NRC Study: Supporting a Transition to Hydrogen Fuel Cell Vehicles in the US Will Require About $200B Over Next 16 Years
17 July 2008
While hydrogen fuel cell vehicles (HFCVs) could alleviate US dependence on oil in transportation and significantly reduce US emissions of carbon dioxide, bringing the technology from its current state to market viability will require substantial time and additional investment, according to a new study by the National Research Council.
The study estimates a total public-private investment of about $200 billion would be required from 2008 to 2023, at which point fuel cell vehicles would become competitive with gasoline-powered vehicles. The government cost to support the transition would be roughly $55 billion. This funding includes a substantial research and development program ($5 billion), support for the demonstration and deployment of the vehicles while they are more expensive than conventional vehicles ($40 billion), and support for the production of hydrogen ($10 billion).
Private industry would be investing far more, the authors concluded: about $145 billion for R&D, vehicle manufacturing, and hydrogen infrastructure over the same period.
Current US government expenditures in this area, largely for R&D, are about $300 million per year. If 2 million HFCVs are to be on the road by 2020 (the maximum number determined practicable by the study), R&D funding may have to be increased by as much as 20% over the next several years.
The National Research Council (NRC) study was performed in response to a congressional request in the Energy Policy Act of 2005. The study estimated the maximum practicable number of hydrogen fuel cell vehicles (HFCVs) that could be deployed in the United States by 2020 and beyond, together with the investments, time, and government actions needed to carry out this transition. The study also assessed the consequent reductions in US oil consumption and emissions of carbon dioxide that could be expected and compared those reductions with the potential impact that the use of alternative vehicle technologies and biofuels might have on oil consumption and CO2 emissions.
One of the primary conclusions of the report is that:
A portfolio of technologies including hydrogen fuel cell vehicles, improved efficiency of conventional vehicles, hybrids, and use of biofuels—in conjunction with required new policy drivers—has the potential to nearly eliminate gasoline use in light-duty vehicles by the middle of this century, while reducing fleet greenhouse gas emissions to less than 20 percent of current levels. This portfolio approach provides a hedge against potential shortfalls in any one technological approach and improves the probability that the United States can meet its energy and environmental goals. Other technologies also may hold promise as part of a portfolio, but further study is required to assess their potential impacts.
Other main conclusions from the report were:
Lower-cost, durable fuel cell systems for light-duty vehicles are likely to be increasingly available over the next 5-10 years, and, if supported by strong government policies, commercialization and growth of HFCVs could get underway by 2015, even though all DOE targets for HFCVs may not be fully realized.
If appropriate policies are adopted to accelerate the introduction of hydrogen and HFCVs, hydrogen from distributed technologies can be provided at reasonable cost to initiate the maximum practicable case. If technical targets for central production technologies are met, lower-cost hydrogen should be available to fuel HFCVs in the latter part of the time frame considered in this study. Additional policy measures are required to achieve low-carbon hydrogen production in order to significantly reduce CO2 emissions from central coal-based plants.
The maximum practicable number of HFCVs that could be on the road by 2020 is around 2 million, out of a light-duty fleet of 280 million (0.7%). Subsequently, this number could grow rapidly to as many as 60 million by 2035 and more than 200 million by mid-century, but such rapid and widespread deployment will require continued technical success, cost reductions from volume production, and government policies to sustain the introduction of HFCVs into the market during the transition period needed for technical progress.
While it will take several decades for HFCVs to have major impact, under the maximum practicable scenario fuel cell vehicles would lead to significant reductions in oil consumption and also significant reductions in CO2 emissions if national policies are enacted to restrict CO2 emissions from both mobile and stationary sources (such as central hydrogen production plants).
The unit costs of fuel cell vehicles and hydrogen in the Hydrogen Success scenario—the maximum practicable case—decline rapidly with increasing vehicle production, and by 2023 the cost premium for HFCVs relative to conventional gasoline vehicles is projected to be fully offset by the savings in fuel cost over the life of the vehicle relative to a reference case based on the EIA high-oil-price scenario. At that point, according to the committee’s analysis, HFCVs become economically competitive in the marketplace. The committee estimated that about 5.5 million fuel cell vehicles would be on the road at that time.
Policies designed to accelerate the penetration of HFCVs into the US vehicle market will be required to exploit the long-term potential of HFCVs. The committee concluded that these policies must be durable over the transition time frame but should be structured so that they are tied to technology and market progress, with any subsidies phased out over time. Such policies are likely to deliver significant long-term reductions in US oil demand, but additional policies limiting greenhouse gas emissions will be required in order to also reduce CO2 emissions significantly.
