So, have you heard the story of the boy who cried “fuel cell vehicle feasibility”?
Don’t worry, this isn’t a re-telling. It’s an investigation of one of the hurdles fuel cells face in their quest for respect from the cleantech crowd. Namely, can the hydrogen ever come clean?
Most hydrogen produced today comes from fossil natural gas through the steam-methane reforming, or SMR, process – and unless hydrogen can be produced competitively from renewable energy, fuel cell technology risks hitting fossil status, itself.
Fuel cells are a polarizing technology (hey, like sunglasses!) thanks in part to boys who cried “fuel cell vehicle feasibility” decades too early. Bullsh*t claims on both sides don’t help the situation, and Toyota’s astonishingly ill-advised anti-EV ad campaign has cost it some of the goodwill it won through the Prius.
I have worked on fuel cells for the past 15 years, and do see promise in the technology, which has proven to be a good fit in certain niches. For example, over 100,000 micro-CHP (combined heat and power) fuel cells have been sold in Japan. These provide all of a household’s hot water needs, along with its first 700 watts or so of electricity. While all-solar households like my in-laws’ may become the norm in Japan, micro-CHP holds promise for multi-unit dwellings (condos/apartments) and in colder, cloudier climes such as Europe’s.
I also own a plug-in hybrid electric vehicle, chronicle Canadian EV sales, and see batteries as our best, fastest way to take an enormous bite out of worldwide transportation emissions.
Now, despite their higher costs and lower “wind turbine-to-tire” efficiency, I still believes fuel cell vehicles will play a supplemental role in decarbonizing transportation.
In many respects, my opinion aligns with that of Greenpeace, which in section 11.3.1 (page 288) of its Energy [R]evolutions 2012 report noted that:
“In the future it may not be possible to power LDVs [light duty vehicles] for all purposes by rechargeable batteries only. Therefore, hydrogen is required as a renewable fuel especially for larger LDVs including light commercial vehicles.”
The Union of Concerned Scientists largely concurs.
Why Worry Where The Hydrogen Comes From?
Since fuel cell vehicles will be lucky to achieve even rounding-error levels of global vehicle sales in the coming decade, readers would be forgiven for thinking the question of where the hydrogen comes from, is moot. Why talk about tomorrow’s hypotheticals, when we can tackle today’s troubles?
Running the numbers, a few tomorrows from now – the end of 2017 – Toyota plans to have sold up to 3,000 Mirai FCEV’s in the United States. The car gets about 60 miles per kg hydrogen (H2), so assuming drivers cover 12,000 miles per year (a bit less than the average Californian, to reflect the limited fueling infrastructure), we can estimate Toyota’s fuel cell forerunners would use about 1.5 tonnes of hydrogen per day.  In two years. Maybe. If everything goes to plan. Which it often hasn’t, in the past. And even the present. (I love my fuel cells, but I need to be honest, eh?)
But there is a rapidly growing market where fuel cells already use 4 times as much hydrogen today – more than 10,000 passenger FCEVs’ worth. It’s the warehouse forklift market.
The Forklift Factor
Segment leader Plug Power had about 5,000 fuel cell forklifts in distribution centers around North America at the end of 2014, which it expects will grow to about 8,000 at the end of the year.
[Disclosure: your contributor owns no stock in Plug Power, Toyota, or any other company mentioned in the article. Besides which, investing is one of his core incompetencies!]
However cheap lithium-ion batteries get, fuel cells are likely to dominate this niche because tearing the battery-charging areas out of their warehouses effectively allows companies to “enlarge” each one by 5 to 10%. The resulting productivity savings are bigger than the cost premium of fuel cells and hydrogen, over lead acid batteries and electricity.
But back to the hydrogen.
If generated from renewable electricity, it would probably take a 40 to 45 MW wind farm to electrolyze those 6 (and rising) daily tonnes of hydrogen. 
While that’s not huge, it’s not tiny, either. Add a few more years of forklift growth and throw in some FCEVs, and we’re looking at enough possible electric demand that hydrogen producers (specialty gas companies such as Praxair or Air Liquide) could start signing PPAs (Power Purchase Agreements) with renewable energy developers.
Of course, that will only happen if renewable hydrogen from electrolysis proves cheaper than fossil hydrogen from natural gas. So, how do these stack up?
Fossil North America …
The cost to produce chemicals in large quantities generally simplifies to the feedstock costs plus the amortization of the capital costs incurred to build the facility. (Labour costs tend to approach 0%.)
As for capital costs, Table 6 of the Nicholas/Ogden paper referenced in endnote  suggests that the capital costs of new electrolyzers and new SMR units are broadly comparable, with electrolyzers perhaps being a bit higher.
Which leaves feedstock costs.
Building on Table 7 of the paper, I have estimated the feedstock costs for renewable and fossil hydrogen. The screengrab below comes from a spreadsheet available at www.tinyurl.com/FCStats (on the “Renewable Hydrogen” tab).
