The following HTML text is provided to enhance online
readability. Many aspects of typography translate only awkwardly to HTML.
Please use the page image
as the authoritative form to ensure accuracy.
Transitions to Alternative Transportation Technologies — A Focus on Hydrogen
FIGURE 7.3 Total annual costs of transition to the breakeven year for the Case 1 scenario, including RD&D costs plus total vehicle and hydrogen supply costs.
by the federal government over a 5-year period.1Allowingfor some expenditures of this nature,the committee estimatesthe government share of total vehicle plus hydrogen coststo be approximately $50 billion (an average of $9,500 pervehicle) during the transition period.
The committee’s analysis assumed (for simplicity) that all costs shown in Figures 7.1 and 7.2 are borne by U.S. companies and government. To the extent that participation by Japanese and other foreign manufacturers accelerates the introduction of HFCVs, and subsidizes the costs of a transition to fuel cell vehicles, the total U.S. costs shown here would be further reduced. For example, if early HFCV markets outside the United States were half as large as the assumed U.S. markets, the time for transition would be accelerated by 1-2 years, and the cumulative cost difference between HFCVs and gasoline vehicles would be reduced by $5 billion to 10 billion (from the $40 billion estimated here) assuming shared learning. Although the committee did not attempt to estimate the potential role of non-U.S. investments in HFCV technologies, it is aware that major efforts outside the United States are currently under way and could have a significant influence on the development and cost of a transition to HFCVs in this country.
OVERALL BUDGET ROADMAP
Figures 7.3 and 7.4 combine estimates of government and private sector RD&D costs with the estimated costs of vehicle deployment in Figures 7.1 and 7.2, respectively. The overall cost for the transition period (2008 to 2023, inclusive) then totals approximately $200 billion, shared between industry and government. The government portion of thetotal transition cost, including RD&D, is estimated to beroughly $55 billion (an average of $10,000 per vehicle), as summarized in the last line of Table 7.6 (which shows estimated transitions costs on a cumulative and average per-vehicle basis). As discussed above, these estimates are based on the committee’s Hydrogen Success scenario defining the maximum practicable number of HFCVs that could be on U.S. roads by 2020. This overall cost range translates to an average of roughly $3 billion per year over 16 years (2008-2023). To put these amounts in perspective, the U.S. government subsidy for ethanol fuel in 2006 was approximately $2.5 billion and, if extended at the current rate, could grow to $15 billion per year in 2020 as a result of the recent (December 2007) energy act.2
Note, too, that while the budget roadmaps presented here apply only to the transition period through 2023, the successful introduction of fuel cell vehicles would involve substantial additional expenditures—primarily by the private sector—for infrastructure, energy resources, and other requirements of a full-scale HFCV-based transportation system. For example, as seen in Table 7.4, the committee estimated that over more than $400 billion would be required by 2050 to fully build out the hydrogen supply system to fuel the HFCVs. However, the committee believes that follow-
The overall federal fleet is about 650,000 vehicles, with acquisitions of about 65,000 per year. While many of the newly acquired vehicles would not be appropriate for hydrogen or would not be in an area where hydrogen is available, the federal fleet could by itself account for a significant fraction of early HFCVs (GSA, 2007).
The Volumetric Ethanol Excise Tax Credit (VEETC) of 51 cents per gallon is provided to all ethanol blended with gasoline, which was about 5 billion gallons in 2006, according to DOE data. Although the VEETC is set to expire after 2010, Congress is debating various ways of extending it, as it has since the credit was first created in 1978. The Energy Independence and Security Act of 2007 established a renewable fuel standard that would reach 30 billion gallons by 2020, most of which is likely to be ethanol. A 51 cents per gallon credit applied to that amount would represent a subsidy in excess of $15 billion per year.