Hydrogen and FCEVs discussion thread

[GRA]

ARB's

2015 Annual Evaluation of
Fuel Cell Electric Vehicle Deployment
and Hydrogen Fuel Station Network
Development

report is now available online: http://www.arb.ca.gov/msprog/zevprog/ab8/ab8_report_2015.pdf

From the Executive summary:

• 179 FCEVs are currently registered with Department
of Motor Vehicles (DMV), a growth of 43% from
the previous year’s estimate as of late 2013.

• Auto manufacturer projections indicate that California’s
FCEV fleet will grow to 10,500 by the end of 2018 and 34,300
by the end of 2021, representing a near doubling from the
previously reported projections of 18,465 FCEVs in 2020 [4].

• A total of 44 stations are now expected to be in operation statewide by the end
of 2015, with all 51 currently funded and operational stations available by the
end of 2016. These 51 stations will have a fueling capacity of 9,400 kilograms per
day, equivalent to an expected demand of approximately 13,500 FCEVs.

• The 2015 auto manufacturer survey results suggest the FCEV market may grow faster
than previously projected based on the 2014 survey. As a result, currently funded
stations will support hydrogen demand of California’s FCEV fleet out to 2018. After 2018,
the number of vehicles expected to be on the road may need more fuel than can be
provided by the number of hydrogen stations that can be built with currently available
public funding, assuming funding levels and station capacity remain unchanged.

• Addressing the expected gaps in hydrogen capacity and coverage may require
exploring innovative actions to maximize the utility of public investment and
rapidly accelerate industry momentum to expand the fueling network.

• Station technical capabilities must continue to advance to satisfy customer
expectations for a retail fueling experience, including meeting current fueling
protocols and expanding capacity to fuel growing numbers of FCEVs.

• ARB’s analysis finds that the full $20 million annual allocation (for FY 2016/17)
available from ARFVTP funding under AB 8 is necessary to support additional
hydrogen stations. Innovative approaches to utilize this funding could help meet
projected accelerating demand for hydrogen fuel from a growing FCEV fleet.

Also, there's this via GCR:

CA Renewable Hydrogen Rule: Forcing The Carbon Numbers To Work

http://www.arb.ca.gov/msprog/zevprog/ab8/ab8_report_2015.pdf

 

[GRA]

If they're there,...

They are there. Almost certainly this would not be happening without them.

Still it seems doubtful that they will make money on this venture. They'll likely be back to the trough for more later.

No one is expecting to make money on H2 sales for FCVs for several years, which is why Toyota et al are subsidizing operating costs. "The Hydrogen Transition" calculates year 7 to 9 as most probable, but Toyota thinks it may be possible to end the subsidies as early as 2020, if not likely. Any of the above would beat Tesla (est. 2003) to profitability, as Elon forecast they may not make it before 2020.

Further to the above, from the ARB report which I'm currently reading (I'd forgotten that the state is also kicking in funds for O&M):

Finding 1: Post-2018, FCEV deployment is anticipated
to accelerate more rapidly than previously projected.

Auto manufacturers’ responses to ARB’s 2015 survey indicate much larger numbers of planned
vehicle deployments over the next six years than previously projected in the 2014 Annual
Evaluation. In the 2014 Annual Evaluation, 6,650 and 18,500 vehicles were projected for 2017
and 2020, respectively. This 2015 Annual Evaluation projects 10,500 by the end of 2018 and
34,300 vehicles by the end of 2021. Figure ES1 provides a side-by-side comparison of the FCEV
populations projected from the 2014 and 2015 analyses. The horizontal bars below the columns
display the years for which ARB collected data in the 2014 and 2015 surveys. Each survey includes
two periods: a mandatory period spans three model years after the survey date and provides
vehicle deployments on a county and annual basis. An optional period spans the next three
model years and provides aggregate vehicle deployments statewide as a single sum for those
three years. Orange represents the reporting periods and vehicle projections developed from
the 2014 survey and blue represents the same for the 2015 survey. AB 8 also requires an annual
assessment of DMV registrations, which are analyzed each year during the evaluation process.

