Economic Implications of Peak vs Base-Load Electric Costs on Nuclear Hydrogen Systems

Electricity demand varies daily, weekly, and seasonally. The cost and price of electricity to meet the peak demands can be an order of magnitude greater or more than the cost and price of electricity at times of minimum demand. Nuclear systems are capital intensive, with low operating costs relative to those for most other methods used to produce electricity; thus, nuclear energy is most competitive in the production of base-load electricity (i.e., that part of the electricity demand that is constant throughout the year). Nuclear energy is generally not competitive for the production of intermediate and peak electricity, where the power plant operates for only a fraction of the year. Two nuclear hydrogen technologies (hydrogen produced using the energy from a nuclear reactor) have the potential to “convert” peak electricity demand into “base-load” demand and thus expand the markets in which nuclear energy is competitive. The production of hydrogen by electrolysis for industrial markets at times of low electricity demand can significantly increase the base-load demand for electricity. Alternatively, the Hydrogen Intermediate and Peak Electrical System (HIPES) may enable nuclear hydrogen to be used to economically meet peak electrical demands and further expand the market for nuclear energy. HIPES would use off-peak electricity or dedicated nuclear hydrogen plants to produce hydrogen and oxygen that is stored and then used in hydrogen–oxygen steam cycles or fuel cells to produce peak electricity. If electrolysis is used, the off-peak electricity to hydrogen to peak electricity efficiency is ~50%. The critical technology for both of these markets is low-cost bulk hydrogen storage for periods of days, weeks, and months because hydrogen demand does not occur at the same time that hydrogen is produced. Low-cost bulk hydrogen storage in underground salt deposits is a commercial technology; however, this technology has not been commercialized for other geologies. HIPES requires the development of several other technologies. These existing markets are not dependent upon future uses of hydrogen such as a transport fuel.