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What’s it about hydrogen for trucking that leads researchers to deeply low-ball prices at each alternative? I’ve tried to reply this query a number of occasions. In Germany, gruppendenken — groupthink — is clearly concerned. With organizations just like the ICCT, it seems a determined try and make hydrogen work as a result of they assume it’s obligatory results in error after error. Completely different points plague different hydrogen for vitality reviews the place main consultancies like DNV produce unhealthy reviews for shoppers who’re paying them to get particular outcomes, no matter actuality.
I’ve tended to count on higher of the US nationwide laboratories, which have principally been stable researchers and analysts. However in current months, I’m discovering myself scratching my head at among the outcomes. Just a few weeks in the past I looked through a DOE NREL report on the hydrogen refueling stations in California. The info there was clear.
The refueling stations have been barely getting used even at their highest historic volumes, averaging 54 kilograms a day per station in the course of the first half of 2021. The report didn’t point out that very low utilization, however as an alternative celebrated a 300 kilograms a day peak utilization.
The stations have been out of service for two,000 extra hours than they have been really pumping hydrogen, 20% extra downtime than productive utilization. However you had dig by means of the information and do some math to determine that out.
If the stations have been working at full capability, they might seemingly have been costing 30% of capital expenditure to take care of per yr. Upkeep prices have been over $9 per kilogram distributed. As soon as once more, the information was there, however the conclusion was lacking in motion.
The report was a masterpiece of deceptive the folks it was introduced to into considering that issues have been rosy in hydrogen refueling stations in California. The fact is evidenced by Shell leaving cash on the desk, refusing $48 million to construct extra of them and shutting down its seven current light-vehicle refueling stations.
And now a brand new report from the USA’s Nationwide Renewable Vitality Lab (NREL), a division of the Division of Vitality, one with outstanding assumptions. Levelized Cost of Dispensed Hydrogen for Heavy-Duty Vehicles is sizzling off the presses in March of 2024. It presents a rosy image of cheap hydrogen prices.
That’s a comforting diagram, isn’t it? As quickly as hydrogen trucking is scaled, then refueling will price solely $6.5 per kilogram. That’s solely a bit above diesel at its present California charge that’s hovering round $5 per gallon, an equal quantity of vitality. And on condition that gas cells are extra environment friendly than diesel engines, that truly means hydrogen goes to be cheaper as a trucking gas than diesel!
However wait, there’s extra.
Sure, per this NREL research, hydrogen will probably be cheaper than diesel for a similar vitality. Effectively, drawback solved, let’s all go residence. Trucking is sorted.
Yeah, not so quick. Check out the highest of every of these bars, the bit with $1.5 in it. What’s that?
“… the present evaluation assumes that the price of producing hydrogen that’s later delivered to the modeled 2030 fueling stations is $1.50/kg-H2”
That’s the present price of producing grey hydrogen per kilogram within the USA from low-cost pure gasoline at industrial-scale services. A US governmental research in 2024 had the chance to place in an acceptable price of producing low-carbon hydrogen and bailed. As a reminder, the common for inexperienced hydrogen offers in Europe from 2024 was €9.49 per kilogram or $10.30. Nobody is considering that truly low-carbon hydrogen goes to price $1.50 per kilogram in 2024, but it’s in an official NREL report and is artificially deflating the value level.
As Boston Consulting Group reported, inexperienced hydrogen in 2030 shouldn’t be even going to get all the way down to the prior consensus determine — a consensus amongst STEM and financial illiterate hopium addicts — of €3, however can be within the vary of €5-€8. The underside finish of that vary continues to be very optimistic. My projection, after price workups for manufacturing hydrogen on three continents with a number of situations, is that inexperienced hydrogen will common $6-$8 per kilogram, with some outliers that will probably be each decrease and better.
However it’s an excellent worse assumption for making hydrogen at stations. That’s one thing that the ICCT did in its fatally flawed research, however even the ICCT didn’t get issues so incorrect as to make use of a price level of $1.5 per kilogram.
