emissions, and Volume in Canada, Various Technologies
60
Water Electrolysis (coal thermal)
Steam Methane Reformation
Emissions, CO2 /kg H2
40
Hydrocarbon Gasification
Plasma Dissociation
Autothermal Reformation
20
Water Electrolysis (wind power)
0
Solar Hydrogen Reforming
By-product Hydrogen Recovery
-20
0
5
Cost, $/kg H2
10
15
It is clear that SMR dominates for the simple reason that it is cost‑effective, and its emissions are relatively low. It does, however, consume considerable
volumes of natural gas. The price of natural gas is causing the users of SMR to move towards gasification using cheaper feedstock.
The newer technologies such as solar hydrogen and plasma dissociation have a higher cost of production, but lower emissions.
Hydrocarbon gasification is the technology for which the oil and gas industry is looking to reduce the cost of hydrogen, but there will be an
emissions penalty.
Byproduct hydrogen recovery is inexpensive if requirements for compression and/or transmission are limited. Capture has negative emissions because it
replaces hydrocarbon fuels, usually for the production of hot water or steam. Using this hydrogen for applications such as transportation could increase
the value of the hydrogen.
Water electrolysis using wind power is penalized by the high capital costs associated with the development of wind generation. Emissions, however, are
zero. Water electrolysis using coal has the highest emissions.
54 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
4.6
Business Assessment
4.6.1 Risk Factors
The risks for newer hydrogen production methods are largely technology, manufacturing, market, and infrastructure based. Incumbent technologies have
a cost advantage, and emissions currently play no role in this assessment. While SMR is the more active currently, the continued high price of natural gas
places the technology at risk — from an industry perspective, this is the dominating issue — especially while there is still uncertainty of Large Final
Emitter (LFE) impact from climate change “regulations”. Notwithstanding, the industry has considerable investment in the equipment for SMR processing;
the “transfer” to other types of technology such as gasification is still a hurdle based on capital cost replacement. There remain many technological risks
associated with the newer technologies, and they are as yet unproven in larger capacities. For some, electricity must be available at a competitive price
and from low emissions or emissions free sources.
The Overall Risk Rating for hydrogen production shown in Figure 20 is based on an assessment using a computer-based analysis tool that combines
analytical data, reports, stakeholder feedback, and industry intelligence in a common information platform. The output is a discrete set of prioritized
technology investment opportunities. The yellow dot represents “small” hydrogen, which is higher risk (farther from market), the green dot represents the
amalgamated risk for the sector, and the blue dot represents “big” hydrogen. The dots take into account the ability for technology investments to make
a significant reduction in emissions intensity (vs. employing sequestration and storage). The sector average is set at medium-high mainly due to the
emphasis in this document on “small” hydrogen vs.“large” hydrogen.
Figure 20 :  Overall Risk Rating
Very High
Small H2
Sector Average
Big H2
Very Low
4.6.2 Market
Today, almost all hydrogen is produced via steam reforming of natural gas at oil refineries and oil sands producers since that is the most cost‑effective
process. An intense dialogue has developed over the past few years regarding the validity and efficacy of pursuing a hydrogen economy based largely
on the continued production of hydrogen from fossil fuels. While hydrogen is a clean burning fuel, it is only as clean or renewable as its energy source.
Markets for hydrogen in the new economy will develop slowly as the need to address emissions, the rising price of fossil fuels, and the greater availability
of renewable and non-fossil fuel electricity continue to evolve. Niche markets will be the start, followed by more mainstream opportunities.
4.6.3 Financial
The cost effectiveness of the hydrogen economy continues to be measured against the cost of incumbent fuels and technologies. In the near term, it will
be other drivers such as emissions reduction end-use technology development that drive this change. Overall investment will be very large, but many
co-benefits will be realized.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 55
4.7
Risk Mitigation
4.7.1 Technological
Canada enjoys a technological lead in many areas of the hydrogen economy, including hydrogen purification and small hydrogen production. Other
countries, in particular the US and Japan have recently made major commitments to hydrogen research and development. There is a very large need for
newer and better technologies, and these will likely focus in the near term on small-scale hydrogen production where the hydrogen will be used as an
energy carrier, and where the gains can be realized more quickly.
4.8
SDTC Experience
4.8.1 Statements of Interest Responses
A review of Statements of Interest (SOIs) specifically addressing Hydrogen Production and/or Purification was undertaken with the aim of categorizing
the various technologies, key activities to be undertaken, needs in the marketplace and perceived barriers to implementation or broad-scale rollout. The
information collected was from the perspective of the proponent – i.e. barriers reported were those that the proponent identified, not those that may be
identified by stakeholders or the industry in general. The following represents a general summary of findings salient to the SD Business Case.
Table 9 provides a breakdown of the SOIs that aligned with the various technology categories identified for hydrogen production and/or purification. This
does not include SOIs dealing with hydrogen infrastructure (storage and utilization) and most of the fuel cell SOIs that have been submitted to SDTC.
Table 9 :  SOIs by Technology Category
Technology Category
Number of SOIs
Electrolysis
13
Plasma Dissociation
2
Autothermal Reformation
1
Thermal Catalytic Dry Reformation
2
Byproduct Hydrogen Recovery
1
Steam Methane Reformation
8
Gasification and Chemical Production
4
Hydrogen Purification
6
4.8.1.1 Electrolysis
As electrolytic hydrogen production is often synonymous with small-scale on-site production, technologies in this area largely focus on providing
distributed renewable energy or the on-board production of hydrogen to reduce transportation emissions. SDTC has received the greatest number of SOIs
in this category for hydrogen overall. Most of the submissions that looked at integrated solutions for fuelling networks or for residential fuel generation
included electrolysis as the primary means of hydrogen production. Most off-grid technologies referenced solar and wind power as the source for energy.
End-use applications focused on residential power as well as transportation fuelling infrastructure and niche applications (i.e. fork lifts).
4.8.1.2 Plasma Dissociation
Plasma hydrogen production is a relatively new technology that produces a methane-hydrogen mixture and solid carbon black from natural gas via a
non-thermal plasma process. The mixture can be used directly in turbines and internal combustion engines, or can be upgraded to pure hydrogen. The
two SOIs submitted in this category focused on the use of proprietary software, electronics, and high dielectric ceramic materials in a low-temperature
56 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
process. Proponents articulated that economic success can be somewhat dependent on finding markets for the carbon – although such powder can be
used in a variety of applications such as tires, laser printers, and specialty adsorbents.
4.8.1.3 Autothermal Reformation (ATR)
ATR applications are helpful in that they provide some flexibility around hydrogen production, as this technology is adaptable to a variety of different
feedstock. The only SOI received in this area (in 2005) focused on the use of landfill gas to produce hydrogen. This submission illustrates growing interest
in the conversion of landfill methane into hydrogen, though other recent advances have focused on the use of solar power to convert this gas.
4.8.1.4 Thermo Catalytic Reforming
Thermo catalytic reforming uses solar energy in place of standard SMR to produce hydrogen and thereby requires few, if any, external catalysts. In Canada,
some work is ongoing in terms of using non photovoltaic-based solar concentrators to augment and improve the efficiency of this process. SDTC has
received three SOIs in this area from researchers working in central Canada.
4.8.1.5 Byproduct hydrogen recovery
The essence of this area is that of efficiency, in that technologies are often designed to take advantage of used hydrogen produced through existing
processes. As a result, recovery technologies are often tightly coupled to purification and can also be so classified. In the single received SOI, byproduct
hydrogen recovery was proposed based on using the hydrogen captured from two chlor-alkali plants for power generation, steam production, and
transportation fuel. A PSA purification system, using a new PSA technology that can operate up to 100 times faster than conventional PSA, was included.
The power plant would generate up to 12 MW and steam would be provided to a chlor-alkali plant to provide all its steam needs. Operation of the plant
was designed to optimize the sale of electricity and the production of hydrogen for sale to a number of nearby customers for transportation and other
uses. This represents a classic example of hydrogen byproduct recovery for which there is considerable potential in Canada – however not significant
SOI uptake.
4.8.1.6 Steam Methane Reformation
SMR essentially utilizes hydrocarbon feedstock to produce hydrogen and chemicals. SDTC has received a number of applications that could be classified
as involving SMR in some capacity. Applications ranged from the use of fuel cells for creating chemicals and hydrogen, the production of hydrogen from
biomass and wastewater, to the use of catalysts to manufacture olefins and hydrogen. Still other proponents looked to generate hydrogen from natural
gas and from methanol. End-use applications for the hydrogen varied from the development of refuelling stations for vehicles to the use of micro-fuel
cells for battery replacement.
4.8.1.7 Gasification and Chemical Production
Gasification is arguably the largest and most centralized method for producing hydrogen or other syngases. Hydrogen produced by gasification can be
considered “black” or “green” depending on the type and long-term sustainability of the feedstock used to generate the hydrogen. SOIs in this area have
focused on the transformation of MSW, biomass, and hog fuel to produce hydrogen and syngas.