Given North America’s fracking-assisted low natural gas prices, fossil hydrogen will be cheaper than renewable hydrogen for the foreseeable future. A hydrogen producer would have to sign a wind energy PPA for the equivalent of 1.1 cents/kWh to have a shot.
Unfortunately, PPAs in the United States are still generally north of 2 or 3 cents – and that’s with a small assist from the Wind Production Tax Credit.
Carbon taxes are unlikely to make a difference, as a $20/tonne CO2 price would only increase the cost of fossil hydrogen production from about $0.63 to $0.74 cents per kg. For renewable hydrogen to be competitive at 2 cents/kWh electricity, the carbon price would have to be north of $100/tonne. (We can dream…)
An October 2010 white paper from Praxair  does estimate that 50–90% of the CO2 produced in SMR plants could be captured at a carbon price of $40 to $50/ton. Unfortunately, hydrogen plants don’t generate enough CO2 to make transporting it worthwhile, and it’s entirely possible that the gas would get injected into aging wells … where it would help push more oil out of the ground (a process known as “enhanced oil recovery”).
So, absent far higher natural gas prices (whether from drilling economics or carbon pricing) it’s likely that in the United States, hydrogen will continue to be fossil-derived. Perhaps this is why the California Energy Commission legislated that 33% of the hydrogen sold through stations it subsidized had to be derived from renewable sources; policymakers may have realized that without the legislation, it’d just be another fossil fuel.
… and Renewable Europe?
Europe, however, is a different story. Natural gas costs are roughly triple – and countries are keenly interested in being less reliant on Russia for supply.
If European specialty gas plants could source renewable electricity for about 3 cents/kWh, when it comes time to increase production or replace aging facilities, it might just be cheaper for them to choose electrolysis over SMR.
Wholesale electricity prices in Europe aren’t quite that low, but renewable electricity certificates in Sweden and Norway are already in the right range, with upcoming wind projects expected to drive prices lower.
Wrinkles do remain – would utilities allow industry to access wholesale rates or renewable electricity certificate pricing? – but costs are in the right ballpark. Perhaps progressive utilities with access to cheap wholesale electricity might partner with electrolyzer and/or specialty gas companies with the right technology and infrastructure. Or maybe carbon prices and/or low-carbon fuel standards could also tip the balance towards renewable hydrogen when new facilities are planned.
Wrinkles notwithstanding, it does seem that, in parts of Europe, renewables-derived hydrogen may become more compelling than fossil hydrogen –not just on an idealistic or moral basis, but on a mercenary, profit basis as well.
Whenever and wherever that crossover happens, local fuel cell proponents will surely sigh with relief that they no longer have to acknowledge valid criticisms about where their fuel comes from. (Toyota will no doubt bring out a new ad in its “Fueled by Everything” campaign to commemorate the event.)
And while carbon pricing may get credit for helping hydrogen “come clean,” especially if attempts are made to account for fugitive methane emissions, it would be more accurate to give the recognition to the wind industry, for steadily driving costs down year after year as it has marched down the experience curve.
After all, without those cost reductions leading to the aggressive buildout of wind capacity, which in turn pancaked wholesale electricity prices, few people would consider making hydrogen from cleanly electrocuted water, and it would ultimately continue to come from dirty holes, dug deep in the ground.
Acknowledgements: the author would like to thank the following individuals for their assistance as the article evolved: Al Burgunder (Praxair); Andy Marsh (Plug Power); David Reichmuth (Union of Concerned Scientists); Geoff Budd (ITM Power); Michael Nicholas (UC Davis). All errors and inaccuracies are the author’s.
 3000 cars x 12,000 miles/year x 1 kg H2/60 miles = 600,000 kg H2/year = 600 tonnes/year
600 tonnes/year x 1 year/365 days = 1.6 tonnes/day
The 60 mile per kg H2 figure comes from the Mirai getting 300 miles per 5 kg fill-up, in Toyota’s press materials.
 It takes about 55 kWh of electricity to electrolyze and compress 1 kg H2, according to the following paper:
Michael Nicholas and Joan Ogden, An Analysis of Near-Term Hydrogen Vehicle Rollout Scenarios for Southern California, UC Davis Institute for Transportation Studies, February 2010.
To generate 6000 kg H2 per day, then, would require:
6000 kg H2 x 55 kWh/kg H2 = 330,000 kWh = 330 MWh
There are 24 hours in a day, so the hydrogen would require a continuous power of:
330 MWh/24h = 14 MW
Assuming a wind farm has 33% capacity factor, to provide an average 14 MW per day its size would have to be:
14 MW/0.33 = 42 MW
Given the uncertainties, call it a 40 to 45 MW wind farm.
Going from compressed to liquefied hydrogen would take more energy, and a bigger wind farm. But that energy is also required to liquefy hydrogen from Steam Methane Reforming plants.
 Dante Bonaquist, Analysis of CO2 Emissions, Reductions, and Capture for Large-Scale Hydrogen Production Plants, Praxair, Oct 2010.
Top image by Mercedes-Benz