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The complete price of producing hydrogen in smaller portions will probably be a lot greater than the price of manufacturing it in industrial-scale services for 3 causes. First, the refueling station will nonetheless want all the steadiness of plant, however it will likely be tiny parts, not scaled, low-cost for the quantity parts. Hooking all of them collectively requires all the electricians, plumbers, chemical engineers, welders, and the like, however they’ll be tiny connections and welds.
The second cause is that stations will probably be paying someplace on the order of commercial charges for electrical energy. The US common is $0.11 per kWh at current and with steadiness of plant it takes about 55 kWh to fabricate a single kilogram of hydrogen from water. Simply the electrical energy will price $5,50, $4 above the price level the NREL research makes use of. And California’s industrial charges averaged $0.17 over 2022. That’s $9.35 only for the electrical energy for onsite manufacturing.
Third, an industrial facility has rigorous preventative upkeep and onsite workers to deal with points instantly to take care of manufacturing. Hydrogen refueling stations gained’t have that as a result of the price of sustaining high-cost labor on them will probably be prohibitive. They’ll be both out of service much more of the time or will probably be paying for restore workers to be twiddling their thumbs and having high-cost parts standing by on web site.
May NREL have checked out actual knowledge and made a more sensible choice about price level for onsite manufacturing of hydrogen? Sure, they may have regarded on the California hydrogen bus knowledge.
That’s a mean of $12.60 only for electrical energy and a few minor ins and outs. It clearly doesn’t embody the price of sustaining the refueling facility, which was out of service on account of electrolyzer and steadiness of plant issues a full 14% of the yr. As famous for mild automobile refueling stations, the common price of upkeep labored out to be above $9 per kilogram.
Additionally as famous, upkeep prices for pumping hydrogen, or something actually, scale linearly. Compressors, pumps, and seals give out extra quickly with extra use. Because the heavy automobile pumping facility knowledge above reveals, it’s not restricted to mild autos in any respect. 700 atmospheres of strain in tanks has to exceed 800 atmospheres of compression with a view to fill automobile tanks. That’s a strain which is the equal of being greater than 5 miles below the floor of the ocean. It’s non-trivial to construct one thing with the tolerances to realize that and compressors at that stage fail far more typically than compressors for fridges.
And no, shifting to liquid hydrogen gained’t get monetary savings. It simply has completely different giant and unavoidable bills, not least of which that it requires a 3rd of the embodied vitality within the type of electrical energy to run very refined cryogenic tools to get it down to twenty° above absolute zero. Buying and selling one set of prices and engineering compromises for a distinct set won’t lead to low-cost hydrogen.
This price of electrical energy doesn’t have any of the capital prices of the electrolyzer, the price of capital, the upkeep prices, or any earnings. The actual price of hydrogen is undoubtedly over $20 per kilogram. Whereas it’s for an order of magnitude much less dishing out of hydrogen per day than the bottom sure of the brand new NREL research, the prices of electrical energy are nonetheless going to be excessive.
The NREL research at the least provides capital prices to the price per kilogram, so far as I can inform. The diagrams of LCOH make it clear that for the on-site manufacturing situations they’ve added $1.1 to $4 to the price of a kilogram of hydrogen from the price of the station, however nowhere within the report do they specify what goes into that price. There is no such thing as a readability about electrolyzers, steadiness of plant, or the rest for the manufacturing aspect.
Presumably this was to permit somebody to place a steam reformation plant at a hydrogen refueling station in some deeply backward resolution, allowing the expertise agnosticism that the report is aiming for round hydrogen manufacturing. Does this stand as much as the slightest scrutiny? No.
The price of pure gasoline for industrial clients in California is at the moment $12.52. Hydrogen is 1 / 4 of the mass of methane, which is usually 92% of the mass of pure gasoline. Different effectivity challenges make a ratio of a kilogram of hydrogen for each 5 kilograms of pure gasoline about proper. At that charge, simply the pure gasoline enter to steam reformation would price $2.61, over a greenback greater than the price of hydrogen manufacturing assumed within the report. And that’s for grey hydrogen.
Given the small scale of the power and the necessity to bolt on carbon seize and do one thing with the carbon dioxide afterward, the prices are seemingly triple that.
