Process heat accounts for roughly half of industrial energy demand, and currently 95 % of process heat is derived from the combustion of natural gas, oil, and coal. Electrification of industrial heating could be an alternative, potentially expanding locations suitable for manufacturing; however, industrial facility owners may desire energy storage to stabilize energy costs. In this work, the economic benefits of pairing thermal storage with electrified process heat to reduce the average price paid for energy are analyzed. Cost savings focus on energy arbitrage, or leveraging flexible energy pricing schemes, alone. The cost of natural gas combustion across decades (2019-2060) is compared to the costs of electricity and thermal energy storage in four United States Independent System Operator (ISO) regions. Systems installed today may not yield positive net present value (NPV) compared to the use of natural gas. However, using estimated electricity prices, systems installed in 2030 using arbitrage alone could be profitable when compared to natural gas in some regions of the U.S. Furthermore, if capital expenditures could be reduced by 50 % for sensible thermal storage systems by 2030, profitable systems are found across all regions. This implies that electrification of industrial process heat, when paired with inexpensive thermal energy storage systems, could be less expensive than brownfield natural gas systems, using arbitrage as the only source of revenue and without a dependency on any future policy drivers such as pricing externalities that could further incentivize the electrification of industrial process heat.

Enabling rapid and extensive decarbonization within the electric power and industrial sectors is likely to require high levels of renewable energy deployment, supported by technologies that store and transform renewable electricity into other useful forms. Within hard to decarbonize sectors such as organic chemicals and heavy-duty transportation, the use of low-carbon intensity hydrogen as a fuel and chemical building block is emerging as a near-term alternative to reduce their fossil-fuel dependency. Water splitting electrolysis to produce hydrogen requires only water and electricity as inputs, eliminating the use of natural gas in steam methane reforming, which is the conventional hydrogen production pathway. When powered by low-carbon electricity, electrolysis represents an important pathway towards cross-sectoral decarbonization.

A technoeconomic analysis of grid to low temperature electrolysis (Grid-LTE), photovoltaic to low temperature electrolysis (PV-LTE), concentrating solar power to high temperature electrolysis (CSP-HTSE) and a concentrating solar power with PV to high temperature electrolysis (CSP-PV-HTSE) centralized hydrogen production systems are analyzed to assess the economics of system and to provide a baseline for comparing these technologies against hydrogen production cost targets. A framework integrating the system advisor model (SAM) and US Department of Energy hydrogen production models (H2A) is developed to assess these systems. The hydrogen levelized cost given current and future assumptions for technology cost and performance is evaluated at optimal system configurations. The framework described in this report integrates SAM with H2A electrolyzer technologies and provides analysts a detailed technoeconomic method to analyze concentrating and photovoltaic solar technologies to produce energy that are directly coupled to LTE and HTSEs that use that energy to split water into hydrogen and oxygen. The baseline hydrogen levelized cost (HLCs) for the GRID-LTE, PV-LTE, CSP-HTSE, and CSP-PV-HTSE systems in Daggett, CA are 2.82, 3.86, 3.68, and 2.90 $\$$USD 2016/kg H2 and 2.50, 2.13, 2.84, 2.15 $\$$USD 2016/kg H2 in the 2020 and 2050 scenarios respectively. To achieve the $\$$2/kg H2 target in locations with excellent solar resources, cost parameters values aligned with aggressive R&D targets will need to be achieved for all the systems configurations. In Daggett, PV costs of $\$$0.68 /Wac or moderate ATB PV CAPEX projections result in HLCs of $\$$2 /kg H2. Similarly for PV-MSALT-HTSE systems, $\$$0.60 /Wac result in $\$$2/kg H2. For the MSALT-HTSE systems, better than aggressive 2050 ATB salt tower CAPEX projections would be needed to reach $\$$2/kg H2. Molten salt tower capital costs of $\$$2400/kW would enable $\$$2/kg H2 in 2050.

