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An economy-wide analysis of hydrogen economy in Taiwan
Renewable Energy 34 (2009) 1947–1954
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An economy-wide analysis of hydrogen economy in Taiwan Duu-Hwa Lee a, *, Shih-Shun Hsu b, Chun-To Tso c, Ay Su d, Duu-Jong Lee e a
Institute of Applied Economics, National Taiwan Ocean University, Keelung 202, Taiwan Department of Agricultural Economics, National Taiwan University, Taipei 106, Taiwan c Research Division I, Taiwan Institute Economic Research, Taipei 104, Taiwan d Fuel Cell Center, Department of Mechanical Engineering, Yuan Ze University, Chungli, Taoyuan, Taiwan e Department of Chemical Engineering, National Taiwan University, Taipei 106, Taiwan b
a r t i c l e i n f o
a b s t r a c t
Article history: Available online 3 January 2009
This study, based on the Taiwan dynamic computable general equilibrium modeldenergy, hydrogen (TAIGEMdEH), provides an economic baseline forecast for petroleum and hydrogen economies in Taiwan in 2004–2030. Through survey data on existing energy sectors and other industries, TAIGEMdEH predicts that developing hydrogen economy presents an appropriate strategy for meeting the Kyoto Protocol’s CO2 emissions mitigation target with attempt to keep economic growth. Hydrogen economy is noted sensitive to industrial structure and rate of technical progress on hydrogen production. Transition from petroleum economy to hydrogen economy acquires strong governmental support and significant technical progress. Ó 2008 Elsevier Ltd. All rights reserved.
Keywords: Hydrogen economy Petroleum economy Computable general equilibrium
1. Introduction Hydrogen is an attractive alternative energy source that is clean, renewable and affordable. To meet future hydrogen economic trends, many countries have invested heavily in hydrogen-related technologies [1–7]. Numerous studies developed roadmaps for achieving hydrogen economies by 2040 [8–12]. Transition from a petroleum-based economy to hydrogen-based economy is a complex process that demands long-term investment and technological breakthroughs [13,14]. Economical models are useful to conclude numerous scenarios presented as a consequence of different applied economical actions. This study utilized a model, called ‘‘Taiwan general equilibrium modeldEnergy for hydrogen (TAIGEMdEH)’’, as the forecast tool to evaluate economic impacts on economic growth rates, energy share, and CO2 emission rates for Taiwan in 2004–2030 [15,16]. Sensitivity analysis on changes in Taiwan’s economic structure and related technical progress rates to the impacts were discussed. 2. Model
Taiwan, consisting of 170 sectors, 6 types of labor, 8 types of margin, and 182 commodities. In the model, hydrogen is regarded as a secondary energy source and hydrogen-related sectors including hydrogen production and fuel cell were incorporated. The input demand for industry production is represented as a five-level nested structure (Fig. 1), and the operation of each level is independently decided. The energy composite of the model is comprised of industries of hydrogen, coal products, oil products, natural gas products, and electricity. Individual industries minimize their costs to meet production/consumption needs or to maximize utility efficiency because of budget constraints. The outputs of the model are the ‘‘optimal’’ states of all agents in the economic body of the ‘‘demand equals supply’’ criterion. The power sector of TAIGEMdEH is modeled as a technology bundle derived from the MEGABARE model, which is composed of 11 power generation technologies, namely, hydro, stream turbine oil, stream turbine coal, stream turbine gas, combined cycle oil, combined cycle gas, gas turbine oil, gas turbine gas, diesel, nuclear and fuel cell (Fig. 2). The power sector is able to switch between different power technologies in response to changes in their relative costs.
2.1. Model 2.2. Database The TAIGEMdEH model, derived from MONASH model, is the most comprehensive forecast model available for the economy of * Corresponding author. Tel./fax: þ886 2 26258024. E-mail address: [email protected] (D.-H. Lee). 0960-1481/$ – see front matter Ó 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.renene.2008.12.006
The database for the TAIGEMdEH model is presented in the input–output table calculated by Directorate-General of Budget, Accounting and Statistics (DGBAS) [17]. The supply side includes intermediate and primary inputs for industries, and the demand
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D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
Local Market
Export Market
Local Market
Export Market CET
CET
Good 1
Good G
CET
Functional Form Inputs or Outputs
Activity Level Leontief
Good 1
Good G
CES
CES
CES
Imported Good G
Domestic Good 1
Imported Good 1 Land
Domestic Good G
Primary Factors
Energy CES
CES
Labor
Composite Coal Products
Capital
Composite Oil Products
CES
CES
Composite Natural Gas Products
CES
Natural Gas
Gas
Refinery Gas
Diesel
H y d r o g e n
P o w e r
CES
Fuel Oil
Kerosen
CES
CES
Gasoline
Coal Product
Occupation Type O
Coal
Occupation Types 1
Primary Factors and Energy
Other Costs
CES CES
CES
CES CES
CES
Imported
Domestic
Domestic
Imported
Domestic
Imported
Imported
Imported
Domestic
Domestic
Imported
Domestic
Imported
Imported
Domestic
Domestic
Imported
Domestic
Imported
CES
Domestic
CES
Fig. 1. Structure of production: non-electricity sectors.
side includes intermediate demand for industries and final demand for household consumption, government expenditure, investment, net export, and inventory. The demand side of hydrogen in Taiwan is by sectors such as hydrogen fuel cell manufacturing, semiconductor production, glass production, powder metallurgy, and research institutions and universities. Table 1 presents the cost’s share of hydrogen and fuel cell obtained from a recent survey conducted by the Taiwan Institute of Economic Research. The cost of producing 1 m3 of hydrogen is 1.67 USD, and the cost of fuel cell assembly is 10,000 USD/kW. The energy balance sheet of Taiwan was used to estimate the CO2 emission matrix from 15 emission commodities, including coal, natural gas, other nonmetallic minerals, gasoline, diesel fuels, aviation fuels, fuel oils, kerosene, lubricants, naphtha, refinery gas, asphalt, other refining products, coal products, and gas. To demonstrate needs for clean hydrogen energy, the elasticity of substitution of hydrogen (0.1) is set smaller than of other energies (0.5). Also, elasticity of substitution between power sectors of hydro and coal generation is 0.1, nuclear generation at 1.0, other
technologies at 0.5, and fuel cell power generation at 0.1 owing to governmental support for decreasing CO2 emissions. The TAIGEMdEH acquires a historical database of supplies and demands in all sectors of Taiwan. Table 2 presents the exogenous shocks in the forecast of the petroleum economy baseline in 2000– 2030 according to a national economic report provided by DGBAS and the results are summarized as follows: (1) annual economic growth rate at 2%; (2) annual energy efficiency improvement rate at 1.2% and production cost reduction rate at 2%; (3) total annual employment rate increase at 1%; (4) annual consumer price index (CPI) at 2%; (5) prices of imported crude oil increased by 27.4% and 38.9% in 2004 and 2005, respectively. It will continue to rise at a pace of 3.21% onwards until 2030, based on the high oil price projection of EIA’s forecast [18]; (6) as Taiwan entered the WTO in 2002, tariffs will continue to decline, based on WTO regulations, until 2010.
D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
Leontief
1949
Hydrogen Fuel Cell Hydro
Leontief
Leontief
Stream turbine: Oil Technology
Leontief
Stream turbine: Coal
Leontief
Leontief
Bundle
Stream turbine: Gas
Combined cycle: Oil
Leontief
CRESH
Combined cycle: Gas
Leontief
Gas turbine: Oil
Leontief
Gas turbine: Gas
Leontief
Diesel
Nuclear
Leontief
Fig. 2. Technology bundle of TAIGEMdEH model: electricity sector.
3. Scenario design Baseline forecasting was conducted for the petroleum-based economy in 2004–2030. Sensitivity analysis was applied to determine which economic structure facilitates the transition from a petroleum-based economy to a hydrogen-based economy with the least resistance and in the least amount of time.
