A review of hydrogen production technologies for energy

system models

UKSHEC Working Paper No. 6

2012
Paul E. Dodds and Will McDowall
UCL Energy Institute, University College London
Central House, 14 Upper Woburn Place
London WC1H 0NN, UK
p.dodds@ucl.ac.uk
1

Contents
1

Introduction ......................................................................................................................... 2

Methodology for producing energy systems data .................................................................. 3

2.1
Calculating plant investment and O&M costs ........................................................................ 3
2.2
Converting costs for use in UK MARKAL ................................................................................. 4
2.3
Heat of combustion ................................................................................................................ 4

Hydrogen Production technologies ....................................................................................... 5

3.1
Natural gas .............................................................................................................................. 6
3.2
Coal ......................................................................................................................................... 9
3.2.1
IGCC ................................................................................................................................. 9
3.3
Biomass ................................................................................................................................. 10
3.4
Water .................................................................................................................................... 11
3.4.1
Energy storage using hydrogen-electrolysis systems ................................................... 11
3.4.2
Thermochemical cracking of water............................................................................... 12

Technology data for energy system models ......................................................................... 12

4.1
Summary of technologies in current MARKAL models ......................................................... 13
4.2
Recommendations for the future ......................................................................................... 13
4.3
Uncertainties in technology costing ..................................................................................... 18
4.4
Learning curves ..................................................................................................................... 19

Conclusion.......................................................................................................................... 19

References ......................................................................................................................... 20

1 Introduction
UK greenhouse gas (GHG) emissions predominantly result from the combustion of fossil fuels to
provide energy services in all sectors of the economy. In the future, it will be necessary to either
capture the emissions or to utilise zero-carbon sources of energy.
Hydrogen has been identified as a potential zero-emission energy carrier for the future, primarily for
the transport sector but also for energy storage and CHP applications. Hydrogen gas does not exist
naturally and must be produced from fossil fuels or water. It has been produced for industrial
applications for many decades and several production technologies are now available that use a
range of fuels.
The UKSHEC I project reviewed some of these technologies (Hawkins and Joffe 2005) and
implemented a comprehensive hydrogen energy system in the UK MARKAL model (Joffe et al. 2007;
Kannan et al. 2007). MARKAL is a partial-equilibrium E4 optimisation model (energy-environmenteconomics-engineering) that is used to represent the entire UK energy system. The technology
characterisation is several years old and we have identified some shortcomings and inconsistencies
in the data. As part of the UKSHEC II energy systems research programme, hydrogen production is
being revisited to: (i) recommend consistent representations of hydrogen production technologies
2

for the UK MARKAL and TIAM-UCL models (TIAM-UCL is a global E4 optimisation model that has
been recently developed); (ii) ensure that the assumptions underlying the hydrogen technologies are
also consistently applied to other competitor technologies; and, (iii) identify technologies for which
the deployment costs are likely to substantially reduce with large-scale deployment. The third
objective reflects the greater emphasis on innovation and technology learning in UKSHEC II.
Hughes (2008) provided an initial paper setting out some of the technological developments that
have occurred since UKSHEC I was completed. This paper builds on that qualitative work using a
comparison of the existing hydrogen production data in the UK and US9R MARKAL models and a
literature review. We recommend revised technology data for the UKSHEC II project and consider
the uncertainties in the data. The impacts of these uncertainties on model simulations will be
considered in a separate paper.

2 Methodology for producing energy systems data

Hydrogen production technologies were identified from current MARKAL models and from the
literature. For each technology, the E4 models require capital investment and operations and
maintenance (O&M) costs, efficiency data, and fuel inputs and outputs. Few sources provided all of
this data for each technology so we based our recommendations on a comparison of all available
data rather than adopting a single source. This approach required a greater understanding of the
factors underlying the costs and efficiencies of each technology which enabled us to consider data
uncertainties. One potential drawback is that the recommended data might no longer represent a
single plant design.
We encountered three difficulties in particular. Firstly, the investment and O&M costs must be
calculated for each technology using a consistent approach with other energy system technologies
so that an unbiased comparison can be performed. Secondly, it is necessary to convert the costs
into consistent monetary units. Thirdly, the energy efficiency must be calculated consistently across
the model for each fuel. The following sections expand on these difficulties.

