"CARS 21 public hearing 2012" European Commission DG Enterprise and Industry Automotive Industry Unit 20 April 2012 Breydel Building, Auditorium

Transcription

1 "CARS 21 public hearing 2012" European Commission DG Enterprise and Industry Automotive Industry Unit 20 April 2012 Breydel Building, Auditorium Brussels

2 The Levelized Costs of Generating Electricity (LCOE) Investment costs are probably the most important element in any investment decision. Overnight cost is a common unit of measure of power investments. Overnight cost is the cost of a construction project if no interest was incurred during construction, as if the project was completed overnight. The unit of measure typically used is USD/kW. The notion of Levelized Costs of Generating Electricity (LCOE) is a handy tool for comparing the unit costs of different power generation technologies. The LCOE approach is a financial model used for the analysis of generation costs. Focus of estimated average LCOE is the entire operating life of the power plants for a given technology. In LCOE financial model, different cost components are taken into account: capital costs, fuel costs, operations and maintenance costs (O&M). These costs are an average over the life of a project and for a specific technology, based on a specific and particular set of assumptions. The costs cash-flow is discounted to the present (date of commissioning) using assumed specific discount rates. The resultant LCOE values, one for each generation option, are the main driver for choice technology. The unit of measure typically used is USD/MWh. 2

3 The U.S.-EIA LCOE Data In the mid 70's the Energy Information Administration (EIA) began publishing the Annual Energy Outlook (AEO) in which, annually, presents a forecast and analysis of U.S. energy supply, demand, and prices. Since 1996 AEO considers and realizes forecast about Overnight costs and LCOE. Fuel Cells technologies were mentioned and included in EIA documents since 1994, but EIA never provided data about the Fuel Cells LCOE. In January 2010 the LCOE data for Central Production Power Plant are published in a separated document, these data are revisited in December 2010 (based on the AEO Early Release) and in April 2011 (EIA, Annual Energy Outlook 2011 ). 3

4 The U.S.-EIA LCOE Data 4

5 The U.S.-EIA LCOE Data 5

6 The U.S Energy Policy Act and the DOE 2011 Program Plan The Energy Policy Act of 2005 fixed the U.S. Hydrogen and Fuel Cell Vehicle Program goals in Sec In particular: shall be to demonstrate and commercialize the use of hydrogen for transportation, utility, industrial, commercial, and residential applications. ; For vehicles, the goals of the program are (A) to enable a commitment by automakers no later than year 2015 to offer safe, affordable, and technically viable hydrogen fuel cell vehicles in the mass consumer market; and (B) to enable production, delivery, and acceptance by consumers of model year 2020 hydrogen fuel cell and other hydrogen-powered vehicles. Sec The Secretary shall submit to Congress a report describing (4) progress, including progress in infrastructure, made toward achieving the goal of producing and deploying not less than (B) 2,500,000 hydrogen-fueled vehicles in the U. S. by In autumn 2011, in the final version of Hydrogen and Fuel Cells Program Plan - An Integrated Strategic Plan for the Research, Development, and Demonstration of Hydrogen and Fuel Cell Technologies, the U.S. DOE announced while the Program has broadened its focus beyond the 2015 technology readiness milestone for fuel cell electric vehicles (FCEVs), it continues to pursue technology advancements needed for their commercialization. The milestone for automotive fuel cells has shifted from 2015 to

7 Fuel Cells and Hydrogen I chose to consider the Hydrogen Fuel Cell (PEM) Powertrain (H2FC Powertrain) as Power Generation Plant because, if the current U.S. Hydrogen and Fuel Cell Vehicle Program is able to meet all the 2015/2017 technological targets, in the subsequent year, the high volume associated with the H2FC vehicles mass production (up to units sold per year) will permit to reduce dramatically the Fuel Cell system manufacturing costs, in order to be competitive with current gasoline ICE systems. Every day more than 90% of vehicles are parked, even during peak traffic hours. In this situation the vehicle power generation system H2FC powertrain, if properly equipped, could become a new power generation source, supplying electricity to homes and to the grid like a new type of distributed generation: Vehicle-to-Grid (V2G). If H2FC vehicles, properly equipped and parked in V2G mode, become a new power generation source supplying electricity to homes and to the grid, it could be useful to analyze the H2FC powertrain relevance in the power generation sector. But, in my opinion, in mass production perspective, H2FC Powertrain will be so cost competitive to be useful adopted also for stationary power generation application. 7

8 The Hydrogen Fuel Cell Powertrain Levelized Cost of Electricity In order to calculate the H2FC Powertrain specific LCOE it is necessary to know some H2FC Powertrain data: the system cost and efficiency, the expected system lifetime, the fuel cost (i.e. the H2 cost). Current Status (U.S. DOE public data, based on projected high volume production): Overnight cost, 49 USD/kW; 53%-59% System Efficiency; Lifetime, hours; H2 cost (based on natural gas steam reforming), 3 UDS/GGE. Table 2 summarizes the DOE Projected Transportation Fuel Cell System Cost. 2015/2017 DOE technical targets (based on the same assumption): Overnight cost 30 USD/kW; 60% System Efficiency; Lifetime 5000 hours; H2 cost 2 4 UDS/GGE. 8

9 The Hydrogen Fuel Cell Powertrain Levelized Cost of Electricity Based on the above mentioned assumption the LCOE H2FC Powertrain range value is today USD/MWh and USD/MWh for 2015/2017. Table 3 shows these results. Thanks to the fact that expected system life is shorter than one year (also in 2015/2017) it is not necessary to consider any financial aspect. In a conservative perspective, I do not take in consideration the possibility to recover the heat co-produced during the electricity generation (like in a CHP power plant). 9