Table 1 Cost share of hydrogen and fuel cell. Hydrogen
Intermediate Input
Primary input
Fuel-cell
Input
USD/m3
Input
USD/kW
By-product hydrogen Catalyst
0.15
Electricity
0.03
Polymer film Catalyst Carbon paper Gasket Bipolar plate Steel plate Fan Heat exchanger
550 775 375 75 650 75 400 433.3
Wage Depreciation Rent of land Rent of durables Interest Profit Other cost
0.15 0.09 0.18 0.24 0.03 0.30 0.27
Wage Depreciation Rent of land Rent of durables Interest
1666.7 666.7 333.3 333.3 333.3
Other cost
333.3
Total cost
USD 1.67
Total cost
USD 10,000
0.06
Developed countries have funded R&D of hydrogen technologies, thereby accelerating technical progress for related industries. This study developed another scenario to identify the impacts of different technical developments for hydrogen, nuclear power and coal on economic growth. The following outlines the three simulations. (1) Baseline forecasting: Traditional petroleum economic structure forecast for 2004–2030. (2) Simulation I: A petroleum-based economy transitioning to a hydrogen-based economy in 2004–2030. (3) Sensitivity Analysis of the hydrogen economy under limited development of fossil fuel-based industries.
4. Results and discussion 4.1. Hydrogen macroeconomy Table 3 presents the macroeconomic impacts on the hydrogenbased and petroleum-based economies, as well as the differences between the two economies. The real GDP growth rate for the hydrogen-based economy is lower than that of the petroleumbased economy prior to 2020, and higher in 2021 and after. Before 2020, the transition cost to hydrogen-based economy, including the economic reallocation of resources and money to hydrogen R&D and infrastructure, eliminates resources in other sectors, thereby reducing real GDP growth. In 2021, the hydrogen supply chain will
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Table 2 Exogenous shocks for forecasting baseline: from 2000 to 2030. Macroeconomic variables growth rate (%) 2000 Energy-saving decline rate Real GDP Imports Household consumption Export Investment Government expenditure Number of households Employment trend Aggregate price index Exchange rate Imports price index (c.i.f.) Exports price index Primary factors productivity Consumer price index The energy structure Industrial structure Labor (primary factor) demand Price of imported petroleum Technology bundle Ascension to WTO Nuclear-free homeland policy
2001
2002
2003
2004w2030
0.60 0.60 0.60 0.60 1.20 5.78 2.22 3.94 3.33 Endog 4.54 13.51 5.71 6.72 Endog. 4.84 1.00 2.07 0.84 Endog. 18.14 8.08 10.48 10.94 Endog. 8.38 21.14 1.61 2.05 Endog. 0.28 0.55 1.47 0.71 Endog. 2.28 1.80 1.80 1.76 2.00 1.20 0.49 1.13 1.07 1.00 1.80 0.51 0.89 2.21 Endog. 5.15 6.00 1.29 0.49 Endog. 4.62 1.34 1.25 2.98 Endog. 0.87 0.77 0.32 0.87 Endog. Endog. Endog. Endog. Endog. 2.50 Endog. Endog. Endog. Endog. 2.00 Endog. Endog. Endog. Endog. Endog Endog. Endog. Endog. Endog. Endog Labor is a CES aggregation of the different types of labor force. The price of imported petroleum increased by 4.96% in 2002, 13.94% in 2003, 27.40% in 2004, 38.91% in 2005, and was assumed to increase by 3.21% onwards up to 2030, based on high oil price projection of EIA (2005) forecast. By CRESH function assumption, the substitution elasticity of hydrogen fuel cell is 0.1, hydro 0.1, nuclear power 1.0, coal 0.1, oil 0.5, and natural gas 0.5. Because Taiwan entered the WTO in 2002, we set the tariff rate decline rate in conformance to WTO rules until 2010. Because Taiwan’s government adopts the ‘‘nuclear-free homeland’’ policy, we assume that the existing three nuclear plants will all be shut down before 2015 and number 4 to begin operation after 2010.
be in place and hydrogen has substituted other high-priced energies and energies with high CO2 emissions. Employment in the hydrogen-based economy is lower than that in the petroleum-based economy before 2011 and higher after 2011. The transition to a hydrogen-based economy will create more jobs than will the petroleum-based economy because of the creation of new industries. Importation of hydrogen follows the same trend of development because new hydrogen technologies and equipment will need to be developed locally. Household consumption in the hydrogen-based economy is lower than that of the petroleumbased economy before 2016 and higher after 2016. Transition toward a hydrogen economy will not disrupt economic development in a 20-year time frame, and effects of hydrogen economy originate from micro-to-macro when spreading out to the entire economy. 4.2. Impacts on CO2 emission mitigation The CO2 emissions by 2030 under the petroleum-based economy is estimated as 654.3 million tons, and under the hydrogen-based economy, 579.4 million tons (Table 4). After 2008, usage of clean energies, such as hydrogen and natural gas, will reduce CO2 emissions. The hydrogen-based economy will produce 674.8 million fewer tons of CO2 emissions than the petroleum-based economy in 2010–2030. According to the trend, reduction in CO2 will become increasingly significant after the year 2030. Thus, developing hydrogen economy presents an appropriate strategy for meeting the Kyoto Protocol’s CO2 emissions mitigation target. 4.3. Hydrogen economy’s impacts on energy prices Due to investment in hydrogen R&D, technical progress and large-scale production, hydrogen prices will drop (Table 5). Along with technology development and infrastructure development, the hydrogen price will continue decreasing by 4–6% annually until