2.1 Calculating plant investment and O&M costs

Direct plant investment costs refer to the actual cost of the installed equipment. All plant
construction projects also have substantial indirect costs as well. System costs include design, site
preparation, contingency costs and profits for the construction contractor (direct costs implicitly
include profits for equipment manufacturers). The cost of land, licensing and permits vary between
countries. Some plants have additional financial costs to cover financing for up-front fees.
Estimates of technology costs always include direct costs but some indirect costs are often omitted.
Since indirect costs are often more than 50% of the direct costs, the inclusion or omission of indirect
costs can be one of the principle drivers of cost differences between studies. It is important that
comparable costs are included for all technologies in the energy system models, both for hydrogen
production and elsewhere, so that unbiased comparisons of technologies can be performed. There
are presently no clear guidelines about which indirect costs are included in the UK MARKAL or TIAMUCL models. In this study, we chose to include all indirect costs except for additional financial costs,
which are separately accounted for by the model investment discount rate equations.
O&M costs are also difficult to estimate because they include equipment outage costs, running
costs, licensing costs and labour. Some are fixed each year while other variable O&M costs depend
on the production rate. For hydrogen production technologies, the principle variable cost is the fuel
3

and this is separately accounted for by the energy system models so we concentrated on fixed O&M
costs. Our approach calculated the annual O&M costs as a fraction of the capital investment costs.

2.2 Converting costs for use in UK MARKAL

The UK MARKAL model uses British pounds in the year 2000 while the TIAM-UCL model uses US
dollars in the year 2005. Investment costs in the literature are specified in both dollars and euros,
for a range of years, so it is necessary to account for both currency conversion and inflation. The
choices are (i) to adjust for inflation in the original currency and then apply the year 2000 currency
conversion rate; or, (ii) to convert to /$ in the technology year then adjust for the UK inflationary
difference to the year 2000. Exchange rates are more volatile than inflation rates so the first option
produces a more consistent conversion factor (Figure 1).
In this paper, in common with Lemus et al. (2010) and Bartels et al. (2010), the first approach is
adopted. There is a 1.72 factor between the UK(2000) and US$(2005). However, there is no
correct methodology as such and it is necessary to consider the conversion rates as a potential
source of uncertainty when producing cost estimates of technologies.
Figure 1: $: conversion factors for two conversion methods

2.3 Heat of combustion

The energy that can be extracted from a fuel is often measured as the energy released as heat when
the fuel undergoes complete combustion with oxygen. Table 1 shows this heat of combustion for
several common fuels including hydrogen.
The heat of combustion can be specified in terms of the higher or lower heating value (HHV or LHV).
The HHV represents the entire produced heat while the LHV excludes any energy that is used to
vaporise water during combustion. The difference between the two is higher for lower-carbon fuels
(Table 1). The extent to which energy is lost to water vaporisation depends on the technology; the
LHV is most appropriate where large amounts of water vapour are produced at a temperature below
150C or where condensation of the combustion products in impractical. Both HHV and LHV are
used in different sources in the literature so it is necessary to use a consistent approach. Since UK
MARKAL energy efficiencies are theoretically calculated on the basis of the HHV, HHV values are
4

used throughout this report. However, the existing data in UK MARKAL has not always been
consistently calculated using HHV data; for example, the vehicle technology data uses the LHV
(which inflates the costs of hydrogen storage tanks, because it effectively reduces the assumed
usable energy in hydrogen). The high hydrogen HHV:LHV ratio (Table 1) accentuates the
discrepancies caused by using different approaches for different hydrogen technologies relative to
other fuels.
Table 1. Heat of combustion of several fuels (MJ/kg)

Hydrogen
Methane
Gasoline
Coal (Anthracite)
Wood

Higher Heating Value

142
56
47
27
15

Lower Heating Value

121
50
44
27
15

HHV:LHV ratio
1.17
1.12
1.07
1.00
1.00

For solid fuels with higher carbon content (e.g. coal and biomass), the HHV and LHV can vary
substantially depending on the exact fuel composition. For example, the efficiency of coal
gasification will be substantially influenced by the composition of the coal being used. Great care
must be taken to match the fuel type to the process efficiency; if necessary, the process technology
should be defined several times for different fuel compositions with different process efficiencies.