4.8.1.8 Hydrogen Purification
Technologies in this area generally focus, through a variety of means, on producing higher quality hydrogen for both large and small applications. SDTC
has received SOIs that range from proposing new substrates and materials for membrane separation techniques, boosting SOFC efficiencies by optimizing
the gas compositions at various nodes (i.e. anode and cathode), and means to recover high purity hydrogen from coke ovens, among other options.
Statements of Interest Analysis
From the SOIs received to date, it could be said that applicants to SDTC are examining the entire suite of technologies available for hydrogen production
and purification. The majority of hydrogen production applications (over 50%) include in some form, electrolysis and SMR. The next largest category
Copyright © 2006 by SDTC™
Sustainable Development Business Case 57
was that of purification, followed by gasification, plasma hydrogen production and thermocatalytic reforming, and finally byproduct hydrogen recovery
and ATR.
Although applicants are not limiting themselves to one specific technology in this area, it is worth noting that specific applications for byproduct
hydrogen recovery may be worth encouraging given estimates around Canada’s substantial waste hydrogen resources in recent years, as referenced
elsewhere in this report.
Further, the applicant focus on electrolytic hydrogen production is of interest given the high price points associated with the generation of hydrogen from
such sources. As such, cost‑effective developments in solar and wind technologies will have bootstrap technology implications beyond perhaps what is
currently commonly understood.
Lastly, the proponent focus on SMR should be carefully examined in terms of the source of the energy for hydrogen production and whether this
appropriately addresses the sustainability mandate of SDTC.
The analysis also sought to identify proponent reported technological challenge, i.e. what would the funding be directed towards. Integration and
performance optimization were seen to remain continuing technological challenges for SOIs relating to hydrogen production. Through the support of
SDTC funding, proponents hoped to improve on project performance and demonstrate better results.
Many proponents sought to demonstrate their technology application, which does represent the appropriate place on the innovation chain for SDTC.
The analysis also sought to identify non-technical barriers as reported by the proponents. This analysis was complicated by the lack of information in the
SOIs regarding barriers, as this was not a specific area requiring disclosure in the first few rounds of applications. For a number of applications, barriers
were assigned based upon the description of the project or an understanding of the technology. This represents an area of uncertainty in the analysis.
Applicants identified two major barriers :  performance and integration challenges. Interestingly, price or costing issues were not identified as major
barriers; however the resolution of performance problems may address the price issue from the applicant’s perspective. The dominance of the
performance/demonstration theme is an indication that the units, while functioning, are early in the commercialization continuum where price has not
yet become an issue.
Overall, most of the SOIs were submitted in the year 2002, and have decreased over time.
58 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
5
Investment Priorities
Global production of hydrogen amounts to 6.4 exajoules [EJ], which is equivalent to one-third the energy demands of the U.S. light vehicle fleet. In the
US approximately 11million tons of hydrogen is produced from fossil fuels, representing about 96% of the hydrogen production market. Canada produces
3.4 million tonnes of hydrogen annually, 80% of which is presently generated through SMR technology using fossil fuel feedstock.
Based on the analysis undertaken for this business case, the following key conclusions were reached:
• “Big” hydrogen is mainly produced by steam methane reformation of natural gas, primarily for use as a chemical feedstock. Future production
methods may include processes utilizing high-temperature nuclear, clean coal, and low-temperature electrolysis technologies.
• Emerging transportation markets with fuel cell vehicles will create fuel-based demand for hydrogen and for a distributed means of production
– this will be a major driver for the small hydrogen market.
• There is currently a surplus of hydrogen produced in Canada (~200,000 t/yr) some of which could be captured and utilized. This will depend on
the quality and quantity of byproduct hydrogen produced at a given site, and the economics of cleaning and supplying the hydrogen for existing
and new market applications.
• Hydrogen production will remain fossil fuel based in the short term, but can transition to a more sustainable/renewable based scenario over time
as fossil fuels become scarcer and more expensive to utilize for this application.
5.1
Near-Term Technology Investments
5.1.1 The Near Term Market
The market will be dominated by conventional, fossil fuel based production of hydrogen as a chemical feedstock for the oil and gas industry for
applications such as oil upgrading, sulphur removal from existing vehicle fuels, and the production of chemicals and plastics. Initial demonstrations of fuel
cell vehicles requiring hydrogen fuel will be undertaken which will require a distributed means for hydrogen production.
5.1.2 Near Term Investment Priorities
For large scale hydrogen production, the primary modes of production in the near term will continue to be fossil based SMR with the introduction of
some new, fossil fuel based gasification plants in the oil sands.
For distributed hydrogen infrastructure, the primary modes of production in the near term will be SMR and electrolysis. Renewable energy will provide
the most environmentally benign source of hydrogen by means of electrolytic hydrogen production. Steam methane reforming (SMR) technology is the
next most environmentally benign source of hydrogen, although distribution logistics for centralized plants and operational issues of decentralized plants
remain problematic.
The following areas are considered to be highest priority over the near term. The first two priorities focus on incremental improvements that can be made
to large hydrogen (and also have a substantial downstream impact on small hydrogen). The third priority focuses on opportunities to scale down and
expand available feedstocks for hydrogen production at smaller scales.
Increase Byproduct Use – This argument is based on the utilization of what is already produced where it can be shown to be economically
viable. Essentially the focus is on those technologies that enable the capture and purification of byproduct hydrogen to displace conventional
steam methane reformation hydrogen production. This would include technologies that enable more cost‑effective compression and the recovery
of lower concentrations of byproduct hydrogen in applications where feasible, e.g. refineries.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 59
Improve Hydrogen Purification – Hydrogen purification advancements are required in order to increase the use of byproduct hydrogen,
and are also applicable to some of the conventional and new production technologies employed with biofuels such as landfill gas. Hydrogen
purification technologies also support efforts to separate gases at large scale to enable sequestration of CO2 from “big hydrogen” production
methods (refer to the SD Business Case report on Oil and Gas).
Opportunities in this area include technologies that improve cost‑effectiveness and efficiency, such as advanced adsorbents and sealing materials,
improvements to pressure swing adsorption processes, and the development of real-time purity monitoring systems.
Advanced Autothermal Reforming Processes – ATR processes offer an opportunity to expand hydrogen production from other, renewable
sources such as biofuels. Demonstrations of market applications where there is access to natural gas will help drive technology development in
this area.
5.2
Long-Term Technology Investments
5.2.1 The Long Term Market
In the longer term market, production of liquid hydrogen may be needed to supply a growing fuelling infrastructure as demand expands in the
transportation market sector. Liquid hydrogen requires considerably more electricity to produce compared with gaseous hydrogen. This characteristic
adversely affects the overall life-cycle environmental performance and fuel cost of liquid hydrogen.
Renewable energy sources will also comprise a growing share of the electricity supply mix. Hydrogen production by means of electrolysis will offer an
opportunity for both energy storage and alternative fuel products to be incorporated with these renewable electricity systems.
As greater emphasis is placed on GHG and air pollutant emissions, the ability to integrate carbon dioxide capture and sequestration cost‑effectively with
hydrogen production and purification processes will play a key role in the selection of production technologies for distributed hydrogen production.
5.2.2 Long Term Investment Priorities
The following areas are expected to have the highest priority over the longer term and focus on the improvements that can be made to small hydrogen
technologies. This attention will help ensure that this suite of production opportunities will remain viable until Canada has established its approach to
the management of its hydrogen resources.
Electrolysis from Renewable Sources – This argument centres on the idea that more and cheaper renewable resources will help drive the
argument for producing hydrogen from these sources. By solving technological and market infrastructure problems associated with renewable
electricity generation, hydrogen could be produced more sustainably. Therefore, technologies that focus on the development of improved power
control systems to manage hydrogen production and storage from renewable power sources (e.g. wind/hydrogen systems) are vital.
Plasma Dissociation – For plasma dissociation, two trends are important to support :  one being technology-related in terms of developing
better materials and the other market-related in terms of capitalizing on the drivers that can boost the successful development of this area.
Technologies that can offer advanced technical capability in various system components are valuable, as would be opportunities to promote
byproduct carbon black as a product well suited to emissions control.
Thermal Catalytic (Dry) Reforming – Thermal reforming at this stage is primarily about demonstrating concepts at a pilot scale, and as such,
pilot plants that can demonstrate the commercial viability of the dry fuel reformation process are of utmost priority. Technologies that investigate
advanced technical capability in key system component areas (e.g. reactor and gas extraction systems) are also helpful.
60 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
5.3
National Strategy Impacts
All of the stated technologies are considered to be equally important at this stage. Each is expected to develop individually as respective market
applications continue to evolve. For this reason, SDTC anticipates that it will adjust its priorities as markets develop. From a national perspective, three
strategic development conclusions can be drawn:
Develop High H/C Fuel Sources :  Canada should focus on improving the efficiency of hydrogen use in oil sands operations, and on increasing
the H/C ratio in hydrogen production from fossil sources. It is acknowledged that fossil-based hydrogen will produce more emissions on a per
unit basis than renewable sources, but this is lower than the emissions created from consumption of fossil fuels alone.
Develop Cleaner Fuels :  Canada should develop cleaner (i.e. low sulphur) fuels, whether from fossil or renewable sources.
