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Assessing the Competitiveness of Hydrogen
and Biofuels in European Transport
Timur Gül, Socrates Kypreos, Leonardo Barreto
Energy Economics Group, Laboratory for Energy Systems Analysis
Paul Scherrer Institute / Switzerland
World Energy Congress, 13 November 2007, Rome / Italy
Timur Gül WEC 2007, Rome / Italy Silde 2 of 22
Presentation Outline
1. Research Objective
2. Cost Analysis of Hydrogen and Biofuels
3. Modeling Framework
4. Scenario Analysis
5. Conclusions
Timur Gül WEC 2007, Rome / Italy Silde 3 of 22
Research Objective
1. Analysis of costs and prospects of hydrogen and biofuels for
European transport (US H2A analysis, literature review)
→ Modeling input
2. Understand the competitiveness of hydrogen and biofuels under
CO2 reduction policies, fuel subsidies and increasing oil prices
→ Modeling analysis in a cost-optimization framework
Part 1: Cost Analysis
Timur Gül WEC 2007, Rome / Italy Silde 5 of 22
Hydrogen Production Cost in 2030
Sources: adapted from US DoE (2006) and Felder (forthcoming)
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0
Natural Gas
Natural Gas w/ CCS
Coal
Coal w/ CCS
Wind + Electrolysis
Nuclear SI cycle
Nuclear HT Electrolysis
Nuclear HP Electrolysis
Biomass
Electrolysis
HP Electrolysis
Solar Coke
Solar Zn/ZnO
US$2000/ kg H2
Production Cost Feedstock CostNote: Interest rate 5%
Timur Gül WEC 2007, Rome / Italy Silde 6 of 22
Cost of Delivered H2 from Coal Gasification 2030
Source: US DoE (2006)
0
10
20
30
40
50
60
Liquid DirectTruck Delivery,
Small FS
Gaseous DirectTruck Delivery,
Small FS
Liquid DirectTruck Delivery,
Large FS
Pipeline RingSystem, Large
FS
Pipeline,Terminal,
Liquid TruckDelivery, Large
FS
Pipeline,Terminal,
Gaseous TruckDelivery, Large
FS
US$2000/GJ Large Fueling Station
Small Fueling Station
Gaseous Truck Delivery
Liquid Truck Delivery
Terminal
Liquefaction
Pipeline
Compression
Production
Gasoline $0.5/litre
Timur Gül WEC 2007, Rome / Italy Silde 7 of 22
Biofuels Costs
Source: Ragettli (2007)
0 5 10 15 20 25 30 35 40
Wood-to Biodiesel
Wood-to-FT-Diesel
Wood-to-DME
Wood-to-SNG
Wood-to-MeOH
Stover-to-EtOH
Corn-to-EtOH
Sugar Beet-to-EtOH
Oil Crops-to-FAEE
Waste-to-SNG
US$2000/GJ
Production [$/GJ] Biomass [$/GJ] Energy [$/GJ] T&D [$/GJ]
Gasoline $0.5/litre
2nd Generation
1st Generation
Part 2: Modeling Framework
Timur Gül WEC 2007, Rome / Italy Silde 9 of 22
European Hydrogen Model EHM
• developed at Paul Scherrer Institute
• MARKAL-class model
• „bottom-up“ energy-system model with detailed representation of
technologies
• cost-optimization model: identifies least-cost solutions for the energy
system under given sets of assumptions and constraints
• represents the energy system of EU-29
Timur Gül WEC 2007, Rome / Italy Silde 10 of 22
EHM Reference Energy System - Structure
Resource
Extraction
•Oil
•Gas
•Coal
•Renewables
•Uranium
Conversion
Technologies
•Electricity / Heat Generation
•Fuels Production (Oil products, Biofuels, Hydrogen, etc.)
T&D
End-Use
Technologies
•Transportation
•Industrial Thermal
•Industrial Specific
•Res./Comm. Thermal
•Res./Comm. Specific
•Feedstocks
PrimaryEnergy Carriers
FinalEnergy Carriers
Each Technology isrepresented by its costs
and efficiency!