3 Hydrogen Production technologies

Hydrogen is currently produced for industrial applications by cracking carbonaceous fossil fuels.
Methane is the most common fuel but coal has also been used. Since the principle aim of a
hydrogen economy is to reduce carbon emissions, it would be necessary to deploy carbon capture
and storage (CCS) systems on these plants and this would only be economic for large-scale
production.
Recently, a number of methods have been developed to produce hydrogen from biomass. Biomass
gasification is the most advanced but has not been tested at the scale of a large plant. Most other
biomass methods are still at the laboratory stage of development.
Hydrogen is also produced by cracking water, a technology that does not require a carbonaceous
fuel. Electrolysis is the only method that has been demonstrated on an industrial scale. The
principle drawback of this method is the high cost of electricity relative to other fuels; it has been
proposed that high-temperature thermal cracking, using heat from nuclear reactors or photovoltaic
cells, could improve the efficiency of the process and reduce the electricity use.
This section briefly reviews each of these technologies with the aim of identifying suitable data for
energy systems models. Schoots et al. (2008) analysed the actual construction costs of numerous
SMR, coal gasification and electrolysis plants and these data were used to estimate the actual built
plant costs. Estimates of current and future costs and energy efficiencies for all of the principle
technologies were extracted from the H2A (Steward et al. 2008) and TECHPOL (Krewitt and Schmid
2004) technology databases. Further data were extracted from studies in the literature (Gray and
Tomlinson 2002; NRC 2004; Kreutz et al. 2005; Iaquaniello et al. 2008; NRC 2008; Cormos 2010; DEA
2010; Khamis and Malshe 2010). Where possible, we compared these data with existing data from
the current UK and US9R MARKAL models.
5

We found that only six hydrogen technologies have been sufficiently developed to produce realistic
cost and efficiency data; these are compared in Figures 2 and 3, respectively. Each of these
technologies is discussed in the following sections.

3.1 Natural gas

Natural gas reforming is currently the most efficient, economical and widely used process for
production of hydrogen and has been utilised globally for many decades in the oil refinery and
fertiliser industries. Steam reforming (SMR) is the standard method but membrane reforming has
also been demonstrated in small-scale plants (Iaquaniello et al. 2008; Shirasaki et al. 2009).
Compact, small-scale reformers, suitable for refuelling stations, have been proposed as one option
for a hydrogen economy (Ogden 2001). While this option would remove the requirement for
expensive delivery infrastructure in the early stages of a transition to hydrogen, the systems would
be too small for CCS to be used so substantial GHG emission savings would be not be achieved.
Both large-scale and small-scale SMR technologies are represented within UK MARKAL, each with
two technology vintages (Figure 2). The current UK MARKAL data has one apparent data input
mistake. Investment costs for future large-scale SMR are higher than those for current technologies,
in contrast to the data in the NRC (NRC 2004) report on which the costs are based. Estimates of
large SMR plant investment costs in the literature are substantially lower than for smaller plants
(Damen et al. 2006), although small-scale plant costs are expected to reduce substantially in the
future, perhaps through the adoption of membrane technology. SMR has the lowest capital costs of
the hydrogen production technologies at around 4 GJ-1 y-1.
SMR efficiencies are currently in the range 60%80%, with larger plants being more efficient (Figure
3). Efficiencies are expected to rise only slightly in the future but the scale gap should close.
Membrane plants are likely to only slightly increase the operating efficiencies (Shirasaki et al. 2009).
Operating efficiencies will be reduced if plants employ CCS in future. The level of the reduction will
depend on the energy required to capture, compress and transport the CO2 to the underground
storage site. UK MARKAL currently assume a total process energy efficiency reduction of 5% to
account for CCS.

Figure 2. Capital investment costs from the literature for hydrogen production technologies

Figure 3. Energy efficiencies from the literature for hydrogen production technologies. The SMR and coal data include a
mix of CCS and non-CCS plants.

3.2 Coal
Prior to the development of electricity networks, coal gasification was used to produce gas for
lighting purposes. The technology is mature but is less-widely used that SMR, despite cheaper fuel
costs, because the capital investment costs are higher and more variable and the energy efficiency is
lower. Only large-scale plants are envisaged in the literature.
UK MARKAL investment costs for current vintages are comparable to constructed plants but future
vintages are cheaper than forecasts in the literature (Figure 2). This is partly caused by the inclusion
of coal membrane gasification technologies using cost data from Parsons Group (Parsons
Technology Group 2002) that is considered speculative and possibly unrealistic (Pers. comm. F. Starr
2011). It is unlikely that the capital investment costs for coal gasification will change substantially in
the future.
The energy efficiency of coal gasification is lower than that of SMR (Figure 2), although the
differential has been reduced historically by relatively lower coal prices. Efficiencies range from
50%80%, which could represent both technological differences and the wide variations in the
quality of different types of coal. Even if membrane technology becomes available, overall
efficiencies are unlikely to change substantially in the future (e.g. see Li et al. 2010).
Any future energy efficiency improvements will be reduced by the incorporation of CCS. UK MARKAL
uses the same approach as for SMR and currently assume a total process energy efficiency reduction
of 5% to account for CCS. Since a greater quantity of CO2 is produced by coal gasification for each
unit of produced hydrogen, one might expect a greater efficiency reduction for this technology. On
the other hand, membrane technology is expected to reduce the efficiency loss due to CO2 capture
(Amelio et al. 2007).
3.2.1

