Natural gas in hydrogen production: a cost study

Abstract

A comprehensive economic performance evaluation framework for palladium (Pd)-based industrial-scale catalytic membrane reactor (CMR) modules integrated into hydrogen (H2) production systems (HP-CMR) through methane steam reforming has been developed. The HP-CMR technology option offers a promising pathway towards hydrogen production with enhanced environmental performance in a carbon dioxide-constrained world. Within the above context, this paper develops comprehensive baseline models for total capital investment (TCI) and total product cost (TPC) to evaluate the economic performance of CMRs. Various sources of uncertainty (raw material market prices, labour costs, membrane lifetime and maintenance costs, financing costs, etc.) are recognised and their effect on TCI and TPC is explicitly taken into account using Monte Carlo techniques. As a result, insightful distribution profiles of TCI and TPC are derived rather than single-point value estimates and more realistic distributions of CMR economic performance outcomes are generated. Furthermore, tornado diagrams are developed, establishing the predominant effect of palladium unit price, membrane lifetime and financing interest costs on TCI and TPC.

Economic performance evaluation of process system design flexibility options under uncertainty: The case of hydrogen production plants with integrated membrane technology and CO2 capture

“…Indirect costs include engineering and supervision pertinent costs, legal expenses, construction expense and contractor's fees, as well as contingency-relevant costs (for a more detailed description please see [9,29,31,32]).…”

“…avoided within the proposed context [23,40]. In addition, the above probabilistic distribution profiles can be also viewed as -risk-reward/opportunity‖ profiles that enable the quantification of -risks/rewards‖ through the -value at risk‖ and the -value at opportunity‖ at pre-specified levels, which are extensively used as financial evaluative tools/indicators in risk management and investment planning [9,29,32,40]. In the present study, the -value at risk‖ is denoted as P 5 , and it is characterized as a threshold-value at a probabilistic level of 5%, indicating that there is a 5% probability of generating a NPV lower than the P 5 threshold-value.…”

“…evaluating economic performance at average conditions does not necessarily represent average economic performance (known as the -flaw of averages‖ in probability theory [23]). These limitations can be effectively overcome by the integration of Monte Carlo simulation techniques as demonstrated in [9,20,23,25,29].…”

“…Triangular profiles are generally applied for cost estimation and risk assessments purposes with little knowledge about the model input outside the domain of approximate estimates related to its minimum, most likely, and maximum values[9,40,42,43]. Simple uniform or rectangular distribution profiles have a rectangular probability density function defined by two parameters, the model input's minimum and maximum values[29,32,40,44,45]. These profiles usually take into consideration reasonable ranges of values for the model input under consideration.…”

Editorial: Natural gas

“…Liang-Chih Ma and co-authors write from the United States to provide insight into the advantages to be obtained in methane steam reforming by way of a move to catalytic membrane reactor modules (Ma et al, 2015). This approach yields higher efficiencies and provides carbon dioxide at high pressure, thereby facilitating sequestration and avoiding harmful emissions to the atmosphere.…”