Pursue Renewable Sources :  Canada should actively explore renewable electricity options for the production of hydrogen. This links to
the renewable electricity generation strategy (refer to SD Business Case report on Renewable Electricity) which focuses on Canada’s overall
electricity production, but where the production of hydrogen can play a key strategic role. By solving the technological and market infrastructure
problems associated with renewable electricity generation, hydrogen could be produced more sustainably and cost‑effectively.
In order to capture this growing opportunity and help Canada achieve its sustainability and innovation objectives, industry has expressed the need for
significant investment in new hydrogen technologies and for concerted effort by industry and government to bring these technologies to market. SDTC is
pleased to be a contributor to this effort.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 61
6
Acknowledgements
6.1
SDTC Thanks the Following Contributors
SDTC would like to thank the following individuals for providing technical information and/or participating in the various interviews and stakeholder
workshops. This report was prepared for SDTC through a collaborative effort involving both SDTC staff and industry consultants. A special thank you to all
the organizations that supported the underlying research and reports referenced throughout this document.
Allison, Jeff
HTC Hydrogen Technologies Corp.
Armstrong, Colin
Sacré-Davey Engineering
Bakos, Jamie
Giffels Associates Limited
Cheh, Chris
Ontario Power Generation (Retired)
Connor, Denis
QuestAir Technologies Inc.
Dalziel, Jane
Hydrogenics Corporation
Daoust, Claude
EKA Chimie Canada Inc.
Desgagnes, Annie
Industry Canada
Doyon, Sabastien
Natural Resources Canada
Fairlie, Matthew
Fairfield Group
Fehr, Ray
SHEC Labs
Fletcher, Dan
Atlantic Hydrogen Inc.
Gilchrist, Steve
Canadian Hydrogen Energy Company
Jacob Fletcher, Michal
TCP H2
Kimmel, Terry
T.B. Kimmel & Associates
Martin, David
Membrane Reactor Technologies Ltd.
McGowan, Mike
BOC Canada Limited McIntyre, Vaughan
Accelerator Business
Nick Beck
Natural Resources Canada Pogorski, Stephen
Enbridge Gas Distribution Inc.
Potter, Ian
Alberta Research Council
Ostiguy, Eve
EKA Chimie Canada Inc
Richard Fry
Natural Resources Canada /CTFCA
Rivard, Pierre
Hydrogenics Corporation
Sacre, Chris
Sacré-Davey Engineering
Smith, G. Rymal
Hydrogen Village
Stuart, Andy
Alchemix / H2 Canada
Teichroeb, David
Enbridge Gas Distribution Inc. Thompson, Alison
Suncor Energy Inc.
Townson, Bruce
Hydrogenics Corporation
Varmer, Vicrum
Fuel Cells Technology Ltd.
Venter, Ron
Canadian Hydrogen Association
Wressel, Peter
Stuart Energy Systems Corporation.
62 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
7
Appendices
The following appendices provide supporting information to the Hydrogen Production investment report. The appendices include data on market
characterization and information on the calculations and assumptions used in the sustainability analysis.
7.1
Appendix A :  Market Identification Matrix
Table 10 :  Market Identification Matrix
Market Segment
Incumbent Process
End User(s)
Market Share
- Market Prediction
Conventional Large
Captive SMR
Oil Processing:
> 10 tonnes per day
(t per day)
Naphtha reforming
– (refineries only)
– de-sulphurization
55% (1.6 Mega-tonne
per year – Mt/yr)a
– heavy oil upgrading
– expects to triple in
15yrs
End User
Requirements
(ranked)
Reliability/security of
supply
SDTC Tech
Road Map
Market Factors
MSI processes such as
Hydro‑Max
Cost
Gasification
Rising natural gas costs
– “demand destruction
“ strategy
Purity
Purification to increase
hydrogen recovery
Pressure depends on
PSA – typically 2060 bar
Cost
Ammonia Production
(fertilizer production)
20% (0.6 Mt/yr)
Reliability
Methanol
6.9% (0.2 Mt/yr)
Purity – NH3 < 5ppm,
O2 /oxides , MeOH
< .1ppm S
Other
Conventional Small
< 10 t per day
(near‑term)
(1000 t per yr)
Non-conventional
Hydrogen systems
< 10 t per day
(1000 t per yr)
Incremental SMR
or from by-product
hydrogen recovery
Delivered as high
pressure gas in tube
trailer or as liquid
On-site electrolysis
Liquid H2
– liquefaction from
large SMR
Merchant gas:
- Generator cooling
- Metal Heat Treaters
- Float Glass
Pressure depends on
PSA – typically 20‑60
18% (0.5 Mt/yr)
bar – higher pressure
in reactor
.06% of total hydrogen Cost
production
Purity
- growing at 6% per
year
- Semiconductor fab
Reliability
Storage pressure
– approx 200 bar
CO2 Capture technology
On-site Electrolysis
Poly‑generation/
integration – H2 plus
other energy services
CO2 capture costs
– CO2 purity key
Thermal Dissociation
Provided as a supply
service contract
by industrial gas
companies
– other service can
also be supplied.
“Packaged Gas” delivery
established
Safety
On-site ATR
On-site Plasma
dissociation
Vehicle fuelling station <.001% (< 20t/yr)
including compression, – expected to grow
storage and dispensing. exponentially to 1 Mt
Fuelling for portable
in 15 y with intro of
and stationary power
H2 vehicles
Fuel Cell Purity:
On-site Electrolysis
‑5ppm O2, 5 ppm
H2O, 1ppm CO, 1ppm
CO2, .01ppm sulphur
compoundsb
On-site Plasma reactor
Industrial sites where
storage can’t be sited.
Pressure:
‑350 bar at vehicle,
450 bar on storage,
up to 700 bar under
development
By‑Product Hydrogen
Recovery – close to
source
On-site ATR
Thermal Dissociation
Purification to achieve
fuel cell purity
Hydrogen value
proposition – CO2
emission reduction
– emission of energy
source in hydrogen
production is key
Real estate
Cost
Foot print
Convenience
a Canadian Hydrogen Current Status and Future Prospects, Dalcor et al. (2004)
b Compressed Hydrogen 350-bar Station Specifications, Version 1.0 (Revision 2), Ford Motor Co., DaimlerChrysler (2005).
Copyright © 2006 by SDTC™
Sustainable Development Business Case 63
7.2
Appendix B :  Hydrogen Production Technologies – Estimate Of Costs And Emissions
Note to Reader : 
Reviewers should note that there are a number of caveats to the information presented in Table 11. First, identifying comparable estimates in
the literature proved difficult as estimates for costs ranged depending on whether the TCI or the unit production cost was quantified – these
distinctions were not always made clear. Specific TCI is a measure of the capital cost of a facility for each unit of hydrogen produced, processed,
or stored. For hydrogen production technologies, this value is the TCI divided by the annual hydrogen production capacity. The TCI was used to
develop unit costs wherever possible.
In some cases, small-scale SMR/ATR with PSA technology is indicated as having a lower cost of produced hydrogen than without PSA, despite
higher capital and operating costs for the former. Both Canadian and American sources were solicited for this information, which may have
contributed to this discrepancy. For example, small scale SMR (without purification estimates) was derived from a Canadian study (Dalcor).
This value was the average for facilities producing various tonnes of H2 a day (from 0.28 to 0.48 tonnes). Costs for small scale SMR with
purification and membrane technologies were derived from an American study based on proceedings from a US DOE Hydrogen Program
Review. In the case of ATR, the costs were developed from a SOI in this area submitted to SDTC and similarly the ATR plus purification and
membrane cost estimates were provided from the above American study referenced. All American estimates were converted to Canadian
currency at an exchange rate of 1.13.
Also, thus far purification costs provided have been derived through consultation with limited stakeholders to date, who have indicated that
significant cost differentials do not exist between technologies at a general level. Membrane purification and PSA are largely applicable to
reforming and gasification technologies, whereas purifiers for electrolysis systems are largely based on using de-oxo-catalysts and desiccant
bed type dryers. The applicability of this generalization needs to be corroborated.
One key point that must be noted is that, compared to membrane purification, PSA does not reduce the pressure of the output significantly
– this can have a significant impact on the cost of hydrogen if the end use requires the fuel to be at high pressure. In this case, membrane
purification may be a less attractive option for end-uses requiring high pressure hydrogen.
In some cases, end values derived allow comparison to a1999 study developed by the US National Renewable Energy Laboratory (NREL). In
cases where significant discrepancies exist – as in the case of hydrocarbon gasification (noted in red) – it is postulated that the original cost
per unit of production used in our analysis does not account for the TCI.
All CO2 emissions calculations and assumptions utilized are further detailed in the Appendix to this table. In some cases applicable values came
from GHGenius. In others, documentation from various sources was reviewed (National Academy of Sciences, Fairfield Group, Dalcor & Intuit
Strategies, and NREL, among others). In some of these sources values were also derived directly from GHGenius. In other cases (NAS, NREL) the
parameters of CO2 emissions were not always specifically documented however personal communication and feedback was used to narrow
estimates and build assumptions. Note that this was not meant to be an exhaustive treatment of CO2 emissions as estimates vary greatly
depending on the parameters for calculation and the novelty of the technology under review.