Timur Gül WEC 2007, Rome / Italy Silde 11 of 22
European Hydrogen Model EHM
• detailed representation of hydrogen and biofuels production & delivery
pathways
• detailed, but still stylised personal transport sector
• calibrated to year 2000 statistics from IEA
• based on an updated IPCC-SRES B2 scenario („middle-of-the-road“)
• 10 year time steps until the year 2100
• exogenous technology learning assumptions
Timur Gül WEC 2007, Rome / Italy Silde 12 of 22
General Key Modeling Assumptions
• We use European biomass potential only (7.2 EJ)
• No biomass or biofuels imports considered
• Low oil prices assumed as
• US$2005 60/bbl in 2050 (old IEA projections), and
• US$2005 80/bbl in 2100
• Interest rate 5%
Timur Gül WEC 2007, Rome / Italy Silde 13 of 22
Key Modeling Assumptions in Transport
• Exogenous cost reduction assumptions for all vehicles
• Fuel cell costs assumed
• US$ 250 /kW at market launch in 2020, and
• US$ 40 /kW 50 years later due to learning progress
• Share of 1% of total market for new personal vehicles at market
launch
• Maximum growth rate car technology of 10% per year
Scenario Analysis
Timur Gül WEC 2007, Rome / Italy Silde 15 of 22
Scenario Analysis
1. Baseline Scenario under given set of assumptions
2. Impact of a 50% CO2 reduction target by 2050
• Additional higher oil prices and fuel subsidies as of 2010
3. Impact of a more stringent CO2 reduction target: 60% reduction by
2050
Timur Gül WEC 2007, Rome / Italy Silde 16 of 22
Baseline Scenario: Personal Transport EU-29
0
500
1000
1500
2000
2500
3000
3500
4000
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
billion vehicle-km
Biofuels Hybrid
CNG Hybrid
CNG ICEV
Diesel ICEV
Gasoline ICEV
Timur Gül WEC 2007, Rome / Italy Silde 17 of 22
50% CO2 Reduction Target in 2050
0
500
1000
1500
2000
2500
3000
3500
4000
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
billion vehicle-km
Hydrogen FCV
Plug-in Hybrid
Gasoline HEV
Hydrogen HEV
Biofuels HEV
CNG HEV
Biofuels ICEV
CNG ICEV
Diesel ICEV
Gasoline ICEVICEVs
Hybrids
H2 Fuel Cells
Timur Gül WEC 2007, Rome / Italy Silde 18 of 22
Mid-term Impacts of Oil Price and Fuel Subsidies
Biofuels in 2050
0
12
34
5
5358
6368
7378
10%
15%
20%
25%
Biofuels Market
Share
Biofuels
Subsidy
[US$/GJ]
Oil Price in 2050 [US$/bbl]
Hydrogen in 2050
0
12
34
5
5358
6368
7378
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
Hydrogen
Market Share
Hydrogen
Subsidy
[US$/GJ]
Oil Price in 2050 [US$/bbl]
Timur Gül WEC 2007, Rome / Italy Silde 19 of 22
Long-term Impacts of Oil Price and Fuel Subsidies
Hydrogen in 2100
0
12
34
5
7080
90100
110120
70%
75%
80%
85%
90%
95%
Hydrogen
Market Share
Hydrogen
Subsidy
[US$/GJ]
Oil Price in 2100 [US$/bbl]
Biofuels in 2100
0
1
23
45
7080
90100
110120
0%
5%
10%
15%
Biofuels Market
Share
Biofuels Subsidy
[US$/GJ]
Oil Price in 2100 [US$/bbl]
Timur Gül WEC 2007, Rome / Italy Silde 20 of 22
More stringent CO2 Targets in 2050
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Biofuels H2 Biofuels H2
50% Target 60% Target
Market share
Year 2020 Year 2050 Year 2100
Timur Gül WEC 2007, Rome / Italy Silde 21 of 22
Again: 50% CO2 Reduction Target in 2050
0
500
1000
1500
2000
2500
3000
3500
4000
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
billion vehicle-km
Hydrogen FCV
Plug-in Hybrid
Gasoline HEV
Hydrogen HEV
Biofuels HEV
CNG HEV
Biofuels ICEV
CNG ICEV
Diesel ICEV
Gasoline ICEVICEVs
Hybrids
H2 Fuel Cells
Timur Gül WEC 2007, Rome / Italy Silde 22 of 22
Conclusions
• The lower the costs of the fuel cell become in a foreseeable future, the better the
prospects for hydrogen in transport
• CO2 reduction policies support the penetration of hydrogen and biofuels in
transport.
�More stringent CO2 reduction targets increase the competitiveness in particular
of hydrogen in transport
• Subsidies as well as high oil prices can increase the competitiveness for such
alternative fuels, particularly for biofuels in the mid-term
�Note: here only moderate oil price increases were assessed
Thank you for your attention