From these numbers, it is clear that auto manufacturers not only anticipate releasing increasing
numbers of vehicles in the coming years, but they also anticipate a rapid acceleration in the rate
of vehicle deployment over the same time. FCEV registration grew 43% since the close of 2013,
due in large part to the release of the Hyundai Tucson Fuel Cell vehicle. Given the anticipated
release of Toyota’s Mirai FCEV at the end of 2015, another significant increase in on-the-road
vehicles is expected within the coming year.

Finding 2: Overall, deployment progress of the station network has
remained largely on track. Early evidence indicates some recently funded
stations are progressing at accelerated rates, while others previously
projected to be operational in 2015 are now projected for 2016.

The Energy Commission and GO-Biz have spent significant effort in the past year coordinating
with station developers to advance station progress. Time has been spent with each developer
to stress the incentives for early project completion from Program Opportunity Notice (PON)
13-607. Because of these efforts, this year the State has a clearer picture of expected operational
dates for the most recently funded stations. As a result, revised projections indicate 44 of the 51
stations will be operational before the end of 2015. The remaining seven are projected to become
operational in 2016.

Overall, the progress of recently funded stations has remained largely on track. Although some
individual station projections have moved back, many others have remained on schedule.
While stations previously expected to be operational in 2014 have been delayed, there are early
indications that newer station projects have been progressing at a faster pace than previously
witnessed. Factors contributing to this acceleration may include: improved workflows and
institutional knowledge within the developer organizations, increased experience within local
permitting and zoning agencies, and the financial incentive provided by the structure in the most
recent grant solicitation. Station designs are becoming more modular and best practices are
beginning to materialize, allowing for quicker implementation of a variety of available footprints.
A more in depth analysis of this trend will be included in a future joint Energy Commission-ARB
report to be published in December 2015.

Finding 3: AB 8 directs the Energy Commission to invest $20M annually
in hydrogen stations until California reaches at least 100 stations.
Increased demand for crucial Operations and Maintenance (O&M)
grants directly impacts funding available for new stations. As a result,
the annual new station deployment rate is projected to be lower than
last year’s projection.

In this 2015 Annual Evaluation, projections of future hydrogen fueling station deployment rates
have been adjusted to a slower pace to properly account for the use of AB 8 funds for eligible
station O&M costs. The Energy Commission offered O&M grants in 2014 to provide operations
support to early market station developers to compensate for projected negative revenues from
hydrogen sales during the initial years of commercial vehicle launch until station use rates ramp
up to commercially viable levels. The 2014 grant program allowed station developers to apply for
grants of up to $100,000 per year for up to three years. These grants have received a great deal
of support from stakeholders and played a key role in generating increased interest in the Energy
Commission’s most recent PON. However, the 2014 Annual Evaluation did not account for the
funds to support O&M grants when projecting the rate at which new stations could continue to
be co-funded by the State. Since that time, there have been indications from station developers
that the State should expect a high rate of subscription for O&M grants, emphasizing their
importance. Assuming that the Energy Commission’s current capital funding support remains
constant, an updated and more robust assessment accounting for O&M grant funds indicates the
potential rate of State co-funding for new stations will decrease by an estimated four stations per
year. Under these assumptions, 14 new stations are expected to be funded by 2018, and 35 by
2021, as shown in Figure ES2.

Finding 4: In order to provide coverage to the most likely areas of
early market adoption, San Francisco, Berkeley, San Diego, Greater
Los Angeles, Torrance, and other areas with a high market potential
should receive priority. Stations in Lebec and Los Banos are needed
to strengthen the planned connector on I-5 in Coalinga.

In 2015, ARB assessed the anticipated growth of hydrogen demand and capacity with the same
accounting tool as in the 2014 Annual Evaluation. ARB has also developed a new Geographical
Information System (GIS)-based tool to help analyze the potential FCEV market and where gaps
exist between existing station coverage and needed coverage. The new tool provides greater
resolution and detail in assessment, reduces ambiguity, and fills in some voids of knowledge vital
to a full assessment. Using these tools together, ARB has adjusted its recommendations from the
previous evaluation. These recommendations can inform the next funding solicitation that the
Energy Commission is currently in the process of developing.