With appropriate policies or market conditions in place, potential synergies between the transportation sector and the electric power sector could accelerate the potential for reduced oil use and decreased CO2 emissions as benefits from the use of hydrogen in both sectors. In the near term, electrolysis of water at refueling sites using off-peak power, and in the longer term (after 2025), cogeneration of low-carbon hydrogen and electricity in gasification-based energy plants, are potential options that offer additional synergies.
Continued advancements in conventional vehicles—which includes hybrid electric vehicles—offer significant potential to reduce oil use and CO2 emissions through improved fuel economy, but policy measures and/or significant long-term increases in fuel cost probably will be required to realize these potential fuel economy gains in a significant number of on-road vehicles.
Although use of corn- and oil-based biofuels can provide some benefits in reducing US oil use and CO2 emissions, cellulosic biofuels will be required for such benefits to be significant. Lower-cost biofuel production methods and conversion processes will have to be developed for large-scale commercialization, but the initial high costs of biofuels, together with other barriers, may limit their market potential, absent policy interventions or significant oil price increases or supply disruptions.
The committee’s analysis indicates that at least two alternatives to HFCVs—advanced conventional vehicles and biofuels—have the potential to provide significant reductions in projected oil imports and CO2 emissions. However, the rate of growth of benefits from each of these two measures slows after two or three decades, while the growth rate of projected benefits from fuel cell vehicles is still increasing. The deepest cuts in oil use and CO2 emissions after about 2040 would come from hydrogen.
The committee chose not to include plug-in hybrid electric vehicles (PHEVs) in its alternative vehicle case even though it noted that PHEVs have “significant long-term potential.” The main issue for the committee was predicting the rate of battery advancement to achieve significant driving distances. Such advancement, in the committee’s view, represents more than evolutionary technology.
The National Research Council (NRC) functions under the auspices of the National Academy of Sciences (NAS), the National Academy of Engineering (NAE), and the Institute of Medicine (IOM). The four organizations are collectively referred to as the National Academies.
What a f*&%ing joke! Where did they dig up these bozos. "The committee chose not to include plug-in hybrid electric vehicles" ... did they write that with a straight face? (or a pocket full of cash from the H2 lobby)
Posted by: OldNeil | 17 July 2008 at 02:47 PM
Sounds like warm fusion to me - success projected in 20 years time. What's the buy-down required to bring solar energy and wind energy to grid parity within 10 years? (Hint: much less than $200 million.)
Posted by: NorthernPiker | 17 July 2008 at 03:19 PM
No, no, no. It's a simple question. Do we have more lithium for BEVs or platinum for FCVs?
Posted by: Healthy Breaze | 17 July 2008 at 03:41 PM
The report seems to contain contain nothing but maybes and is unsure about those. But who really thinks ten, twenty, and thirty year studies can be definitive?
It appears to me that fuel cell construction technology and the methods for on-site handling H are progressing so fast that the utilization barriers can fall within a decade.
The supply side of H2? Well, no one suggests we can get it free, or w/o the expenditure of another form of energy. And I expect building a national distribution network could not be afforded even if it met cost estimates, which it would not.
IMO our energy woes must be overcome by generating more electricity w/o fossil fuels, distributing it on better grids. And the cost advantage of electricity will then steadily displace NG in homes and also defeat the ICE in the marketplace.
Posted by: K | 17 July 2008 at 04:05 PM
I hope those that have kept up with HFCV research will objectively evaluate this and post.
I agree that this can readily be interpreted to say "there must be a better way". Using all the best estimates it seems like a huge risk of going down the wrong road.
Who's pushing HFCVs anyway, who are the "H2 lobby" ?
Posted by: ToppaTom | 17 July 2008 at 04:13 PM
The most remarkable thing about this Study are the milestones - 2015, 2023, 2040, mid-century? With oil independence that far away and little indication of oil prices falling below $100, we are truly witnessing the re-distribution of Western civilization wealth to oil-producing nations. Without comparable leaps in technology and industrialization that western countries had to go through throughout the mid 20th century, the oil-producing world is inheriting(gouging?) its way to 1st world status. Interesting to see if the people and cultures develop with that wealth rather than have a wide chasm from ultra-rich sheikh to dirt-poor, uneducated, unhealthy peasant. There is more to being a rich country than the size of your skyscrapers, Dubai.
Posted by: Jer | 17 July 2008 at 04:18 PM
The current and near future source of H2 is reformed fossil fuels, like natural gas. I see a red herring here create by the fossil fuels industry to burn government money that should be redirected into renewable/solar power generation and electric drive transportation. Just think if all this research money were made available for battery/renewable/solar mass production development, how far we could go toward solving our economic problems.