Lastly, the cost of compression, although not treated in this analysis, must be considered. Some technologies, as in electrolysis, which operates
at low pressures (10 atmospheres), require higher compression to distribute the hydrogen by pipelines or tube trailers compared to other
hydrogen production technologies.
See Appendix C for Notes and References to Table 11.
64 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Table 11 :  Hydrogen Production Technologies – Estimate of Costs and Emissions
Process &
Feedstock
Steam
Methane
Reforming
(SMR)
natural gas
Hydrogen
Production
Technology
Large-scale
Large-scale, with
sequestration
Small-scale
Small-scale, with
PSA
Small-scale, with
membrane
Gasification Large-scale
bituminous
Large-scale, with
coal, asphaltics sequestration
Autothermal Mid-size (480 kg)
Reformation Small-scale, with
(ATR)
PSA
natural gas,
Small-scale, with
liquids
membrane
Electrolysis
Large-scale
water &
Coal thermal
electricity
Nuclear
Grid mix
Grid w/ wind
Solar
Large-scale
Hydrogen
Small-scale
Reforming
olar/ water/
catalyst
Plasma
Small-scale
Dissociation
natural gas/
negative value
feedstocks
Waste
Large-scale
Hydrogen
Capture
Small-scale
hydrogen
End Use(r) &
Requirements
Current Volume
(Cda)
Oil processinga
1,531,350 tonnes
per yr
1,300,000 tonnes
per yr
0
Ammonia, methanol
plants b
Refineries, ammonia,
methanol plants
Merchant gas c
0.06% of total
production
Total Capital
Investment*
($/kg)
$1.50
Purification
Cost
($/kg)
$ 0.25
Total Cost
($/kg)
Total Cost
($/GJ)
$1.74
NREL
Emissions
Estimate** (kg/GJ)
($/GJ)
$13.72
77.5
$1.75
$12.32
$ 0.25
$1.99
$14.01
$19.17
19.4
$4.47
–
$0.30
–
$4.77
$4.06
$33.61
$28.56
$32.95
–
77.5
–
–
$4.49
$31.61
–
Some refineries,
fertilizer production
0
$1.51
$1.60
$0.30
$1.81
$1.90
$12.75
$13.38
Merchant gas/
Distributed on-site
power, fuel celld
0; although
sometimes SMR
processes are
equivalent to ATR
$4.50
–
$0.35
–
$4.85
$4.31
$34.15
$30.34
–
–
$5.14
$36.17
$4.35
$11.19
$6.84
$8.73
$2.80
$5.10
$1.00
–
–
$5.35
$12.19
$7.84
$9.73
$2.80
$5.10
$37.68
$85.85
$55.21
$68.52
$19.72
$35.92
$3.00
$0.25
$3.25
$22.89
–
$1.14
–
$1.14
$8.00
–
$0.41
$1.55
$10.90
–
Merchant gas/
Distributed on-site
power, fuel cell
Minor amounts:
<0.001% (<20T/
yr)
Merchant gas/
Distributed on-site
power, fuel cell
0
Merchant gas/
Distributed on-site
power, fuel cell
0
Direct to boiler (chlor- 2 M GJ
alkali, sodium chlorate
plants)
Small manufacturing 89.6 t per yr
plants, FCV end use
$40.38
–
–
$22.55 $22.80, nonspecified
sources
–
–
150
37.5
77.5
368.3
5.8
30.7
23.6
58
–
-67.61
* Specific Total Capital Investment (TCI) is a measure of the capital cost of a facility for each unit of hydrogen produced, processed, or stored. For hydrogen production technologies, this value is the TCI divided by the
annual hydrogen production capacity. The TCI was used to develop unit costs wherever possible. In most cases the values provided under purification are added on to these values to estimate the total cost for
production. Exceptions occur in instances where these costs were not broken out due to lack of detail in the literature or other.
** Converted from $ USD.
a Oil processing requirements include pressure (usually dependant on PSA) of typically 20 -60 bar.
b Ammonia/methanol plants usually require typically 20-60 bar, purity NH3 < 5 ppm O2/oxides, MeOh <0.1 ppm S.
c Merchant gas refers to generator cooling, metal heat treaters, float glass, semiconductors. Usually require 200 bar storage pressure.
d Fuelling for stationary and portable power, and for vehicles require fuel cell grade hydrogen (5 ppm O2/H2O, 1 ppm CO/CO2, 0.01 S); Pressure (350 bar @vehicle, 450 bar storage, 700 bar under development).
Please refer to Appendix C for a detailed compendium of notes and references for the figures presented.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 65
7.3 Appendix C :  Notes And References To Table 11
This Appendix provides notes and references to Table 11 :  “Hydrogen Production Technologies – Estimate of Costs and Emissions”
Note to Reader:
Specific Total Capital Investment (TCI) is a measure of the capital cost of a facility for each unit of hydrogen produced, processed, or stored. For
hydrogen production technologies, this value is the TCI divided by the annual hydrogen production capacity. This is different from the unit
production cost, which incorporates the amortized capital plus operating cost components divided by the annual output. TCI was used where
possible to facilitate comparison with other data (i.e. NREL 1999).
Steam Methane Reforming (Large Scale)
SMR produces a gas mix of hydrogen and methane as well as CO2. Hydrogen concentrations are usually less than 75%. SMR systems are usually
immediately attached to PSA systems that clean up the product to end-user specifications. Generally, end users such as oil refineries or ammonia
production plants are satisfied with purities of 99.9%. In general, PSA costs tend to approximate 10% of the total production costs.
Achieving higher purities of 99.995 and less than 20 ppb of CO, as would be desirable for fuel cell grade hydrogen, would incur additional costs as the
recovery rate would be lower due to decreased efficiency (75-78% vs. an original 85%). This would result in an additional cost or performance penalty.
Table 12 :  Steam Methane Reforming (Large Scale)
Parameter
Estimate
Notes
Volume in production
(oil processing)
1,531, 350 tonnes per yr
Total Canadian hydrogen production was 3,403,000 tonnes in 2004. The captive industrial
market accounts for over 90% of hydrogen produced. About 50% of the hydrogen produced
for these users is via SMR of natural gas. These estimates are consistent with SDTC internal
report prepared by Fairfield Group (2005).
Volume in production
(ammonia)
1,300,000 tonnes per yr
Ammonia :  0.6 Mt/yr; Methanol :  0.2 Mt/yr; Other :  .5 Mt/yr (Fairfield Group, 2005).
Purification Costs
(99.9% purity)
$ 0.25 per kg
Stakeholders estimate that an SMR generating 10- 100 tonnes a day will have purification
costs running from 20 – 25 cents CAD for deriving bulk grade hydrogen (98% purity). This
purity is considered sufficient for the end-users noted.
Total Cost
(inc. purification)
$10.54 / GJ H2
($1.497 per kg)
2005 scenarios run by the US DOE have prices ranging from $0.75 to$ 2.2 per kg of hydrogen
produced depending on assumptions used (i.e. varying capital costs and/or fuel costs). Fuel
costs had the great impact on sensitivity, with natural gas inputs of $0.082/Nm3 equating to
a $0.75/kg production cost to $0.38/Nm3 equating to a $2.2/kg production cost.
Assumptions used include a plant design capacity of 379,387 kg per day and industrial
natural gas as a primary feedstock, with no carbon sequestration. PSA is used for hydrogen
purification.
Emissions
11 kg per kg H2 produced;
77.5 kg per GJ H2.
Compare to : 
12.1 to 10.3 kg per kg of hydrogen (NAS, 2004);
12.01 tonnes CO2 per tonne H2 (HRM Working Group, 2004);
10 tonnes CO2 per tonne hydrogen produced - “CO2 management in refineries”, Graham
Phillips, Foster Wheeler Energy Limited, paper presented at gasification V, Noordwidjk, Holland,
April 2002.
Fairfield paper for SDTC (2005) states 10 kg per kg H2.
Values for sequestration were reduced by 75% as it was assumed that 75% of emissions
could be captured at a cost-effective rate (Dalcor et al., 2004). These are shown separately in
the table.
66 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Table 13 :  Steam Methane Reforming (Large Scale with Sequestration)
Parameter
Estimate
Notes
Purification costs
$0.25 per kg
Assumed same cost as for no sequestration pathways.
Total cost (inc. purification)
$ 11.90 per GJ H2 produced
($1.69 per kg)
2005 scenarios run by the US DOE have prices ranging from $1.22 to 1.63 per kg/ of hydrogen
depending on assumptions used (i.e. varying capital costs and/or fuel costs).
Assumptions used include a plant design capacity of 379,387 kg per day and industrial natural gas
as a primary feedstock, and with sequestration of 90% of the carbon. PSA is used for hydrogen
purification.
Emissions
2.75 kg per kg H2 produced;
19.4 kg per GJ H2
Assuming that 75% of emissions could be captured at a cost‑effective rate. Dalcor et al. (2004) state
that existing technologies could offer a cost‑acceptable solution for 75% of the CO2 stream from
SMR processes (pg. 1.41). Supported by other literature, which cite 70% as a break‑even point for
deployment.