• Table ES1: Primary Suggested Areas for Further Hydrogen Fueling Infrastructure Investment
  Area Purpose
  1 San Francisco Establish Core Market
  2 Berkeley/Oakland/Walnut Creek/ Pleasant Hill Establish Core Market
  3 San Diego/La Mesa Expand Core Market Coverage
  4 Greater Los Angeles/Sherman Oaks/Granada Hills/Glendale Core Market Capacity
  5 South San Diego/Coronado Expand Core Market Coverage
  6 Torrance/Palos Verdes/Manhattan Beach/Redondo Beach Core Market Capacity
  7 Pasadena/San Gabriel/Arcadia Expand Core Market Coverage
  8 Long Beach/Huntington Beach/Buena Park/Fullerton Expand Core Market Coverage
  9 Santa Cruz Future Market
  10 Encinitas/Carlsbad Connector/Future Market
  11 Fremont Future Market
  12 Sacramento/Land Park Expand Core Market Coverage
  13 Sacramento/Carmichael Expand Core Market Coverage
  14 Thousand Oaks Future Market
  27 Lebec Support Existing I-5 Connector
  28 Los Banos Support Existing I-5 Connector

ARB recommends the areas listed in Table ES1 as the next targets for increasing fueling station
coverage in areas with high likelihood of FCEV adoption. In addition, connector stations in
Lebec and Los Banos along the I-5 will be important for strengthening the reliability of the
north-south connector route. Each priority area is listed along with the role that new stations in
the area may fill. Some will establish the first coverage in an area with projected high interest
in FCEVs; others will help expand the capacity or coverage in markets with existing, but limited,
coverage. ARB has also developed an extended list including high priority areas for further
investment in later years to provide a basis for long term network planning. Refinement and
further discussion of the geographical boundaries of priority areas will be presented in future
public workshops and documents.

Finding 5: By 2020, accelerated hydrogen demand from FCEVs may
outpace the rate of hydrogen fueling capacity provided by publicly
funded stations.

Findings 1 and 3 represent two key factors that have dramatically altered the assessment of
statewide and local hydrogen fueling capacity balance. The 2014 evaluation found that the
existing and funded stations, together with continued deployment of stations through State co-
funding programs, would be sufficient to provide necessary refueling capacity until at least 2020.
In this updated evaluation, the combination of accelerated vehicle deployment and less money
available for new stations (assuming current funding structures continue) leads to the conclusion
that by 2020, there may not be sufficient hydrogen capacity, either on a local county level or
statewide. The bottom two bars in Figure ES3 show county level balances of hydrogen (with
capacity shortfalls on the left of the y axis and sufficient capacity on the right) for the existing and
planned network of 51 stations for 2018 and 2021, respectively (following Figure ES2). The top two
bars show statewide balances for scenarios including new stations projected to be built by 2018
and 2021, respectively. This analysis shows even with 35 additional stations by 2021, business
as usual in State funding programs and station technology will result in a statewide hydrogen
capacity shortfall. Alameda, Sacramento, San Francisco, and Ventura counties may need
additional capacity before 2018, given demand in these areas may outpace capacity around 2018.

 

[ydnas7]

thats a cheerful document http://www.arb.ca.gov/msprog/zevprog/ab8/ab8_report_2015.pdf CARB 2015 report

65 stations by 2020, due to O&M costs eating up funds for new station station.
page 8

 

[ydnas7]

refresher

Prediction, The entities that use California grant money for to build H2 infrastructure are going to want money to pay for keeping the H2 station open. I predict this will come from the funding for new stations, the result, the original target of 100 station will reduce to 85 stations, then the next 25 new stations will be funded, then no more will be funded as ongoing costs keep the tally to 75 stations.

its simple, everyone want $100,000 per year to keep their station open, CA will give mostly-everyone such grant, so its an 30% cost.
Its even simple to model on a spread sheet.

 

[lorenfb]

Its even simple to model on a spread sheet.

Right, forecasting numbers on a spreadsheet? Probably as reliable as Tony's "crystal ball" forecasting
about the BEV battery technology evolution! Hopefully you didn't use your spreadsheet analysis to forecast
Blackberry's future sales before the iPhone arrived and bought their stock based on that analysis.

