WinDS-H2 MODELWind Deployment Systems Hydrogen Model

Workshop on Electrolysis Production of Hydrogen from Wind and Hydropower

Walter Short

Nate Blair

September 9, 2003

NREL 1617 Cole Boulevard Golden, Colorado 80401-3393 (303) 275-3000Operated for the U.S. Department of Energy by Midwest Research Institute Battelle Bechtel

Presentation Contents

Background Representation of wind in WinDS Representation of hydrogen in WinDS-H2

Questions that WinDS-H2 might answer System configuration Factors considered/Assumptions/Control strategy

Preliminary results Conclusions Additional Modeling Required

Background/Status

Initial WinDS model did not include H2 Under development since 2002 First results for wind electricity only available in May

2003 WinDS-H2 development began in June 2003

Initial version does not consider sources of H2 other than wind

Have a few preliminary results today Seeking your input on how to improve our current

approach

WinDS Model

A multi-regional, multi-time-period model of capacity expansion in the electric sector of the U.S

Designed to estimate market potential of wind energy in the U.S. for the next 20 – 50 years under different technology development and policy scenarios

WinDS is Designed to Address the Principal Market Issues for Wind

Access to and cost of transmission Class 4 close to the load or class 6 far away? How much wind can be transmitted on existing lines? Will wind penetrate the market if it must cover the cost of

new transmission lines? Intermittency

How does wind capacity credit change with penetration? How do ancillary service requirements that increase non-

linearly with market penetration impact wind viability How much would dispersal of wind sites help?

WinDS Addresses These Issues Through:

Many wind supply and demand regions Constraints on existing transmission available to wind Explicit accounting for regulation and operating

reserves, wind oversupply, and for wind capacity value as a function of the amount and dispersion of wind installations

Tracking individual wind installations by supply/demand region, wind class and transmission line vintage

General Characteristics of WinDS

Linear program optimization (cost minimization) for each of 25 two-year periods from 2000 to 2050

Sixteen time slices in each year: 4 daily and 4 seasons 4 levels of regions – wind supply/demand, power

control areas, NERC areas, Interconnection areas 4 wind classes (3-6), wind on existing AC lines and

wind on new transmission lines Other generation technologies – hydro, gas CT, gas

CC, 4 coal technologies, nuclear, gas/oil steam

Updated Wind Resources with Fewer Land-Use Exclusions

Transmission in WinDS

Wind Intermittency in WinDS

Constraints Capacity credit to reserve margin requirement Operating reserve Surplus wind

Probabilistic treatment Explicitly accounts for correlation between wind

sites Updated values between periods

Wind Contribution to Reserve Margin

Uses LOLP to estimate the additional load (ELCC) that can be met by the next increment of wind

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Operating Reserve Constraint

Ensures adequate spinning reserve, quick-start capacity and interruptible load are available to meet normal requirements plus those imposed by wind

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Surplus Wind

0

500

1000

1500

2000

2500

3000

0 2000 4000 6000 8000 10000

hours

MW

Load duration curve

Derated must-run units Must-run units

Surpluswind

Usable wind

1000 MW nameplate wind36% capacity factor

Wind Costs

Cost and performance vary by wind class, and over time according to user inputs or with learning PTC or ITC with start/stop dates, term, rate Capital cost can increase with rough terrain

Price penalty on capital costs for rapid national and regional growth

Financing explicitly accounted for Transmission costs –

Existing lines: $/kWh/mile or postage stamp New lines: $/kW/mile; penalties for rough terrain and dense

population

Load

Operating reserve

Reserve Margin

Forced Outages

Imports Exports

Planned Outages

Hydroelectricity in WinDS

No capacity expansion allowed Retirements – both scheduled and

unscheduled Generation constrained by water availability

(set to average over last 5 years) Dispatched as needed for peaking power

Not constrained by irrigation, recreation, environmental considerations, etc.

WinDS-H2

Modified form of the WinDS model that includes the on-site use of wind generated electricity to produce H2 through electrolysis

Status: Initial version under development Selected preliminary results available today Seeking your comments

Questions WinDS-H2 Can Help Answer

What is the market potential for H2 from wind – nationally? Regionally?

What improvements are required in electrolyzers, storage, fuel cells and H2 transport to make wind-H2 competitive?

Does the possibility of H2 production from wind increase the potential of wind power?

What will be the principal use of H2 from wind - H2 fuel or fuel-cell-firming of wind?

Will local H2-fuel demand spur much wind-H2?

Wind-H2 System Configuration

Electrolyzer

H2 Storage

H2-fuel transport

Fuel cell

Transmission to Grid

Compressor

H2 Factors Considered by WinDS-H2

H2 and fuel cells: Fuel cells contribute 100% to reserve margin Higher transmission line capacity factor Fuel cells contribute 100% to operating reserves Reduction in surplus wind

H2 transportation fuel production Transportation cost

Local vs remote transportation fuel demand

Major Assumptions in WinDS-H2

Only new wind farms have the option to produce H2, because: Power purchase agreements Wind turbine and power controls Transmission requirements

There is a market for H2 fuel at a fixed price Market size varies with region

Fuel cells used only to fill-in behind wind

Control Strategy Summary

The fraction of each wind farm’s capacity dedicated to H2 production is the same from one year to the next

The fractions of H2 sent to the fuel cell and sold as fuel are the same from one year to the next for each wind farm

Size H2 storage for daily peak load use of H2 in fuel cell Generate with the fuel cell only during daily peak load

period to firm up the wind generation Use fuel cell generation to provide operating reserve as

required Use electrolyzers to reduce/eliminate surplus wind

generation

Base Case H2 Inputs

Component Capital Cost Operating Cost Efficiency

Electrolyzer $600/kW $0.10/Kg 0.75

Storage $100/kg $0.10/kg 1.0

Fuel Cell $600/kW $2/MWh 0.5

Compressor 0 0 1.0

Transport $0.001/Kg/mile

Base Case Capacity Results

0

500

1000

1500

2000

2500

3000

2000 2010 2020 2030 2040 2050

Year

GW

Wind

nuclear

o-g-s

Coal-IGCC

Coal-new

Coal-old-2

Coal-old-1

Gas-CC

Gas-CT

Hydro

Base Case H2 Inputs (cont’d)

Price of H2 fuel = $2.50/kg Maximum regional demand for H2 fuel =

5 million kg

H2 Fuel Production Sensitivity

0

50

100

150

200

250

300

350

400

450

500

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

An

nu

al P

rod

uc

tio

n C

ap

ac

ity

(M

illio

n k

g)

50% cost

100% cost

150% cost

Sensitivity to H2 Component Capital Costs

0

2

4

6

8

10

12

14

16

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

GW

EC 50%

EC 100%

EC 150%

FC 50%

FC 100%

FC 150%

Preliminary Conclusions

H2 can be modeled in the WinDS model H2 from wind can be attractive at reasonable

electrolyzer and fuel cell cost and performance

Wind market penetration may be increased if the cost and performance of the electrolysis-fuel cell cycle can be improved

Additional Modeling Required

Refine existing WinDS-H2 model Implement consensus suggestions from this

workshop – both data and model Include competitive sources of H2

Distributed electrolysis Natural gas SMR Biomass Hydroelectricity