Merchant Hydrogen Generation and On-site Distributed Generation

Report Highlights

• Revenues from merchant and on-site hydrogen sales will reach $2.7 billion in 2008, up from $1.8 billion in 2003, at an average annual growth rate (AAGR) of 8.5%.
• Revenues for hydrogen packaged in cylinders will decrease from $535.4 million in 2003 to $381.8 million in 2008, for an AAGR of -7.0%.
• Dispersed, small-size “on-demand” plants will see revenues rise to $83.3 million in 2008, up from $41.2 million in 2003, at an AAGR of 15.1%.
• Liquid hydrogen shipment revenues will increase from $487.8 million in 2003 to $641.5 million in 2008, at an AAGR of 5.6%.
• Revenues from on-site plants and pipelines will rise at an AAGR of 16.7% from $735.6 million in 2003 to $1,593.4 million in 2008.

INTRODUCTION

Hydrogen now is a major energy source, and an important chemical feedstock for a multitude of key industrial processes. Therefore, customers are looking for reliable cost-effective supply options, among them, the utilization of hydrogen from merchant and on-site gas suppliers, and small hydrogen generators on-site at end-user facilities. Together, they meet the needs of users in specialty chemicals, fats and oils, metals, glass and power utilities. On-site hydrogen generators will increase and boost productivity and enhance product quality for these end users.

While gas cylinders are the most widely used method for hydrogen delivery, they suffer from a number of major drawbacks, including the potential to cause serious injury, either through misuse or ignorance of the dangers involved in working with high-pressure gases. Bulk delivery of liquid hydrogen likely will remain more expensive than the bulk delivery of other fuels.

On-site distributed hydrogen generation either by small “in-demand,” or intermediate size generators, however, ensures that the end user has complete control over the gas supply. Once installed, the gas always is available when needed. It also frees the immediate vicinity of bulk cylinders and avoids the hazards and time involved in moving cylinders into and out of a building.

This comprehensive BCC report on merchant and on-site hydrogen sourcing analyzes, evaluates, assesses and quantifies the U.S. market for merchant and on-site hydrogen generation. The study provides a comprehensive assessment and evaluation of the current and near-term market for merchant hydrogen utilization and on-site hydrogen generation, including technical developments to meet the forecasted market. It also looks at the international scene with due consideration given to relationships between major producers and consumers.

SCOPE OF STUDY

The report contains:

• Investigation and assessment of the future use of merchant hydrogen and on-site distributed generation
• Analysis of the structure of the industry and assessment of key players, distribution channels, key customer values and purchasing influences
• Examination of how environmental regulations and alliances affect sales of hydrogen generators
• Evaluation of the factors necessary for deciding the most appropriate hydrogen generator size and required purity
• Determination of the extent of the impact of the on-site hydrogen generator market on the merchant hydrogen industry
• Forecasts by technology to 2008.

METHODOLOGY

In this report, both historic and current data have been utilized for analyzing the market for merchant and onsite hydrogen generators. The results of the calculations presented here are therefore based on three components; a historic analysis of the global market in the period 2000 to 2003; estimates for 2003, and forecasted market scenarios for the 2003 to 2008 time frames. The report also gives estimates of the market for merchant and onsite hydrogen generators by size of unit.

AUTHOR CREDENTIALS

Edward Gobina is a Research Professor in Chemical & Processing Engineering and has over 15 years research and teaching experience in petrochemical reaction engineering, catalysis and membrane technology. He has been published extensively, with over 100 relevant publications in international scientific journals. He is the author of three major patents on membrane-related technologies and the author of eight previous reports relating to the chemical energy, and oil and gas industries. He is currently the principal investigator of three externally funded research projects involving postdoctoral researchers designing new compact reactor systems for enhancing fluid processing in offshore/deepwater platforms. Dr. Edward Gobina is a member of the European Membrane Society (EMS), the North American Membrane Society (NAMS) and the New York Academy of Sciences (NYAS). He is currently the director at the Centre for Process Integration and Membrane Technology (CPIMT) within the school of engineering at the Robert Gordon University in the UK.