 

[TonyWilliams]

No one is expecting to make money on H2 sales for FCVs for several years, which is why Toyota et al are subsidizing operating costs. "The Hydrogen Transition" calculates year 7 to 9 as most probable, but Toyota thinks it may be possible to end the subsidies as early as 2020, if not likely. Any of the above would beat Tesla (est. 2003) to profitability, as Elon forecast they may not make it before 2020.

Let's see what Totyota's ultra low volume H2 car is doing different than ALL Tesla cars, with regards to "profit":

---------------------------- Volume ---------------------- Infrastructure
-------------------------2015 --- 2020 ------------------- 2015 -- 2020

Toyota H2 --- few dozen --- few thousand -- dozen ----- maybe 100

Tesla EV -------- 100,000 -------- 500,000 -------- 2200 ------ LOTS MORE

**********

Largely tax payer funded extreme low volume H2 in primarily one state versus nearly ubiquitous worldwide Tesla funded Superchargers. It is absolutely no surprise why Tesla won't be "profitable" until 2020, however low volume H2 cars won't be either in 2020... or 2030. That's the flaw in your logic.

 

[downeykp]

Tony, I have to agree. I really do not see how H2 could ever become a viable source of transportation. Stations are never going to be cheap to build. The product will never be cheap to produce. Unless I am missing something H2 will never be a viable source of transportation.
The concept 10 plus years ago was exciting, but in reality there are too many obstacles to overcome.

 

[lorenfb]

Tesla funded Superchargers. It is absolutely no surprise why Tesla won't be "profitable" until 2020.

Tesla's funding of SCs is a very small contributor to Tesla's present and future unprofitability.
Any auto OEM with a very low sales volume like Tesla's, even with a 20 percent GP, can't cover the
required R&D and GA to be long term profitable.

 

[lorenfb]

Tony, I have to agree. I really do not see how H2 could ever become a viable source of transportation. Stations are never going to be cheap to build. The product will never be cheap to produce. Unless I am missing something H2 will never be a viable source of transportation.
The concept 10 plus years ago was exciting, but in reality there are too many obstacles to overcome.

Maybe you'll be correct about Hawaii.

 

[TonyWilliams]

Tesla funded Superchargers. It is absolutely no surprise why Tesla won't be "profitable" until 2020.

Tesla's funding of SCs is a very small contributor to Tesla's present and future unprofitability.
Any auto OEM with a very low sales volume like Tesla's, even with a 20 percent GP, can't cover the
required R&D and GA to be long term profitable.

Well, I'm confident that at least the folks at Tesla would disagree with you. But, that speil probably sounds great with your short sell buddies.

Yes, the $6 billion total on Gigafactory is a far bigger expense (operational in 2016, with continued expansion and additional Gigafactories) than the expected Supercharger expenses.

It gives me such great pleasure to watch folks like you lose money on writing off Tesla.

 

[epirali]

Tesla funded Superchargers. It is absolutely no surprise why Tesla won't be "profitable" until 2020.

Tesla's funding of SCs is a very small contributor to Tesla's present and future unprofitability.
Any auto OEM with a very low sales volume like Tesla's, even with a 20 percent GP, can't cover the
required R&D and GA to be long term profitable.

Well, I'm confident that at least the folks at Tesla would disagree with you. But, that speil probably sounds great with your short sell buddies.

Yes, the $6 billion total on Gigafactory is a far bigger expense (operational in 2016, with continued expansion and additional Gigafactories) than the expected Supercharger expenses.

It gives me such great pleasure to watch folks like you lose money on writing off Tesla.

Not sure what you mean, the point is valid, tesla is losing money at low volume sales with ok margin.

As for gigafactory: so far only $60 million max has been spent by estimates. Even with 1.5 billion in state incentives that still leaves a lot more money that will be required.

 

[DNAinaGoodWay]

CA is such an interesting place. Willing to gamble on H2 comic tragedy while at the epicenter of the AV emergence that will transform personnel transportation everywhere.

 

[epirali]

CA is such an interesting place. Willing to gamble on H2 comic tragedy while at the epicenter of the AV emergence that will transform personnel transportation everywhere.