10 The Hydrogen Fuel Cell Powertrain Levelized Cost of Electricity If the current U.S. Hydrogen and Fuel Cell Vehicle Program is able to meet all the 2015/2017 technological targets the high volume associated with the H2FC vehicles mass production will permit to reduce dramatically the Fuel Cell system manufacturing costs and the H2FC Powertrain will be so cost competitive to be useful adopted also for stationary power generation application. Using the 2015/2017 DOE H2FC Powertrain data target the LCOE would be in a range of USD for MWh and, in the U.S. context, for the lower value of this range it appears competitive with many of the power generation technologies considered. Observing these H2FC Powertrain data, it will be necessary to think the Hydrogen FCV link to energy sector considering also the possibility to utilize the H2FC Powertrain as a Power Generation Plant, smart grid connected, with relevant and positive consequences for a rapid development of these lowcarbon technologies. 10

11 Consideration About the European Context: the LCOE Data 11

12 Consideration About the European Context: the LCOE Data 12

13 Consideration About the European Context: the LCOE Data Whit regards to European LCOE data: In November 2008 the Commission Staff Working Document accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Second Strategic Energy Review an EU Energy Security and Solidarity Action Plan - Energy Sources, Production Costs and Performance of Technologies for Power Generation, Heating and Transport SEC(2008)2872 included the most recent official LCOE data. Most recent authoritative European LCOE data was included in the International Energy Agency (IEA): Projected Costs of Generating Electricity 2010 Edition. 13

14 Consideration About the European Context: The Hydrogen and Fuel Cell Data Whit regards to European Hydrogen and Fuel Cell official data: The Fuel Cells and Hydrogen Joint Undertaking (FCH JU) in the Multi - Annual Implementation Plan (November 2011) provided the official European Hydrogen and Fuel Cell Strategy targets. Mid-term (2015): Cars more than 5.000, price less than EUR, Fuel Cell system 100 EUR/kW; Hydrogen delivered to retail station 5EUR/GGE; Micro CHP units 1 kwe price EUR/system; Stationary Industrial/Commercial H2 based more than 5 MW installed, price EUR/kW. Long-term (2020): Cars , price less than EUR, Fuel Cell system 50 EUR/kW; Hydrogen delivered to retail station 5EUR/GGE; Micro CHP units 1 kwe price EUR/system; Stationary Industrial/Commercial H2 based more than 50 MW installed, price EUR/kW. 14

15 Consideration About the European Context: The Hydrogen and Fuel Cell Data and Initiatives Other initiatives, data and analysis were recent provided by: Leading car manufacturers 1 signed in September 2009 a Letter of Understanding in which they stated their goal to commercialise FCEVs by 2015, with hundreds of thousands of vehicles being rolled out worldwide. McKinsey & Company in A portfolio of power-trains for Europe: a fact-based analysis. The role of battery electric vehicles, plug-in hybrids and fuel cell electric vehicles (2010) made a factual evaluation of BEVs, FCVs, PHEVs and ICEs based on proprietary industry data. The analysis depicted a roll-out scenario that assumes 100,000 FCVs in 2015 and 1 million in With an average vehicle subsidy of nearly EUR for FCVs (as currently provided for BEVs in several Member States) the purchase price of FCEVs could start to close with ICEs by Hydrogen retail delivered costs rapidly approach 4,5 EUR/GGE. Fuel Cell stack cost: 2015 mid-term, 252 (high) 110 (mid) 42 (low) EUR/kW; 2020 long-term, 98 (high) 43 (mid) 16 (low) EUR/kW. 1 Daimler AG, Ford Motor Company, General Motors Corporation/Opel, Honda Motor Co., Hyundai Motor Company, Kia Motors Corporation, Renault SA - Nissan Motor Co. and Toyota Motor Corporation. 15

16 Consideration About the European Context: The Hydrogen and Fuel Cell Data Other data and analysis were recent provided by: New Energy World Industry Grouping (NEW-IG) of Fuel Cells and Hydrogen Joint Undertaking (FCH JU) in Fuel cells and Hydrogen technologies in Europe: Financial and technology outlook on the European sector ambition (November 2011). Target By 2020: FCVs around , reduce by a factor of 10 the production cost of fuel cell systems and the vehicle integration costs; Stationary applications around 50,000 households micro CHP (<5kWe) and more than 500 MWe to industrial and commercial installations, micro CHP targeting 5,000 EUR/kW system cost, large scale units (between 5 kwe and 1 MWe) for Industrial CHP/DG solutions using H2 and natural gas/biogas, reach benchmark cost and reliability of competitive incumbent solutions, cost of EUR/kW for H2 systems and EUR/kW for natural gas systems. Bruegel in The great transformation: decarbonising Europe s energy and transport systems (January 2012) made an analysis utilizing other studies or data (among other HyWays 2008, Blesl 2009, and McKynsey 2010). 16

17 Final Consideration About the European Context The relevance of these data and the possible consequences in European economy, in terms of competitiveness, growth, and climate change mitigation through CO2 abatement are evident. I think that European Commission and his structures could work to answer some necessities: The necessity of new LCOE official data; The necessity of a clear Hydrogen and Fuel Cell legal strategic framework. For the transport sector, in a well-to-wheel perspective, maybe developed through the CARS 21 initiative and/or the Strategic Transport Technology Plan (STTP); The necessity of a fine tuning of the Hydrogen and Fuel Cell official targets; The necessity to develop a new holistic approach that considers together the H2FC Powertrain applications in automotive and energy sectors. 17

18 Thank you for your kind attention Contact: 18