fuel cells

Can the US Catch Up in the Green Hydrogen Economy?

A new report highlights the massive potential to decarbonize transport, industry and power grids — and the massive investments needed to get there.

By: JEFF ST. JOHN
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Green hydrogen industry heavyweights line up behind boosting U.S. investment.

The U.S. needs a massive green hydrogen industry to decarbonize its electricity, transportation and industrial sectors, and major investments and policy changes today to enable it to grow to its full potential in the decades to come. 

So says a new report sponsored by major oil companies, automakers, hydrogen producers and fuel cell manufacturers pushing U.S. policymakers to follow the lead of the European Union in making a major commitment to building the infrastructure to grow its green hydrogen capacity. 

The Roadmap to a U.S. Hydrogen Economy report forecasts that hydrogen from low-carbon sources could supply roughly 14 percent of the country’s energy needs by 2050, including hard-to-electrify sectors now dependent on natural gas such as high-heat industrial processes and manufacturing fertilizer.

Hydrogen to power fuel cells will also augment battery-powered vehicles in decarbonizing the transportation sector, particularly for vehicles requiring long ranges and fast refueling times such as long-haul trucks, said Jack Brouwer, a professor at the University of California at Irvine and associate director of the National Fuel Cell Research Center, in a Monday webinar introducing the report.

Meanwhile, wind, solar and nuclear power that might otherwise be forced to curtail generation when the power grid doesn’t need it could be used to electrolyze water to generate hydrogen that can be stored to power natural-gas-fired turbines needed for grid reliability or on-site fuel cells to maintain continuous power at data centers, hospitals and other critical sites, he said. 

The report, prepared by consultancy firm McKinsey, is “agnostic” as to how this future hydrogen supply is generated, “as long as it’s low-carbon,” Brouwer said. Beyond electrolysis via zero-carbon electricity, that could include steam reforming of natural gas — the way most of today’s hydrogen supply is made — using carbon capture and storage to reduce its greenhouse gas impact, or employing less fully developed methods such as waste gasification, he said. 

The U.S. already generates about 11.4 million metric tons of hydrogen per year, with an estimated value of about $17.6 billion. But reaching the report’s targets could drive about $140 billion per year in revenue and support 700,000 jobs by 2030, and about $750 billion per year in revenue and a cumulative 3.4 million jobs by 2050, it states. 

The U.S. lags behind China, Japan and the European Union in infrastructure and research investments to reach this potential. Government and industry investment in hydrogen as an energy carrier adds up to $2 billion per year in Asia and the European Union, the report finds, while U.S. Department of Energy funding for hydrogen and fuel cells has ranged from approximately $100 million to $280 million per year over the last decade. 

A roadmap for green hydrogen expansion 

The report doesn’t set specific dollar targets for U.S. investment. But it highlights the need for capital to build the hydrogen production and transport infrastructure to carry it to end users, incentives to stimulate private-sector investment, codes and standards to regulate a growing supply chain, and research into still-nascent technologies. 

It also lays out a phased approach for building on existing hydrogen use cases to expand to new ones. Experience with the roughly 25,000 fuel cell-powered forklifts in use in the U.S. will enable expansion to larger classes of vehicles, for example, and fuel cells being used for on-site power at data centers can serve as models for integrating hydrogen into large-scale generation. 

Major challenges lie ahead of this growth, Brouwer said. To reach the report’s goals, the number of fuel cell vehicles will have to grow from today’s roughly 2,500 to nearly 1.2 million by 2030, and the number of fueling stations will have to expand from about 100 today to more than 4,300. And advances are needed to blend existing pipelines will be needed to expand its use. 

But utilities across the country are relying on these kinds of advances to allow them to meet goals of zero carbon by 2050. One example is Gulf Coast utility Entergy’s work with Mitsubishi Power to blend hydrogen into its gas mix at its power plants and plans to convert an underground gas storage facility to hold hydrogen as part of its long-term decarbonization goals. 