The $1.50 price level of hydrogen within the report is just defensible if the belief is grey hydrogen manufactured in industrial services in locations the place pure gasoline is cheaper than in California, one thing that’s precisely reverse to the purpose of decarbonizing trucking with hydrogen. The idea within the report is that hydrogen is manufactured inside 62 miles of refueling stations, so it’s going to be paying native industrial charges for pure gasoline if that’s the plan.
This report additionally frames the query as hydrogen vs hydrogen, versus as hydrogen vs electrification. That’s the temporary that the staff had, and it’s the identical temporary that one of many researchers had in 2020 once they revealed Hydrogen Delivery and Dispensing Cost, The highest finish of that research was half of hydrogen quantity as the underside finish of this research, and the outcomes are about the identical because the lowest quantity state of affairs, however totally excluded hydrogen manufacturing prices.
In different phrases, a research from the identical group from 4 years in the past discovered that simply delivering hydrogen was as costly as the complete stack on this price workup. Perhaps they didn’t use the identical fashions? Nope. The mannequin is similar, only a completely different model, the Hydrogen Supply Situation Evaluation Mannequin (HDSAM), 3.1 vs 4.5.
Regardless of 4 extra years of proof that delivering and dishing out hydrogen is costlier than estimated and a number of proof that making hydrogen prices much more than $1.50, this new NREL report really has end-to-end manufacturing, supply, and dishing out prices go down.
It’s like validating towards the empirical actuality of hydrogen for vitality and even acknowledging it’s not a requirement within the NREL anymore. It’s just like the a long time of expertise with a number of ranges of hydrogen refueling stations and supply of hydrogen goes to be overturned by 2030. That’s disturbing.
In fact, nobody within the worth chain within the situations on this report is making a revenue, and even making use of a markup to cowl their prices. The report clearly states this, however as everybody goes to be wanting on the major graphics, evaluating the prices to the retail price of diesel and respiration large sighs of reduction, that’s simply not a fantastic alternative both.
However additionally they explicitly exclude all the doable price decreasing subsidies accessible for low-carbon fuels:
- Various Gas Automobile Refueling Property Credit score (30C) for certified various gas automobile fueling property
- Credit score for Manufacturing of Clear Hydrogen (45V)
- Certified Superior Vitality Venture Credit score (48C)
- Credit score for certified business clear autos (45W)
Is that related? In actuality no, however in notion sure. The centralized industrial hydrogen electrolysis manufacturing facility at the least has the potential for energy buy agreements that meet 45V necessities for locality, temporality, and additionality of low-carbon era of electrical energy. Which may get the price per kilogram down into the $2-$3 vary after the subsidy. As famous in my evaluation of the ICCT’s flawed report, native refueling stations gained’t be capable to obtain this. And blue hydrogen won’t qualify for 45V and would solely get a lot decrease carbon seize credit.
In different phrases, any remotely decarbonized hydrogen at refueling stations, no matter pathway, taking off subsidies and including affordable assumptions about markups for prices and earnings results in vastly greater than $1.50 hydrogen. It’s simply not defensible as a alternative in 2024, even for centralized services. At small services at refueling stations it’s doubly indefensible.
But this report and particularly its charts are going go away lots of people with the misunderstanding that hydrogen at refueling stations will probably be dust low-cost. In the event that they discover the $1.50 in any respect and are disturbed it, they’ll see all the rebates and assume that they’ll be relevant and issues will probably be nice.
A transparent takeaway is that NREL needs to be reassessing its HDSAM mannequin. It’s producing outcomes that aren’t aligned with empirical actuality, and the researchers look like unwilling or unable to place up their arms and say so. Mannequin reverence is one thing I identified in my assessment of the PIK Potsdam Institute for Local weather Affect Analysis associated to its LIME-EU and REMIND fashions, each of which have very low price hydrogen prices embedded in them, one thing researchers in a single main report clearly missed. The NREL researchers needs to be studying Thompson’s Escape from Model Land and have the braveness to use skilled judgment.
The NREL report does the dialogue across the precise price of hydrogen for trucking in comparison with alternate options a major disservice. Like many different reviews, it’s artificially low-balling the prices of hydrogen. Why? It’s exhausting to say. Maybe as a result of the truth of the prices is clearly not remotely economically viable and so they actually don’t wish to be those to face up and be counted.
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