Author

Liang-Chih Ma

Faculty Advisor or Committee Member

Nikolaos K. Kazantzis, Advisor

Faculty Advisor or Committee Member

Yi Hua Ma, Advisor

Faculty Advisor or Committee Member

Susan C. Roberts, Department Head

Faculty Advisor or Committee Member

Michael T. Timko, Committee Member

Faculty Advisor or Committee Member

Huong N. Higgins, Committee Member

Faculty Advisor or Committee Member

Bernardo Castro-Dominguez, Committee Member

Identifier

etd-012216-111004

Abstract

Hydrogen (H2) represents an energy carrier endowed with the potential to contribute to the design of a robust and reliable global energy system by complementing electricity as well as liquid fuels use in an environmentally responsible manner provided that the pertinent H2 production technologies (conventional and new ones) can reach techno-economically attractive performance levels in the presence of irreducible (macroeconomic, fuel market, regulatory) uncertainty. Indeed, the role of H2 in the global energy economy is widely recognized as significant in light also of fast-growing demand in the petrochemical and chemical processing sector as well as future regulatory action on greenhouse gas emissions. Pd and Pd/Alloy-based catalytic membrane reactor (CMR) modules potentially integrated into H2 production (HP-CMR) process systems offer a promising technical pathway towards H2 production with enhanced environmental performance in a carbon-constrained world. However, the lack of accumulated operating experience for HP-CMR plants on the commercial scale poses significant challenges. Therefore, any preliminary attempt to assess their economic viability is certainly justified. A comprehensive techno-economic performance assessment framework has been developed for HP-CMRs with CO2 capture capabilities. A functional Net Present Value (NPV) model has been developed first to evaluate the economic viability of HP-CMRs. The plant/project value of HP-CMR is compared to other competing technology options such as traditional coal-gasification and methane steam reforming-based hydrogen production plants with and without CO2 capture. Sources of irreducible uncertainty (market and regulatory) as well as technology risks are explicitly recognized and the effect of these uncertainty drivers on the plant’s/project’s value is taken into account using Monte-Carlo techniques. Therefore, more realistic distribution profiles of the plant’s economic performance outcomes are generated rather than single-point value estimates. It is shown that future regulatory action on CO2 emissions could induce appealing NPV-distribution profiles for HP-CMRs in the presence of uncertainty and technology risks. Finally, the valuation assessment is complemented with a sensitivity analysis for different representative values of the discount rate that span a reasonable range associated with business and financing risks. It apparently indicates that creatively structured financing mechanisms leading to a reduction of the cost of capital/discount rate could induce more appealing economic performance outcomes and valuation profiles. Furthermore, the proposed research work aims at the development of a methodological framework to assess the economic value of flexible alternatives in the design and operation of HP-CMR plants with carbon capture capabilities under the aforementioned sources of uncertainty. The main objective is to demonstrate the potential value enhancement associated with the long-term economic performance of flexible HP-CMR project investments by managing the uncertainty associated with future environmental regulations. Within the proposed context, promising design flexibility concepts for HP-CMR plants are introduced and operational as well as constructional flexibility options are identified and assessed. In particular, operational flexibility will be realized through periodic and temporary shutdowns of the carbon capture unit in response to regulatory uncertainties. Constructional flexibility will be realized by considering the installation of a carbon capture unit at three strategic periods: 1) installation in the initial design phase, 2) retrofitting at a later stage and 3) retrofitting with preinvestment. Monte Carlo simulations and financial analysis will be conducted in order to demonstrate that, in the presence of irreducible uncertainty, design flexibility options could lead to economic performance enhancement of HP-CMR plants by actively responding to the above sources of uncertainty as they get resolved over the plant’s lifetime.

Publisher

Worcester Polytechnic Institute

Degree Name

PhD

Department

Chemical Engineering

Project Type

Dissertation

Date Accepted

2016-01-22

Accessibility

Unrestricted

Subjects

Carbon capture, Catalytic membrane reactor technology, Economic performance assessment under uncertainty, Economics & Finance/Energy/Environment, Flexibility in engineering design, Hydrogen production, Membrane reactor module, Monte-Carlo simulation, Palladium membrane lifetime

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