Steam Methane Reforming (Small Scale)
SMR purification on a smaller scale tends to produce hydrogen at around 99.9% purity. Although costs tend to be higher compared to larger-scale
operations due to economies of scale, the purity of the hydrogen stream from smaller systems provides some mitigation against added costs. Typically
small-scale SMR produces hydrogen for industries like tilt glass and stainless steel plants, as well as for oil hydrogenation (this latter is a more common
use outside of North America).
Table 14 :  Steam Methane Reforming (Small Scale)
Parameter
Estimate
Notes
Purification costs
$ 0.30 per kg
Discussion with stakeholders indicated that economies of scale mean that the purification “add‑on”
is proportionally quite a bit higher at the smaller scale as is the generation costs. Smaller scale
operations generally go to higher purity. On site SMR in particular is generally higher purity, as
impurities are not added during transportation and distribution.
Total cost (inc. purification)
$ 33.61 / GJ H2
($ 4.77 per kg)
• Average of TCI cost estimates for hydrogen production from Dalcor, 2004 (Table 1.3 - 4). Costs for
small facilities (0.28, 0.48 tonnes H2/day), which translates to specific TCI costs of $ 4400, $ 5130,
and $ 2667 a tonne. These costs were averaged. *
• The total cost of production, as well as the capital intensity of each process, is shown as cost per
tonne of relatively pure hydrogen, i.e. not less than 99.9% purity. Note that adequate purity for most
industrial uses of hydrogen is less stringent than that required for PEMFCs.
• This estimate was increased by 10% as natural gas feedstocks have increased by 23% since 2004
(see tab “Natural Gas”).
Emissions
11 kg per kg H2 produced;
77.5 kg per GJ H2.
Assumption that SMR emissions are equivalent regardless of scale.
* As a comparison, SMR costs for small-scale hydrogen production are estimated to run from 4.0 - 5.8USD$ per kg in 2003 (Table 6; pg. 17 - Study of Small-Scale Hydrogen Production Options in Alberta DRAFT
Confidential report). Based on decentralized hydrogen production with 20 demonstration trials involving both electrolysis and steam methane reforming approaches, Air Products and Chemicals. Converted from
Exchange Rate :  0.84USD, Bank of Cda - Nov. 9/2004.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 67
SMR Small Scale and Purification (Specific Estimates)
Two specific estimates for small-scale applications with both PSA and membrane purification were found in the literature. These costs are provided here
for comparison purposes – purification costs were included within these numbers. Cost estimates ranged from $28.56 per GJ H2/$4.06 per kg (with
PSA), to $31.61 per GJ/$4.49 per kg (with membrane purification).
Table 15 :  SMR Small Scale and Purification
Parameter
Estimate
Notes
Total cost (inc. purification)
- PSA
$4.06 per kg/
$28.56 per GJ
Myers et al., (2002) “Cost and performance comparison of stationary hydrogen fuelling appliances”
Proceedings of the 2002 US DOE Hydrogen Program Review, NREL/CP-610-32405.
Total cost (inc. purification)
- membrane
$4.49 per kg/
$31.61 per GJ
Myers et al., (2002) “Cost and performance comparison of stationary hydrogen fuelling appliances”
Proceedings of the 2002 US DOE Hydrogen Program Review, NREL/CP-610-32405.
Emissions
11 kg per kg H2 produced;
77.5 kg per GJ H2.
Emissions were held constant to other SMR estimates.
Hydrocarbon Gasification
Very little hydrocarbon gasification is conducted in North America as in the past natural gas has traditionally been a cheaper feedstock for hydrogen
production. China and South Africa are leading jurisdictions in this respect, often producing hydrogen via coal gasification for large industrial applications,
as in the production of urea fertilizer. There is some current Canadian research and development in the gasification of asphaltics (the first phase of
oil sands extraction), which refineries are noting with interest as this has implications for the reduced use of natural gas. Natural gas is becoming an
increasingly expensive feedstock to use for hydrogen production.
As coal is a solid fuel and has lower conversion efficiency and concentration of hydrogen compared to natural gas, and in addition contains detrimental
material (i.e. sulfur, chlorine) larger equipment as well as purification (i.e. amine scrubbers) is required for production, with associated higher capital costs.
Although a conventional coal gasification plant has four times the capital cost of a comparable SMR plant using natural gas as its source of hydrogen, the cost
of coal in the United States is one quarter or less than the price of equivalent energy in natural gas at today’s prices. When coal is used rather than natural
gas, the difference in feedstock price can make the overall cost of hydrogen production via gasification less expensive than with SMR.62 Coal-based hydrogen
production also has the important advantage of using a feedstock that can be contracted long term, thereby minimizing feedstock price risk in the future.
Table 16 :  Hydrocarbon Gasification
Parameter
Estimate
Notes
Purification costs
$0.30 per kg
Stakeholders indicated that often gasification can have fairly low concentrations of hydrogen – which
means there is therefore a limit to the number of technologies that can purify this output. Bulk
separation can be applied at 20 – 30 cents per kg. Stakeholders indicated that gasification can often be
a cheaper mechanism for hydrogen production than SMR.
Total cost (inc. purification)
$9.51 per GJ H2,
or $1.35 per kg
2005 scenarios run by the US DOE show prices ranging from $1.21 to 1.65 per kg of hydrogen produced,
depending on assumptions used (i.e. varying capital costs and/or fuel costs). Capital costs had the
greatest impact on final production costs.
Assumptions used include a plant design capacity of 379,387 kg per day and electrical utility steam
coal. The technology modeled included an EGas gasifier, conventional gas cooling, commercial shift
conversion, commercial sulfuric acid technology and PSA technology. Two-stage Selexol is used to
remove CO2.
As another comparison, the National Academy of Sciences found that the current production cost of
making hydrogen from coal gasification in central station (i.e., large, centralized) plants is estimated to
be $1.03/kg USD in 2004. This statement corresponds with information published by the New York State
Energy Research and Development Authority.
Emissions
21.3 kg per kg H2 produced;
150 kg per GJ
Table 1.3 - 1. Dalcor Consultants Ltd. & Intuit Strategies Inc., in consultation with Deligiannis, G., Fairlie,
M. and Potter, I. (2004) “Canadian Hydrogen - Current Status and Future Prospects” Prepared for Natural
Resources Canada.
68 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Table 17 :  Hydrocarbon Gasification with Sequestration
Parameter
Estimate
Notes
Purification costs
$0.30 per kg
Assumed to be the same as without sequestration pathways.
Total cost (inc. purification)
$11.41 per GJ H2,
or $1.62 per kg.
2005 scenarios run by the US DOE show prices ranging from $1.58 to 1.9 per kg of hydrogen produced,
depending on assumptions used (i.e. varying capital costs and/or fuel costs). Capital costs had the
greatest impact on final production costs.
Assumptions used include a plant design capacity of 379,387 kg per day and electrical utility steam coal.
The technology modeled included an EGas gasifier, conventional gas cooling, commercial shift conversion,
commercial sulfuric acid technology, and PSA technology. Two-stage Selexol is used to remove CO2.
Emissions
5.4 kg per kg H2 produced;
37.5 kg per GJ
Assuming that 75% of emissions could be captured at a cost-effective rate. Dalcor et al. (2004) state
that existing technologies could offer a cost-acceptable solution for 75% of the CO2 stream from SMR
processes (pg. 1.41). Supported by other literature which cite 70% as a break-even point for deployment.
Autothermal Reformation
ATR is a hybrid between gasification and SMR technologies and is often applied to heavier liquids as in diesel fuel as higher heat is often required to crack
such molecules, for example. Purity of end-use hydrogen can be a major determinant of cost – there is a large escalation of costs as one approaches six
9s of hydrogen vs. five 9s of hydrogen, for example. This is a critical component and depends on end-user requirement and locale. Diesel fuel, biogas,
and methanol reforming are also potential feedstocks – for fuel cell applications (this also depends on the type of fuel cell). Biogas has potential to
make significant reductions in greenhouse gas emissions – wastewater treatment plants for example flare or use this gas to power generators. Fuel cells
have potential to fill niche market for smaller applications. APU applications are driven partially by emissions and partially through reducing localized air
pollution at truck stops.63
Table 18 :  Autothermal Reformation
Parameter
Estimate
Notes
Purification costs
$0.35 per kg
Whether steam or autothermal processes are used will depend on the availability of oxygen.
Autothermal reactions will be favoured if there is significant oxygen available and the products that
come from air separation (argon, nitrogen) are desired. ATR is generally deployed at a smaller scale
than SMR, and the production H2 is less pure natively than SMR due to the presence of air in the
reaction zone (i.e. ATR will produce ~ 40% pure H2 as opposed to SMR, at 60-70% purity). However,
the hydrogen/syngas generated is generally cheaper than SMR so purification costs may end up being
balanced out. $0.35 per kg was estimated.
Total cost (inc. purification)
$34.15 per GJ
($4.85 per kg).
Original cost data (n.i. purification) from Atlantic hydrogen SOI (estimate of $4-5 per kg H2).
Emissions
11 kg per kg H2 produced;
7.5 kg per GJ H2.