Or maybe, like they have shown in the past, CA is ahead of the curve and investing for 20 years down the line with Hydrogen? Because despite the never ending back and forth truth is the technology commercializations of hydrogen is in its infancy, and no one can predict whether it will fail or succeed.

If everyone just listened to the "it's impossible" crowd there would be no Tesla in existence either.

 

[DNAinaGoodWay]

I have no doubts that H2 will continue to develop in CA, and it may even prosper statewide, eventually, but if it's going to be a real option, they'll need a LOT more stations, probably thousands. Wild guess, at least 1/10 the number of current gas stations. Might work well for long haul trucking or similar applications. Meanwhile, aging boomers and the willing carless will drive the all electric AV market and soaring insurance premiums will phase out human driving except for well heeled die hards.

 

[GRA]

No one is expecting to make money on H2 sales for FCVs for several years, which is why Toyota et al are subsidizing operating costs. "The Hydrogen Transition" calculates year 7 to 9 as most probable, but Toyota thinks it may be possible to end the subsidies as early as 2020, if not likely. Any of the above would beat Tesla (est. 2003) to profitability, as Elon forecast they may not make it before 2020.

Let's see what Totyota's ultra low volume H2 car is doing different than ALL Tesla cars, with regards to "profit":

---------------------------- Volume ---------------------- Infrastructure
-------------------------2015 --- 2020 ------------------- 2015 -- 2020

Toyota H2 --- few dozen --- few thousand -- dozen ----- maybe 100

Tesla EV -------- 100,000 -------- 500,000 -------- 2200 ------ LOTS MORE

**********

Largely tax payer funded extreme low volume H2 in primarily one state versus nearly ubiquitous worldwide Tesla funded Superchargers. It is absolutely no surprise why Tesla won't be "profitable" until 2020, however low volume H2 cars won't be either in 2020... or 2030. That's the flaw in your logic.

Tony, it's not 'my' logic, it's the logic of the ARB and all the stakeholders. As to projections of sales, we'll just have to wait and see if Toyota et al's are more realistic and less wildly optimistic than GM's and Nissan's were when they introduced the Volt and LEAF.

 

[sparky]

Or maybe, like they have shown in the past, CA is ahead of the curve and investing for 20 years down the line with Hydrogen? Because despite the never ending back and forth truth is the technology commercializations of hydrogen is in its infancy, and no one can predict whether it will fail or succeed.
If everyone just listened to the "it's impossible" crowd there would be no Tesla in existence either.

While I wait to get some first hand experience with FCVs, I'm becoming more and more convinced that they are the new "penalty" vehicles. Expensive, underpowered, limited storage and all the fueling options of a 1st stage rocket motor. This is specifically what Tesla overcame (and Nissan to some extent). Tesla has, over the last 8 years, invented desire for an EV.
I've yet to discern a glimmer of that for FCVs based on what's being offered and proposed. So far there's no "pull" for FCVs, only push it seems.

 

[GRA]

I have no doubts that H2 will continue to develop in CA, and it may even prosper statewide, eventually, but if it's going to be a real option, they'll need a LOT more stations, probably thousands. Wild guess, at least 1/10 the number of current gas stations. Might work well for long haul trucking or similar applications. Meanwhile, aging boomers and the willing carless will drive the all electric AV market and soaring insurance premiums will phase out human driving except for well heeled die hards.

What makes you think that building thousands of stations will be impossible? I've listed (way upthread) the buildout rate and decadal totals for gas stations in this country, and they went from nothing in 1912 to thousands in a very short time. H2 stations will be more expensive, especially initially, but scale, the learning curve and technical improvements will drive them down. For those who've forgotten, here's the gas station data I'd previously posted:

Here's the total # of U.S. stations from 1920 to 1990 (remember that the first U.S. gas station only opened in 1913, and the major boom in the U.S. car fleet came after WW1):

1920 15,000
1930 123,979
1958 193,948
1969 236,000 approx.
1970 216,059
1980 158,540
1990 111,657

As you can see, 15,000 stations were built nationwide in only 8 years with another 109,000 in the next decade, and most of the H2 stations will be added on to existing gas stations, eliminating the need to purchase the property as well as much of the construction., e.g. the station near me is tearing up part of their asphalt to install the H2 components., but the gas pumps/mini-mart all remain in operation. As one of last year's reports indicated, in a survey of SoCal gas stations they found that 1 out of 5 could have H2 added using existing safety regulations (which were designed for industrial H2 situations, and it was believed that required clearances etc. could be eased to allow more stations to add H2 without exceeding gasoline levels of safety).

