Cleantech Market Intelligence
How Will Affordable Hydrogen Fueling Evolve for Fuel Cell Cars?
My previous blog post talked about vehicle side of the clichéd “chicken and egg” conundrum. This post covers the infrastructure side and again pivots off a presentation from the Fuel Cell and Hydrogen Energy 2011 conference. In the last day’s keynote session, Markus Bachmeier of The Linde Group provided a breakdown of potential cost reductions for hydrogen fueling following two pathways; one of low throughput stations and the other of high throughput stations. As one of the world’s leading industrial gas companies, Linde has a clear interest in use of hydrogen as a fuel. Over the past few years, Linde and other industrial gas companies such as Air Liquide, Air Products, and Praxair have taken an increasingly center stage role as the conventional energy companies have lost interest in hydrogen fueling in the United States and, to a lesser degree, elsewhere. (This is in contradiction to the conspiracy theory in Who Killed the Electric Car? suggesting that fuel cell vehicles are a plot by the oil companies to maintain control of auto fueling.) As with the automotive supply chain costs, the big factor for hydrogen fueling costs is volume, according to Linde. In a March 2010 presentation, Linde showed that a massive drop-off in cost per kilogram occurs when station usage reaches 100 cars per day. Customers will likely buy three to five kilograms a fill-up (typical tank size is five to six kilograms), so this translates into 300 to 500 kilograms of hydrogen per day.
In his more recent speech, Bachmeier analyzed the potential cost of hydrogen from a very high throughput station, able to provide 100 kilograms per hour, against a station that produces only 50 kilograms per day. His conclusion was that it is too expensive for a small station to produce hydrogen, while the high throughput station can produce hydrogen affordably at a 200 car per day volume.
Two big questions came to me from this presentation. First, how will stations survive in the long ramp up to the high throughput volumes? My recent analysis of the LDV market suggests these volumes could occur in 2013-2014, but only in a few select markets where there is industry/government investment in anticipatory station build-out. Second, will small, flexible hydrogen producers such as ITM Power or H2Logic offer disruptive business models or technologies to change the cost equation? This is one trend cited in Pike’s recent white paper on 2011 fuel cell trends.
I am exploring these questions now as I develop Pike’s new report on the hydrogen infrastructure. Your thoughts on this are welcome as I work through the analysis.