Nuclear Production of Hydrogen, Fourth Information Exchange ...

NUCLEAR H 2 PRODUCTION – A UTILITY PERSPECTIVE
Oil shale
The United States has sufficient oil shale deposits to meet our current oil demands for approximately
100 years. Many oil shale deposits are thick (200 to 700 m) and can yield up to 2.5 million barrels of oil
per acre, or about $125 million/acre (with oil at $50/barrel). Methods for low-cost in situ recovery of
shale oil are being developed by Shell Oil and others. The leading option involves drilling wells into oil
shale and using electric heaters to raise the bulk temperature of the oil shale deposit to ~370°C to
initiate chemical reactions that produce light crude oil, and then pumping the oil to the surface. (Note:
shale oil contains no oil, the heating of the oil shale causes chemical reactions to yield oil.)
Approximately 250 to 300 kW-hr of electricity are required for down-hole heating per barrel of oil.
An alternative method being considered is the use of HTGR to provide high temperature heat to
replace the electricity. Direct use of high temperature heat avoids the factor-of-2 loss in converting high
temperature heat to electricity (which is then used to heat oil shale). The concentrated characteristics
of United States oil-shale deposits make it practical to transfer high temperature heat over limited
distances from a reactor to the oil shale deposits while operating the reactor for 40 to 60 years.
Commercial feasibility
Our evaluations on the production of hydrogen from nuclear energy have included a wide spectrum of
processes and techniques from conventional electrolysis using existing nuclear technologies to
thermochemical water-splitting and high temperature electrolysis using advanced high temperature
gas-cooled reactors. Since hydrogen production from nuclear energy will likely be a merchant operation,
economic viability will depend on the competitiveness of nuclear produced hydrogen with the more
traditional SMR process. Unless and until advancements are made in conventional electrolysis, it is
unlikely that existing nuclear technologies and conventional electrolysis will be competitive with SMR
in the bulk hydrogen markets. We believe that HTGR coupled with compatible advanced hydrogen
production processes do, however, have the potential to be competitive with SMR.
While the potential market for the advanced HTGR and nuclear hydrogen production technologies
is substantial, key considerations such as: i) economic competitiveness with the alternatives;
ii) feasibility of licensing and permitting; iii) the acceptability of the operating risks and off-take
contracts, must be assessed and deemed satisfactory before this commercial market becomes viable.
Economic competitiveness
Although we have a basic understanding of the advanced hydrogen production processes being
considered for incorporation with the NGNP project, our assessment as to their commercial viability is
very limited due to the developmental nature of the technologies and the lack of sufficient design
maturity. Over the past several years, we have participated in several studies with the DOE and the
Idaho National Laboratory that have resulted in what we believe to be the best available projections
for cost and economics for hydrogen production using an HTGR. As depicted in Figure 5, these studies
indicate a H 2 production cost in the range of $2/kg-$4/kg. In this range nuclear production of hydrogen
is competitive with SMR when natural gas is above $8/MMBTU and perhaps as high as $16/MMBTU.
An NGNP study currently underway suggests that the cost of hydrogen is actually in the higher
end of this range. At face value, these price ranges are clearly not competitive with hydrogen
produced by SMR at today’s natural gas prices. In assessing economic competitiveness, however,
consideration must be given to the volatility in natural gas prices, the security of supply and the
potential cost consequences of carbon legislation – all of which may influence the economics and the
commercial viability discussion. Given the uncertainty in the basic cost assumptions, the fluctuation
in natural gas prices seen over the past several years, and the possibility of carbon emissions legislation,
it seems logical that further technology development and design work be done to more accurately
estimate costs and hopefully improve economic competitiveness.
Licensing and permitting
There will no doubt be challenges to overcome in licensing a nuclear facility co-located or in the
proximity of a major industrial complex and coupling its output to the industrial facility processes.
NUCLEAR PRODUCTION OF HYDROGEN – © OECD/NEA 2010 295