2030. Sale prices for coal, oil refining products, natural gas, gasoline and diesel have increased steadily. 4.4. Sensitivity analysis Two sensitivity analyses were utilized to identify the energy structure that can ease the transition to a hydrogen-based economy. 4.4.1. Limited development of petroleum-related industries coupled with promotion of hydrogen-related industries This scenario demonstrates how a virtual society makes the transition to a hydrogen-based economy if the government limits expansion of production capabilities for petroleum-related industries as a method of reducing CO2 emissions, and promotes a hydrogen-based economy. The use of fossil fuels would drop, with hydrogen use increasing more rapidly than that in Simulation I. Coal, crude oil, chemicals, chemical products, oil refineries, coal products and plastic products are seven industries that would have limited expansion in their production capacity in the future. The society is assumed to invest in four hydrogen-related industries at approximately 20% of total existing capitals each year. This same variables in Simulation I are adopted. In Scenario I (Fig. 3) hydrogen energy will grow to third place at approximately 17% of total energy use. However, simply ‘‘turningoff’’ petroleum-related industries cannot effect a full transition to a hydrogen-based economy before 2030. Petroleum and coal will continue to be the two most important energy sources; however, petroleum use will decrease to 32.44%, close to that of coal (28.71%). The simulation results for Scenario II (Fig. 4) suggest that the share of energy structure for hydrogen will dominate at approximately 31%, exceeding that of petroleum and coal. This finding suggests that if government policy limits development of fossil fuel-related industries and government increases its investment in hydrogen-related industries, a hydrogen-based economy will be realized by about 2030. Petroleum usage will decrease substantially
D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
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Table 3 Effects of hydrogen economy on macroeconomic variables. Real GDP (%)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Real GDP level (billions US dollar) Petroleum economy
Difference
Hydrogen economy
Petroleum economy
Difference
Hydrogen economy
Petroleum economy
Difference
5.42 3.63 3.77 3.85 3.92 3.86 3.79 3.68 3.65 3.69 3.51 3.45 3.36 3.41 3.35 3.32 3.29 3.53 3.49 3.43 3.50 3.49 3.45 3.38 3.36 3.38 3.42
5.88 3.93 4.13 4.18 4.19 4.20 4.19 3.97 3.94 3.91 3.87 3.83 3.54 3.50 3.46 3.41 3.37 3.33 3.30 3.26 3.22 3.20 3.19 3.17 3.15 3.13 3.12
0.46 0.30 0.36 0.33 0.27 0.34 0.40 0.29 0.29 0.22 0.36 0.38 0.18 0.09 0.11 0.09 0.08 0.20 0.19 0.17 0.28 0.29 0.26 0.21 0.21 0.25 0.30
373.7 387.2 401.8 417.3 433.7 450.4 467.5 484.7 502.4 520.9 539.2 557.8 576.5 596.2 616.2 636.6 657.6 680.8 704.5 728.7 754.2 780.5 807.5 834.8 862.8 892.0 922.5
375.3 390.1 406.2 423.1 440.9 459.4 478.6 497.6 517.2 537.5 558.3 579.6 600.2 621.2 642.7 664.6 687.0 709.9 733.3 757.2 781.6 806.6 832.3 858.7 885.7 913.5 942.0
1.6 2.8 4.3 5.8 7.2 9.0 11.2 13.0 14.9 16.6 19.1 21.9 23.6 25.0 26.5 28.0 29.4 29.1 28.7 28.5 27.4 26.0 24.8 23.9 22.9 21.5 19.5
1.97 1.48 1.58 1.62 1.74 1.70 1.63 1.69 1.72 1.58 1.45 1.44 1.35 1.36 1.32 1.29 1.27 1.54 1.49 1.46 1.53 1.51 1.47 1.44 1.42 1.38 1.41
2.78 2.05 2.15 2.09 2.01 1.91 1.80 1.34 1.24 1.15 1.07 1.00 0.56 0.55 0.56 0.57 0.59 0.62 0.64 0.67 0.67 0.70 0.75 0.77 0.80 0.81 0.83
0.81 0.57 0.57 0.47 0.27 0.21 0.17 0.35 0.48 0.43 0.38 0.44 0.79 0.81 0.76 0.72 0.68 0.92 0.85 0.79 0.86 0.81 0.72 0.67 0.62 0.57 0.58
Consumption (%)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Employment (%)
Hydrogen economy
Export (%)
Investment (%)
Import (%)
Hydrogen Economy
Petroleum Difference Hydrogen Petroleum Difference Economy Economy Economy
Hydrogen Economy
Petroleum Economy
Difference
Hydrogen Economy
Petroleum Economy
Difference
5.37 3.48 3.55 4.09 3.76 3.79 3.82 3.82 3.76 3.74 3.69 3.71 3.70 3.69 3.70 3.72 3.76 4.16 4.22 4.31 4.40 4.52 4.63 4.77 4.93 5.12 5.35
6.06 4.56 4.81 4.85 4.87 4.86 4.83 4.23 4.14 4.04 3.94 3.85 3.18 3.10 3.04 2.99 2.96 2.93 2.91 2.90 2.86 2.85 2.87 2.87 2.87 2.86 2.86
7.15 6.90 6.98 7.31 7.04 6.69 6.23 5.69 5.18 4.81 4.58 4.50 4.47 4.45 4.41 4.34 4.24 4.32 4.23 4.10 3.94 3.78 3.62 3.49 3.39 3.33 3.30
8.87 7.82 8.06 8.13 8.86 8.36 7.85 6.87 6.18 5.58 5.06 4.62 3.81 3.30 2.88 2.55 2.28 2.07 1.92 1.82 1.72 1.69 1.74 1.78 1.83 1.89 1.95
1.72 0.92 1.08 0.82 1.82 1.67 1.62 1.18 1.00 0.77 0.48 0.12 0.66 1.15 1.53 1.79 1.96 2.25 2.31 2.28 2.22 2.09 1.88 1.71 1.56 1.44 1.35
9.33 7.94 8.20 8.80 8.32 8.00 7.56 7.15 6.95 6.77 6.79 6.75 6.87 7.05 7.24 7.45 7.66 8.22 8.37 8.57 8.82 9.04 9.35 9.66 10.04 10.49 11.01
10.35 8.50 8.45 8.38 8.44 8.32 8.20 6.79 6.61 6.44 6.29 6.15 4.73 4.59 4.48 4.39 4.32 4.27 4.23 4.21 4.17 4.17 4.20 4.21 4.22 4.24 4.25
1.02 0.56 0.25 0.42 0.12 0.32 0.64 0.36 0.34 0.33 0.50 0.60 2.14 2.46 2.76 3.06 3.34 3.95 4.14 4.36 4.65 4.87 5.15 5.45 5.82 6.25 6.76
0.69 1.08 1.26 0.76 1.11 1.07 1.01 0.41 0.38 0.30 0.25 0.14 0.52 0.59 0.66 0.73 0.80 1.23 1.31 1.41 1.54 1.67 1.76 1.90 2.06 2.26 2.49
5.16 3.48 4.16 4.56 4.82 4.91 4.88 4.82 4.83 4.77 4.80 4.77 4.79 4.83 4.85 4.87 4.87 5.60 5.44 5.38 5.36 5.31 5.29 5.25 5.21 5.17 5.14
5.86 3.82 4.12 4.32 4.31 4.55 4.77 4.46 4.73 4.95 5.14 5.28 4.85 4.98 5.06 5.09 5.09 5.07 5.03 4.98 4.94 4.88 4.82 4.76 4.71 4.65 4.61
0.70 0.34 0.04 0.24 0.51 0.36 0.11 0.36 0.10 0.18 0.34 0.51 0.06 0.15 0.21 0.22 0.22 0.53 0.41 0.40 0.42 0.43 0.47 0.49 0.50 0.52 0.53
to about 26.63% due to production limitations applied to petroleum-related industries. Coal usage will be third in 2030 at roughly 24%, due to the fact that the coal stocks may last for 200 years and CO2-reduction technologies for coal usage are currently being developed. Natural gas will place fourth, increasing before 2020 and decreasing to 2030 to approximately 10%. As Taiwan must currently adhere to the ‘‘nuclear-free homeland’’ policy,
nuclear power usage will decrease slowly in the future. Hydro placed last. If government policy supports development of hydrogen via public investments in R&D, by encouraging private investment, limiting fossil fuel usage and production capacity for petroleum-related industries, or by enacting environmental laws, such as a carbon tax, Taiwan can achieve the transition from a petroleum-based economy to
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D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
Table 4 Hydrogen economy’s impacts on CO2 emission.
Table 5 Hydrogen economy’s impacts on energy prices.