Assumed emissions are the same as SMR; although SMR would depend on what fuels the reformers
and how efficient these processes are (high temperature combustion). ATR, being run at lower
temperatures, may actually result in lower emissions (fuel, air, steam) – generating lower composition
H2 but at a lower temperature. Purification is also occurring internally. ATR may, then, result in lower
emissions than SMR processes.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 69
Autothermal Reformation (Small Scale and Purification)
Two specific estimates for small-scale ATR applications with both PSA and membrane purification were found in the literature. These costs are provided
here for comparison purposes. Emissions were held constant to other SMR estimates.
Table 19 :  Autothermal Reformation (Small Scale and Purification)
Parameter
Estimate
Notes
Total cost (inc. purification)
– PSA
$30.34 per GJ
($4.13 per kg)
Myers et al., (2002) “Cost and performance comparison of stationary hydrogen fuelling appliances”
Proceedings of the 2002 US DOE Hydrogen Program Review, NREL/CP‑610‑32405.
Total cost (inc. purification)
– membrane
$36.17 per GJ
($5.14 per kg)
Myers et al., (2002) “Cost and performance comparison of stationary hydrogen fuelling appliances”
Proceedings of the 2002 US DOE Hydrogen Program Review, NREL/CP‑610‑32405.
Emissions
11 kg per kg H2 produced;
77.5 kg per GJ H2.
Assumed emissions are the same as SMR; although SMR would depend on what fuels the reformers
and how efficient these processes are (high temperature combustion). ATR, being run at lower
temperatures, may actually result in lower emissions (fuel, air, steam) – generating lower composition
H2 but at a lower temperature. Purification is also occurring internally. ATR may, then, result in lower
emissions than SMR processes.
Electrolysis
Electrolysis produces relatively pure hydrogen, which lends itself more directly to fuel cell applications as there is no CO in the stream produced. Although
costs for purification on a dollar per unit basis are approximately half that of SMR costs, economies of scale dictate these costs are higher overall.
Electrolysis applications are not significantly deployed in Canada at this point in time with the exception of remote locations.
A purification cost of $1 per kg H2 produced were added to all cost estimates for electrolysis (described below) regardless of feedstock. The source
of electrons is irrelevant in regards to purification, which is why this estimate was provided consistently regardless of the energy source. Membrane
purification and PSA are largely applicable to reforming and gasification technologies, where as purifiers for electrolysis systems are largely based on using
de-oxo-catalysts and desiccant bed type dryers (drying and some NaOH scrubbing removal).
Table 20 :  Electrolysis – Coal Thermal
Parameter
Estimate
Notes
Purification costs
$1.00 per kg
A purification cost of $1 per kg H2 were added to all cost estimates for electrolysis (described below)
irregardless of feedstock (see note).
Total cost (inc. purification)
$37.68 per GJ
($5.35 per kg)
Specific assumptions:
In GHGenius the efficiency of the electrolyzer in the year 2010 is 81.16% and requires 48.55 kWh of electricity
to produce one kilogram of hydrogen. With electrolysis, power costs run from 1/2-1/3 the total operating costs
(Pers. Comm: R. Quick, SDTC).
Assuming that this holds true for all electricity sources, the retail cost of delivery for coal electricity was applied
to this formula. The price of coal is about $1-$2/GJ today. At 37% efficiency, the cost of power from feedstock
contribution is about $.01/kWhr. Capital is no more than 1–2 cents per kWhr. Large industrial users can buy
coal power for <$.05 /kWhr all in (Pers. Comm: R. Ferer, Stuart Energy). Therefore 3c per kWH * 48.55 kWh =
145.65 cents, or $1.45.
Assuming this is 1/3 of the total cost to produce hydrogen via electrolysis, the total cost to produce hydrogen
through coal feedstock is estimated to be: $4.35 per kg of hydrogen (n.i. purification of $1/kg).
Emissions
52.3 kg per kg H2;
368.3 kg per GJ
Table 1.3 - 1. Dalcor Consultants Ltd. & Intuit Strategies Inc., in consultation with Deligiannis, G., Fairlie, M. and
Potter, I. (2004) “Canadian Hydrogen – Current Status and Future Prospects”. Prepared for Natural Resources
Canada.
70 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Table 21 :  Electrolysis – Nuclear – Notes and Reference
Parameter
Estimate
Notes
Purification costs
$1.00 per kg
A purification cost of $1 per kg H2 were added to all cost estimates for electrolysis (described below) irregardless
of feedstock (see note).
Total cost (inc. purification)
$85.85 per GJ
($12.19 per kg)
Specific assumptions:
In GHGenius the efficiency of the electrolyzer in the year 2010 is 81.16% and requires 48.55 kWh of electricity to
produce one kilogram of hydrogen. With electrolysis, power costs run from 1/2-1/3 the total operating costs (Pers.
Comm: R. Quick, SDTC). Assuming that this holds true for all electricity sources, the retail cost of delivery for nuclear
power was applied to this formula.
In 1998 Ontario Hydro’s cost of producing electricity from nuclear power was 7.7 per kWh. Therefore 7.7c per kWH
* 48.55 kWh = 373 cents, or $3.73.
Assuming this is 1/3 of the total cost to produce hydrogen via electrolysis, the total cost to produce hydrogen
through nuclear feedstock is estimated to be: $11.19 per kg of hydrogen (n.i. purification of $1.00 per kg).
Emissions
0.83 kg per kg H2;
5.8 kg per GJ
Table 22 :  Electrolysis –Grid Mix
Parameter
Estimate
Notes
Purification costs
$1.00 per kg
A purification cost of $1 per kg H2 were added to all cost estimates for electrolysis (described below)
irregardless of feedstock (see note).
Total cost (inc. purification)
$58.17 per GJ
($8.26 per kg)
Specific assumptions:
In GHGenius the efficiency of the electrolyzer in the year 2010 is 81.16% and requires 48.55 kWh of electricity
to produce one kilogram of hydrogen. With electrolysis, power costs run from 1/2-1/3 the total operating costs
(Pers. Comm: R. Quick, SDTC).
Assuming that this holds true for all electricity sources, the retail cost of delivery for grid electricity was applied
to this formula, using Ontario’s rate of 5 c/kWH. Therefore 5 c per kWH * 48.55 kWh = 242.75 cents, or $2.42.
Assuming this is 1/3 of the total cost to produce hydrogen via electrolysis, the total cost to produce hydrogen
through grid electricity is estimated to be: $7.26 per kg of hydrogen (n.i. purification of $1.00 per kg).
Emissions
Copyright © 2006 by SDTC™
4.35 kg per kg H2;
30.7 kg per GJ
Assuming that the emissions are 1.3 times that of a wind/grid system (assumption in this latter system is that
wind would generate electricity 30% of the time). Emissions are estimated to be 3.25 kg C per kg of hydrogen
produced via this hybrid system. National Academy of Sciences, 2004. Grid mix electricity was assumed in
this case to be the average for the US, as these assumptions were not specifically cited in the report. For the
electric power sector, coal-fired plants accounted for 52 percent of generation, nuclear 21 percent, natural gas
16 percent, hydroelectricity 7 percent, oil 3 percent, geothermal and “other” 1 percent in 2005 (EIA, 2005).
Sustainable Development Business Case 71
Table 23 :  Electrolysis – Wind with Grid Mix Back-up
Parameter
Estimate
Notes
Purification costs
$1.00 per kg
A purification cost of $1 per kg H2 were added to all cost estimates for electrolysis (described below) irregardless
of feedstock (see note).
Total cost (inc. purification)
$64.30 per GJ,
or $9.13 per kg
$9.13 per kg H2, n.i. purification. This compares favourably to the National Academy of Sciences estimates of
$6.64/kg USD in 2004. The committee’s analysis considers a system that uses grid electricity as backup for when
the wind isn’t blowing to alleviate the capital underutilization of the electrolyzer.
Specific assumptions:
In GHGenius the efficiency of the electrolyzer in the year 2010 is 81.16% and requires 48.55 kWh of electricity
to produce one kilogram of hydrogen. With electrolysis, power costs run from 1/2-1/3 the total operating costs
(Pers. Comm: R. Quick, SDTC). Assuming that this holds true for all electricity sources, the retail cost of delivery for
wind electricity with grid back up was applied to this formula.
The assumptions were as follows:
The cost of grid electricity was 5.0 c per kWh as per current Ontario rates.
The cost of wind delivered electricity was 7 c per kWh.
Wind contributed approximately 30% of the total electricity delivered.
Therefore the price for the wind/grid mix was estimated to be 5.60 c per kWh using a weighted average – or at
5.60 c per kWH * 48.55 kWh = 271.88 cents, or $2.71.
Assuming this is 1/3 of the total cost to produce hydrogen via electrolysis, the total cost to produce hydrogen
through this feedstock is estimated to be: $8.13 per kg of hydrogen (n.i. purification of $1.00 per kg).
Emissions
3.35 kg per kg H2;
23.6 kg per GJ
Emissions are estimated to be 3.25 kg C per kg of hydrogen produced via this hybrid system. National
Academy of Sciences, 2004. Grid mix electricity was assumed in this case to be the average for the US, as these
assumptions were not specifically cited in the report. For the electric power sector, coal-fired plants accounted
for 52 percent of generation, nuclear 21 percent, natural gas 16 percent, hydroelectricity 7 percent, oil 3 percent,
geothermal and “other” 1 percent in 2005 (EIA, 2005).Table 23: Electrolysis – Wind power only – Notes and
References.