The growing recognition of the value of hydrogen as an energy intermediate in supporting future power systems with high shares of variable renewable energy has prompted many studies to quantify the economic potential of multi-output hybrid systems, which are one type of integrated energy systems (IES). Because of the complexity of modeling multiple sectors, these studies typically use simplified modeling approaches to capture the interactions between sectors. In this study, we explore the implications of alternative modeling approaches for nuclear-hydrogen IES focusing on a power system in the Midwest United States. We combine highly resolved capacity expansion and production cost modeling tools of the power system with a detailed hydrogen system optimization tool to determine the optimal electrolyzer and storage sizing and optimal operations of the nuclear-hydrogen hybrid resource across three future study years. We compare economic and operational outcomes across a spectrum of modeling approaches, including a non-hybridized base approach; a traditional price-taker approach that does not include the impact of hydrogen production on the electricity system; a power-system-focused price-maker approach that does not account for temporal hydrogen constraints; and two improved price-taker and price-maker approaches that each address the impact of revenue-optimal levels of electricity production on the resulting power system and temporal hydrogen constraints on the overall feasible solution. Results show how a traditional price-taker approach can overestimate the economic benefits of multi-output nuclear-hydrogen IES compared to our two improved approaches that estimate both hydrogen system constraints and power system interaction. We find that hydrogen output requirements and storage size limits are key drivers to overall operations and some economic outcomes. Under our assumed constant hydrogen output requirement, storage costs, test system, and modeling approaches, our results indicate that hybridization can provide a net benefit, but results are sensitive to the treatment of hydrogen revenues and electricity prices as impacted by the power system evolution.

Among other changes, variable renewable energy (VRE) - primarily wind and solar photovoltaics - is achieving a growing share of total generation. High VRE penetrations may result in an increased level of curtailment and thus suppress the value of additional VRE. This VRE, that either would not be built due to price suppression or would be curtailed, can be considered a resource that we define as low-cost, dispatch-constrained electricity (LDE). LDE could be used for various applications which value low-cost electricity and can operate at reduced capacity factors. Examples include electrolytic hydrogen production and carbon capture. This report provides initial estimates of the quantity and availability of the potential LDE resource in the U.S. under scenarios with high VRE penetrations. It also provides supply curves that can be used in subsequent analysis of the opportunity to use the LDE. We modeled several scenarios using capacity expansion and production cost models for LDE prices ranging from $0/MWh to $30/MWh. These LDE prices, coupled with low renewable energy cost assumptions, resulted in VRE penetrations ranging from 48-66% in 2050. The resulting LDE supplies range from 100 - 300 TWh/yr at a price of $0/MWh to 3,500 - 4,200 TWh/yr at $30/MWh. Increasing LDE prices increases wind and photovoltaics deployment; however, other generation technology capacities do not decrease equivalently in our models. Thus, additional generation is available but the capacity of traditional dispatchable generation is only reduced slightly. The available LDE is concentrated in the central and southwest U.S. regions because of their high wind and solar resources.

The United States has pledged to develop a 100% carbon-free electric power system by 2035 and a net-zero-emissions economy by 2050. While important advancements have been made in the scale, performance, and economics of clean energy technologies, meeting the nation's ambitious goals will not only require their deployment at scale, but also additional innovation and effective integration of different solutions. Technological developments across the broad suite of low-carbon energy solutions are advancing rapidly, with ongoing innovations in renewable electricity generation, industrial processes, and energy-saving technologies and services, including LED lighting, induction heating, electric vehicles, energy storage solutions, and mobility as a service, plus smart devices, controls, and more efficient and smart buildings. Combining renewable electricity with biotic and abiotic pathways to produce chemicals, fuels, and materials promises to deliver new solutions. Grid-interactive buildings and communities, integrating transportation infrastructure and vehicles, are likely to be significant components of any zero-carbon energy strategy. Low-carbon industrial manufacturing will also make strong contributions to a net-zero economy. While the technical prospects appear promising, variations in the state of infrastructure, jurisdictional and social equity, pollution, economic and socio-cultural constraints, energy resource availability, and supply chain dynamics found in different locations present a range of challenges and demand customized solutions. This paper provides a critical review and offers new insights into the technical, infrastructure, analytic, political, and economic challenges faced in translating the nation's ambitious net-zero-emissions goals into feasible and reliable implementation action plans.