CO2 emission (millions tons)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Hydrogen economy
Petroleum economy
Difference
252.2 259.4 269.6 276.3 284.3 293.3 303.7 315.0 327.2 339.7 351.9 364.5 378.3 392.7 407.5 422.7 438.5 453.2 468.5 483.3 499.6 514.5 531.3 542.1 556.4 568.2 579.4
243.5 252.4 262.1 272.9 284.5 297.1 310.7 324.4 338.8 353.9 369.5 385.7 401.3 417.2 433.3 449.7 466.4 483.4 500.8 518.4 536.5 555.0 573.9 593.3 613.1 633.4 654.3
8.7 7.0 7.5 3.4 0.2 3.8 7.0 9.4 11.6 14.2 17.6 21.2 23.0 24.5 25.8 27.0 27.9 30.2 32.3 35.1 36.9 40.5 42.6 51.2 56.7 65.2 74.9
a hydrogen-based economy with few obstacles and at an early date. Countries that place considerable emphasis on environmental protection, such as European countries, will achieve easier transition to a hydrogen-based economy than those that emphasize economic development and ignore problems associated with fossil fuel usage. Success will also depend on structure of industry. 4.4.2. Rate of technical progress for hydrogen, nuclear and coal fuels This study utilized three different technical progress rates for hydrogen, nuclear power and coal to determine how high technology progress rate assists in the realization of a hydrogen-based economy. Clean coal usage efficiency (like IGCC) is assumed increasing. The rate of technical progress for hydrogen-related industries, nuclear power and coal is set separately as in the three levels (10%, 5%, and 5%), (15%, 10%,
50% 45% 40% 35%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Coal Oil refining Natural Gasoline Diesel Hydrogen HFC product gas
HFC HFC Vehicle Power
4.53 22.40 7.96 46.20 4.94 7.55 3.24 8.67 3.13 2.86 3.31 3.07 3.46 3.23 3.45 3.24 3.22 3.02 3.02 3.83 2.82 3.63 2.81 3.61 2.81 3.60 2.84 3.62 2.90 3.66 2.96 3.68 3.03 3.65 2.85 3.99 2.86 3.34 2.92 4.81 2.98 3.68 3.05 4.20 3.11 3.59 3.20 4.21 3.30 3.52 3.43 3.59 3.59 3.74
1.02 2.12 0.18 2.14 5.74 3.81 4.30 5.08 5.30 5.74 6.90 6.70 6.26 6.57 6.47 6.47 5.27 6.30 6.20 6.61 6.09 6.87 6.73 6.60 6.47 6.33 6.19
6.58 12.75 5.73 2.72 2.91 3.09 3.23 3.21 2.98 2.77 2.55 2.52 2.49 2.49 2.49 2.46 2.30 2.91 2.44 2.50 2.97 3.10 3.81 4.06 3.68 3.61 3.70
12.50 30.20 8.93 8.17 1.90 1.21 1.66 1.89 1.96 2.23 2.44 2.83 3.15 3.40 3.56 3.63 3.60 3.42 3.15 2.91 2.61 2.28 1.90 1.51 1.08 0.62 0.13
10.50 18.60 5.80 5.10 0.83 0.81 0.53 0.35 0.28 0.09 0.69 0.54 0.93 1.42 1.83 2.15 2.36 2.23 2.30 2.28 2.13 1.97 1.71 1.45 1.14 0.82 0.49
0.40 5.42 4.94 6.87 5.36 5.40 5.44 5.38 5.23 5.11 4.99 5.02 4.92 4.88 4.83 4.76 4.69 5.61 5.50 5.39 6.27 6.07 6.02 6.90 6.70 6.52 6.31
3.29 0.37 2.12 3.17 4.40 4.28 5.03 5.25 5.48 5.71 6.01 5.45 5.03 5.78 5.71 5.82 5.12 5.07 5.27 5.42 5.43 5.59 6.26 6.68 6.56 6.71 6.01
3.13 1.20 1.81 2.83 3.05 4.43 5.87 5.36 5.92 5.50 5.19 4.90 4.69 4.52 4.37 4.23 4.10 4.76 4.48 5.24 5.01 5.72 5.63 5.46 6.23 6.03 6.82
and 5%), and (20%,15%, 5%), respectively, denoting the low, median and high-technical progress rates. Low technical progress rates (Fig. 5) cannot accelerate toward a hydrogen-based economy. Hydrogen usage is fourth at about 11% and nuclear usage is fifth at roughly 10.7%. Petroleum and coal have the top two spots, suggesting that a petroleum-based economy exists in 2030 and the hydrogen-based economy remains remote. With a median rate of technical progress rate (Fig. 6), hydrogen places the third at approximately 17% and nuclear is fifth but increasing to 13.5%. Petroleum and coal still occupy the two top spots; however, the gap between hydrogen and fossil fuels is narrowing. With a high-progress rate (Fig. 7), a hydrogen-based economy in Taiwan will be realized before 2030. Petroleum and coal place second and third at roughly 26% and 17% of energy share, respectively.
Coal Crude Oil Natural Gas Nuclear Hydro Hydrogen Crude Oil:32.44%
30%
Coal:28.71%
25% 20% Hydrogen:17.04% 15% Natural Gas:12.36% 10%
Nuclear:8.51%
5% Hydro:0.93%
20
0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 2 20 8 2 20 9 30
0%
Fig. 3. Sensitivity analysis of hydrogen economy under limit fossil fuel-related industries’ impacts on energy structure.
D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
1953
50% Coal Crude Oil Natural Gas Nuclear Hydro Hydrogen
45% 40% 35%
Hydrogen:31.39%
30%
Crude Oil:26.63% Coal:23.88%
25% 20% 15%
Natural Gas:10.38%
10%
Nuclear:6.96%
5%
Hydro:0.76%
20
0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 28 20 2 20 9 30
0%
Fig. 4. Sensitivity analysis under limit fossil fuel-related industries and encourage hydrogen-related industries’ impacts on energy structure.
50% Coal Crude Oil
45%
Natural Gas
40%
Nuclear Hydro
35%
Hydrogen
Crude Oil:36.36%
30% Coal:25.59%
25% 20% 15%
Natural Gas:15.09%
10%
Hydrogen:11.26% Nuclear:10.72%
5% Hydro:0.98%
20
0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 2 20 8 2 20 9 30
0%
Fig. 5. Sensitivity analysis of low rate of technical progress in hydrogen, nuclear and coal.
50% Coal Crude Oil Natural Gas Nuclear Hydro Hydrogen
45% 40% 35%
Crue Oil:32.33% 30% 25% Coal:23.07% 20% Hydrogen:16.72% Natural Gas:13.49% Nuclear:13.48%
15% 10% 5%
Hydro:0.91%
20
0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 05 20 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 2 20 8 2 20 9 30
0%
Fig. 6. Sensitivity analysis of median rate of technical progress in hydrogen, nuclear and coal.
1954
D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954 50% Coal Crude Oil Natural Gas Nuclear Hydro Hydrogen
45% 40% 35%
Hydrogen: 29.46% 30% Crude Oil: 26.25%
25% 20%
Coal:17.04% Nuclear:15.85%
15%
Natural Gas: 10.60%
10% 5%
Hydro:0.80%
20 0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 2 20 8 2 20 9 30
0%
Fig. 7. Sensitivity analysis of high rate of technical progress in hydrogen, nuclear and coal.
5. Conclusions Great efforts and huge investment are needed for transit a petroleum economy to a hydrogen economy in Taiwan. The simulation results based on TAIGEMdEH consider different scenarios to occur in Taiwan up to 2030, and realize the impacts of numerous economic factors on the proposed transition.
References [1] Chalk S. Technologies for carbon capture and storage and hydrogen and electricity production. Hydrogen, fuel cells and infrastructure technologies program. Available from:. U.S.D.O.E; 2003. [2] Cheney D, Powell CC, O’Neill P, Norton G, Veneman AM, Evans DL, et al. National energy policy. Report of the National Energy Policy Development Group; 2001. [3] Eudy L, Parish R. Hydrogen fuel cell bus evaluation. Washington, DC: National Renewable Energy Laboratory, United States Department of Energy; 2004. [4] Berry GD, Pasternak AD, Rambach GD, Smith JR, Schock RN. Hydrogen as a future transportation fuel. Energy 1996;21(4):289–303. [5] IEA. Hydrogen task 18: evaluation of integrated demonstration systems. IEA; 2005. [6] Paul K. Electric power required in the world by 2050 with hydrogen fuel productiondrevised. International Journal of Hydrogen Energy 2005;30(15):1515–22.
