United States: Policies Promoting Hydrogen & Fuel Cells

Transcription

1 U.S. Department of Energy (DOE) HYDROGEN PROGRAM United States: Policies Promoting Hydrogen & Fuel Cells Fred JOSECK Technology Analyst U.S. DOE Hydrogen Program Presented at: Japan Hydrogen & Fuel Cell Demonstration Project Seminar March 6, 2009 Tokyo, Japan 1

2 OUTLINE Overview Drivers Drivers Benefits Benefits of of Hydrogen Hydrogen and and Fuel Fuel Cells Cells Hydrogen Hydrogen and and Fuel Fuel Cells Cells in in the the U.S. U.S. Technology Development Path Path Industry Industry Growth Growth U.S. U.S. DOE DOE Hydrogen Program Challenges and and Barriers Barriers Key Key Technical Technical Progress Progress Technology Validation Validation Budget Budget History History Policy-related Analyses Scenario Scenario Analysis Analysis Government Acquisition Analysis Analysis Policies and and Initiatives in in the the U.S. U.S. Summary 2

3 OVERVIEW 3

4 Drivers Emissions and Oil Consumption CO 2 emissions mainly due to transportation and electric power sector. U.S. DOE Hydrogen Program working towards advanced technology solutions to alleviate these issues. U.S. CO 2 Emissions by Sector (2006)* U.S. Oil Consumption (2006)* Electric Power Generation 40% Transportation 33% Industrial 25% Transportation 67% Light Vehicles 66% Commercial: 4% Residential: 6% Industrial 17% Residential: 4% Commercial: 2% Electric Power: 1% Rail: 2% Marine: 5% Air: 9% Heavy Vehicles 18% * Source: U.S. Energy Information Administration (EIA) Annual Energy Review U.S. DOE HYDROGEN PROGRAM MISSION Reduce Oil Consumption & GHG Emissions Reduce petroleum use and greenhouse gas emissions by overcoming the full range of barriers to the widespread commercialization of hydrogen and fuel cell technologies. U.S. DOE HYDROGEN PROGRAM KEY GOALS Advance Technologies & Reduce Barriers Advance hydrogen and fuel cell technologies through research, development, and validation efforts to be competitive with current technologies in terms of both cost and performance. Reduce the institutional and market barriers to their commercialization in the transportation, stationary and portable power sectors. 4

5 Benefits of Hydrogen & Fuel Cells Environmental and Energy Security Studies have shown that hydrogen and fuel cells can significantly reduce oil use and greenhouse gas emissions. Millions of Barrels Per Day Domestic Oil Consumption by Light-Duty Vehicles Base Case (gasoline hybrids) Gasoline PHEV Scenario 4 Ethanol PHEV Scenario 2 0 Fuel Cell Vehicle Scenario Each technology scenario assumes sales of vehicles using that technology will achieve 75% of total sales by Source: Dr. Sandy Thomas, NHA Transportation Study, November 2008 conducted using data and models developed by his group, EIA and Argonne National Laboratory. Billions of Tons CO 2 Equivalent Per Year Greenhouse Gas Emissions by Light-Duty Vehicles Base Case (gasoline hybrids) 1990 emissions level Gasoline PHEV Scenario Ethanol PHEV Scenario 60% below 1990 emissions 80% below 1990 emissions Fuel Cell Vehicle Scenario

6 Hydrogen & Fuel Cells in the U.S. Where are we today? H 2 & Fuel Cells for Transportation: > 200 fuel cell vehicles > 20 hydrogen-fueled buses > 60 fueling stations Current onboard storage: compressed H 2 tanks Several carmakers (including GM, Honda, Daimler) have announced plans for increased deployments in the next few years. Fuel Cells for Stationary Power and Niche-Markets Fuel cells have become a costcompetitive option for Critical-load facilities Backup power Forklifts H 2 Production & Delivery In the U.S., there are currently: 9 million metric tons of H 2 produced annually. > 1,200 miles of H 2 pipelines. 6

7 Technology Development Continuous Path Decreasing Cost Space Applications Portable Devices (1W 3kW) Forklifts (2kW 12kW) Stationary Power (5kW 1MW) Fuel Cell Vehicles (35kW 100kW)

8 Fuel Cell Industry Growth in Markets The fuel cell industry has seen an average annual growth of 59% over the past three years. More than 12,000 new units were shipped in Cumulative Shipments Worldwide Stationary Portable Transport Development in North America Large Stationary Small Stationary Portable Transport 40,000 6,000 35,000 5,000 30,000 25,000 4,000 20,000 3,000 15,000 2,000 10,000 1,000 5, Source: Fuel Cell Today Industry Review 2008.