As to AV, works just as well (actually better in many cases) with FCEV AVs, as you can park them anywhere, and they only need to be fueled once a day or less. One of the biggest problems with using BEVs for car-sharing is that they have to be parked in places with charging, and that's going to take a long time for the necessary infrastructure to be installed in/near every area where they might be left. Indeed, it's a problem in cities like S.F. now, because most apartment dwellers who would most benefit from _owning_ BEVs park on the street, and (as they never know exactly where they will be able to park) until charging is available at almost every spot a BEV just isn't an option for them, barring daytime charging at work. ICEs and now H2-fueled FCEVs don't have that issue. San Francisco is well known for its lack of parking, despite the more than 440,000 publicly-accessible spaces, both on-street and in parking lots/garages.

To provide an anecdotal example of the practical problems, I had a girlfriend who'd lived in an S.F. apartment for several years before she met me. Shortly after we got together, she showed me a bill she'd received for overdue parking tickets. It was for something like $2,800. I was flabbergasted, and asked her how anyone could get that many parking tickets (let alone let them accumulate). She said it was because she was working swing shift, and when she got home ca. 2 a.m. the nearest legal space was likely to be 6 or more blocks away. She wasn't going to walk that distance by herself at that time of night (not the greatest neighborhood), so she did what many other people in similar situations did - she parked in a bus stop, with her alarm set to wake her about the time the first buses started running, in hopes that some early worker would leave for work and she'd be able to re-park her car legally. She might spend half an hour or more driving around looking for a space to open up. Sometimes when she was very tired the alarm wouldn't wake her, so she got ticketed.

Now just imagine that situation with a BEV with only an occasional charging spot. An autonomous one would help a great deal, as it could go park itself in some central location with charging that might be quite a long ways away, but ideally you want it parked fairly close by to eliminate unnecessary mileage and energy use; for car-sharing you don't want to pay excessive dead-head fees (distance spent moving without pax to pick you up or return to the barn). At any convenient point during the day an FCEV AV could make the trip to a fueling point, and be out of there 5-10 minutes later. You will need to pay an attendant, barring some sort of automatic fueling device (and I've expressed my opinion of them elsewhere; wireless charging has an advantage here), but IMO the practical benefits seem to outweigh the extra costs in many cases. It's probably cheaper to give the user a discount (miles or minutes) if they are willing to spend the time to fuel the vehicle.

Longer-ranged autonomous BEVs will certainly help matters, but not if they require putting on lots of unnecessary miles to recharge, eating up most if not all of their energy advantage. Construction of charging infrastructure will eventually solve that problem, but I don't think we have the decades to spare, even if cities had the money.

 

[epirali]

While I wait to get some first hand experience with FCVs, I'm becoming more and more convinced that they are the new "penalty" vehicles. Expensive, underpowered, limited storage and all the fueling options of a 1st stage rocket motor. This is specifically what Tesla overcame (and Nissan to some extent). Tesla has, over the last 8 years, invented desire for an EV.
I've yet to discern a glimmer of that for FCVs based on what's being offered and proposed. So far there's no "pull" for FCVs, only push it seems.

I think you are right. FCVs are in the push, early adopter, bleeding edge, infant, must cajole and delicately develop stage and probably will be for years. But so were EVs (and still are in a sense). Disagreement here is about potential for it to replace ICE vs potential of pure BEVs to do the same.

 

[GRA]

Further from the ARB report (was going to include this in yesterday's post, but had to run an errand and then got busy last night):

Finding 6: With a projected shortfall in hydrogen fueling capacity
anticipated after 2020, it will be important for the State to explore and
consider a diverse range of options to increase the impact of public
investments and maximize fueling capacity of future hydrogen stations.