[7] Prince-Richard M, Whale M, Djilali N. A techno-economic analysis of decentralized electrolytic hydrogen production for fuel cell vehicles. International Journal of Hydrogen Energy 2005;30(11):1159–79. [8] U.S.D.O.E. A national vision of America’s transition to a hydrogen economy – to 2030 and beyond. Based on the results of the National Hydrogen Vision Meeting Washington, DC; 2002. [9] U.S.D.O.E. National hydrogen energy roadmap, toward a more secure and cleaner energy future for America based on the results of the national hydrogen energy roadmap workshop. Washington, DC: United States Department of Energy; 2002. [10] U.S.D.O.E. Protecting national, energy, and economic security with advanced science and technology and ensuring environmental cleanup. Washington, DC: United States Department of Energy; 2003. [11] U.S.D.O.E. Hydrogen posture plan an integrated research, development, and demonstration plan an integrated research, development, and demonstration plan. Washington, DC: United States Department of Energy; 2004. [12] U.S.D.O.E. Renewable energy trends 2003. With preliminary data for 2003. Washington, DC: United States Department of Energy; 2004. [13] Jones MD. Towards a hydrogen economy. In: Presentation to the IEA Renewables Energy Working Party Seminar, Paris; 2003. [14] Simbeck DR. CO2 capture and storagedthe essential bridge to the hydrogen economy. Energy 2004;29:1633–41. [15] Lee DH, Lee DJ. Bio-fuel economy and biohydrogen competition. Energy & Fuels 2008;22(1):177–81. [16] Lee DH, Lee DJ. Hydrogen economy in Taiwan and biohydrogen. International Journal of Hydrogen Energy 2008;33(5):1607–18. [17] DirectoratedGeneral of Budget, Accounting, and Statistics (DGBAS). Taiwan input–output tables. DirectoratedGeneral of Budget 1976–2001. Republic of China: Accounting and Statistics; 2005. [18] International Energy Agency (IEA). International energy outlook. Energy Information Administration (EIA); 2006.
Contents lists available at ScienceDirect
Renewable Energy journal homepage: www.elsevier.com/locate/renene
An economy-wide analysis of hydrogen economy in Taiwan Duu-Hwa Lee a, *, Shih-Shun Hsu b, Chun-To Tso c, Ay Su d, Duu-Jong Lee e a
Institute of Applied Economics, National Taiwan Ocean University, Keelung 202, Taiwan Department of Agricultural Economics, National Taiwan University, Taipei 106, Taiwan c Research Division I, Taiwan Institute Economic Research, Taipei 104, Taiwan d Fuel Cell Center, Department of Mechanical Engineering, Yuan Ze University, Chungli, Taoyuan, Taiwan e Department of Chemical Engineering, National Taiwan University, Taipei 106, Taiwan b
a r t i c l e i n f o
a b s t r a c t
Article history: Available online 3 January 2009
This study, based on the Taiwan dynamic computable general equilibrium modeldenergy, hydrogen (TAIGEMdEH), provides an economic baseline forecast for petroleum and hydrogen economies in Taiwan in 2004–2030. Through survey data on existing energy sectors and other industries, TAIGEMdEH predicts that developing hydrogen economy presents an appropriate strategy for meeting the Kyoto Protocol’s CO2 emissions mitigation target with attempt to keep economic growth. Hydrogen economy is noted sensitive to industrial structure and rate of technical progress on hydrogen production. Transition from petroleum economy to hydrogen economy acquires strong governmental support and significant technical progress. Ó 2008 Elsevier Ltd. All rights reserved.
Keywords: Hydrogen economy Petroleum economy Computable general equilibrium
1. Introduction Hydrogen is an attractive alternative energy source that is clean, renewable and affordable. To meet future hydrogen economic trends, many countries have invested heavily in hydrogen-related technologies [1–7]. Numerous studies developed roadmaps for achieving hydrogen economies by 2040 [8–12]. Transition from a petroleum-based economy to hydrogen-based economy is a complex process that demands long-term investment and technological breakthroughs [13,14]. Economical models are useful to conclude numerous scenarios presented as a consequence of different applied economical actions. This study utilized a model, called ‘‘Taiwan general equilibrium modeldEnergy for hydrogen (TAIGEMdEH)’’, as the forecast tool to evaluate economic impacts on economic growth rates, energy share, and CO2 emission rates for Taiwan in 2004–2030 [15,16]. Sensitivity analysis on changes in Taiwan’s economic structure and related technical progress rates to the impacts were discussed. 2. Model
Taiwan, consisting of 170 sectors, 6 types of labor, 8 types of margin, and 182 commodities. In the model, hydrogen is regarded as a secondary energy source and hydrogen-related sectors including hydrogen production and fuel cell were incorporated. The input demand for industry production is represented as a five-level nested structure (Fig. 1), and the operation of each level is independently decided. The energy composite of the model is comprised of industries of hydrogen, coal products, oil products, natural gas products, and electricity. Individual industries minimize their costs to meet production/consumption needs or to maximize utility efficiency because of budget constraints. The outputs of the model are the ‘‘optimal’’ states of all agents in the economic body of the ‘‘demand equals supply’’ criterion. The power sector of TAIGEMdEH is modeled as a technology bundle derived from the MEGABARE model, which is composed of 11 power generation technologies, namely, hydro, stream turbine oil, stream turbine coal, stream turbine gas, combined cycle oil, combined cycle gas, gas turbine oil, gas turbine gas, diesel, nuclear and fuel cell (Fig. 2). The power sector is able to switch between different power technologies in response to changes in their relative costs.
2.1. Model 2.2. Database The TAIGEMdEH model, derived from MONASH model, is the most comprehensive forecast model available for the economy of * Corresponding author. Tel./fax: þ886 2 26258024. E-mail address: [email protected] (D.-H. Lee). 0960-1481/$ – see front matter Ó 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.renene.2008.12.006
The database for the TAIGEMdEH model is presented in the input–output table calculated by Directorate-General of Budget, Accounting and Statistics (DGBAS) [17]. The supply side includes intermediate and primary inputs for industries, and the demand
1948
D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
Local Market
Export Market
Local Market
Export Market CET
CET
Good 1
Good G
CET
Functional Form Inputs or Outputs
Activity Level Leontief
Good 1
Good G
CES
CES
CES
Imported Good G
Domestic Good 1
Imported Good 1 Land
Domestic Good G
Primary Factors
Energy CES
CES
Labor
Composite Coal Products
Capital
Composite Oil Products
CES
CES
Composite Natural Gas Products
CES
Natural Gas
Gas
Refinery Gas
Diesel
H y d r o g e n
P o w e r
CES
Fuel Oil
Kerosen
CES
CES
Gasoline
Coal Product
Occupation Type O
Coal
Occupation Types 1
Primary Factors and Energy
Other Costs
CES CES
CES
CES CES
CES
Imported
Domestic
Domestic
Imported
Domestic
Imported
Imported
Imported
Domestic
Domestic
Imported
Domestic
Imported
Imported
Domestic
Domestic
Imported
Domestic
Imported
CES
Domestic
CES
Fig. 1. Structure of production: non-electricity sectors.
side includes intermediate demand for industries and final demand for household consumption, government expenditure, investment, net export, and inventory. The demand side of hydrogen in Taiwan is by sectors such as hydrogen fuel cell manufacturing, semiconductor production, glass production, powder metallurgy, and research institutions and universities. Table 1 presents the cost’s share of hydrogen and fuel cell obtained from a recent survey conducted by the Taiwan Institute of Economic Research. The cost of producing 1 m3 of hydrogen is 1.67 USD, and the cost of fuel cell assembly is 10,000 USD/kW. The energy balance sheet of Taiwan was used to estimate the CO2 emission matrix from 15 emission commodities, including coal, natural gas, other nonmetallic minerals, gasoline, diesel fuels, aviation fuels, fuel oils, kerosene, lubricants, naphtha, refinery gas, asphalt, other refining products, coal products, and gas. To demonstrate needs for clean hydrogen energy, the elasticity of substitution of hydrogen (0.1) is set smaller than of other energies (0.5). Also, elasticity of substitution between power sectors of hydro and coal generation is 0.1, nuclear generation at 1.0, other
technologies at 0.5, and fuel cell power generation at 0.1 owing to governmental support for decreasing CO2 emissions. The TAIGEMdEH acquires a historical database of supplies and demands in all sectors of Taiwan. Table 2 presents the exogenous shocks in the forecast of the petroleum economy baseline in 2000– 2030 according to a national economic report provided by DGBAS and the results are summarized as follows: (1) annual economic growth rate at 2%; (2) annual energy efficiency improvement rate at 1.2% and production cost reduction rate at 2%; (3) total annual employment rate increase at 1%; (4) annual consumer price index (CPI) at 2%; (5) prices of imported crude oil increased by 27.4% and 38.9% in 2004 and 2005, respectively. It will continue to rise at a pace of 3.21% onwards until 2030, based on the high oil price projection of EIA’s forecast [18]; (6) as Taiwan entered the WTO in 2002, tariffs will continue to decline, based on WTO regulations, until 2010.