Former Energy Secretary Ernest Moniz said at Wood Mackenzie’s Power & Renewables conference last week that “federal and state incentives to build a few major regional hubs for hydrogen” will be a critical early step for proving the fuel’s cost-effectiveness as a decarbonization strategy. “We think we should not be sitting here thinking of hydrogen as something for the 2030s and 2040s — it is, but let’s also make it something for the 2020s,” Moniz said. 

U.S. green hydrogen activity in the works

Andy Marsh, CEO of report sponsor Plug Power, noted Monday that the company’s hydrogen fuel cell-powered forklifts and distribution center vehicles used by customers like Amazon, Walmart, Home Depot and Lowe’s are using about 27 million tons of hydrogen per day, supplied by its more than 100 fueling stations across the country. It’s expanding into heavy-duty vehicles to serve ports in the U.S. and Europe, and into producing stationary fuel cells for data centers and distribution hubs. 

Last week Plug Power signed a deal with Brookfield Renewable Partners to supply 100 percent renewable power for what Marsh described as a “gigafactory” it plans to build in an as-yet-undisclosed location. The factory will be capable of producing up to 60,000 fuel cells and about 500 megawatts of green hydrogen electrolyzers per year, he said. 

Toyota, one of the first major automakers to commit to fuel cell vehicles with its Mirai sedan, is also planning to expand production of hydrogen-powered semitrucks now being tested at the ports of Los Angeles and Long Beach, Senior Engineer Jackie Birdsall said. Toyota sees the growth of light-duty fuel cell vehicle markets driving cost reductions through economies of scale, along with heavy-duty fuel cell vehicles increasing demand for hydrogen fuel production and distribution. 

Dutch oil giant Shell, which is planning a gigawatt-scale, wind-power-driven hydrogen cluster in the Netherlands, is also building hydrogen fueling stations in Los Angeles to serve these ports’ fuel cell vehicle’s needs, said Wayne Leighty, the company’s hydrogen fuel business development manager. Shell is also investing heavily in EV charging businesses centered on battery-powered vehicles, but “hydrogen fuel cells and electric vehicles are quite complementary” for meeting different needs, rather than being mutually exclusive options for zero-carbon transportation, he said. 

French industrial gas manufacturing giant Air Liquide is investing $150 million into a renewable liquid hydrogen generation plant in Nevada set to generate 30 tons per day, or enough to supply 40,000 fuel cell vehicles, when it opens in 2022, said Karine Boissy-Rousseau, president of the company’s North American hydrogen energy and mobility business. It’s also investing about $40 million to renovate a hydrogen facility in Quebec, Canada to double its capacity to convert renewable hydropower and wind power to green hydrogen to 20 megawatts by year’s end, she added. 

Amazon Invests In Hydrogen Fuel Cell Electric Vehicles

By: Tina Casey on Triple Pundit

Amazon Hydrogen
Retail giant Amazon made waves with its recent forays into the entertainment field. And now it looks like the sprawling enterprise is about to pull the rug out from under hydrogen fuel cell skeptics.

Last week the company signed a deal with fuel cell innovator Plug Power for a new generation of zero-emission, hydrogen-powered electric forklifts and other equipment at its fulfillment centers.

Warehouse operations aren’t the most exciting sector in the auto industry, but the new Amazon forklift deal could make a big difference for the future of fuel cell electric cars. That market has been slow to take off, but the Amazon announcement adds momentum to the trend, helping to keep investors and auto manufacturers interested in pushing the technology forward.

A big deal for hydrogen fuel cell vehicles

Fuel cell vehicles run on electricity, like the now-familiar battery electric vehicles. Both types of EV emit no air pollutants. The main difference is that fuel cells generate electricity on-the-go through a chemical reaction. Battery EVs run on stored electricity.

That difference looms large in warehouse operations, where excess fat shaved from time and space translates into big bottom-line savings.

Battery-powered forklifts require relatively long charging times, and extra storage space for battery charging. In contrast, fuel cell forklifts can be fueled up in a matter of minutes, like an ordinary gas-powered vehicle, and they don’t require a “battery room” or other excess storage.

