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SHEC expects to capitalize on two growing markets, the increasing demand for hydrogen and the emerging market for greenhouse gas credits. Hydrogen is an important industrial gas and is viewed by many scientists and economists as a potential future source of energy.
According to the US Department of Energy, the current market for hydrogen is approximately 500 billion normal cubic meters per year, or 42 billion kg per year, representing an estimated market of $50 billion US worldwide. This corresponds to less than 1% of current worldwide energy demand since hydrogen is only beginning to be considered for large scale transportation and power applications.
Hydrogen production technologies have been commercially available for more than 75 years. Initially, hydrogen was manufactured primarily for use in the production of ammonia, but today the technological base for hydrogen utilization has expanded tremendously to incorporate applications in chemical and petroleum refining, metallurgy, hydrogenation of edible fats and oils, space and weather programs, fuel cells and the manufacture of high quality electronic components.
The developing markets for this technology include distributed power and hydrogen for transportation. Although the developing markets are in their infancy, it is possible that they could ultimately exceed the existing industrial hydrogen market.
The National Hydrogen Association (NHA) has set goals for passenger vehicles, including the production of enough hydrogen to supply 50% of all new vehicles sold under the California Zero-Emission Vehicle (ZEV) program, including opt-in states, by 2010. By 2015, they plan to produce enough hydrogen to supply 25% of all new passenger vehicles. Cost goals incorporate hydrogen-fueled ICE hybrid power train or vehicle fuel cell systems at less than US$35/kW and delivered hydrogen at less than US$2.50/kg (US$5.91/1,000 SCF) from natural gas at US$4/GJ (US$4.05/1,000 SCF).
There are three primary markets for hydrogen that the Corporation could deliver to:
SHEC plans on targeting the higher valued markets initially wherever possible. This would include the existing merchant hydrogen market initially. This near term merchant market represents an estimated 1% of the overall existing hydrogen market. Hydrogen can be sold into sectors of the merchant market in the range of $7.50 to $75.00 per kg depending on the purity, method of delivery, and properties of the gas (pressure and state) at the point of delivery.