D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
Leontief
1949
Hydrogen Fuel Cell Hydro
Leontief
Leontief
Stream turbine: Oil Technology
Leontief
Stream turbine: Coal
Leontief
Leontief
Bundle
Stream turbine: Gas
Combined cycle: Oil
Leontief
CRESH
Combined cycle: Gas
Leontief
Gas turbine: Oil
Leontief
Gas turbine: Gas
Leontief
Diesel
Nuclear
Leontief
Fig. 2. Technology bundle of TAIGEMdEH model: electricity sector.
3. Scenario design Baseline forecasting was conducted for the petroleum-based economy in 2004–2030. Sensitivity analysis was applied to determine which economic structure facilitates the transition from a petroleum-based economy to a hydrogen-based economy with the least resistance and in the least amount of time.
Table 1 Cost share of hydrogen and fuel cell. Hydrogen
Intermediate Input
Primary input
Fuel-cell
Input
USD/m3
Input
USD/kW
By-product hydrogen Catalyst
0.15
Electricity
0.03
Polymer film Catalyst Carbon paper Gasket Bipolar plate Steel plate Fan Heat exchanger
550 775 375 75 650 75 400 433.3
Wage Depreciation Rent of land Rent of durables Interest Profit Other cost
0.15 0.09 0.18 0.24 0.03 0.30 0.27
Wage Depreciation Rent of land Rent of durables Interest
1666.7 666.7 333.3 333.3 333.3
Other cost
333.3
Total cost
USD 1.67
Total cost
USD 10,000
0.06
Developed countries have funded R&D of hydrogen technologies, thereby accelerating technical progress for related industries. This study developed another scenario to identify the impacts of different technical developments for hydrogen, nuclear power and coal on economic growth. The following outlines the three simulations. (1) Baseline forecasting: Traditional petroleum economic structure forecast for 2004–2030. (2) Simulation I: A petroleum-based economy transitioning to a hydrogen-based economy in 2004–2030. (3) Sensitivity Analysis of the hydrogen economy under limited development of fossil fuel-based industries.
4. Results and discussion 4.1. Hydrogen macroeconomy Table 3 presents the macroeconomic impacts on the hydrogenbased and petroleum-based economies, as well as the differences between the two economies. The real GDP growth rate for the hydrogen-based economy is lower than that of the petroleumbased economy prior to 2020, and higher in 2021 and after. Before 2020, the transition cost to hydrogen-based economy, including the economic reallocation of resources and money to hydrogen R&D and infrastructure, eliminates resources in other sectors, thereby reducing real GDP growth. In 2021, the hydrogen supply chain will
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Table 2 Exogenous shocks for forecasting baseline: from 2000 to 2030. Macroeconomic variables growth rate (%) 2000 Energy-saving decline rate Real GDP Imports Household consumption Export Investment Government expenditure Number of households Employment trend Aggregate price index Exchange rate Imports price index (c.i.f.) Exports price index Primary factors productivity Consumer price index The energy structure Industrial structure Labor (primary factor) demand Price of imported petroleum Technology bundle Ascension to WTO Nuclear-free homeland policy
2001
2002
2003
2004w2030
0.60 0.60 0.60 0.60 1.20 5.78 2.22 3.94 3.33 Endog 4.54 13.51 5.71 6.72 Endog. 4.84 1.00 2.07 0.84 Endog. 18.14 8.08 10.48 10.94 Endog. 8.38 21.14 1.61 2.05 Endog. 0.28 0.55 1.47 0.71 Endog. 2.28 1.80 1.80 1.76 2.00 1.20 0.49 1.13 1.07 1.00 1.80 0.51 0.89 2.21 Endog. 5.15 6.00 1.29 0.49 Endog. 4.62 1.34 1.25 2.98 Endog. 0.87 0.77 0.32 0.87 Endog. Endog. Endog. Endog. Endog. 2.50 Endog. Endog. Endog. Endog. 2.00 Endog. Endog. Endog. Endog. Endog Endog. Endog. Endog. Endog. Endog Labor is a CES aggregation of the different types of labor force. The price of imported petroleum increased by 4.96% in 2002, 13.94% in 2003, 27.40% in 2004, 38.91% in 2005, and was assumed to increase by 3.21% onwards up to 2030, based on high oil price projection of EIA (2005) forecast. By CRESH function assumption, the substitution elasticity of hydrogen fuel cell is 0.1, hydro 0.1, nuclear power 1.0, coal 0.1, oil 0.5, and natural gas 0.5. Because Taiwan entered the WTO in 2002, we set the tariff rate decline rate in conformance to WTO rules until 2010. Because Taiwan’s government adopts the ‘‘nuclear-free homeland’’ policy, we assume that the existing three nuclear plants will all be shut down before 2015 and number 4 to begin operation after 2010.
be in place and hydrogen has substituted other high-priced energies and energies with high CO2 emissions. Employment in the hydrogen-based economy is lower than that in the petroleum-based economy before 2011 and higher after 2011. The transition to a hydrogen-based economy will create more jobs than will the petroleum-based economy because of the creation of new industries. Importation of hydrogen follows the same trend of development because new hydrogen technologies and equipment will need to be developed locally. Household consumption in the hydrogen-based economy is lower than that of the petroleumbased economy before 2016 and higher after 2016. Transition toward a hydrogen economy will not disrupt economic development in a 20-year time frame, and effects of hydrogen economy originate from micro-to-macro when spreading out to the entire economy. 4.2. Impacts on CO2 emission mitigation The CO2 emissions by 2030 under the petroleum-based economy is estimated as 654.3 million tons, and under the hydrogen-based economy, 579.4 million tons (Table 4). After 2008, usage of clean energies, such as hydrogen and natural gas, will reduce CO2 emissions. The hydrogen-based economy will produce 674.8 million fewer tons of CO2 emissions than the petroleum-based economy in 2010–2030. According to the trend, reduction in CO2 will become increasingly significant after the year 2030. Thus, developing hydrogen economy presents an appropriate strategy for meeting the Kyoto Protocol’s CO2 emissions mitigation target. 4.3. Hydrogen economy’s impacts on energy prices Due to investment in hydrogen R&D, technical progress and large-scale production, hydrogen prices will drop (Table 5). Along with technology development and infrastructure development, the hydrogen price will continue decreasing by 4–6% annually until