9 U.S. DOE HYDROGEN PROGRAM 9

10 U.S. DOE Hydrogen Program Challenges and Barriers The Program has identified the critical path barriers and the targets that need to be met for fuel cell vehicle (FCV) technology readiness in Targets for stationary and portable power fuel cells have also been developed. Technology Barriers Economic & Institutional Barriers Hydrogen Cost Target: $2 3 /gge H 2 Storage Capacity & Cost Greater than 300-mile range, without compromising safety or performance Fuel Cell Cost & Durability Targets: Vehicles: $30 per kw, 5000-hr durability Stationary Systems: $750/kW, 40,000-hr durability Safety, Codes & Standards Development H 2 Supply & Delivery Infrastructure Domestic Manufacturing & Supplier Base Public Awareness & Acceptance Technology Validation: Technologies must be demonstrated under real-world conditions Critical Path Barriers for FCVs Market Transformation Assisting the growth of early markets will help to overcome many barriers, including achieving significant cost reductions through economies of scale. 10

11 U.S. DOE Hydrogen Program Key Technical Progress Significant progress has been made in the last few years, on track towards reaching targets to enable widespread commercialization. Doubled Doubled automotive automotive stack stack durability durability to to ~ 2,000 2,000 hrs. hrs. Identified Identified storage storage materials materials with with > 50% 50% improvement improvement in in capacity. capacity. Cost of Automotive Fuel Cell System - Projected to high-volume manufacturing of 500,000 units/year - $300 $275/kW > FUTURE MILESTONES Reduced Reduced the the high high volume volume cost cost of of hydrogen hydrogen from from $5/gge $5/gge to to $3/gge $3/gge (distributed (distributed natural natural gas gas reforming reforming cost). cost). Reduced Reduced high high volume volume automotive automotive fuel fuel cell cell cost cost from from $225/kW $225/kW to to $73/kW. $73/kW. Cost ($/kw) $200 $100 $0 $110/kW $94/kW $73/kW $45/kW TARGET $30/kW 11

12 U.S. DOE Hydrogen Program Technology Validation Technologies must be validated in integrated systems, under real-world conditions. DOE Vehicle/Infrastructure Demonstration (four teams in 50/50 cost-shared projects) Verified performance in 122 fuel cell vehicles and 16 hydrogen stations: EFFICIENCY: 53 58% (>2x higher than gasoline internal combustion engines) RANGE: ~ miles FUEL CELL SYSTEM DURABILITY: 1,900 hours, projected (~57,000 miles) 1,700 hours, observed (~51,000 miles) Additional projects include: Demonstrating integration of renewable power and hydrogen production Data collection and analysis with other agencies DOT s Fuel Cell Bus Program DOD s fuel cell forklifts 12

13 U.S. DOE Hydrogen Program Budget History Request Millions of $ Combined DOE Hydrogen & Fuel Cell Funding 1 DOE Hydrogen Funding DOE Fuel Cell Funding Fiscal Year 1 Programs were integrated in Funding figures prior to FY08 have been adjusted for inflation, expressed in 2007 dollars. 13

14 POLICY-RELATED ANALYSES 14

15 Scenario Analysis Infrastructure & Policy Requirements Potential market penetration scenarios for fuel cell vehicles investigated. Expected cost of incentives needed for fuel cell vehicle market penetration is similar to the cost of existing incentives for alternative fuels. Networks of fueling stations should be established in a limited number of urban centers (hydrogen clusters, not highways). Transition policies will be essential to overcome initial economic barriers. Cost-sharing & tax credits ( ) would enable industry to be competitive in the marketplace by With targeted deployment policies from 2012 to 2025, FCV market share could grow to 50% by 2030, and 90% by Cost of these policies is not out of line with other policies that support national goals. The annual cost would not exceed $6 billion federal incentives for ethanol are expected to cost more than $5 billion/year by Cumulative costs would range from $10 billion to $45 billion, from 2010 to 2025 federal incentives for ethanol have already cost more than $28 billion, and these cumulative costs are projected to exceed $40 billion by Areas of projected hydrogen energy demand. Cost Sharing & Subsidies Scenario 3, Policy Case 2 Analysis by the National Academies has produced similar results, for the report Transition to Alternative Transportation Technologies: A Focus on Hydrogen ( ww.nap.edu/catalog.php?record_id=12222) The projected cost to government for policies to sustain a transition to fuel cell vehicles and hydrogen infrastructure, based on the most aggressive scenario. 15