Today’s energy system uses a variety of fuels and energy carriers in molecular forms, such as coal, oil, and natural gas, each contributing to CO 2 emissions ( Figure 1 ). As solar and wind levels grow and the energy system becomes more electrified, fossil molecular fuels will contribute a progressively smaller fraction of overall energy. As shown in Figure 2 , hydroelectric storage and molecules, such as coal and natural gas, provide substantial storage and dispatch functionality today that will become increasingly critical for electricity operation and stability. Emerging low-carbon gases, such as hydrogen, can support the efficient integration of renewables in the transition from today’s energy system to one that is 100% clean from a carbon emissions perspective.

This Chapter provides an overview of key economic considerations for hydrogen produced from water electrolysis, with the analyses presented here ranging from high-level summaries to detailed considerations of key market and technological drivers. As the electric power sector evolves to account for increasing shares of renewable energy, opportunities are emerging for technologies capable of storing renewable energy in various forms, including as hydrogen. Opportunities for reducing the cost of hydrogen produced from electrolysis include ensuring access to low-cost wholesale electricity, reducing the capital cost of electrolyzers, and development of systems capable of being dispatchable loads without experiencing significant efficiency penalties throughout lifetime. Our analysis indicates that numerous pathways exist for making hydrogen from electrolysis cost-competitive with hydrogen produced from conventional technologies, and significant opportunities exist for research and development to address performance targets for the future electrolysis systems envisioned here.

The development of technologies that utilize carbon dioxide is important to mitigating climate change. The electrochemical reduction of carbon dioxide is one technology that can utilize greenhouse gasses that would be otherwise be emitted to the atmosphere by producing chemicals and fuels from carbon dioxide and electricity. Significant progress has been made in the experimental performance of carbon dioxide reduction systems with novel catalyst designs, new materials, and systems engineering; however, no work has linked such changes in stack design and materials to capital costs for the stack itself. Here we present an analysis that accounts for and analyzes the impacts of alternative materials and system architectures on manufactured costs of carbon dioxide reduction stacks, thus providing a framework to understand exactly how these advances impact the at-scale capital costs of these systems. Specifically, we consider the impact that the addition of a catholyte buffer layer has on an electrolyzer reducing carbon dioxide to formate, finding that the cost of manufacturing this part only increases stack costs by about $30/m(2) at high manufacturing rates, while previous work finds that this part improves system performance. This work shows that the links between system performance, materials, and costs are nonlinear, and that achieving low-cost scalability requires optimization of not just performance parameters but also the use of low-cost and highly scalable materials. These results bridge experimental and technoeconomic analysis of processes for carbon dioxide reduction, informing researchers by providing a quantifiable estimate of the impact of advances in electrochemical carbon dioxide reduction technology on manufactured stack capital costs.

Meeting the last increment of demand always poses challenges, irrespective of whether the resources used to meet it are carbon free. The challenges primarily stem from the infrequent utilization of assets deployed to meet high demand periods, which require very high revenue during those periods to recover capital costs. Achieving 100% carbon-free electricity obviates the use of traditional fossil-fuel-based generation technologies, by themselves, to serve the last increment of demand—which we refer to as the “last 10%.” Here, we survey strategies for overcoming this last 10% challenge, including extending traditional carbon-free energy sources (e.g., wind and solar, other renewable energy, and nuclear), replacing fossil fuels with carbon-free fuels for combustion (e.g., hydrogen- and biomass-based fuels), developing carbon capture and carbon dioxide removal technologies, and deploying multi-day demand-side resources. We qualitatively compare economic factors associated with the low-utilization condition and discuss unique challenges of each option to inform the complex assessments needed to identify a portfolio that could achieve carbon-free electricity. Although many electricity systems are a long way from requiring these last 10% technologies, research and careful consideration are needed soon for the options to be available when electricity systems approach 90% carbon-free electricity.