2030. Sale prices for coal, oil refining products, natural gas, gasoline and diesel have increased steadily. 4.4. Sensitivity analysis Two sensitivity analyses were utilized to identify the energy structure that can ease the transition to a hydrogen-based economy. 4.4.1. Limited development of petroleum-related industries coupled with promotion of hydrogen-related industries This scenario demonstrates how a virtual society makes the transition to a hydrogen-based economy if the government limits expansion of production capabilities for petroleum-related industries as a method of reducing CO2 emissions, and promotes a hydrogen-based economy. The use of fossil fuels would drop, with hydrogen use increasing more rapidly than that in Simulation I. Coal, crude oil, chemicals, chemical products, oil refineries, coal products and plastic products are seven industries that would have limited expansion in their production capacity in the future. The society is assumed to invest in four hydrogen-related industries at approximately 20% of total existing capitals each year. This same variables in Simulation I are adopted. In Scenario I (Fig. 3) hydrogen energy will grow to third place at approximately 17% of total energy use. However, simply ‘‘turningoff’’ petroleum-related industries cannot effect a full transition to a hydrogen-based economy before 2030. Petroleum and coal will continue to be the two most important energy sources; however, petroleum use will decrease to 32.44%, close to that of coal (28.71%). The simulation results for Scenario II (Fig. 4) suggest that the share of energy structure for hydrogen will dominate at approximately 31%, exceeding that of petroleum and coal. This finding suggests that if government policy limits development of fossil fuel-related industries and government increases its investment in hydrogen-related industries, a hydrogen-based economy will be realized by about 2030. Petroleum usage will decrease substantially
D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
1951
Table 3 Effects of hydrogen economy on macroeconomic variables. Real GDP (%)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Real GDP level (billions US dollar) Petroleum economy
Difference
Hydrogen economy
Petroleum economy
Difference
Hydrogen economy
Petroleum economy
Difference
5.42 3.63 3.77 3.85 3.92 3.86 3.79 3.68 3.65 3.69 3.51 3.45 3.36 3.41 3.35 3.32 3.29 3.53 3.49 3.43 3.50 3.49 3.45 3.38 3.36 3.38 3.42
5.88 3.93 4.13 4.18 4.19 4.20 4.19 3.97 3.94 3.91 3.87 3.83 3.54 3.50 3.46 3.41 3.37 3.33 3.30 3.26 3.22 3.20 3.19 3.17 3.15 3.13 3.12
0.46 0.30 0.36 0.33 0.27 0.34 0.40 0.29 0.29 0.22 0.36 0.38 0.18 0.09 0.11 0.09 0.08 0.20 0.19 0.17 0.28 0.29 0.26 0.21 0.21 0.25 0.30
373.7 387.2 401.8 417.3 433.7 450.4 467.5 484.7 502.4 520.9 539.2 557.8 576.5 596.2 616.2 636.6 657.6 680.8 704.5 728.7 754.2 780.5 807.5 834.8 862.8 892.0 922.5
375.3 390.1 406.2 423.1 440.9 459.4 478.6 497.6 517.2 537.5 558.3 579.6 600.2 621.2 642.7 664.6 687.0 709.9 733.3 757.2 781.6 806.6 832.3 858.7 885.7 913.5 942.0
1.6 2.8 4.3 5.8 7.2 9.0 11.2 13.0 14.9 16.6 19.1 21.9 23.6 25.0 26.5 28.0 29.4 29.1 28.7 28.5 27.4 26.0 24.8 23.9 22.9 21.5 19.5
1.97 1.48 1.58 1.62 1.74 1.70 1.63 1.69 1.72 1.58 1.45 1.44 1.35 1.36 1.32 1.29 1.27 1.54 1.49 1.46 1.53 1.51 1.47 1.44 1.42 1.38 1.41
2.78 2.05 2.15 2.09 2.01 1.91 1.80 1.34 1.24 1.15 1.07 1.00 0.56 0.55 0.56 0.57 0.59 0.62 0.64 0.67 0.67 0.70 0.75 0.77 0.80 0.81 0.83
0.81 0.57 0.57 0.47 0.27 0.21 0.17 0.35 0.48 0.43 0.38 0.44 0.79 0.81 0.76 0.72 0.68 0.92 0.85 0.79 0.86 0.81 0.72 0.67 0.62 0.57 0.58
Consumption (%)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Employment (%)
Hydrogen economy
Export (%)
Investment (%)
Import (%)
Hydrogen Economy
Petroleum Difference Hydrogen Petroleum Difference Economy Economy Economy
Hydrogen Economy
Petroleum Economy
Difference
Hydrogen Economy
Petroleum Economy
Difference
5.37 3.48 3.55 4.09 3.76 3.79 3.82 3.82 3.76 3.74 3.69 3.71 3.70 3.69 3.70 3.72 3.76 4.16 4.22 4.31 4.40 4.52 4.63 4.77 4.93 5.12 5.35
6.06 4.56 4.81 4.85 4.87 4.86 4.83 4.23 4.14 4.04 3.94 3.85 3.18 3.10 3.04 2.99 2.96 2.93 2.91 2.90 2.86 2.85 2.87 2.87 2.87 2.86 2.86
7.15 6.90 6.98 7.31 7.04 6.69 6.23 5.69 5.18 4.81 4.58 4.50 4.47 4.45 4.41 4.34 4.24 4.32 4.23 4.10 3.94 3.78 3.62 3.49 3.39 3.33 3.30
8.87 7.82 8.06 8.13 8.86 8.36 7.85 6.87 6.18 5.58 5.06 4.62 3.81 3.30 2.88 2.55 2.28 2.07 1.92 1.82 1.72 1.69 1.74 1.78 1.83 1.89 1.95
1.72 0.92 1.08 0.82 1.82 1.67 1.62 1.18 1.00 0.77 0.48 0.12 0.66 1.15 1.53 1.79 1.96 2.25 2.31 2.28 2.22 2.09 1.88 1.71 1.56 1.44 1.35
9.33 7.94 8.20 8.80 8.32 8.00 7.56 7.15 6.95 6.77 6.79 6.75 6.87 7.05 7.24 7.45 7.66 8.22 8.37 8.57 8.82 9.04 9.35 9.66 10.04 10.49 11.01
10.35 8.50 8.45 8.38 8.44 8.32 8.20 6.79 6.61 6.44 6.29 6.15 4.73 4.59 4.48 4.39 4.32 4.27 4.23 4.21 4.17 4.17 4.20 4.21 4.22 4.24 4.25
1.02 0.56 0.25 0.42 0.12 0.32 0.64 0.36 0.34 0.33 0.50 0.60 2.14 2.46 2.76 3.06 3.34 3.95 4.14 4.36 4.65 4.87 5.15 5.45 5.82 6.25 6.76
0.69 1.08 1.26 0.76 1.11 1.07 1.01 0.41 0.38 0.30 0.25 0.14 0.52 0.59 0.66 0.73 0.80 1.23 1.31 1.41 1.54 1.67 1.76 1.90 2.06 2.26 2.49
5.16 3.48 4.16 4.56 4.82 4.91 4.88 4.82 4.83 4.77 4.80 4.77 4.79 4.83 4.85 4.87 4.87 5.60 5.44 5.38 5.36 5.31 5.29 5.25 5.21 5.17 5.14
5.86 3.82 4.12 4.32 4.31 4.55 4.77 4.46 4.73 4.95 5.14 5.28 4.85 4.98 5.06 5.09 5.09 5.07 5.03 4.98 4.94 4.88 4.82 4.76 4.71 4.65 4.61
0.70 0.34 0.04 0.24 0.51 0.36 0.11 0.36 0.10 0.18 0.34 0.51 0.06 0.15 0.21 0.22 0.22 0.53 0.41 0.40 0.42 0.43 0.47 0.49 0.50 0.52 0.53
to about 26.63% due to production limitations applied to petroleum-related industries. Coal usage will be third in 2030 at roughly 24%, due to the fact that the coal stocks may last for 200 years and CO2-reduction technologies for coal usage are currently being developed. Natural gas will place fourth, increasing before 2020 and decreasing to 2030 to approximately 10%. As Taiwan must currently adhere to the ‘‘nuclear-free homeland’’ policy,
nuclear power usage will decrease slowly in the future. Hydro placed last. If government policy supports development of hydrogen via public investments in R&D, by encouraging private investment, limiting fossil fuel usage and production capacity for petroleum-related industries, or by enacting environmental laws, such as a carbon tax, Taiwan can achieve the transition from a petroleum-based economy to
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D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
Table 4 Hydrogen economy’s impacts on CO2 emission.
Table 5 Hydrogen economy’s impacts on energy prices.