16 Government Acquisition Analysis Impact on Costs A government acquisition program could significantly reduce the cost of fuel cells through economies of scale, and help to support a growing supplier base. OBJECTIVES Enable Enable federal federal agencies agencies to to implement implement fuel fuel cell cell technologies. technologies. Increase Increase sales sales & manufacturing manufacturing volumes volumes of of fuel fuel cells cells to to achieve achieve economies economies of of scale. scale. Support Support development development of of national national infrastructure infrastructure and and domestic domestic supplier supplier base. base. Improve Improve user user confidence confidence in in fuel fuel cell cell reliability. reliability. Recent Recent increase increase in in fuel fuel cell cell investment investment tax tax credit credit (to (to $3,000/kW) $3,000/kW) will will help help accelerate accelerate progress. progress. 16

17 POLICIES AND INITIATIVES IN THE U.S. 17

18 Policies & Initiatives in the U.S. Federal Tax Credits Federal tax credits currently in place to support the deployment of fuel cells in the commercial, industrial and utility sectors. Business Tax Credit Applies to commercial, industrial and utility sectors. 30% of expenditures or $3,000/kW (whichever is smaller). Min capacity of 0.5 kw. Electricity only efficiency of 30% or greater. or Combined Heat and Power (CHP) Tax Credit Applies to commercial, industrial, and utility sectors. Applies to systems up to 50 MW that exceed 60% energy efficiency. Efficiency requirement waived for systems that use biomass for at least 90% of the system energy source (but credit may be reduced). Credit equal to 10% of expenditures. 18

19 Policies & Initiatives in the U.S. Impact of Federal Tax Credits By utilizing federal tax credits, fuel cells can be cost-competitive today in niche applications. 52-hr run time Battery/ Generator $61,082 5 kw Outdoor Installations PEM fuel cell without incentive $61,326 PEM fuel cell with incentive $46, Total cost includes capital costs and operations and maintenance costs. 2. Assume a 5-year battery replacement schedule. Analysis of 3-year replacement schedules (for cold or harsh environments) indicates PEM fuel cells compare more favorably to traditional technologies. Fuel cell cost Federal Credit Debt/Remaining Capital Cost Backup Power Critical Loads 1200 kw Data Center** Without incentive $15,000,000 $0 $15,000,000 **Example data from DOE Germantown Data Center With incentive $15,000,000 $3,600,000 $11,400,000 Net Present Value of Capital Costs Net Present Value of O&M costs (including fuel costs) Net Present Value of Total Costs of System Material Handling 3 kw PEM Fuel Cell Paired with integral NiMH battery, for pallet trucks* Batterypowered (2 batteries per truck) $17,654 $127,539 $145,193 PEM Fuel cellpowered, without incentive $23,835 $52,241 $76,075 PEM Fuel cellpowered, with incentive $16,684 $52,241 $68,925 Assumptions: Operate 7 hours/shift, 3 shifts/day, 7 days/week; batteries changed out every shift, taking about 30 minutes; operator cost $15/hour; PEM fuel cell forklift uses 3kW stacks with NiMH batteries; stack replaced every 5 years at $3,000/kW; batteries replaced every 5 years at $1,800/kW; PEM fuel cell forklift refueled once every shift, refueling time 1 minute; no disposal costs were assumed for any of the technologies. 19 *Source: Identification and Characterization of Near-term Direct Hydrogen Proton Exchange Membrane Fuel Cell Markets,, Battelle Memorial Institute (April 2007).