The name of the game in energy politics has been and still is to slow down BEVs as long as possible. The H2 car is vaporware...too costly and too far in the future.
Posted by: Lad | 17 July 2008 at 04:24 PM
I think the uptake of HFCV (likely via plug-in as a hedge) will be largely dependent on the disposable income of the Western middle class over the next 2 decades and the auto companies' recognition of that potential market. As with television, single-family homes, cars, air travel, etc., during the last century, the middle class will need to see vision, value, and convenience with the HFCV products brought to market. We can go on all night with issues such as global warming, oil independence, grid issues, engineering concerns, and energy efficiency... but truly the middle class consumer will only purchase a compelling product that supports their lifestyle goals and dreams (road trips, commuting, reasonable fuel costs, cargo/passenger capacity, fuel-up convenience, value).
If the carmakers can sell consumers on HFCV the way electronic companies did with laptops and HDTV (and the digital spectrum) than we have a hydrogen future ahead of us starting in 12 to 15 years.
Posted by: Jer | 17 July 2008 at 04:31 PM
It is easy to boggled by the size of the numbers presented, but when you compare that to R&D and distribution in the laptop, flat screen tv, and cel phone industries, it really is nothing - and the market for vehicles is far larger.
Posted by: Jer | 17 July 2008 at 04:40 PM
By 2015, the date they pretend to have implementation, the BEV will be showing Hydrogen cars as a joke.
And the idea of not including the PHEV because battery technology may advance is stupid. We can predict the full implementation of the BEV would be (is) quite successful just using batteries available today with no further development.
This report is a bad steer towards the hydrogen highway.
Posted by: | 17 July 2008 at 06:06 PM
This study began in 2005 which was before breakthroughs in battery technology changed everything. But still, can you imagine the study continuing to completion without considering battery electric?
Posted by: d burgdorff | 17 July 2008 at 06:15 PM
It's amazing that H2 combustion gets left on the curb like a red-headed stepchild. Better yet, how about ammonia (NH3)? Engines can be modified and even retrofit to burn it and it's a completely renewable, carbon-free fuel. NOx emissions are even easier to control in NH3 combustion. There are even NH3 pipelines all across the middle of the US....yet DOE doesn't consider it an alternative fuel possibility...
Posted by: Rainmaker | 17 July 2008 at 07:31 PM
While the whole BEV concept is great, it isn't yet a complete solution. There are too many high-mileage applications for state-of-the-art battery performance. Trucks and buses for instance need too much power for too long a cycle each day. All current battery technologies have a cycle limitation that hinders adoption as well. That said, it would work for my commute and I would buy tomorrow if the product was there (don't feel safe in a tiny little Tesla in rush hour on the Florida Turnpike).
Posted by: Rainmaker | 17 July 2008 at 07:38 PM
$200 B over 16 years is a surprisingly modest number, considering $700 B spent yearly to import petroleum into the USA, or the $200 B/yr. spent on the Iraq war. This is quite a bit lower to what I've projected it would cost to implement the Hydrogen Economy, what a pleasant surprise!
There are several non-platinum catalysts being demonstrated for PEM FC. And then H2-ICE is a real possibility as well, with thermal efficiency of nearly 50% when optimized to run on H2, thanks to the rapid combustion characteristic of H2.
Overall, H2FCV's overall efficiency from renewable energy will be comparable to BEV, and not as low as many of us are lead to believe by those not keeping up with rapid advancements in H2 technologies.
This article has nothing against PHEV or BEV. It's simple a projection for future of HFCV. May be there'll be another article for BEV someday.
HFCV's are vaporwares? There are many fine examples of HFCV on the road right now by leading auto companies like GM, Ford, Honda, Toyota, BMW, MB, Huyndai, etc...And many more will be leased to customers in the near future.
Posted by: Roger Pham | 17 July 2008 at 07:58 PM
These guys are showing signs of addiction to hydrogen research.
Gradual advances in battery technology is exactly what we need to have PHEV vehicles on the road in just a few years. In my estimate the advances in light weight materials could advance PHEV by just as much.
Posted by: Lulu | 17 July 2008 at 07:59 PM
Rainmaker: Trucks and buses for instance need too much power for too long a cycle each day.
Trucks, buses, and other things are a relatively surprisingly small fraction of the total:
After the usual rounds of efficiency improvements -- electrified rail for long-haul transport would be a good step -- isn't entirely crazy to just biomass the entire lot.
