The cost of hydrogen

ITA

My LinkedIn stream pops up an infographic developed by the California Fuel Cell Partnership, where various types of hydrogen filling stations are compared, stating data I had been looking for for some time.

Here it is:

The infographic distinguishes between two cases: hydrogen is produced locally (the true-true green hydrogen) or elsewhere and then transported either as a compressed gas or liquid.

Consumer cost

The amortization of capital expenditure to build the station is a very important item in the operating costs of a hypothetical operator wishing to create a network of service stations, and should be distributed over the the amount of sold hydrogen; of course, the more you sell (up to the maximum theoretical limit), the lower will be the impact.

Therefore, I ran the numbers to understand what the minimum cost of hydrogen would be if you want to repay the installation cost back in, say, ten years by choosing a few common parameters and, precisely:

  • interest rate: 3%
  • payback time: 10 years
  • hydrogen purchase price: $2,5 / kg – I actually chose an average price between Blue and Green hydrogen, but haven’t considered Grey or Black, because they pollute. For the locally produced hydrogen, I assumed zero cost, i.e. the electrical energy needed is completely produced by the local PV array (even though this means a 2MW array for each station, which is probably optimistic).
  • station occupancy rate: 40% – this is a very high occupancy, especially in Italy where occupancy of service stations never exceeds 25% and is often much lower; given this refueling is quite fast, I assumed the consumer might be willing to queue…

I did not make any assumption for other operating costs, nor for the profit margin sough by the operator; in other words this is a lower limit, a sort of gross cost of goods sold, and these are the values I obtained:

To recap, only the liquid transported hydrogen station is in the same ballpark as gasoline: driving the same 100km would cost €8,11 vs. the €10 we spend in gasoline (but remember, the latter cost is all-in, while the former is not). No scenario comes close to the cost of a BEV which of course can also take advantage of a share of electricity sourced at home at lower rates.

Lastly, I have reversed the calculation to derive what the occupancy rates should be to achieve parity with the other fuels: as you can see, breaking even with gasoline requires very high but possible occupancy rates, while parity with electricity can only be achieved by selling more fuel than the theoretical maximum: in other words, it’s completely impossible.

The only BEV scenario that hydrogen comes close to breaking even with, is the unrealistic case one of someone which ALWAYS charges at fast charging stations, paying maximum rates.

My conclusion is that (unlike the case of electric) sustainable mobility based on hydrogen would bring no monetary advantage to the user.

Capital cost

So far I have discussed the end cost of the finished product. But what about the capital cost?

Again, by making some reasonable assumptions, we can estimate the total capital expenditure which would be necessary globally to fuel the 1.5B car stock with hydrogen.

I have chosen the best performing hydrogen station (transported liquid) and compared it with a medium rate electric Fast charger (100kW) and with a gasoline pump; again, the BEV scenario takes advantage of the fact three quarters of the needed electricity are sourced either at home or on the workplace, lowering the number of stations required. The calculation results are as follows:

Under these assumptions, therefore, the capital cost to infrastructure the world for hydrogen mobility are two orders of magnitude higher than for electric mobility (some 12 trillion euros !) – hard to see how economies of scale could lower those capital costs by two orders of magnitude…


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