Table 24 :  Electrolysis – Wind Power Only
Parameter
Estimate
Notes
Purification costs
$1.00 per kg
A purification cost of $1 per kg H2 were added to all cost estimates for electrolysis (described below) irregardless
of feedstock (see note).
Total cost (inc. purification)
$78.66 per GJ,
or $11.17 per kg
$10.17 per kg H2, n.i. purification. This compares favourably to the National Academy of Sciences estimate of
$10.69/kg USD in 2004.
Assumptions:
In GHGenius the efficiency of the electrolyzer in the year 2010 is 81.16% and requires 48.55 kWh of electricity
to produce one kilogram of hydrogen. With electrolysis, power costs run from 1/2-1/3 the total operating costs
(Pers. Comm: R. Quick, SDTC). Assuming that this holds true for all electricity sources, the retail cost of delivery for
electricity was applied to this formula.
The price of wind power ranges from 5-8c per kWh today. Therefore 7 c per kWH * 48.55 kWh = 339.85 cents,
or $3.39.
Assuming this is 1/3 of the total cost to produce hydrogen via electrolysis, the total cost to produce hydrogen
through wind feedstock is estimated to be: $8.73 per kg of hydrogen.
Estimates run by the US DOE in 2005 range from $5.40 – 6.45 per kg produced, with a plant design capacity of
124,474 kg per day, however it should be noted that wind power production in the US has benefited from both
federal (PTC) and state-level (RPS) support in this area.
Emissions
0
Zero emissions.
72 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Table 25 :  Electrolysis – Solar Power
Parameter
Estimate
Notes
Purification costs
$1.00 per kg
A purification cost of $1 per kg H2 were added to all cost estimates for electrolysis (described below) irregardless of
feedstock (see note).
Total cost (inc. purification)
$243.31 per GJ
($34.55 per kg)
Converted from USD cost of $ 28.19 per kg H2 (Exchange Rate: 0.84USD, Bank of Canada - Nov. 9/2004). Using costs
of installed $3,285 $/kW, Electricity cost of $0.319/kWh, and hydrogen cost with Electrolyzer of $28.19/kg. From
NAS, 2004. Not including purification costs.
Note comparison to NREL study ($240 vs. $440 per GJ). The NREL estimate is significantly higher, perhaps due to
improved economics in solar power industry since 1999 (when the NREL study was conducted).
Emissions
0
Zero emissions.
Table 26 :  Solar Hydrogen Reforming (Small and Large Scale)
Parameter
Estimate
Notes
Purification costs
0
Not applicable. Stakeholders indicated that because this process largely starts with water there are not many
impurities, as water-related processes are largely fairly pure (minus the removal of oxygen and water). Compared
to SMR, where approximately 20% of the output has to be removed, solar outputs only require that about 1% of
the output is removed. For any water‑split reaction, whether solar or thermal driven, the purification ‘adder’ will be
roughly equivalent.
Total cost (inc. purification)
– large scale
$19.72 per GJ
($2.80 per kg)
See Table 27
Total cost (inc. purification)
– small scale
$35.92 per GJ
($5.10 per kg)
See Table 27
Emissions
58 kg per GJ
See Table 27
Values were developed for Table 27 using the values for small scale (24,390) and for large-scale (609,756) facilities and associated measures on
emissions, as well as the cost per kg (full cost model for a full commercial system).
Table 27 :  Cost of Production and Emissions from Solar Hydrogen Dry Fuel Reforming
Hydrogen Production (kg/yr)
kg C02 / GJ
C$/kg operating *
C$/kg full cost model ** first
commercial system
C$/kg with established technology **
24,390
58
0.7
5.1
3.6
243,902
58
0.7
3.3
2.3
609,756
58
0.7
2.8
1.9
* Includes feed gas cost, purification costs, energy cost.
** Includes 15% ROI, cost of feed gases, electricity @ $0.075/kWh, load factor (on stream) is 27%, cost of capital is 5%, 20 year equipment life, 2% inflation, insurance, and maintenance.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 73
Table 28 :  Plasma Dissociation
Parameter
Estimate
Notes
Purification costs
$0.25 per kg
This technology is essentially centered around a low temperature electronically induced non-thermal plasma
discharge that dissociates everything into elemental form (carbon black and hydrogen). Plasma dissociation is one
of the few processes that can be performed on mixed media to produce hydrogen, however the output needs to
be purified. This technology produces syngas, similar to SMR. An estimate of $0.25 was used to coincide with SMR
purification costs.
Total cost (inc. purification)
$22.89 per GJ H2
($3.25 a kg).
Stakeholder consultation, Atlantic Hydrogen.
Emissions
Not provided.
Byproduct Hydrogen Capture – Large Scale
Byproduct hydrogen is often fed into the process stream of facilities. The heating value is higher than that of natural gas. Generally the byproduct
hydrogen is provided at atmospheric pressure and is then ‘pushed’ into a low pressure stream. Consequently collection costs are generally not significant
in most applications. Byproduct hydrogen can also be captured from PSA streams, from SMR applications for example, but because this stream is at very
low pressure and does not produce a lot of hydrogen, compression for final use can be very expensive.
Table 29 :  By-product Hydrogen Capture (Large Scale)
Parameter
Estimate
Notes
Volume in production
2 M GJ annually
Approximately 15 sodium chlorate plants are in operation in Canada, a third of which are capturing
hydrogen and burning it in boilers (boiler usage of hydrogen approximates 20% of the 10 million GJ
potential). Pers. Comm. C. Armstrong, Sacré-Davey.
Purification costs
0
No costs added. As a general rule, if less than 50% hydrogen occurs in a gas stream this is used directly
in a boiler. Above 50% the hydrogen is extracted and used for a chemical value as opposed to a heat
value. QuestAir is trying to raise this threshold to 70-75%. Whether or not this stream needs to be
purified depends on the process in question – there is a chlor-alkali plant in Quebec, for example, which
‘freezes out’ the hydrogen and produces a very pure stream – the costs of incremental purification
required are far outweighed by the value of the hydrogen as a chemical feedstock.
Total cost (inc. purification)
$8.00 per GJ ($1.14 per kg)
$8.00 per GJ, n.i. purification. Personal Communication: C. Armstrong, Sacré Davey Engineering.
Emissions
67.6 kg CO2 reduced per GJ H2 captured
The Eka Chimie Plant in Quebec is estimated to recover about 250 metric tonnes of H2 a year, and
reduces electricity consumption by approximately 6,400 MWh annually. Therefore, every one metric
tonne of H2 captured is a 32 MWh electricity reduction using these estimates. At an estimated national
intensity factor of 0.30 t per MWh (0.21 t per MWh is proposed by Government of Canada; CanWEA is
advocating 0.37 t/MWh), this is approximately 67.6 kg CO2 reduced per GJ H2 captured.
* From: http://oee.nrcan.gc.ca/Publications/infosource/Pub/ici/caddet/english/R343.cfm?PrintView=N&Text=N
**CanWEA is advocating 0.37 t/MWh based on the claim the marginal build electricity source will be high efficiency combined cycle natural gas.
74 Renewable Fuels — Hydrogen Production and Purification
Copyright © 2006 by SDTC™
Table 30 :  By-product Hydrogen Capture (Small Scale)
Parameter
Estimate
Notes
Volume in production
89.6 tonnes annually
The west coast pilot captures 20 kg of H2 an hr, over an 8 hr period and has a 20 month demonstration
timeline (P. Comm. C. Armstrong). 28 days of operation per month were assumed.
Purification costs
$0.41 per kg
For more specific end-uses as in fuel cells or on-site , not including capital costs, purification is estimated
to add another $1.90 per GJ – including capital costs, this would be approximately $2.00 per GJ
depending on the level of production.
Total cost (inc. purification)
$10.90 per GJ
($1.55 per kg)
$8.00 per GJ, n.i. purification. Pers. Comm: C. Armstrong, Sacré Davey Engineering.
Emissions
67.6 kg CO2 reduced per GJ H2 captured.
The Eka Chimie Plant in Quebec is estimated to recover about 250 metric tonnes of H2 a year, and reduces
electricity consumption by approximately 6,400 MWh annually*. Therefore, every one metric tonne of
H2 captured is a 32 MWh electricity reduction using these estimates. At an estimated national intensity
factor of 0.30 t per MWh (0.21 t per MWh is proposed by Government of Canada; CanWEA is advocating
0.37 t/MWh**), this is approximately 67.6 kg CO2 reduced per GJ H2 captured.
* From: http://oee.nrcan.gc.ca/Publications/infosource/Pub/ici/caddet/english/R343.cfm?PrintView=N&Text=N
** CanWEA is advocating 0.37 t/MWh based on the claim the marginal build electricity source will be high efficiency combined cycle natural gas.
Copyright © 2006 by SDTC™
Sustainable Development Business Case 75
8
Endnotes
8.1
Comprehensive listing of note references
1 Disruptive Potential is the degree of positive impact that a particular technology would have on its sector and/or adjacent (and even unrelated) sectors if it were to be fully
commercialized. Disruptive technologies entirely change the way in which industries operate or goods and services are produced.
