Hydrogen: The next wave for electric vehicles?
Battery
electric vehicles are making headlines, but fuel cells are gaining
momentum—with good reason. Hydrogen could play a vital role in the
renewable-energy system and in future mobility.
At the COP21 meeting in
Paris in 2015, 195 countries agreed to keep global warming below 2 degrees
Celsius above preindustrial levels. To reach this target, the world will need
to cut energy-related carbon dioxide (CO2) emissions by 60 percent by 2050—even
as the population grows by more than two billion people. This requires dramatic
changes in our energy system: a strong increase in energy efficiency, a
transition to renewable-energy sources and low-carbon energy carriers, and an
increase in the rate at which industry captures and stores or reuses the CO2
emissions created by the remaining fossil fuels in use.
Two years after the
Paris Agreement, at the COP23 meeting in Bonn, the Hydrogen Council—a
consortium of 18 companies in the automotive, oil and gas, industrial gas, and
equipment industries—presented its vision of how hydrogen can contribute to the
ambitious climate targets. It considers hydrogen an enabler of the transition
to a renewable-energy system and a clean-energy carrier for a wide range of
applications. If serious efforts are made to limit global warming to 2 degrees,
the council estimates that hydrogen could contribute around one-fifth of the
total abatement need by 2050. This vision is ambitious but feasible if policy
makers, industry, and investors step up efforts to accelerate the deployment of low-carbon technologies.
Hydrogen can play seven major roles in the energy
transformation
Hydrogen is a versatile
energy carrier and can be produced with a low carbon footprint. It can play
seven major roles in the energy transformation, which span from the backbone of
the energy system to the decarbonization of end-use applications:
·
Enabling
the renewable-energy system (1–3). By providing a means of long-term energy storage,
hydrogen can enable a large-scale integration of renewable electricity into the
energy system. It allows for the distribution of energy across regions and
seasons and can serve as a buffer to increase energy-system resilience.
·
Decarbonizing
transportation (4). Today’s
transportation sector depends almost entirely on fossil fuels and creates more
than 20 percent of all CO2 emissions. Hydrogen-powered vehicles, with their
high performance and the convenience offered by fast refueling times, can
complement battery electric vehicles to achieve a broad decarbonization of
transport segments.
·
Decarbonizing
industrial energy uses (5). In
heavy industry, hydrogen can help decarbonize processes that are hard to
electrify, in particular those requiring high-grade heat. Hydrogen can also be
used in cogeneration units to generate heat and power for industrial uses.
·
Decarbonizing
building heat and power (6). In
regions with existing natural-gas networks, hydrogen could piggyback on
existing infrastructure and provide a cost-effective means of heating
decarbonization.
·
Providing
clean feedstock for industry (7). Current uses of hydrogen as industry
feedstock—amounting to more than 55 million tons per year—could be fully
decarbonized. Hydrogen could also be employed to produce cleaner chemicals and
steel, by being used as a chemical feedstock in combination with captured
carbon and by being used as a reducing agent for iron ore.
Hydrogen’s role in the transportation sector is embedded
in the system-wide vision
As described, hydrogen
has a wide range of applications in the energy system, with its role for the
decarbonization of the transportation sector among the most prominent ones. In
the Hydrogen Council’s vision, in which hydrogen is deployed aggressively to
limit global warming to 2 degrees, a third of the global growth in hydrogen
demand could come from the transportation sector. By 2050, the members of the
council believe hydrogen-powered fuel-cell vehicles could constitute up to 20
percent of the total vehicle fleet, some 400 million cars, 15 million to 20
million trucks, and around 5 million buses. In their scenario, hydrogen would
play a larger role in heavier and long-range segments and hence contribute
around 30 percent—higher than its share due to longer distances driven and
lower fuel efficiency in these segments—to the total emission-abatement target for
the road-transport sector.
In the council’s
vision, hydrogen-powered locomotives could also replace 20 percent of diesel
locomotives, and hydrogen-based synthetic fuel could power a share of airplanes
and freight ships. In all, the transportation sector could consume 20 million
fewer barrels of oil per day if hydrogen were deployed to the extent described.
Fuel cells could complement batteries to decarbonize
transportation
Hydrogen and batteries
are often portrayed as competing technologies, and batteries have received a lot of attention in recent years (“proton
versus electron”). The relative strengths and weaknesses of these technologies,
however, suggest that they should play complementary roles. Battery electric
vehicles exhibit higher overall fuel efficiency as long as they are not too
heavy due to large battery sizes, making them ideally suited for short-distance
and light vehicles. Hydrogen can store more energy in less weight, making fuel
cells suitable for vehicles with heavy payloads and long ranges. Faster
refueling also benefits commercial fleets and other vehicles in near-continuous
use. How the technologies relate will depend mostly on how battery technology
will evolve and how quickly cost reductions from scaling fuel-cell production
can be realized.