Posted by: mdf | 17 July 2008 at 08:09 PM
Roger: read the article:
"The committee chose not to include plug-in hybrid electric vehicles (PHEVs) in its alternative vehicle case even though it noted that PHEVs have “significant long-term potential.” The main issue for the committee was predicting the rate of battery advancement to achieve significant driving distances. Such advancement, in the committee’s view, represents more than evolutionary technology."
These jokers are stating that PHEVs will require "more than evolutionary" improvements in the batteries? Try telling that to GM or Toyota!
What industry are you in Roger?
ToppaTom: "Who's pushing HFCVs anyway, who are the "H2 lobby" ?" Follow the money. Who's going to sell you the H2? Oil and gas companies have the resources and the distribution locations (gas stations).
Posted by: OldNeil | 17 July 2008 at 08:33 PM
Overall, H2FCV's overall efficiency from renewable energy will be comparable to BEV, and not as low as many of us are lead to believe by those not keeping up with rapid advancements in H2 technologies.
Facts ? Figures ? No way this can be true without redefining thermodynamics !
Posted by: François | 17 July 2008 at 10:29 PM
Needless to say: Most if not all fuel cell cars are hybrids and need batteries as well.
Posted by: globi | 17 July 2008 at 11:59 PM
There are two issues with Hydrogen that keep being ignored. Hydrogen leaks from containers and its effects in the atmosphere, like water vapour concentrations, will cause problems with the ozone layer. Nobody knows at what concentrations real problems will start to occur, but they will occur and we may find that Hydrogen needs to be banned like other ozone depleting gasses. And hydrogen is dangerous (there are agencies who track and investigate incidents in today's hydrogen production plants) and, yes I know that the Hindenberg's explosion was more related to Aluminium than hydrogen, but nevertheless a big accident will put people off buying fuel cell cars.
Don't worry about being burnt -you will be dead before you see the flames - hydrogen burns invisibly
Posted by: JohnE | 18 July 2008 at 12:13 AM
Currently we can own a car with a range of say 300 miles, although we use this for < 50 mile journeys most days.
This situation has only existed since WW2. Before that, most people used trains and buses for travel.
Most people could get by with a 60 mile range EV, occasionally renting or borrowing an ICE when required for long trips - or they could use the truck they already own every so often.
If you are only using a truck for 1000 miles / year, the cost of fuel doesn't matter so much.
[ This is a kind of 2 car PHEV solution ]
Changes to the vehicle taxation and insurance laws would allow people to hold a heavy ICE and pay for it on a "per use" basis, and make it easier to get them into smaller EVs.
In Ireland, there is a heavy annual tax on car ownership now based on CO2 / km ratings.
If this were bundled into the fuel tax, you could own a large capacity truck, and only pay for it when using it, and pay very little when using an EV.
This will reduce reliance on imported oil without the need for an H2 infrastructure at vast cost.
Posted by: mahonj | 18 July 2008 at 12:50 AM
Mahoni's "2 car PHEV" idea is truly the answer for a family. Most families need multiple cars, but it is not necessary for each car to serve all the needed functions. In my family, I can envision 95% of my transportation provided by a BEV, with a larger ICE minivan or SUV available for hauling trailers or for the family vacation trip. The gasoline car would probably sit unused in the driveway 95% of the time.
How about forming collectives in which several families would own a single van or truck which could be available on those occasions when a larger more powerful extended range vehicle is needed?
Also, the range issue with BEV's can be easily solved by providing rapid-charging stations or battery exchange stations to the public. One popular scenario involves contracting with a company for a subscription-based battery exchange service, kinda like a cellphone contract. See www.projectbetterplace.com
Posted by: richard | 18 July 2008 at 04:51 AM
expanding on the collective idea, I wonder if it would be possible and legal for communities to form "car swap clubs" in which people could swap vehicles from time to time if one member required the functionality of another guy's car. It would, in essence, form an extended family and expand mahoni's "2-car PHEV" idea into a "multiple-car PHEV". I'm not sure if the auto insurance companies would go for this....
Posted by: richard | 18 July 2008 at 05:00 AM
richard: car sharing clubs already exist (co-operative auto network, zipcar etc..) The cool part about this arrangement for access to an ICE is that you can get different kinds of vehicles depending on your requirement at the time.
Posted by: OldNeil | 18 July 2008 at 05:26 AM
We should stop giving money to World AIDS fund and protect our own and use the Billions of dollars for research instead of giving our feel good money to ingrateful people all over the world.
Posted by: Joe | 18 July 2008 at 05:29 AM