First degree impacts of hydrogen as a transport fuel: A case study in New Zealand

1
First degree impacts of hydrogen as a transport
fuel A case study in New Zealand

• Andrew Baglino
• May 5, 2004

2
Context

• Relevant History
• Responded to 1970s OPEC oil crises with Think Big
  encouraging alternative fuels.
• Signed and ratified Kyoto Protocol. Planned
  policies include
• carbon charges of NZ25/tCO2 and forestry sinks
• New Zealand Quick Facts
• Population of 4 million on two large islands in
  the South Pacific
• Largely deregulated energy sector immense coal
  stocks limited amount of natural gas, 65 of
  oil imported

3
Motivation

• Will hydrogen fuel cell vehicles help New Zealand
  achieve goals of
• Carbon emission reductions
• Sustainable resource use
• Minimizing dependence on foreign oil
• What policies will promote these goals?

4
Methodology

• System dynamics modeling of the NZs energy
  system
• Equilibrating, price-clearing markets for
  electricity and hydrogen
• Myopic (No foresight)
• 16 time steps per year to 2050
• Use Model to
• Determine key variables
• Undertake Monte Carlo sensitivity analysis
• Test policy interventions and their probable
  outcomes

5
Key Assumptions

• Fuel Cell Stack
• 2000/kw today 50/kw 2020
• Hydrogen Vehicles
• Unreliable now Equivalent performance in
  2020
• 6-figures now Equivalent price in 2020
• Exogenous Static Variables
• Population grows at median govt prediction
• Electricity demand linked to 2.5/yr GDP growth

6
Model Block Diagram
Electricity Generation
GDP
Fossil Fuel Extraction/Imports
Hydrogen Production
Carbon Emissions
POP
Vehicle Market
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Stochastic Inputs

• World Oil price
• Imported LNG price
• Biomass price
• Hydrogen technology improvement
• Cost of carbon sequestration

8
Scenario Definition

• NOH2 H2 FCVs are never economic.
• BAU No H2-specific government regulation
• Subsidize H2 H2 excise taxes reduced by 50
• 1/kM to .5/kM
• Double CTax Carbon taxes doubled in 2012
• 12.5/tCO2 to 25/tCO2
• Tax Petrol Petrol taxes increase by 50 in 2020
• 2/kM to 3/kM

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Sample Output BAU CO2 Distribution
Median
25th percentile
5th percentile
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Carbon Emissions in 2050
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Carbon Emissions Median Reductions

• No scenarios predict emissions
• returning to 2002 levels by 2050

12
Fossil Energy in 2050
13
Fossil Energy Median Reductions

• Fossil fuel use will
• continue to increase

14
Petrol Use in 2050
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Petrol Use Median Reductions

• BAU shows reasonable reductions
• Petrol Taxes and H2 Subsidies both can bring
  consumption down to 2002 levels.

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Overall Implications

• Business as Usual
• Modest emission (5) and fossil fuel consumption
  (2) reductions
• Petrol demand reduced by 12
• Of the three policy goals, minimizing dependence
  on foreign oil is the most achievable.
• Policy is an effective driver.

17
Summary

• International interest in RD in hydrogen
  technologies
• New Zealand as a unique and motivated nation
• Even with strong policy instruments, a hydrogen
  economy will not help New Zealand meet Kyoto
• Stepping stone to a renewable future?

18
Acknowledgements

• Jonathan Leaver and the School of the Built
  Environment at Unitec Institute of Technology in
  Auckland, New Zealand
• Paul Kruger, Jim Sweeney, the Goldman Program at
  the Center for Environmental Science and Policy
  at Stanford University