CO2 emission (millions tons)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Hydrogen economy
Petroleum economy
Difference
252.2 259.4 269.6 276.3 284.3 293.3 303.7 315.0 327.2 339.7 351.9 364.5 378.3 392.7 407.5 422.7 438.5 453.2 468.5 483.3 499.6 514.5 531.3 542.1 556.4 568.2 579.4
243.5 252.4 262.1 272.9 284.5 297.1 310.7 324.4 338.8 353.9 369.5 385.7 401.3 417.2 433.3 449.7 466.4 483.4 500.8 518.4 536.5 555.0 573.9 593.3 613.1 633.4 654.3
8.7 7.0 7.5 3.4 0.2 3.8 7.0 9.4 11.6 14.2 17.6 21.2 23.0 24.5 25.8 27.0 27.9 30.2 32.3 35.1 36.9 40.5 42.6 51.2 56.7 65.2 74.9
a hydrogen-based economy with few obstacles and at an early date. Countries that place considerable emphasis on environmental protection, such as European countries, will achieve easier transition to a hydrogen-based economy than those that emphasize economic development and ignore problems associated with fossil fuel usage. Success will also depend on structure of industry. 4.4.2. Rate of technical progress for hydrogen, nuclear and coal fuels This study utilized three different technical progress rates for hydrogen, nuclear power and coal to determine how high technology progress rate assists in the realization of a hydrogen-based economy. Clean coal usage efficiency (like IGCC) is assumed increasing. The rate of technical progress for hydrogen-related industries, nuclear power and coal is set separately as in the three levels (10%, 5%, and 5%), (15%, 10%,
50% 45% 40% 35%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Coal Oil refining Natural Gasoline Diesel Hydrogen HFC product gas
HFC HFC Vehicle Power
4.53 22.40 7.96 46.20 4.94 7.55 3.24 8.67 3.13 2.86 3.31 3.07 3.46 3.23 3.45 3.24 3.22 3.02 3.02 3.83 2.82 3.63 2.81 3.61 2.81 3.60 2.84 3.62 2.90 3.66 2.96 3.68 3.03 3.65 2.85 3.99 2.86 3.34 2.92 4.81 2.98 3.68 3.05 4.20 3.11 3.59 3.20 4.21 3.30 3.52 3.43 3.59 3.59 3.74
1.02 2.12 0.18 2.14 5.74 3.81 4.30 5.08 5.30 5.74 6.90 6.70 6.26 6.57 6.47 6.47 5.27 6.30 6.20 6.61 6.09 6.87 6.73 6.60 6.47 6.33 6.19
6.58 12.75 5.73 2.72 2.91 3.09 3.23 3.21 2.98 2.77 2.55 2.52 2.49 2.49 2.49 2.46 2.30 2.91 2.44 2.50 2.97 3.10 3.81 4.06 3.68 3.61 3.70
12.50 30.20 8.93 8.17 1.90 1.21 1.66 1.89 1.96 2.23 2.44 2.83 3.15 3.40 3.56 3.63 3.60 3.42 3.15 2.91 2.61 2.28 1.90 1.51 1.08 0.62 0.13
10.50 18.60 5.80 5.10 0.83 0.81 0.53 0.35 0.28 0.09 0.69 0.54 0.93 1.42 1.83 2.15 2.36 2.23 2.30 2.28 2.13 1.97 1.71 1.45 1.14 0.82 0.49
0.40 5.42 4.94 6.87 5.36 5.40 5.44 5.38 5.23 5.11 4.99 5.02 4.92 4.88 4.83 4.76 4.69 5.61 5.50 5.39 6.27 6.07 6.02 6.90 6.70 6.52 6.31
3.29 0.37 2.12 3.17 4.40 4.28 5.03 5.25 5.48 5.71 6.01 5.45 5.03 5.78 5.71 5.82 5.12 5.07 5.27 5.42 5.43 5.59 6.26 6.68 6.56 6.71 6.01
3.13 1.20 1.81 2.83 3.05 4.43 5.87 5.36 5.92 5.50 5.19 4.90 4.69 4.52 4.37 4.23 4.10 4.76 4.48 5.24 5.01 5.72 5.63 5.46 6.23 6.03 6.82
and 5%), and (20%,15%, 5%), respectively, denoting the low, median and high-technical progress rates. Low technical progress rates (Fig. 5) cannot accelerate toward a hydrogen-based economy. Hydrogen usage is fourth at about 11% and nuclear usage is fifth at roughly 10.7%. Petroleum and coal have the top two spots, suggesting that a petroleum-based economy exists in 2030 and the hydrogen-based economy remains remote. With a median rate of technical progress rate (Fig. 6), hydrogen places the third at approximately 17% and nuclear is fifth but increasing to 13.5%. Petroleum and coal still occupy the two top spots; however, the gap between hydrogen and fossil fuels is narrowing. With a high-progress rate (Fig. 7), a hydrogen-based economy in Taiwan will be realized before 2030. Petroleum and coal place second and third at roughly 26% and 17% of energy share, respectively.
Coal Crude Oil Natural Gas Nuclear Hydro Hydrogen Crude Oil:32.44%
30%
Coal:28.71%
25% 20% Hydrogen:17.04% 15% Natural Gas:12.36% 10%
Nuclear:8.51%
5% Hydro:0.93%
20
0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 2 20 8 2 20 9 30
0%
Fig. 3. Sensitivity analysis of hydrogen economy under limit fossil fuel-related industries’ impacts on energy structure.
D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954
1953
50% Coal Crude Oil Natural Gas Nuclear Hydro Hydrogen
45% 40% 35%
Hydrogen:31.39%
30%
Crude Oil:26.63% Coal:23.88%
25% 20% 15%
Natural Gas:10.38%
10%
Nuclear:6.96%
5%
Hydro:0.76%
20
0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 28 20 2 20 9 30
0%
Fig. 4. Sensitivity analysis under limit fossil fuel-related industries and encourage hydrogen-related industries’ impacts on energy structure.
50% Coal Crude Oil
45%
Natural Gas
40%
Nuclear Hydro
35%
Hydrogen
Crude Oil:36.36%
30% Coal:25.59%
25% 20% 15%
Natural Gas:15.09%
10%
Hydrogen:11.26% Nuclear:10.72%
5% Hydro:0.98%
20
0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 2 20 8 2 20 9 30
0%
Fig. 5. Sensitivity analysis of low rate of technical progress in hydrogen, nuclear and coal.
50% Coal Crude Oil Natural Gas Nuclear Hydro Hydrogen
45% 40% 35%
Crue Oil:32.33% 30% 25% Coal:23.07% 20% Hydrogen:16.72% Natural Gas:13.49% Nuclear:13.48%
15% 10% 5%
Hydro:0.91%
20
0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 05 20 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 2 20 8 2 20 9 30
0%
Fig. 6. Sensitivity analysis of median rate of technical progress in hydrogen, nuclear and coal.
1954
D.-H. Lee et al. / Renewable Energy 34 (2009) 1947–1954 50% Coal Crude Oil Natural Gas Nuclear Hydro Hydrogen
45% 40% 35%
Hydrogen: 29.46% 30% Crude Oil: 26.25%
25% 20%
Coal:17.04% Nuclear:15.85%
15%
Natural Gas: 10.60%
10% 5%
Hydro:0.80%
20 0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 2 20 0 2 20 1 2 20 2 2 20 3 2 20 4 2 20 5 2 20 6 2 20 7 2 20 8 2 20 9 30
0%
Fig. 7. Sensitivity analysis of high rate of technical progress in hydrogen, nuclear and coal.
5. Conclusions Great efforts and huge investment are needed for transit a petroleum economy to a hydrogen economy in Taiwan. The simulation results based on TAIGEMdEH consider different scenarios to occur in Taiwan up to 2030, and realize the impacts of numerous economic factors on the proposed transition.
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