Engineering Management Project: Technology Strategy for Future Hydrogen Production

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This presentation was given for a Final Presentation for an Engineering Management class. The presentation aims at defining innovation success factors and laying out technological strategy to market or promote a new way of hydrogen production.

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  • Largest third-party hydrogen producer – over 50% shareOperate over 60 plants – Americas, Europe, AsiaProduce over 1.25 million tonnes per yearNYSE: AP
  • Our technology is producing hydrogen using electrolysis using a newly discovered catalystby Daniel Nocera, a professor of chemistry at MIT. This technology uses a new catalyst with to turn water into hydrogen. The catalyst enables the electrolysis system to function efficiently at room temperatures and at ordinary pressure. This allows hydrogen cells to be mass produced in a simpler, convenient, practical, and cheap way for commercial use to fulfill the energy on demand. The produced hydrogen could power hydrogen fueled cars. More ambitiously, the reaction could also be used to split seawater to produce fresh water and generate electricity at the same time. This technology is currently under research at MIT and has been patented by Polaris Ventures Partnership and is assumed will be established by Airproducts our company of choice. In the water at the negatively charged cathode, a reduction reaction takes place, with electrons (e−) from the cathode being given to hydrogen cations to form hydrogen gas (the half reaction balanced with acid):Cathode (reduction): 2H2O(l) + 2e− -> H2(g) + 2OH−(aqAt the positively charged anode, an oxidation reaction occurs, generating oxygen gas and giving electrons to the cathode to complete the circuitAnode (oxidation): 4OH−(aq) -> O2(g) + 2H2O(l) + 4e−Combining either half reaction pair yields the same overall decomposition of water into oxygen and hydrogen:Overall reaction: 2H2O(l) -> 2H2(g) + O2(g) When renewable energy like solar power, hydroelectric, wind, biomass and nuclear become a primary source of electricity, vast amounts of affordable storage will be needed. And today's options for storing electricity just aren't practical on a large enough scale.Batteries, meanwhile, are expensive: they could add $10,000 to the cost of a typical home solar system. And although they're improving, they still store far less energy than fuels such as gasoline and hydrogen store in the form of chemical bonds. The best batteries store about 300 watt-hours of energy per kilogram, Lewis says, while gasoline stores 13,000 watt-hours per kilogram. The numbers make it obvious that chemical fuels are the only energy-dense way to obtain massive energy storageOf those fuels, not only is hydrogen potentially cleaner than gasoline, but by weight it stores much more energy--about three times as much, though it takes up more space because it's a gas. The challenge lies in using energy from the sun to make such fuels cheaply and efficiently. This is where our technology comes in.Why Hydrogen?Hydrogen has the highest combustion energy per pound relative to any other fuel, meaning it is more efficient on a weight basis than fuels used currently. Hydrogen offers 2-3 times more energy than most other common fuels. It combines readily with oxygen, releasing considerable energy as heat. Hydrogen is the simplest and lightest element in the universe. It is made up of one proton and one electron. Hydrogen is the lightest of all elements and gases, and is 14 times lighter than air. A gaseous hydrogen "spill" diffuses immediately into the air, and does not pollute the ground or groundwater. Hydrogen is colorless, odorless and nontoxic. It does not produce acid rain, deplete the ozone or produce harmful emissions. Hydrogen is the most abundant element, comprising about three quarters of the mass in the universe. Hydrogen is found in the water that covers 70% of the earth's surface and in all organic matter.
  • With the current world population rapidly growing, it is no secret that the world now demands energy more than ever to fuel that growth. In United States itself the energy market is worth more than 1 trillion dollars. The society now is also much more concerned about the environment due to the eminent fact of global warming and air pollution. Energy industry get the most blame for it due to the world dependence of fossil fuel and the carbon emission it produces. Our technology would then able to offer the alternative source of energy that is clean and limitless which is hydrogen fuel.Other than that many nations including United States have shown their support to shift toward Hydrogen Economy to decrease the dependence on fossil fuel with the risk of them being depleted in the near future.
  • Relative performance over cost advantage:We are expecting to break steam-methane reformation (SMR) dominance in hydrogen production industry a few years after our technology is commercially applied and we believe that the limited nature of natural gas would help us achieve that. Even though our technology basically derives from the costly electrolysis process, we expect to break that price barrier using our novel catalyst.We also look to lower our production cost by getting government funding.Government policy:Hydrogen fuel has been known to be the cleanest fuel for a long time and the biggest step towards hydrogen energy happened after the government announced its major plan in 2005 to take hydrogen fuel seriously in a so-called 'Hydrogen Economy' future. What this big plan means for us is that we are able to get a large sum of government spending to support our technology. Therefore the Hydrogen Economy program has provided us very high positive externality.Process and discipline knowledge:Air Products is world-renowned for its superiority in gas production discipline. We have attracted partnerships with many accomplished chemical companies in the world – an example is Technip. Technip and Air Products has been successful partners for over 40 years now in the hydrogen production and Air Products major contribution in this partnership is its technical expertise in the gas production discipline.Technology cleanness:The cleanness of our technology is itself an attraction to the market.
