The high cost of hydrogen fueling facilities and lack of FCEVs makes it impossible to justly building and operating a station without Federal and/or State incentive and funding opportunities, Table 6. The Newport Beach Hydrogen Fueling Station illustrates the funding and financing structure.
The station opened to the public July 2012. The facility stores on a daily basis up to 100 kg of gaseous hydrogen from steam methane reforming of natural gas. Production, purification, compression, and storage complete the systems integrated into the station. The owner received a $2.0 million grant from the U.S. Department of Energy as part of a Hydrogen Station Analysis Project to collect data from state-of-the-art hydrogen fueling facilities and demonstrate the footprint and equipment arrangement of such a retail facility.
A general breakdown of the funding / financing structure of the Newport Beach Station is:
- Total: 4.0 million (ARB estimate February 2011)
- Govt: DOE – $2.0 million (2006) for 2nd generation equipment
- ARB – $1.7 million grant
- Private / Cost Share: Shell – $2.3 million
- Public Funding Period: Three years
(ARB = Air Resources Board – California Environmental Protection Agency)
On the state level, California’s Energy Commission (CEC) a leader providing both capital and O&M funding support for Alternative and Renewable Fuel and Vehicle Technology Programs. The CEC investment plan for 2013-2014 allocates $100 million in grants for alternative fuels and vehicles through its Alternative and Renewable Fuel and Vehicle Technology Program. The plan calls for $20 million in funds for an additional 68 hydrogen fueling stations to support the anticipated rollout of these vehicles in 2015-2017. Currently California has about 24 stations are built or in development.
The acceleration of FCEVs in the U.S. is being supported by several incentives. These federal incentives have either expired or about to expire unless extended by Congress and include:
- Investment tax credits (ITC) through 2106 equal to 30% of the capital cost, up to $3,000/kW, associated with business purchase of qualifying fuel cell products;
- ITC through 2014 equal to 30% of the capital cost, up to $200,000/station, toward the purchase of hydrogen fueling equipment; and
- Grant-in-lieu of tax credit through 2011 (expired) equal to 30% of the capital cost, up to $3,000/kW, associated with the purchase of qualifying fuel cell products; and
The U.S. Department of Energy’s Alternative Fuels Data Center (AFDC) provides information on Federal and State regulations and incentives, data and tools to help fleets and other transportation decision-makers find ways to reduce petroleum consumption through the use of alternative and renewable fuels, advanced vehicles, and other fuel-saving measures.
A listing of any applicable state incentives for FCEVs and hydrogen fueling facilities is given in the Database of State Incentives for Renewables and Efficiency.
In closing, this paper took a brief look at costs, carbon credits, permitting and incentives of hydrogen fueling stations. Adoption of FCEVs has a steep hill to climb. It will take legislation like California’s Low Carbon Fuel Standards and grant programs like those available through California’s Energy Commission, and partnerships with automakers, major O&G companies, and fuel cell manufacturers for FCEVs to gain any traction in the marketplace.
Neither EVs nor FCEVs are zero emission; zero emission at the car level, yes; but not when the entire life cycle of the fuel, electrons or hydrogen, is taken into consideration. Generating hydrogen by steam reforming of natural gas produces CO2 even with renewable sources of energy, unless the CO2 by product is captured and sequestered. Same is true of lithium-ion batteries charged with electrons produced from coal- and gas-fired electrical generation stations. Cradle to grave ZEVs will only happen when electricity for charging batteries or electrolyzing water comes from 100% renewable energy. For the time being reduced emissions is a step in the right direction.
Lessons learned from Tesla tell us that cost of the vehicle is not a roadblock to stimulate market interest as long as the vehicle appeals to the buyer and convenient ways to “fill-up” are available. For FCEVs this is obviously easier said than done. Where EVs can plug-and-go anywhere in America and most nations on earth, one would think it’s impossible for FCEVs to make it. But lithium-ion batteries have practical limitations. The question is how money will it take to make noticeable improvements that overcome these limitations.
Possibly the industry— electric vehicles—is looking at the problem the wrong way. Other than where the juice comes from, EVs and FCEVs are fraternal twins. Fuel cells are nothing more than next generation batteries. When lithium-ion battery technology becomes too cumbersome and costly, fuel cells will be there to take over. Got to run, time to recharge my cell phone.
The opinions expressed in this article are solely those of the author Dr. Barry Stevens, an accomplished business developer and entrepreneur in technology-driven enterprises. He is the founder and President of TBD America Inc., a global technology business development group serving the private and public sectors in energy, fuels and water industries. To learn more about TBD America, please visit http://tbdamericainc.com