Hydrogen fuel cell forklifts have already begun to establish a solid track record in the logistics sector, and it looks like Amazon didn’t take much convincing.

The recent deal enables the company to acquire more than 55 million common shares in Plug Power in connection with a $600 million commitment from Amazon to purchase goods and services from Plug Power.

This could be just the beginning…

Amazon and Plug Power plan on a relatively modest start for the new venture, with a total of $70 million in buys this year for fuel cell equipment at selected fulfillment centers.

What’s really interesting about the deal is the “and services” part of the agreement. Forklifts appear to be just the start of a wide-ranging collaboration between the two companies, leading to other applications.

Here’s Plug Power CEO Andy Marsh enthusing over the potentials:

“This agreement is a tremendous opportunity for Plug Power to further innovate and grow while helping to support the work Amazon does to pick, pack and ship customer orders. … Our hydrogen fuel cell technology, comprehensive service network, and commitment to providing cost-savings for customers has enabled Plug Power to become a trusted partner to many in the industry and we are excited to begin working with Amazon.”

To put this in perspective, consider that just a few years ago it was difficult to get investors interested in fuel cell technology. The hydrogen economy dream was hitting a harsh reality — namely that the technology was not quite ready for prime time. Growing competition from battery-powered EVs also helped to shove hydrogen fuel cells down the ladder.

TriplePundit’s RP Siegel interviewed Marsh about the fuel cell dilemma in 2012, and the CEO made these observations about Plug Power, forklifts and the future of fuel cell EVs:

“With limited capital, we had to be selective in our decisions about which markets to go after. … The one that really jumped out at us was replacing batteries in fork lift trucks with fuel cells. How big of a market could that be? Well, in the US there are over 1.5 million forklift trucks, and worldwide, the number is 6 million.

“We chose this market because it was a way to build a profitable business that would allow us to attract large customers in a relatively large market … as we continue to drive down our costs, we should be at parity with IC [internal combustion] engines in five to six years, at which point we’ll be ready to expand into other areas.”

With the new Amazon partnership, it looks like Plug Power is hitting that five- to six-year timeline for growing into other areas.

Fuel cell EVs hit the streets

Just a wild guess, but in a few years you could see Amazon introduce its own fuel cell EV for street use.

That may seem far-fetched, but consider that Google began dabbling in the related field of self-driving cars in 2015 and is now a burgeoning leader in the space. (That project has since been transferred to Google’s parent company, Alphabet.)

Apple is also inching into the self-driving car market.

Intel is another tech company putting feelers into the self-driving sector. Just last month it took a giant step with a $15.3 billion acquisition of the Israeli startup MobilEye.

Amazon will have to act fast if it wants to catch the train. Mainstream auto manufacturers are beginning to add fuel cell EVs to their rosters at a quickening pace.

Toyota was among the first to make a firm commitment to the field with its fuel cell Mirai. The company’s efforts include the all-important transition to sustainable hydrogen and support for growing the network of hydrogen fuel stations, along with a foray into the forklift sector.

Other companies introducing fuel cell EVs to the consumer market include GM and Honda.

So, who’s giving fuel cell EVs the stinkeye?

In response to the Amazon fuel cell forklift news, last week MIT Technology Review pumped out a brief article with this observation about the consumer market:

“Attempts to convince the public to embrace hydrogen-powered cars have flopped. While some automakers continue to push on with the vehicles, other are increasingly having second thoughts.”

Calling Debbie Downer!

On the brighter side, last December the journal IEEE Spectrum took an in-depth look at the potential for the fuel cell EV market to bust loose, penned by the director of the National Fuel Cell Research Center at the University of California, Irvine.

The article emphasized that both battery and fuel cell EVs will have a place in the zero-emission market of tomorrow, but fuel cells will give batteries a run for the money based on a number of advantages including range and refueling time.

The author, Scott Samuelson, also makes a good case that excess renewable energy can be used to manufacturing sustainable hydrogen for fuel cell vehicles.

That growing market could provide an important incentive for investors to accelerate the pace of renewable energy development.