20 Policies and Initiatives in the U.S. The American Recovery & Reinvestment Act (H.R.1) This recent act provides incentives and opportunities for hydrogen and fuel cell technologies. American Recovery & Reinvestment Act Passed by House and Senate Feb 13, 2009 Signed by President Obama Feb 17, 2009 $787 B total, including $16.8 B for Energy Efficiency and Renewable Energy $2 B for DOE Office of Science (including $400 M for the Advanced Research Projects Agency) $3.4 B for Fossil Energy R&D $4.5 B for Electricity Delivery & Energy Reliability (Smart Grid) $6 B for Loan Guarantee Program $5.6 B for GSA (includes high performance green federal buildings and fleets) $300 M for DoD Energy research, including fuel cells 20

21 The American Recovery & Reinvestment Act (H.R.1) EERE Breakout Energy Efficiency & Renewable Energy (EERE) received $16.8 billion in funding. Energy Efficiency & Renewable Energy (EERE): $16.8 B Total $2.5 B $5 B $3.1 B $3.2 B $400 M $300 M $2 B $300 M Research, development, demonstration and deployment ($1.2 B specified for biomass and geothermal) Weatherization State Energy Program Energy Efficiency and Conservation Block Grants Transportation Electrification Alternative Fueled Vehicles Pilot (Clean Cities) Advanced Battery Manufacturing Energy Efficient Appliance Rebate Program/EnergyStar 21

22 The American Recovery & Reinvestment Act (H.R.1) Tax Credits Some tax credits affecting fuel cells were expanded. Tax Credits in the Conference Bill Hydrogen Fueling Facility Credit Increases the hydrogen fueling credit from 30% or $30,000 to 30% or $200,000. Grants for Energy Property in Lieu of Tax Credits Allows facilities with insufficient tax liability to apply for a grant instead of claiming the Investment Tax credit (ITC) or Production Tax credit (PTC). Only entities that pay taxes are eligible. Manufacturing Credit Creates 30% credit for investment in property used for manufacturing fuel cells and other technologies Residential Energy Efficiency Credit Raises ITC dollar cap for residential fuel cells in joint occupancy dwellings to $3,334/kW. 22

23 The American Recovery & Reinvestment Act (H.R.1) Opportunities for Fuel Cells Many provisions offer funding opportunities for fuel cells, even if not specifically mentioned. Forklifts All Application Stationary fuel cells for CHP (hot water and power) Vehicles and fueling infrastructure Development of hydrogen and fuel cell industry Hydrogen for grid storage Funded Opportunity Energy efficiency improvements in federal buildings and HUD housing Alternative fueled vehicles for Clean Cities and GSA federal fleets State Energy Program Smart Grid programs efficiency improvements at DoD facilities, and electrification infrastructure at ports Loan guarantees for projects to reduce pollution and GHGs including fuel cells for residential, industrial or transportation applications. $4.5 B (federal) $250 M (HUD) $300 M (Clean Cities) $300 M (GSA) $3.1 B $4.5 B $3.7 B (DoD) $400 M (electrification) $6 B Amount Hydrogen and fuel cell solutions should be promoted in funded areas where the technology makes sense. 23

24 SUMMARY Hydrogen Hydrogen and and fuel fuel cells cells offer offer significant significant environmental, environmental, energy energy security security and and employment employment benefits benefits --U.S. U.S. DOE DOE Hydrogen Hydrogen Program Program working working towards towards advancing advancing technology technology to to realize realize these these benefits. benefits. The The development development path path of of hydrogen/fuel hydrogen/fuel cells cells technology technology is is a continuous continuous one one immediate immediate markets markets already already exist exist today today to to start start taking taking advantage advantage of of technology s technology s benefits. benefits. Scenario Scenario analyses analyses conducted conducted indicate indicate that that supportive supportive policies policies could could increase increase the the technology s technology s market market share share at at costs costs that that are are in in line line with with other other policies policies that that support support national national goals. goals. Analysis Analysis has has shown shown that that government government acquisition acquisition efforts efforts allow allow federal federal government government to to play play important important role role in in reducing reducing technology technology costs, costs, supporting supporting a domestic domestic supplier supplier base, base, and and supporting supporting development development of of infrastructure. infrastructure. Incentives Incentives in in place place or or recently recently established established offer offer many many opportunities opportunities to to further further enhance enhance R&D R&D and and stimulate stimulate market market development. development. 24

25 Thank You QUSTIONS? For For more more information, visit: visit: For information on effects of policies on transition to hydrogen economy. For information on the Hydrogen Program. For information on effects of the hydrogen economy on employment. 25