IGCC

The hydrogen gas stream from coal gasification can be combusted to produce electricity in an
integrated gaseous combined cycle (IGCC) plant (Chiesa et al. 2005; Garca Corts et al. 2009). The
primary advantage of this technology is the flexibility it provides; in return for an additional capital
investment in turbines and steam generators, it allows electricity to be produced at times of peak
demand and hydrogen to be produced at other times.
The additional plant will be similar to a gas CCGT; the main rotating parts, condenser, cooling system
and electricals account for around 75% of the gas CCGT cost (Mott MacDonald 2010:p25). For a new
GTCC in 2030, technology ENGA-CC30B, there is an investment cost in UK MARKAL of 357/kW. We
therefore estimate the cost of upgrading a coal gasification plant to an IGCC as 268/kW. The
energy efficiency is more difficult to specify because it reduces as the proportion of electricity is
increased, hence the large range from the literature in Figure 3. Figure 4 shows that the overall
efficiency varies between 35% and 60% for one proposed plant (Cormos 2010), a conclusion
supported by Li et al. (2010) using a different model.
The UK MARKAL IGCC representation has fixed outputs of hydrogen (10%) and electricity (90%).
Since the principle advantage of this technology is increased flexibility over electricity generation,
with only minor efficiency improvements over conventional power stations, the current UK MARKAL
representation should be altered to reflect this increased flexibility.

Figure 4. Overall IGCC efficiency as a function of the hydrogen production rate (data from Cormos 2010).

3.3 Biomass
Biomass accounts for 15% of global primary energy consumption and is particularly important in
less-developed countries. Technologies to produce hydrogen from biomass are most strongly
characterised by their diversity, in terms of both the types of technology and the range of different
biomass fuels that are used. All technologies suffer from low yields because of the low hydrogen
content of biomass (approximately 6%) and the 40% oxygen content which lowers the overall
available energy; as a result, there are no completed industrial-scale demonstrations of any biomass
technology for producing hydrogen (Kalinci et al. 2009) and cost and efficiency data must be
considered speculative. Efficiencies are higher for biomass-derived biofuels (e.g. bioethanol) that
are processed prior to the hydrogen production plant; the principle advantage of such fuels would
be to reduce the fuel transport costs from the plantation to the hydrogen plant. Biofuel production
has increased substantially in recent years, with the loss of land for food production causing
controversy.
Sexena et al. (2008) identify three broad methods for producing hydrogen from biomass:
1. Thermochemical conversion: combustion, gasification or pyrolysis of biomass. The latter
two are represented in the UK MARKAL model. Gasification is normally combined with
steam reforming to maximise the hydrogen yield. The most suitable crops UK indigenous
feedstocks would be wood or energy crops but imports would allow a greater range of
technologies (for example, Haryanto et al. (2005) describe systems for steam reforming of
ethanol which could be produced from sugar cane or maize).
2. Biochemical/biological conversion, which uses either algae to decompose complex biological
molecules (e.g. anaerobic digestion) or photosynthesis with hydrogen as a by-product.
These technologies are limited by high capital costs and low production rates and so are only
ever likely to be niche solutions for problems such as biodegradable waste. Several small
anaerobic digestion plants have been constructed in the UK for electricity generation (ENDS
report 2011).

10

3. Mechanical extraction, which produces very low yields and is never likely to be a viable
technology.
Figure 2 shows investment costs for biomass gasification and pyrolysis. Costs must be considered
speculative but are similar to coal gasification costs because the conversion processes and plant
requirements are broadly similar. Pyrolysis uses biomass oil as a feedstock which can be produced
from wood.
The range of energy efficiencies in Figure 3 reflects the range of potential fuels; the conversion
efficiency of wood is unlikely to exceed 50% because of the low heat of combustion (Table 1) while
the higher values represent steam reforming of biofuels. The latter efficiencies are artificially high
because they do not account for the energy that is required to produce biofuel from the feedstock.
None of these technologies include CCS, which could potentially lead to negative lifecycle emissions
but would cause the process energy efficiency to reduce by perhaps 5%.
The biomass technology data in the UK and US9R MARKAL models are very different. The UK model
data appears to be broadly consistent with literature while the US9R model has a very pessimistic
representation.

