“Infrastructure, infrastructure, infrastructure” – the main barrier for FCVs

With Hyundai's fuel cell car now available commercially in the US as well as Europe, Rachael Hogg asks key industry players whether they expect FCVs to go mainstream any time soon

toyota-fcv-concept2014 looks set to be the year that fuel cell vehicles finally begin to make a commercial impact on the industry.While this will be in small numbers at first, Hyundai’s ix35 Fuel Cell, the first commercially-available production fuel cell vehicle (FCV) will be leased from select California dealerships this year, before the Honda FCX Clarity and Toyota 2015 FC launch in 2015. However, while this exciting technology which has always been “ten years away” is finally arriving, the barriers to its mainstream adoption rear their heads.

Many bodies, from OEMs, to suppliers, to governments are in agreement that infrastructure is probably the single biggest barrier to the effective deployment of FCVs. There are issues arising over location, cost, and the support required. Dr Timothy Lipman, Co-Director, UC Berkeley Transportation Sustainability Research Center said, “The vehicles are coming, now it’s infrastructure, infrastructure, infrastructure, but who is going to pay for it? Having operated our station for the last three years, they do require significantly more maintenance than a gasoline station does.”

Dr Wolfgang Bernhart, Partner, Roland Berger Strategy Consultants agreed, “The availability of hydrogen infrastructure is a key reason why FCVs haven’t yet made it to the mainstream. Public funding is probably necessary for the first couple of years, since investment cannot be justified by a proper business case. There are means to produce hydrogen in a sustainable way, but the cost to build infrastructure is expensive.”

Hyundai-ix35It seems almost impossible that a hydrogen infrastructure could be rolled out without the support of governments, but, as with EVs, this support cannot last forever. Dr Lars-Peter Thiesen, Manager of Advanced Technology Strategy at GM Europe said, “In the future it will be important to receive funding in order to offset the higher price of these technologies and vehicles. However, one should be very clear that it won’t make sense from an economic point of view to have incentive systems running over decades.”

Convenience

Consumers need convenience, and to be persuaded to buy an expensive FCV, they will want the same convenience that they have from a gasoline or diesel car. Catherine Dunwoody, Executive Director, California Fuel Cell Partnership explained the situation in California: “The main challenge right now is building up a sufficient network of stations that give customers the convenience to fuel with hydrogen in the same way they fuel with gasoline today. In 2012 we published our roadmap, which established the need for 68 stations state-wide to provide that convenience. We partnered with one of our university partners who have a modelling tool they’ve developed to look at traffic patterns and locations of existing stations and travel times and demographics, and identify how many stations are needed in each of those early market regions. Then we also worked with OEMs to determine where the connectors and destinations need to be so that those people who want to go away for a weekend have access to fuel.”

fuel-cell-station-calicfornia
Fuel cell station locations in California. 9 stations are currently open with a further 48 under development including 2 bus fueling stations.

Some think this needs to go further though, and that being able to refuel at home, like with an EV, would be more convenient. Lisa Jerram, Senior Consultant, Navigant Research said, “The infrastructure is really the key thing. If you can figure out some breakthrough, if there’s some kind of innovative financing, or you could figure out a way to have more distributed refuelling or home refuelling, that would make a huge difference. The concern is that you have to put stations in place, and you put in a major investment and hope a sufficient number of vehicles will use them. It has to grow over time to match the demand, and that is a major investment. That’s why you’re seeing all these governments involved as well as putting together a hydrogen roadmap and figuring out how to make it happen.”

Infrastructure is coming

However, despite the current severe lack of infrastructure, projects are being developed around the world. In April 2014, a £31m (US$51m) deal was announced to make hydrogen vehicles a viable choice for motorists across Europe. The HyFIVE project (Hydrogen for Innovative Vehicles), with five OEMs – Honda, BMW, Toyota, Hyundai and Daimler – along with ITM Power, Air Products and Fuel Cells and Hydrogen Joint Undertaking, and co-ordinated by the office of the UK’s Mayor of London, will see 110 FCVs deployed in several European locations, and will also see the development of hydrogen refuelling stations. Locations for the new refuelling stations in London, Aarhus and Odense (Denmark), and Innsbruck (Austria), are being decided, and should be operational by 2015. Chris O’Keefe, Senior Manager, External Affairs, Toyota Motor Europe, said, “We believe the HyFIVE programme will provide practical insights into how best to encourage and benefit from hydrogen-powered transport. The HyFIVE project provides an excellent forum for this, ensuring the benefits of fuel cell electric vehicles can be appreciated and realised through coordinated use and demonstration.” Alongside the 110 vehicles, six new refuelling stations will be built. But will six prove sufficient?

Hydrogen highways

Europe is not the only market investing in fuel cells. Other recent investments include a US$3m injection from the US Energy Department for FuelCell Energy, to increase the competitiveness of the fuel cell market in the US, help cut costs, and improve performance. There are also plans either in place, or scheduled over the coming years to create ‘hydrogen highways’. In Japan, the government plans to add up to 100 hydrogen stations by 2015, covering 50% of the installation costs, and other companies such as JX Energy, Toho Gas and Iwatani Corp, Toyota Tsusho and Air Liquide also plan to create stations. There are similar hydrogen highway initiatives in Germany, Italy, Scandinavia, the US, South Korea, and Canada.

Honda-FCXA hydrogen fuelling station rollout is under way in California. According to Toyota and the University of California-Irvine, 68 hydrogen fuelling stations across California would be sufficient for a viable fuel cell vehicle launch supporting at least 10,000 fuel-cell vehicles in five major urban areas. Members of the CaFCP have recommended five geographic clusters where the first owners of FCVs should live: Berkeley, South San Francisco Bay Area, Santa Monica and West LA, Torrance and nearby coastal communities, and Irvine and southern Orange County. Around 34 of the 68 stations are now open, in the planning stages or have funding allocated, and an additional US$65m is available to provide support to build and operate stations until they become profitable.

Saehoon Kim, Team Leader, Kia Motor Corporation Fuel Cell Vehicle Team said, “It is clear that hydrogen infrastructure should be in place in order to operate FCVs. Opening an entirely new market that requires new infrastructure such as refuelling stations would not be easy if all burdens are given to the automotive industry alone. Close collaboration between all stakeholders, OEMs, energy suppliers, and governments around the world is mandatory to trigger establishing necessary infrastructure, consequently increasing readiness of mass production of FCVs.” Toyota has recently announced it will not be renewing its contract with Tesla Motors for its Rav4 EV components, and will instead be focusing on its fuel cell efforts. The OEM also announced it has given a loan of US$7m to FirstElement Fuel, as part of a collaboration to help build hydrogen fuel stations in California.

GM’s Thiesen, however, sees a combination of affordability and infrastructure availability helping with the deployment of FCVs: “If we want to bring these cars to the market as an industry, I guess the most important aspect is to make these cars affordable for more customers within an available infrastructure region. This maximises the deployment and strengthens the infrastructure in the sense that the single refuelling stations will enjoy high volumes of traffic, which means that the investment pays off much more quickly.”

It is unlikely that by 2020, there will be widespread deployment of FCVs, but in parts of the US, parts of Europe, Japan, and South Korea, volumes will grow. More OEMs are likely to make vehicles available, and will be increasing their production numbers. However, this will only happen with an appropriate infrastructure in place. At the moment, baby steps are being taken to develop said infrastructure, but if OEMs, suppliers, and government bodies want FCVs to be a success, those baby steps quickly need to become major strides.

This article was first published in the Q2 2014 issue of Automotive Megatrends Magazine. Follow this link to download the full issue

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