The Hydrogen Economy (NRC, 2004) indicated that this long-term potential could be possible once a large number of HFCVs are in the market and a mature hydrogen industry is in place. This section discusses the transitional period and lays out a picture of what this might look like. The technologies discussed are those that are the most well developed and nearest to technical and economic readiness. These are the technologies that are included in the resource estimates in Chapter 6, along three alternative time frames:

  1. Early hydrogen delivery for first vehicle owners—supplied from existing industry excess capacity or small skid-mounted production appliances at existing gasoline stations

  2. Midtransition vehicle owners—supplied mainly by on-site production at full-size refueling stations

  3. Late transition to self-sustaining hydrogen transportation system—supplied mainly in large central production facilities and delivered by pipeline to refueling stations

Early Hydrogen Infrastructure

Before HFCVs can be marketed generally, there must be enough fueling facilities to convince buyers that fuel will be available when and where they need it. Based on the analogy with diesel fuel, between 10 and 25 percent of stations providing an alternate fuel gives customers confidence in fuel availability. Meeting this standard for early hydrogen vehicle users will be very challenging because hydrogen fueling equipment is much more expensive than traditional liquid fuels. Reducing the number of locations while still providing good coverage will be important to hold down capital costs and to increase the hydrogen volume sold at each location. Recent estimates (Nicholas et al., 2004) are that as few as 5 percent of stations offering hydrogen might satisfy customer concerns if their locations are closely coordinated to provide adequate coverage of urban and suburban areas. This very close coordination in locating stations is a new concept compared with today’s free market and individual company decisions to determine locations. This concept involves coordination between auto companies, energy providers, and local governments that is not practical today because of antitrust concerns.

Convincing hydrogen suppliers to build hydrogen stations before the introduction of many HFCVs is sometimes referred to as the “chicken-and-egg problem.” Hydrogen suppliers are reluctant to invest large sums before they know that many HFCVs will be sold. Similarly auto companies will not be able to sell many HFCVs without an adequate number of hydrogen fueling stations. A way around this quandary is to stage HFCV introduction in phases by region. This approach is referred to as the “lighthouse concept” (Gronich, 2007). For example, if the HFCV is first introduced in the Los Angeles area, then only 5 percent of the stations in that region need to offer hydrogen to provide adequate coverage. As more HFCVs are sold, the infrastructure expands, eventually to mid- and late transition supply options discussed in the next two sections. This is then repeated in more cities. This concept is more fully explained in Chapter 6, as is a list of possible cities.

The demand for hydrogen at these stations will be very low for the first several years of operation because there will be an excess of stations for the few HFCVs in the market. All of the hydrogen stations will be underutilized for a period of years. During the first several years of operation there will be fewer than 10 HFCV fills (at perhaps 5 kg each) per station per day on average. At very low demand the technology choices to provide hydrogen include truck delivery of hydrogen from current industrial hydrogen gas suppliers or from excess hydrogen production at some refineries and chemical plants directly to the filling station where it is stored, much as in today’s gasoline station. Where hydrogen is not available, small skid-mounted natural gas reformers or small water electrolysis systems could be used to generate hydrogen at the refueling station. As demand grows, these small units might be moved to new areas and replaced by larger facilities. The initial hydrogen cost for all of these options is high, but as the hydrogen sales volume increases the cost will decline. The hydrogen sales volume might increase quickly during this early stage if hydrogen-powered internal combustion engine vehicles (ICEVs) as well as HFCVs were also filling at these stations. Box 3.1 contains a discussion of the hydrogen ICEV.

To illustrate this point, for a 500 kg/d natural gas reformer (about one-third the size of a full commercial-scale unit needed for a full-size refueling station) producing hydrogen at a station and dispensing at 5,000 pounds per square inch (psi), the hydrogen cost will be $3.50/kg when operating at full capacity (70 percent). Full capacity will provide about 70 refuelings per day. For this station in the very early years when there are only 10 refuelings per day, the hydrogen cost increases to $7.70/kg.

Midtransition Infrastructure for Expanding Hydrogen Availability to Full-size Stations

With increasing HFCV sales, hydrogen demand will eventually catch up to the initial capacity of the first stations. In addition, coverage must expand to cover distant suburban areas as well as some rural areas and highways between urban areas. The amount of hydrogen needed around any urban center would still be small, which favors hydrogen technologies that do not need a large hydrogen distribution system. This includes distributed reforming of natural gas or renewable liquid fuels such as ethanol and electrolysis of water using electricity. The distributed approach uses large appliance-type devices located at the refueling site to convert the raw material to hydrogen. These devices would be factory



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