3.4 Water
Alkaline electrolysis has been used to produce hydrogen since the eighteenth century and is the
basis of most commercially-available electrolysers. Extremely pure hydrogen is produced but at a
substantially higher cost than from SMR due to the substantially higher cost of electricity relative to
fossil fuel feedstocks. Low-temperature polymer electrolyte membrane (PEM) and hightemperature solid oxide electrolyser (SOE) electrolysers have been proposed as more efficient
technologies for the future (DEA 2010). PEM electrolysers are suited to small-scale hydrogen
production while SOE electrolysers can reduce electricity requirements by the use of hightemperature heat instead, a process called thermal cracking.
Figure 2 shows a wide range of capital investment costs for electrolysis systems from the literature.
The most surprising aspect is the large number of estimates that are substantially higher than even
the most expensive plants that have been built (the middle built estimate, at 18 GJ-1 y-1, represents
the average cost of building an electrolysis plant at present). Costs for small systems are particularly
high but all systems are expected to become substantially cheaper in the future through
technological breakthroughs and learning.
Twentieth-century electrolysers achieved energy efficiencies in the range 58%72% (Levene et al.
2007) and it is reasonable to assume that new electrolysers will be at the upper end of this range.
The efficiencies of current electrolysers in both MARKAL models, at 60%65%, are therefore
representative of older technology vintages and are lower than recent estimates reported in the
literature. Efficiencies in the range 85%95% are expected to be achieved for both small and
medium-sized plants in the future, particularly if PEM and SOE electrolysers can be successfully
developed.
3.4.1

Energy storage using hydrogen-electrolysis systems

Increasing the share of wind in UK electricity generation is likely to introduce a problem of power
generation intermittency. Electricity cannot be stored on a large scale but it has been proposed that
the excess could be stored by producing hydrogen through electrolysis.
11

The electrolysers would be operated intermittently, which could cause efficiency reductions and
introduce heat management and safety issues (Sherif et al. 2005). If the electrolyser temperature is
too low, due to a low production rate, then the efficiency of the electrolyser will reduce. A low
production rate could also allow hydrogen and oxygen to permeate through the electrolyte and
come into contact, reducing the efficiency and possible causing a fire. Alkaline electrolysers are
particularly sensitive to these problems but PEM electrolysers are also affected to a lesser extent.
Hydrogen would be produced predominantly using off-peak electricity at times of low demand.
While this would decrease the running costs, it would increase the capital investment costs of the
electrolysers because production would be substantially below capacity. Any analysis of
intermittent production would have to carefully consider the electrolyser utilisation factor.
3.4.2

Thermochemical cracking of water

It was mentioned above that SOE electrolysers operating at higher temperatures achieve greater
hydrogen production efficiencies. Hundreds of other high-temperature chemical cycles have been
identified for producing hydrogen (Rosen 2010). Studies have primarily concentrated on two
technologies to produce the energy for these thermochemical cycles. Firstly, high-temperature
nuclear reactors could supply both electricity and high-temperature waste heat to an adjacent
production plant (Utgikar and Thiesen 2006; Lubis et al. 2010). Secondly, concentrated solar power
(CSP) plants could produce both electricity and the required temperatures in a central tower for
hydrogen production (Felder and Meier 2008; Coelho et al. 2010).
The USA has funded substantial research into fourth-generation high-temperature helium reactors
for hydrogen production under the DOE Nuclear Hydrogen Initiative program (Bartels et al. 2010)
but no plants have been demonstrated on an industrial scale. The high uncertainty in the capital
costs of such a system are reflected by the wide range of estimates in Figure 2. Cost evaluation tools
are now being developed (e.g. Khamis and Malshe 2010) so more authoritative estimates might
become available in future. The different technology energy efficiencies (Figure 3) reflect the
different efficiency measurements that are used in the literature. The higher estimate only
considers the hydrogen production plant (Steward et al. 2008) while the lower estimate represents
the entire nuclear reactor and hydrogen production system (Khamis and Malshe 2010). For the
hydrogen production process alone, the energy efficiency should exceed 90% in the future.
The costs of CSP are even more speculative. Most authoritative studies are relatively old (e.g.
Glatzmaier et al. 1998) and both the costs and efficiencies are uncertain at the moment due to the
early stage of development of the technologies (Steinfeld 2005), so no data is presented here. Both
costs and efficiencies would be strongly influenced by the location of the CSP plant due to the
variations in solar radiation across the planet.

4 Technology data for energy system models

We presented energy systems data for a range of hydrogen production technologies in Section 3. In
this section, we summarise the currently-modelled technologies in the UK and US9R MARKAL
models, recommend revised data for the future and consider uncertainties in the data and the
potential for technology learning to reduce investment costs and increase operating efficiencies.

