Nuclear Production of Hydrogen, Fourth Information Exchange ...

NUCLEAR H 2 PRODUCTION – A UTILITY PERSPECTIVE
Figure 5: Hydrogen pricing using an HTGR
6.0
Production using Steam Methane Reforming (SMR)
Hydrogen Price, $/kg
5.0
4.0
3.0
2.0
HTGR Production price range
reflects extreme variations in capital
costs, excess electricity sales price
and CO2 Credits
$30/ton CO2 Cost
No CO2 Cost
Production price using HTGR Technology - best
estimate cost projection
1.0
0.0
4 6 8 10 12 14 16 18 20 22 24
Natural Gas Price, $/MMBtu
These challenges notwithstanding, we believe that licensing and permitting the co-location and
integration of a nuclear facility and an industrial complex is feasible. We further believe that the
safety characteristics of an HTGR are such that nuclear operations can be conducted with little if any
impact on the broader industrial facility operations. Likewise, we believe that the design of the nuclear
plant along with the conduct of nuclear operations can support co-location and integration with
industrial facilities – with no adverse impact on the safety of the nuclear facility.
Operating risks and contractual agreements
Supplying high-temperature process heat and/or producing hydrogen from a nuclear energy heat
source will, in all likelihood, be a merchant operation. It is likely that an experienced nuclear operator
will assume responsibility for the conduct of nuclear operations and enter into a long term agreement
with an end-user for the process heat, electricity or hydrogen off-take. Although the specifics of such
an agreement have yet to be determined, it is likely that the key elements will include reliability of
supply, a take-or-pay commitment for the product, provisions for cessation or reduction of industrial
facility operations, and an off-take pricing scheme mutually beneficial to both parties.
The national interest
There are three inter-linked energy challenges that industry and government face: the rising and
volatile prices for premium fossil fuels such as oil and natural gas, dependence on foreign sources for
these fuels, and the risks of climate change due to carbon emissions. Oil and natural gas supplies are
used as “energy” to power our vehicles, to power our industrial processes and to heat and cool our
homes and businesses. Our economy, the way we live, is dependent upon a secure supply of energy –
energy security. It is important to note that these premium fossil fuels are also the feedstocks used to
produce the chemical products that are found in medicines, cell phones, clothes, tennis shoes,
antifreeze, lubricants, shampoos, cosmetics, automobile interiors, paints and coatings, carpet and
textiles, agricultural chemicals, glues and epoxies, and many other products that we use in our
everyday lives. Because these products are so pervasive in our everyday lives, it is essential that the
supply of feedstocks from which they originate be secure – once again, energy security.
The United States currently imports approximately 60% of its oil supply and approximately 20%
of its natural gas supply from foreign countries, and not all of these supplier countries are aligned with
United States policies. Volatility in energy costs and uncertainty in the long-term supply of energy are
causing larger industrial companies to focus on expansions outside the United States. This import
scenario must change if our nation is to achieve energy security and to maintain economic prosperity.
296 NUCLEAR PRODUCTION OF HYDROGEN – © OECD/NEA 2010