AB 8 provides up to $20 million annually to spur an initial network of at least 100 hydrogen fueling
stations. The State has been and will continue to consider the appropriate balance between
building new stations and supporting O&M of the stations necessary for this initial network. The
current grant program structure is designed to support this balance and ensure stations stay
open in this early market stage. However, as the market develops out of this early phase, the
program can and should explore appropriate alternative approaches to financing this transition.
The current structure of capital grant programs and O&M funding, along with the current typical
or average station specifications, are central to the analysis supporting Finding 5. However,
alternative financing approaches that may develop in the coming years will have a marked
impact on this evaluation. Figure ES4 provides an analysis of the number of FCEVs that could be
supported under three scenarios:

1. A base case analysis for the currently funded and operational 51 stations

2. Continued station deployment according to the rate
indicated by the 2015 analysis in Figure ES2

3. Continued station deployment according to the rate
indicated by the 2014 analysis in Figure ES2.

Based on Figure ES4, assuming the current State funding structure and average station capacity
remain unchanged, it is clear that the State’s ability to address the projected growth in hydrogen
demand would be limited and would not meet the projected need.

There are multiple objectives that must be achieved with limited public funding currently
available. There is a need to keep current stations viable during this early phase, expand
the capacity of existing stations, build new stations, and ensure they all perform to meet
minimum fueling standards. To maximize the State’s ability to meet these needs, thoughtful
evaluation of alternative support options in some instances may be needed. Following are a
number of preliminary ideas that could guide mid- to long term program improvement. Proper
implementation of these or any similar ideas will require robust research and evaluation, as
individual needs may require different financing tools and approaches. A thoughtful program
evolution is needed before 2020, when vehicle demand is projected to outpace fuel supply.
These suggestions, and others that may be developed, require further discussion, feedback, and
consideration through stakeholder and public engagement in meetings and workshops before
implementation in any future funding program.

As technology advancements, cost reductions, and increasing supply chain
development materialize in the near future, the State may have an opportunity
to provide incentives or priority for higher capacity stations.

As technologies and project designs advance, there may be an opportunity for the State to
avoid the projected shortfall by incentivizing innovative station projects with capabilities and
capacity that exceed the standard observed to date. To meet the projected demand in 2021 with
only 86 stations, the average station for the next five years would need to have a capacity of 390
kilograms per day, more than double the current average. If the State and station developers can
reduce costs so that the rate of deployment returns to a total of 100 stations by 2021, then the
average new station capacity would need to be 280 kilograms per day, a size that is more readily
achievable with today’s technology. By pursuing options beyond the business-as-usual case, the
State may be better equipped to address the projected increase in demand.

As the business case for hydrogen fueling stations improves, diverse financing
mechanisms can be explored, particularly in order to meet expansion and
O&M needs.

In future years, it may be appropriate to support expansion of existing stations located in high
fuel demand locations using low/no cost loans, loan guarantees, tax breaks, Market Assurances
Grants (MAGs) as outlined by Energy Independence Now, or other options [8]. In addition,
focusing on larger, more scalable new stations may address both the need for additional capacity
as well as the need for additional coverage while establishing stations that have a higher potential
to self-fund upgrades and expansions.

Future stations co-funded by the State, especially those with smaller capacity,
could be required to demonstrate a clear technical path to expand capacity
with their existing footprint and a financial path or business case independent
of O&M grants.

Given the need to direct funds to new, larger capacity stations there will be a need for increased
scrutiny toward long term viability of stations funded through future grant programs. The rapid
acceleration of the FCEV market and the need for fueling capacity will likely continue in the
future. This will potentially place further strain on the network capacity. To stay ahead of future
hydrogen demand, station developers will need to emphasize their furthest looking plans and
designs. Competitive grants for co-funding need to continue to prioritize the business case
and provide incentives for developers to think critically about how their plans and designs for
expansion and upgrade can most easily and cost-effectively be implemented.

Given the rapid increase in projected FCEV sales, the State has an opportunity
to develop plans and take action to engage private industry and encourage
private investment in additional hydrogen fueling infrastructure to complement
the network backbone of State co-funded stations.