12

4.1 Summary of technologies in current MARKAL models

The hydrogen production technologies currently represented in the UK and US9R MARKAL models
are listed in Table 2. The US9R model focuses on technologies that are already mature and does not
incorporate improved technologies in the future. A wider range of technologies is represented in
the UK model with only medium SMR, which is not considered viable in the UK due to the relatively
smaller delivery distances compared to the USA, being excluded relative to the US9R model. The
IGCC technology in the UK model has a fixed hydrogen output (10% of the total). Neither model
includes nuclear or CSP thermochemical technologies.
Table 2. Summary of hydrogen production technologies represented in the UK and US9R MARKAL models. The UK
model versions were used for the Department for Transport hydrogen study (Strachan et al. 2008) and the more recent
Committee on Climate Change study (Usher and Strachan 2010).

Production
Coal gasification (large)
Membrane coal gasification
IGCC
SMR (large)
SMR (medium)
SMR (refuelling station)
Biomass gasification (medium)
Biomass pyrolysis (medium)
Waste gasification (medium)
Electrolysis (medium)
Electrolysis (refuelling station)

UK DfT
X
X
X

UK CCC
X
X
X
X

X
X
X
X
X
X

X
X
X
X
X
X

US9R
X

X
X
X
X

X
X

4.2 Recommendations for the future

We recommend a number of changes to the hydrogen production technologies that are included in
the UK MARKAL and TIAM-UCL models. Figure 5 shows the recommended energy system.
The IGCC is now represented as an additional add-on technology to coal gasification. Using this
approach rather than a single technology, the models will calculate the overall energy efficiency as a
function of the relative production of hydrogen and electricity rather than using fixed outputs as in
the current model.
A small biomass gasification system could be added that would be situated at a refuelling station. To
limit the labour requirements of such a system to acceptable levels, a high-energy imported liquid
biofuel would be used rather than biomass. The UK MARKAL model does not currently represent
biofuel imports for hydrogen production (although biofuels are used in E85 fuels) so this technology
should only be implemented if such imports are likely. Since the principle objective of a hydrogen
economy is to reduce GHG emissions, a new biomass gasification with CSS technology has been
added. It is assumed that the biomass feedstock is solid ligno-cellusic in nature. The UK MARKAL
model currently simulates biomass pyrolysis as a method of using domestic and imported biomass
oil (from pyrolysis of wood). Waste gasification similarly allows the conversion of solid wastes to
hydrogen although the current energy conversion efficiency of 65% seems very high. The latter is
limited by the amount of available waste. These technologies should only be included if the models
will be used to examine technological niches in the future or if substantial imports of biomass oil
might become available.
13

We have included data for a fourth-generation high-temperature nuclear technology but this should
be considered extremely speculative and we recommend that this technology only be included if
more reliable data becomes available. Conventional nuclear plants are represented by the
electrolysis technology.
Figure 5. Recommended hydrogen production technologies for future versions of the UK MARKAL and UCL-TIAM
models. Dotted technologies should only be included if the circumstances outlined in the main text are satisfied.

The recommended year of availability, capital investment costs and energy efficiencies for each
technology are listed in Tables 3 and 4 for UK MARKAL and TIAM-UCL, respectively. Since capital
costs tend to reduce and efficiencies tend to increase over time, data is provided for technology
vintages in 2000, 2025 and 2050. All of the data represent averages of the study data plotted in
Figures 2 and 3. In view of the range of data in the literature, we rounded the data to the nearest 1
GJ-1 y-1 for the investment costs and 5% for the energy efficiencies.
UK MARKAL v3.26 separately accounts for the carbon capture part of the hydrogen production
plants (technology CCS-CPR). We instead assume, in the absence of better information, that
retrofitting does not occur and that the capital cost is not affected by CCS because the plant is
redesigned to separate the CO2 from other streams. It is, however, necessary to reduce the
technology energy efficiency to account for CCS and we recommend a reduction of 5% in all cases.

14

Table 3. Recommended UK MARKAL investment cost and energy efficiency data for hydrogen production technologies
for the period 20002050, for use in energy systems models. Technologies with CCS should reduce the energy
-1 -1
efficiencies by 0.05. Investment costs have units (2000) GJ y , except for those denoted by * that have units
-1
m(2000) GW . See the text for a description of the data source.

Technology
Coal gasification
IGCC generation (after
coal gasification)
SMR
SMR
SMR
Biomass gasification
Biomass gasification
Biomass gasification
Biomass oil pyrolysis
Waste gasification
Nuclear
Electrolysis
Electrolysis

Size

First year

Large
Large

2000
2020

Large
Medium
Small
Large
Medium
Small
Medium
Medium
Large
Medium
Small

2000
2000
2020
2020
2020
2020
2020
2020
2030
2000
2000

Investment costs
2000 2025 2050
18
16
14
126* 126* 126*
5
12
45
15
30
45
30
30
18
65

4
10
10
15
20
25
20
20
40
10
16

3
8
8
15
20
25
20
20
40
10
10

Energy efficiency
2000 2025 2050
65% 65% 65%
60% 60% 60%
80%
75%
65%
50%
50%
50%
50%
50%
75%
75%

85%
80%
80%
50%
50%
50%
50%
50%
75%
85%
85%

85%
80%
80%
50%
50%
50%
50%
50%
75%
90%
90%

Table 4. Recommended TIAM-UCL investment cost and energy efficiency data for hydrogen production technologies for
the period 20002050, for use in energy systems models. Technologies with CCS should reduce the energy efficiencies
-1 -1
-1
by 0.05. Investment costs have units $(2005) GJ y , except for those denoted by * that have units $m(2005) GW . See
the text for a description of the data source.

