Economics

Preliminary Cost Model

Virent has developed a cost model to develop cost projections for production of hydrogen and alkane fuels. Preliminary cost projections are shown in Figure 1a (hydrogen) and Figure 1b (mixed alkanes).

The following assumptions are made in this analysis to arrive at these projections:

• An APR reforming unit that generates roughly 500 kg of gas per day
• Capital cost which includes the cost of precious metal catalyst
• Operation and maintenance expenses are included
• 10% return on investment with system depreciation over 15 years
• For H2, reactor thermal efficiency of 70% and catalyst performance of 6 watts per gram
• For mixed alkanes, reactor thermal efficiency of 85% and 100% (less heat should be required) and catalyst performance of 6 watts per gram
• There is no consideration of carbon or renewable tax credits, which can have significant impact on overall economics in Kyoto geographies.

Total Cost of Distributed "Green" Hydrogen
(Carbon neutral hydrogen from renewable sources)

Figure 1a. Preliminary cost model for APR production of H2 from glycerol

Cost of Mixed Alkanes

Figure 1b. Preliminary cost model for APR production of Mixed Alkanes
(red and blue line) from glycerol

As shown in Figure 1a, comparing the APR process with lower cost feedstocks, i.e. under 15 cents per pound, to other sources of hydrogen productions shows the APR process to be competitive. A comparable steam reformer utilizing non-renewable natural gas is expected to be 56% efficient and, with expected future advancements, could generate hydrogen at a cost of $4.50 per kg of hydrogen in a distributed system (National Research Council, 2004). Furthermore, a comparable unit that generates hydrogen via the electrolysis of water is projected (assuming certain advancements are made) to generate hydrogen at a cost of $6.50 per kg of hydrogen.

As can be seen in Figure 1a and Figure 1b, the primary economic driver for the APR process is feedstock. There are a number of lower cost feedstocks that are candidates for the APR process. Raw sugars, such as glucose and sucrose, and biodiesel generated glycercol are all cost effective feestocks. In the future, it is expected that certain cellulosic sugars from unused portions of the corn, sugar beet and sugar cane plant may also be the source of sugars for the APR process. All of these feedstocks position the APR process to compete effectively with conventional fuels even before consideration of renewable tax incentives.