Outreach and information sharing sessions with private investors and venture capitalists could
develop awareness and motivate action by the investor community. Further coordination
between the State and existing public-private partnerships, like CaFCP and H2USA, could
leverage and help guide ongoing efforts to increase investor participation. If enough interest
is generated within private industry to address capacity needs in areas that already include
coverage and show a robust emerging market for FCEVs, the State may then focus on expansion
of the network coverage into additional connector, destination, and future core markets. In this
way, the State could continue to act as the initial seed investor, accepting the greatest risk and
easing entry into the market by private investors who may typically avoid early markets due to
increased risk. As market coverage by the State funded initial network progresses and the risk to
investors correspondingly decreases, the State will also need to evaluate the option of increasing
match fund requirements in the mid- to long term future so that more funds can be available to
establish coverage in future markets.

Finding 7: Stations funded by future grant programs should be
required to adhere to the SAE J2601 standard for the fueling protocol.
Additionally, there is an urgent need to upgrade some previously
funded stations that may not yet have this capability.

Beyond capacity, future stations must offer improved technical capabilities to support accelerated
vehicle deployment, including accuracy and fueling protocols. Stations must be able to conduct
consecutive fills with short fueling times for each fill and minimal wait time between fills. The
specifications for achieving (and therefore measuring the ability to achieve) these requirements
are outlined in the SAE J2601: 2014 fueling protocol. This protocol was completed and published
in the last year and was therefore not a requirement of stations funded in previous grant
programs. Retail customers will likely expect stations to perform at least as well as outlined in
SAE J2601. Upgrades of existing stations to the most recent published version of SAE J2601 will
improve customer acceptance and the State should investigate no or low cost options to enable
these upgrades. O&M grants can also cover the expense of the standards compliance work that
calibrates the system to the standard without permanent equipment changes. Additionally, if the
State does decide to invest in a station upgrade, the upgraded station should be required to have
the capability to follow SAE J2601. Finally, all hydrogen stations funded in the future should have
compatibility with the current version of SAE J2601 as a requirement for grant eligibility.

Finding 8: The State of California is successfully implementing and
further developing tools and devices to ensure station performance
standards will provide increased assurance of station performance,
accuracy, and reliability.

Significant progress in assessing and certifying station capabilities has been achieved in the past
year. DMS, along with ARB, Energy Commission, and others, has developed a set of standards,
field tested measurement techniques, and a program to certify the accuracy of individual
hydrogen fueling station dispensers utilized in California. This program has resulted in the first
stations in the world to be certified to dispense hydrogen accurately enough to allow sale of
the hydrogen to the public at “point of sale” hydrogen dispensers. From the momentum of this
precedent, a number of similar efforts are underway to develop the very first tools, techniques,
and programs to assess and certify other aspects of hydrogen fueling station operation. These
include certifying the fueling protocol and monitoring hydrogen quality. These capabilities are
absolutely necessary to ensure that stations perform to customer expectations and will continue
to do so throughout their lifetimes.

Finding 9: With more stations coming on line, together with the
expected increase in vehicle numbers, there is an urgent need for
trained personnel and specialized tools for station commissioning.
This includes multiple devices for protocol testing and validation,
certification of dispensing accuracy, hydrogen quality monitoring
and overall fueling performance evaluation.

Even with the recent progress in capabilities to certify station performance, there remains
an urgent need to enhance these capabilities. Certification of dispenser accuracy is currently
achieved with the use of a single device providing service to all stations throughout California.
The schedule for the single device is currently stressed, and demand will only increase in the
next 12 months as many more stations are completed. There is a clear need for State investment
in additional devices and personnel to support the expected growth in demand. Additionally,
although efforts are underway to develop devices to address other station characteristics, these
projects will likely need to receive additional priority attention in the coming months in an effort
to accelerate project completion. These devices will be just as necessary as the existing accuracy
testing device to ensure satisfactory retail customer experiences at hydrogen fueling stations.

 

[DNAinaGoodWay]

Never said impossible. Said it would be needed if it's going to be a real option. I agree it will be expensive. I think the cost relative to the market share of FCV will be much larger than the same for BEV. I think an Uberish fleet of AVs constantly in motion won't need parking except to charge at designated stations. How CA chooses to spend its money is not my concern, but I think BEV infrastructure would be more cost effective.