Technology
Coal gasification
IGCC generation (after
coal gasification)
SMR
SMR
SMR
Biomass gasification
Biomass gasification
Biomass gasification
Biomass oil pyrolysis
Waste gasification
Nuclear
Electrolysis
Electrolysis

Size

First year

Large
Large

2000
2020

Large
Medium
Small
Large
Medium
Small
Medium
Medium
Large
Medium
Small

2000
2000
2020
2020
2020
2020
2020
2020
2030
2000
2000

Investment costs
2000 2025 2050
31
27
24
217* 217* 217*
9
21
77
26
52
77
52
52
31
112

7
17
17
26
34
43
34
34
69
17
27

5
14
14
26
34
43
34
34
69
17
17

Energy efficiency
2000 2025 2050
65% 65% 65%
60% 60% 60%
80%
75%
65%
50%
50%
50%
50%
50%
75%
75%

85%
80%
80%
50%
50%
50%
50%
50%
75%
85%
85%

85%
80%
80%
50%
50%
50%
50%
50%
75%
90%
90%

Energy system models also require annual operations and maintenance (O&M) costs for each
technology. The principle O&M cost for hydrogen production is the feedstock but this marginal cost
is calculated separately within the models. In most literature studies, the remaining costs are
predominantly fixed each year. The fixed O&M costs for each technology are plotted as a function
of the investment costs in Figure 6. There are variations for each technology but the fixed O&M
costs are generally around 5% of the investment costs.
15

Figure 6. Fixed O&M costs from the literature for hydrogen production technologies.

16

The UK MARKAL model currently represents all O&M costs as variable costs. We recommend that
these be changed to fixed O&M costs in future. Tables 5 and 6 list fixed O&M costs for 2000, 2025
and 2050 vintages of each technology for the UK MARKAL and TIAM-UCL models, respectively.
These costs were calculated by combining representative fixed O&M percentages from Figure 5 with
investment cost data from Table 4.
Table 5. Recommended UK MARKAL annual fixed O&M cost data for hydrogen production technologies for the period
-1 -1
20002050, for use in energy systems models. O&M costs have units (2000) GJ y , except for those denoted by * that
-1
have units m(2000) GW . See the text for a description of the data source.

Technology
Coal gasification
IGCC generation (after
coal gasification)
SMR
SMR
SMR
Biomass gasification
Biomass gasification
Biomass gasification
Biomass oil pyrolysis
Waste gasification
Nuclear
Electrolysis
Electrolysis

Size
Large
Large

Fixed O&M (% of
investment costs)
5%
5%

Large
Medium
Small
Large
Medium
Small
Medium
Medium
Large
Medium
Small

4%
4%
4%
7%
7%
7%
7%
7%
6%
5%
5%

Fixed O&M costs

2000 2025 2050
0.9
0.8
0.7
6.3*
6.3*
6.3*
0.2
0.5
1.8
1.1
2.1
3.2
2.1
2.1
0.9
3.3

0.2
0.4
0.4
1.1
1.4
1.8
1.4
1.4
2.4
0.5
0.8

0.1
0.3
0.3
1.1
1.4
1.8
1.4
1.4
2.4
0.5
0.5

Table 6. Recommended TIAM-UCL annual fixed O&M cost data for hydrogen production technologies for the period
-1 -1
20002050, for use in energy systems models. O&M costs have units $(2005) GJ y , except for those denoted by * that
-1
have units $m(2005) GW . See the text for a description of the data source.