  • Although our technology offer a much less expensive solution to produce hydrogen, our hydrogen would still be relatively more costly than fossil fuel. If we cannot break that barrier not many consumer can afford using hydrogen powered devices itself.This technology’s success is also highly dependent on how many people uses hydrogen infrastructure. Hydrogen devices such as cars, fuel cells and personal electronics are also very new. We need to then grab as much market as possible in that area to be competitive.Government has been very helpful in terms of financing and promoting hydrogen culture. But if they can be more strict to the industries by implementing carbon taxing and strict emission guidelines we can be more hopeful that people would take the Hydrogen Economy seriously.
  • Project 1: Hydrogen storage for renewable energy power plantsAs an energy storage medium, hydrogen is intriguing because in theory a reserve of gaseous hydrogen has the capacity to store truly large values of energy. By contrast, storing energy in batteries or flywheels has distinct limitations. Currently, however, hydrogen storage in compressed or liquid form in tanks, or by means of other technologies such as hydrides, alanates, and other chemicals, has never been undertaken on more than a modest scale. The cost of storing hydrogen today long term on a massive scale would appear to be prohibitive with existing technology, which is precisely why hydrogen storage has only taken place on a small scale. Some proponents of a hydrogen transition believe, however, that a number of nascent techniques are sufficiently promising to warrant the initiation of infrastructure projects today.One suggestion, perhaps the boldest, is that hydrogen simply be stored in transit by being injected into a vast network of pipelines which would themselves communicate with a network of hydrogen powered generators. So long as hydrogen were being produced in sufficient volumes by renewable energy sources-based electrolysers or other hydrogen generators, and fairly promptly consumed subsequently, the lack of concentrated storage facilities would not be a problem. But the energy required to pump hydrogen through a pipeline network is considerable, as are the net losses in energy and in the gas itself, because 1.4% of hydrogen is consumed every 150 kilometers to energize compressors - this assuming that leakage of the gas is negligible. Thus transcontinental transmission of hydrogen gas would consume more than 50% of the total. It follows then that electricity itself would likely become the medium of energy transfer, and that hydrogen would have to be produced and consumed locally, simply because resistive energy losses during long range transmission of electricity are so much less than the energy losses attendant upon transporting hydrogen via pipeline. Therefore, pipeline storage, it appears, is not a very well founded notion.Hydrogen could also be stored in underground reservoirs such as depleted salt mines, and pilot projects toward that end have achieved considerable success. The problem in a fully evolved hydrogen economy would be the ready availability of suitable sites and their distance from large user populations. Hydrogen, as we have seen, is expensive to transmit through pipelines, and if large volumes of hydrogen were to be stored in widely scattered reservoirs, then the demands upon the transmission system would be intense and probably insupportable.Project 2: Hydrogen fuel station -Totally integrated vehicle fueling systems-Operate with delivered hydrogen or hydrogen you generate on-site-Low installation cost-Require minimal utilities-Energy-efficient, using pressure from the hydrogen supply-Fast-fill and latest dispensing technology- Dispensing technology complies with California Fuel Cell Partnership and SAE draft interface standards-Aesthetic, high-tech appearance-Uses Water as source of supplemental alternative fuel.- Reduces emissions up to 98%.- Extends your fuel mileage from 15% - 40%.- Reduction of carbon build up in cylinders, and spark plugs.- Increase catalytic converter life.- Increase spark plug life.- Increase oil lifetime- Restore new car performance Project 3: HomeHydrogen Power Generation System  ·    Reliability, with few moving parts·    Lower capital costs Than combustion engine generators·    Lower life cycle costs Than combustion engine generators     Environmentally friendly·    No Toxins - No NOX - No SOX·    Primary or back-up power ·    Indoor or outdoor installations·    Virtually no maintenance required·    Smaller footprint and weight ·    Silent running, no noise pollution .    Internet ready, able to be remotely monitored·    Automatic, manual or remote start-up ·    A fuel cell is load following so fuel consumption is frugal and     efficient.·    No need for extra floor space in your shelter. Fuel cells can be rack     mounted with to existing equipment. Or pa mounted outside your     shelter .    Hydrogen cylinders are bullet-proof and safe to store above     ground level..    Fuel cells are flexible, powering many different applications. 
