Hydrogen Steps Up, Quietly and Boldly

March 27, 2018

The CEO of Plug Power, Andy Marsh, said it best, “in 2017, there was more movement in the hydrogen industry than any previous year.” Plug Power is an industry leader in materials handling at distribution centers, and has been developing solutions for packaged goods delivery, as well as transportation solutions in China. They’ve seen $250 billion in hydrogen fuel cell investments from the world’s largest retailer and the largest internet retailer.

Others in the hydrogen industry echo Marsh’s view. ITM Power, which built and supplied the electrolyzer for their own fueling station in Riverside, California, says that the station is experiencing an astounding 20% month-over-month growth, and is almost exceeding capacity. ITM’s electrolyzer produces hydrogen at capacity, now supplemented from other sources. According to Steve Jones, Managing Director of ITM Power’s California office, more stations are needed, and increased support from the legislature is needed for further station funding for larger stations, particularly for renewable hydrogen. Jones was heartened by a recent California Energy Commission solicitation asking for proposals for a 1000 kg/d renewable hydrogen facility.

More hydrogen stations are needed, and increased support from the legislature is needed for further station funding for larger stations, particularly for renewable hydrogen.

But equally bullish industrial gas giant Linde LLC, is supportive of opportunities to build a major renewable hydrogen production facility to meet California’s future booming demand. Linde sees strong indications from the market, and from the state funding investments in heavy duty hydrogen fuel cell vehicles. Linde manufactures equipment for fueling stations, and they produce and sell hydrogen. Linde even built a few retail stations in California to help solve the chicken and egg problem between stations and vehicles. According to Nitin Natesan, Linde’s business development manager for hydrogen fueling, they believe that others are already taking up the slack. And as they do, Linde is ready to help make them successful.

But what about the OEMs? As Linde’s Natesan observes, “the battery electrics are getting lots of press. But hydrogen is there, too. Toyota is one of the largest battery manufacturers in the world. What does it say when they are going all-in on hydrogen?”

Prodigious amounts of ink are being given to developments in the battery electric arena, while hydrogen industry coverage is a bit quieter. Some see that as a sign that interest in hydrogen is waning. Craig Scott, director of the advanced technologies group at Toyota Motor Sales USA, believes some media reports have been misleading with questionable motives.  Despite this, Scott thinks that fuel cell electric vehicles will have a leading position amongst zero emission solutions.  “But at the end of the day,” said Scott, “no one will build a product if it lacks economic viability in the long term and likewise most customers won’t pay more for a product with less utility.”

Other auto manufacturers may be agreeing with Scott. Scott points to KMPG’s annual auto executive survey, where 68% of auto executives thought that fuel cells were the future, and that battery electrics would ultimately fail.

Government agencies are a bit more circumspect. The California Air Resources Board, among others, believes that both battery and fuel cell electric vehicles are essential to meeting air standards. “Advances in batteries have heightened interest by some in battery electrics,” said Gerhard Achtelik, manager of zero emission vehicle infrastructure at the California Air Resources Board. But Achtelik also pointed to major advancements in commercializing fuel cell vehicles, including buses and heavy duty trucks. He noted the fuel cell bus production line at bus manufacturer El Dorado, and a fuel cell bus product by New Flyer.

Electrolyzer and fuel cell company Hydrogenics has also been having success with their Celerity product for buses and trucks. Bill Elrick, Executive Director of the California Fuel Cell Partnership sees progress continuing, and cites the long history of fuel cell buses.  “For one or two buses, BEV (battery electric vehicles) is easy. At scale, it’s tougher.”

On the heavy duty truck side in 2017, Achtelik noted the fuel cell work by Kenworth as demonstrating the increased interest in fuel cells. They’ve been developing a Class 8 fuel cell truck with industry pioneers Ballard Power Systems. A Kenworth truck is also the chassis for a fuel cell truck being developed by Toyota. And Hydrogenics also has been working on Class 8 trucks for the Los Angeles area port use.

A Kenworth truck is also the chassis for a fuel cell truck being developed by Toyota. And Hydrogenics also has been working on Class 8 trucks for the Los Angeles area port use.

Battery electric trucks are also adding fuel cells as range extenders. Plug Power has been testing with FedEx delivery trucks. The battery electrics just didn’t have enough range, and adding batteries would have taken away from valuable cargo space.

For those that express concern about state efforts, Achtelik quickly points to the recent order by Governor Edmund G. Brown, Jr., which essentially doubles down on the state’s commitment to fuel cells, both in terms of vehicles and stations.

A leader on the international stage, CARB tracks hydrogen progress internationally. Achtelik notes the hydrogen cities announced in China as further evidence of increasing hydrogen interest.  Plug Power’s Marsh was even more effusive about progress in China. Marsh pointed to the tremendous amount of battery electric adoption in China, but now that there is a Chinese strategic plan focus on fuel cells, many of the limitations of battery electrics can be addressed.

Going even farther, Marsh also said that in 2017, the formation of the Hydrogen Council showed commitment to hydrogen as a high level agenda item among many cooperating companies. 2017 also saw a major commitments of 400 station in Germany by 2023. Germany will be ready as automakers introduce new models and increase production. Toyota, which has produced 3,000 of their fuel cell electric Mirai vehicles, has announced production of 30,000 from the early 2020s. And in late 2016, Honda released its Clarity FCEV. Honda dealers have reported wait lists of eager wannabe owners extending out many months.

All has not been perfect. Where fuel cell electric vehicles have been rolled out, infrastructure challenges remain. Jeff Serfass, Executive Director of the California Hydrogen Business Council observed that while battery electrics may have had unobstructed sales because they don’t require infrastructure, they’ve already been around for 10 years, with limited integration into the light duty fleet. “But,” Serfass said, “I’ve no doubt that fuel cells provide a full replacement for vehicles, and BEVs don’t.”

Serfass sees the industry going through a learning curve. Issues include the availability of hydrogen supply, equipment performance, and problems associated with the reliance in some regions on one station. Linde’s Natesan can relate to that, as it owns and operates the only hydrogen fueling station in Sacramento. “We designed the station to serve six vehicles per hour, yet sometimes we have 12 people in line.” Station builders have been challenged by the rate of change. “We’ve been learning in a compressed timescale.” Natesan said, “Since 2010, the industry has changed fueling protocols three times.”

Interest in hydrogen fuel cells as a transportation fuel may be at its highest level ever, with accelerating upside occurring. While 2017 may have been the best ever for the technology, 2018 and beyond are shaping up to be just the beginning for hydrogen.

The fast rate of change, challenging to some, point a path to success. “Costs have been coming down continuously over time,” according to Marsh. “The migration to metal plates, and improvements in catalyst formulation have advanced over the last two years. Significant cost reductions are coming to fuel cells.”

Marsh may be right that interest in hydrogen fuel cells as a transportation fuel may be at its highest level ever, with accelerating upside occurring. While 2017 may have been the best ever for the technology, 2018 and beyond are shaping up to be just the beginning for hydrogen.