The success of hydrogen as an environmentally friendly transportation fuel will depend on the proportion of hydrogen that is produced from renewable resources in a sustainable manner. One renewable pathway for hydrogen production is from biomass. This paper examines the economics of hydrogen production from agricultural residues. Hydrogen is produced from agricultural residues by gasification of the feedstock. Earlier studies have shown that the cost of hydrogen from biomass gasification is strongly dependent on the cost of the feedstock. Due to the low energy density of agricultural residues and their dispersed nature, transportation costs constitute a large fraction of their delivered cost. Hydrogen also suffers from high transport costs. Using case studies in California, this paper examines the effect the location and size of the conversion facility has on the delivered cost of hydrogen with a methodology developed to optimize hydrogen production from agricultural wastes.

We use real-world data on the location of agricultural fields and population centers to develop scenarios of biomass supplies and hydrogen demands that are based on real life geographies. A steady-state optimization model was developed to design the infrastructure needed to supply hydrogen from the available biomass. The model maximizes the profit of an industry that produces the hydrogen. The biomass supply, hydrogen demand distribution and the selling price of hydrogen are given. The model chooses the best location(s) for conversion facilities, the optimal size of the facilities, the hydrogen demands served by each facility and the mode by which hydrogen is delivered to those demands. Scenarios were examined with hydrogen demands corresponding to 1%, 5%, 10%, 25%, and 50% of current light duty vehicles in California and various biomass supplies. Californian feedstocks examined include rice straw, representing a compact agricultural industry and wheat straw, representing a dispersed agricultural industry with similar magnitude of resource.

Optimal designs of infrastructure are one facility designs in most cases. The best mode of hydrogen delivery for the size of the facility and demand distribution is the main factor in the facility location decision. For systems where liquid truck delivery is the lowest cost option the facility is located to minimize feedstock collection cost. For compressed gas truck and pipeline systems the facility is located to minimize hydrogen delivery cost. In scenarios with large hydrogen demands (>10% of current LDV market), delivered hydrogen cost are predicted at $3 to $4 per kilogram of hydrogen using H2A economic assumptions. Sensitivity analysis is also performed with respect to the major costs, gasifier efficiency, capacity factor, and the scaling factors of the gasifier and hydrogen liquefier.