Navigant Research Blog

The Hydrogen City Is a Thing Again—and Thanks to China, it Might Actually Work This Time

Adam Forni — February 8, 2018

The hydrogen city concept has been around almost as long as the hydrogen energy economy, but neither have really materialized as envisioned. Hydrogen cities (like the unrealized utopias of the 1980s and 2000s) face a familiar chicken-and-egg problem, with demand for hydrogen held back by a lack of hydrogen infrastructure, and vice versa. Now, with a number of recent market developments, the hydrogen city has returned. With global enthusiasm for hydrogen fuel building, this time it could be different.

China Propels the Market Forward

With its city air pollution issues, diverse energy appetite, and top-down interest in developing hydrogen and fuel cell technologies, China has a small but rapidly growing hydrogen scene. Notably, Wuhan in central China’s Hubei province is set to become a hydrogen city thanks to an announced $1.8 billion investment from a tech company. An auto manufacturing hub, the city could have 3,000 hydrogen powered vehicles in 2020 and 100 hydrogen fueling stations in 2025. Other recent developments from China include the world’s largest proton exchange membrane electrolysis order (to fuel buses in Guangdong province) and a number of partnerships with western companies that manufacture and share technology in the country.

Hydrogen Overcoming Hurdles at the Local Level

The hydrogen energy economy has been held back in part thanks to rapidly improving battery technologies, which have seen dramatically higher adoption in both transport and grid-tied storage applications. Underscoring this challenge, outgoing Governor Brown of California announced the raw numbers from last week’s clean vehicle plan—calling for 200 hydrogen fueling stations and 250,000 charging stations. That there were 1,250 times more charging stations points to the infrastructure and complexity challenges of hydrogen, and the strong incumbency of electric infrastructure.

But there is reason for optimism, with many decision makers seeing longer-term hydrogen potential along with a surge in actual deal activity. Though light duty vehicle sales have been slow, more fueling stations are quickly coming online, with one 2017 tally finding that 30% of global hydrogen refueling stations had been built in the past year alone. In the shorter term, captive fleets like buses are showing significant growth with at least 300 units expected in Europe in the coming years, and hundreds more in China and elsewhere. Indeed, a hydrogen city could deploy a fleet of fuel cell vehicles in a mobility as a service configuration, as covered in a recent Navigant Research report. And the potential of power-to-gas for renewables integration, as outlined in another recent Navigant Research report, is being realized with (for example) a massive 100 MW project recently announced in France.

Each of these use cases has a place in the hydrogen city. Aggressive local hydrogen plans in Japan and in the UK city of Leeds all point to the value hydrogen can provide especially when focused on a local level—overcoming infrastructure hurdles, enhancing economies of scale, and boosting local adoption. Whether the larger hydrogen energy economy will materialize remains an open question. But if it does, it just may happen one hydrogen city at a time.

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