  • Research and development is essential to this technology since it is very new and quite radical to the industry. The R&D would focus more on upscaling the production line and applying the process our selected projects. We would also apply for patent protection so that this technology can maintain its competitiveness for at least 15 more years.In order to lower our dependency to hydrogen infrastructure, we would still serve our hydrogen in chemical manufacturing and processing industry.Catalyst is an integral of our technology’s success. Air Products has no expertise in manufacturing catalysts so we will outsource them from other catalyst manufacturers. To get better market positioning we would also develop partnership with related industries for each of our chosen projects. For the power plant hydrogen production and storage project a renewable energy company would be our best partner. Gas companies partnership would help us in the hydrogen fuel station project since they have already established their fuel station lines. Home developers could help us to make our technology more affordable for home owners.
  • Summary of the interview:- We still need very strong government support so that the consumer and the industry would make the billion dollar change to hydrogen economy.Electrolysis is not a favorable method to produce hydrogen. To make it happen we need to improve the bottlenecks such as it’s high energy input which contribute to its high operation cost. If that was to be improved it would have a great future since it is very clean and simple compared to other methods. To make the most impact to the environment (carbon emission, global warming etc.) the best target market for us is the transportation market.
  • Engineering Management Project: Technology Strategy for Future Hydrogen Production

    1. 1. ENGINEERING MANAGEMENT 221 Final Presentation Noel Zulkifli
    2. 2. Founded by Leonard P. Pool in 1940 Produce and sell industrial gases and Leader in hydrogen fuel chemicals, and energy infrastructure systems Serves customers in World’s largest supplier technology, energy, hea of merchant hydrogen lthcare, and industrial markets worldwide Over 300 plants in 30 US $7.4 billion in sales countries
    3. 3. What is the future H₂ production? Hydrogen Produce hydrogen from electrolysis using a newly discovered catalyst by MIT chemist Daniel Nocera Electrolysis Fuel Cell  100% clean Use only renewable energy input as power source, no toxic byproduct Water Energy  Resourceful and simple Only need water, power and cheap and abundant catalyst as input Operable at room condition Do not need caustic solution  Fuel/Energy Source Aims towards Hydrogen Economy
    4. 4. Business Opportunities/Markets  Vast energy market U.S: 1,042,934 million dollars and growing  Growing demand for clean energy source Concerns on global warming, fossil fuel dependence & depletion  Global Hydrogen Economy program Shift from gasoline to hydrogen fuel Support from government policy
    5. 5. Success Factors Importance-Weighted Advantage 25 20 15 10 5 0 -5 Air Products’ outstanding process & discipline -10 knowledge/Commitment Relative performance over cost advantage Scalability Positive Externalities - Greenness
    6. 6. Key Challenges Price • Currently still cost more than fossil fuel Dependence on H2 infrastructure • Hydrogen cars, fuel cells are not widely used yet • Need more renewable sources Maturity/Slow Transition • Deviation from social ideals; people are not use to the idea of hydrogen as a fuel source Government Policy • Without strong governmental support, people will not take Hydrogen Economy seriously
    7. 7. Technology Strategy Project 1 Project 2 Project 3 Hydrogen Storage Power Hydrogen Fuel Stations Hydrogen Home Systems Plants • High discipline • Dependent on • Expensive knowledge hydrogen vehicles • Lack expertise • Fit with corporate • Need government • Licensing to house strategy as support developers industrial gas • Compete with gas • Maybe Later producer • Collaboration with • High prospect Exxon • Invest Now • Maybe now (already initiated in California)
    8. 8. Technology Strategy Project 1 2 3 NPV 13.5 million 4.75 million 0.02 million S 34.3 million 17.6 million 6.3 million X 12.8 million 9.9 million 4.6 million t 2 3 3.5 NPVq 1.58 1.34 1.01 σ√t 0.2 0.25 0.60 Call value 14.6 million 5.9 million 3.9 million
    9. 9. Strategy Improvement Ashok Choudhury Dr. Ram B.Gupta Butch Carmen Proffessor of Material Department of Principle Processing Science and Chemical Engineer Engineering Engineering Olin Charleston Vanderbilt University Europe is a good target Technology scope: Support from government market due to its strict personal devices, hydrogen is crucial for Hydrogen laws I and encouragement storage, hydrogen home Economy shift in alternative energy and system carbon trading Catalysts help improve Price competition with efficiency but not lower SMR: use electrolysis cost cleanness advantage
    10. 10. Conclusion  Future H2 production as a solution to Hydrogen Economy Clean, simple, resourceful  Boundless business opportunity Vast market size, demand for clean energy  Strengthen Air Products position as the leader in industrial gas production

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