2 Hydrogen Systems Project Team (Canadian Hydrogen Association and Natural Resources Canada). “A Discussion Paper for Greenhouse Gas Reduction and Economic Growth”. May 15,
2005. http://www.h2.ca/en/PDF/DISCUSSION%20PAPER%2030aug051.pdf.
3 May also be referred to as thermal dissociation
4 Information taken from PH2 web site http://www.precisionh2.com and http://www.alentecinc.com/waste.htm – What is Plasma? and http://www.alentecinc.com/renewable.
htm.
5 Satish Tamhankar, The BOC Group, Murray Hill, NJ. “Selecting Appropriate Technology for Hydrogen Production”. Presentation at Hydrogen and Fuel Cells 2004 Conference and Trade
Show.
6 “Waste hydrogen in dryers at chemical plant” CADDET Energy Efficiency/OECD. March 1999. Available at NRCan
http://oee.nrcan.gc.ca/Publications/infosource/Pub/ici/caddet/english/R343.cfm?PrintView=N&Text=N. SDTC file is GRP FHY 19990301 NRC WasteH.pdf
7 Presently hydrogen is produced in a limited number of plants and used for making chemical and upgraded fuels.
8 Gasification Technologies Council http://www.gasification.org/index.html.
9 Dalcor et al., (2004). p. 1.22
10 This chapter was prepared by Matthew Fairlie, and is based on a report prepared by :  Fairfield Group, November 8, 2005, for SDTC.
11 Dalcor Consultants et al. Canadian Hydrogen Survey 2004/2005. Available at http://www.h2.ca.
12 Ibid.
13 D. du Plessis,“The Future of Coal Gasification and Implications for Canada’s Energy Sector”, Canadian Institute Clean Coal Symposium, Toronto, April 27-28, 2005
14 Opti-Nexen Long Lake, Fort McMurray.
15 Dalcor Consultants et al.“Canadian Hydrogen Survey 2004/2005”, www.h2.ca.
16 “Hydrogen Systems :  a Discussion Paper for Greenhouse Reduction and Economic Growth”, www.h2.ca.
17 Ibid.
18 D.R. Simbeck et al,“Hydrogen Supply :  Cost Estimate for Hydrogen Pathways – Scoping Analysis”, National Renewable Energy Laboratory Report :  NREL/SR-540-32525
19 Ibid.
20 “Hydrogen Systems :  a Discussion Paper for Greenhouse Reduction and Economic Growth”, http://www.h2.ca.
21 Ibid.
22 C. Higman, M. van der Bugt, Gasification, Elesevier, London, 2003.
23 Ibid.
24 Ibid.
25 Ibid.
26 Oil Sands Technology Roadmap, Alberta Chamber of Resources, January 2004.
27 Opti-Nexen Long Lake, Fort McMurray
76 Renewable Fuels — Hydrogen Production and Purification
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28 J.G. Gillis et al, Survey of Hydrogen production and Utilization Methods, Institute of Gas technology, NASA Contract 8-30757. (1975)
29 Dalcor Consultants et al.“Canadian Hydrogen Survey 2004/2005”, http://www.h2.ca.
30 Ibid.
31 Ibid.
32 “Hydrogen Infrastructure Report” C.E. Thomas, B.D. James, I.F. Kuhn, F.D. Lomax, G.N. Baum, prepared for Ford Motor Co. under contract DE-AC02-94CE50389.
33 Fuel Cell Handbook, 5th Edition, http://www.eng.fsu.edu/~kroth/eml 4930/fchandbook.pdf.
34 S. Pappasava,“Timeline of Activities Necessary for the Development of a Hydrogen Specification Guideline for Hydrogen Fuel Cell Vehicles”,
http://www.eere.energy.gov/hydrogenandfuelcells/pdfs/fp_workshop_papasavva.pdf.
35 Boyd, R., Ciotti, M., Law, L., Fuller E., Rosetto,“Hydrogen Station Fuel Control”, available from National Research Council Canada, Institute for Fuel Cell Innovation, Vancouver, British
Columbia. Also see Canadian Transportation Fuel Cell Alliance, http://ctfca.nrcan.gc.ca.
36 Bob Parsons,“Hydrogen Hybrid ICE Test Cold Weather Demonstration in Winnipeg Manitoba, Govt. of Manitoba (to be released in Fall 2005).
37 “Filling Up With Hydrogen 2000”, http://www.eere.energy.gov/hydrogenandfuelcells/pdfs/merit03/26_stuart_energy_matthew_fairlie.pdf.
38 The all-in cost of an electrolyzer sited at a gas station and sized to fill 10-20 cars per day is far less than the total capital cost of a new large scale steam-methane reformer that
requires a new pipeline or truck-based delivery infrastructure. For this reason, various experts have concluded that electrolysis will have a role in the introductory stages of the
hydrogen-fuelling marketplace. The longer-term role of electrolysis for fuelling will depend upon how the economics of converting electricity to hydrogen compares with the
economics of other fuelling options (Schroeder, C. (2004) “Hydrogen from Electrolysis”. RE Insider, June 21, 2004.)
39 Padro, C.E.G., V. Putsche (1999) “Survey of the Economics of Hydrogen Technologies”. Prepared by the National Renewable Energy Laboratory.
40 Dalcor et al., (2004).
41 Information taken from PH2 web site http://www.precisionh2.com
42 Information taken from Solar Hydrogen Energy Corporation (SHEC) web site http://www.shec-labs.com/process.htm
43 The US captures hydrogen in areas proximal to a merchant use for hydrogen (i.e. space shuttle, semiconductor use). Approximately 50% of plants in US capture their hydrogen, as
there is a load nearby for merchant use.
44 “Waste hydrogen in dryers at chemical plant” CADDET Energy Efficiency/OECD. March 1999. Available at NRCan
http://oee.nrcan.gc.ca/Publications/infosource/Pub/ici/caddet/english/R343.cfm?PrintView=N&Text=N. Our .pdf is GRP FHY 19990301 NRC WasteH.pdf
45 Information in this section excerpted from Dalcor et al., (2004).
46 “The Utility of Hydrogen.” SRI Chemical and Health Business Services per Chemical Engineering magazine. September 2001.
47 “HydroMax® :  Bridge to a Hydrogen Economy”, a white paper by Alchemix Corporation. July 10, 2003.
48 US Department of Energy (2002), pg. 7.
49 Dalcor Consultants Ltd. & Intuit Strategies Inc., in consultation with Deligianis, G., Fairlie, M. and Potter, I. “Canadian Hydrogen – Current Status and Future Prospects”. Prepared for
Natural Resources Canada. (2004)
50 Dalcor et al., (2004).
51 Dalcor et al., (2004).
52 Dalcor et al., (2004).
53 Stuart, A.K. (2004) . ”The Hydrogen Economy – Near Term opportunities in the Longer Term Journey” Presented to Hydrogen Road Map Workshop, Ottawa – May 13, 2004.
54 As the 1987 Hydrogen National Mission for Canada demonstrates, Canada has been an ‘early thought leader in the field’ and has several hydrogen and fuel cell industry pioneers,
such as Ballard, Stuart, Hydrogenics, and Dynetek (Hydrogen Road Map for Canada, 2003).
55 Stuart, A.K. (2004).
Copyright © 2006 by SDTC™
Sustainable Development Business Case 77
56 Oil sand extraction is very energy intensive and has large hydrogen requirements currently provided by natural gas. Possible development of nuclear energy in the oil sands may
provide energy security and improve air quality, as there are negligible CO2 emissions. Oil Sands Technology Roadmap, Alberta Chamber of Resources, January 2004.
57 Hydrogen Systems Project Team. Hydrogen Systems :  A Discussion Paper for Greenhouse Gas Reduction and Economic Growth. Prepared in cooperation with Natural Resources
Canada. May 15, 2005.
58 The Canadian government is funding an initiative with $1.1 million to “connect” the two cities of Vancouver and Whistler (123km/77 miles) with a hydrogen infrastructure by 2010
– [Strange, D. (2004) Climate Change – Presentation to HRM for Canada Workshop. On behalf of Climate Change Secretariat].
59 Britton, R. (2003) Letter to Editor-In-Chief, National Post. June 13, 2003. http://www.fuelcellscanada.ca.
60 Gurney, J.H. (2004) “Building the Case for the Hydrogen Economy :  An Electric Utility Perspective on Building a Hydrogen Infrastructure for Sustainable Electric Power” In IEEE Power
& Energy Magazine, March/April 2004.
61 Pembina Institute. Life-Cycle Value Assessment (LCVA) of Fuel Supply Options for Fuel Cell Vehicles in Canada. June 10, 2002. p. 12.
62 Alchemix website, accessed June 18, 2006 :  www.alchemix.us
63 Personal Communication. B. Peppley, Royal Military College. November 29, 2005.
78 Renewable Fuels — Hydrogen Production and Purification
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Sustainable Development Technology Canada
will act as the primary catalyst in building
a sustainable development technology infrastructure in Canada.
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