Technology
Coal gasification
IGCC generation (after
coal gasification)
SMR
SMR
SMR
Biomass gasification
Biomass gasification
Biomass gasification
Biomass oil pyrolysis
Waste gasification
Nuclear
Electrolysis
Electrolysis

Size
Large
Large

Fixed O&M (% of
investment costs)
5%
5%

Large
Medium
Small
Large
Medium
Small
Medium
Medium
Large
Medium
Small

4%
4%
4%
7%
7%
7%
7%
7%
6%
5%
5%

17

Fixed O&M costs

2000 2025 2050
1.5
1.4
1.2
10.8
10.8
10.8
0.3
0.8
3.1
1.8
3.6
5.4
3.6
3.6
1.5
5.6

0.3
0.7
0.7
1.8
2.4
3.0
2.4
2.4
4.1
0.9
1.4

0.2
0.5
0.5
1.8
2.4
3.0
2.4
2.4
4.1
0.9
0.9

Energy system models require a breakdown of the energy inputs and outputs for each technology.
Table 7 shows data extracted from Khamis & Malshe (2010) for high-temperature nuclear and from
the H2A database (Steward et al. 2008) for the other technologies. Adding CCS to the plants would
increase the electricity consumption.
Table 7. Recommended energy source input and output data for hydrogen production technologies for use in energy
systems models. Technologies with CCS should increase the electricity input and reduce the feedstock by 4%. See the
text for a description of the data source.

Technology
Coal gasification
IGCC generation (after
coal gasification)
SMR
Biomass and waste
Nuclear
Electrolysis

Energy input
Feedstock
Electricity
100%
0%
100%
0%
100%
97%
100%
0%

0%
3%
0%
100%

Energy output
GH2
Electricity
100%
0%
0%
100%
100%
100%
70%
100%

0%
0%
30%
0%

4.3 Uncertainties in technology costing

The plant investment costs presented in Section 3 apply to plants built in the USA or mainland
Europe. The indirect costs can vary in other countries because they are sensitive to land and labour
costs and to national taxation and environmental legislation.
The impact of technology data uncertainties can be assessed using in an energy systems model using
a formal sensitivity study, but this is a time-consuming process. The impacts will depend on both the
size of the uncertainty, the importance of the technology data in the overall energy system and the
proximity of the technology to a tipping point where an alternative technology would be chosen.
The size of the uncertainty can be gauged by comparing data from different studies in Figures 2 and
3: mature gas and coal technologies have lower uncertainties than other immature technologies.
The importance of the technology data depends on the relative size of the investment and feedstock
costs (and hence the feedstock marginal price); Ahluwalia et al. (2011) show that the production
plant investment costs are a relatively small part of the delivered hydrogen cost at current feedstock
prices so it is likely that errors in the energy efficiency will have greater impacts than errors in the
investment costs. The impact of tipping points can only be assessed using a model sensitivity study.
Energy system models tend to be conservative in nature because of a reliance on technologies that
are already mature. Part of the reason is that finding accurate data for unproven, immature
technologies is difficult; we encountered this problem in this project when looking for cost and
efficiency data for CSP hydrogen production systems. Where estimates are available in the
literature, it is necessary to critically appraise the rationality of the assumptions underlying the
estimates. For example, Figure 7 shows estimates for a number of technologies converging to a
single low cost in 2030 that is close to a coal + carbon tax cost. It seems highly unlikely that all of
these technology costs will converge to a similar cost when the exergies vary so much between
technologies.

18

Figure 7: Hydrogen cost forecasts for a range of renewable systems (Lemus et al. 2010)

4.4 Learning curves

One of the aims of the UKSHEC II project is to examine how innovation and technology learning
might reduce hydrogen technology costs and improve efficiencies in the future. Learning curves
describe technology improvements, normally cost reductions, that are achieved as a result of largescale deployment of a technology.
There are limited opportunities for technology learning to influence hydrogen production
technologies. Natural gas and coal technologies are mature and are unlikely to change substantially
over the coming decades. Biomass gasification is an evolution of coal gasification, while nuclear
technologies are also evolutions of current technology. The technology with the most potential for
learning is electrolysis, where currently high investment costs and low energy efficiencies have the
potential to improve substantially as a result of fuel cell research and deployment. Electrolysis
technologies could be included in a technology cluster driven by fuel cell deployment.

5 Conclusion
A range of mature and immature technologies produce hydrogen from a range of fuels. We have
reviewed these technologies and recommended a number of changes to the UK MARKAL and TIAMUCL energy system models. The revised technologies represent a range of production methods and
feedstocks. Since the principle objective of a hydrogen economy is to reduce GHG emissions, CCS is
included as an option where appropriate.
Previous UK MARKAL versions included several similar technologies for the same feedstock (e.g. coal
gasification and membrane technologies). In the future, we recommend specifying a single
technology and represented the cost/efficiency improvements as step changes to the technology
19

vintages. Such improvements are generally small compared to the variations between different
feedstocks.
We concentrated on mature technologies but included some immature technologies where
appropriate. The two areas where our analyses are most likely to be superseded are biomass, where
a great variety of technologies using different feedstocks are at the laboratory stage, and hightemperature hydrogen production.

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