By 2030, the equivalent
of about 80 million zero-emission vehicles will be needed on the road, and by
2050, average CO2 emissions will need to decrease by 70 percent per passenger
kilometer. Reaching these ambitious targets will require a range of powertrains
and fuels.
Not only may battery
electric vehicles (BEVs) and fuel-cell electric vehicles (FCEVs) not be
competing, but the growing success of BEVs may actually drive uptake of FCEVs.
Both technologies benefit as electric mobility becomes widely accepted and growing scale reduces the
costs of electric drivetrains and other components. Industry experts believe
that the total cost of ownership of BEVs and FCEVs could converge over the next
decade and become competitive with internal-combustion-engine (ICE) vehicles 12
or 15 years from today.
Based on their entire
life cycles, FCEVs achieve very low CO2 emissions, in part because they don’t
require large batteries whose production is energy and resource intensive. Even
when FCEVs use hydrogen from natural gas without carbon capture, they emit 20
to 30 percent less CO2 than vehicles powered by internal combustion engines. In
reality, hydrogen is already less CO2 intense than this: a number of refueling
stations draw their hydrogen supply from electrolysis with renewable
electricity, and production from fossil sources can be paired with effective
carbon capture and storage.
Priority segments and use cases could lead the way in
transportation
As in other industries
being transformed by technology, hydrogen adoption could come in waves.
Commercialization of
hydrogen vehicles has already started for passenger cars, where it
is most suitable for larger segments. Three models of FCEVs (Honda Clarity, Hyundai
ix35/Tucson Fuel Cell, and Toyota Mirai)2are offered commercially in Japan, South Korea, the
United States (specifically, California), and Germany, and ten additional
models are slated for release by 2020. Ridesharing or taxi services, which require high uptime, could drive early adoption,
and ambitious national targets—such as 1.8 million FCEVs on Chinese and
Japanese roads by 2030—could create additional momentum.
Hydrogen buses are starting to get traction
due to concerns about local pollution, particularly in Europe, China, Japan,
and South Korea. South Korea plans to convert 26,000 buses to hydrogen, and
Shanghai alone plans to purchase and operate 3,000 fuel-cell buses by
2020. Vans and minibuses could also benefit from stringent
regulations on delivery vehicles and other commercial fleets in cities.
Trucks that carry heavy payloads
over long distances are another priority segment. With long ranges and defined
routes, they might require less infrastructure: some estimates suggest that 350
filling stations could cover the whole United States. Established manufacturers
such as Toyota as well as new start-ups like Nikola Motors have started
building heavy-duty and long-haul trucks to capture opportunities in the
booming freight-transport industry.
Fuel-cell trains could replace many diesel-powered
locomotives on nonelectrified tracks. The first fuel-cell tramway is already
operating in China, and the first “hydrail” train by Alstom will start taking
passengers in Germany by the beginning of 2018.
To reach the ambitious
2050 target outlined in the vision, important milestones need to be reached by
2030. The Hydrogen Council estimates that up to one in 12 cars sold in
California, Germany, Japan, and South Korea could be powered by hydrogen if
major efforts are made to roll out infrastructure and scale up production. Some
50,000 fuel-cell buses and 350,000 fuel-cell trucks could also be on the road
globally, saving as much CO2 as some 3.5 million hydrogen-powered passenger
cars.
To accelerate the momentum, industry, investors, and
policy makers will need to step up efforts
A group of regions—led
by California, Germany, Japan, and South Korea—is driving developments,
spending more than $850 million annually to advance hydrogen and fuel-cell
technology. Other countries are following with vigor, including China, which is
starting to scale up its own manufacturing capacity alongside its network of
refueling stations. Globally, countries have already announced they will build
some 2,800 hydrogen refueling stations by 2025. That’s a small number compared
with the estimated 600,000 petrol filling stations worldwide, but it would be
sufficient to cover the leading markets for hydrogen vehicles if realized (the
German initiative H2Mobility estimates that nationwide coverage is reached with
400 stations).
While these investments
are crucial, more will be required to reach scale and lower costs. Currently,
each ton of CO2 saved through FCEVs is estimated to cost more than $1,500, and
a significant scale-up is required to bring the technology to a breakeven point
with conventional ones around 2030 to 2035. Cost reductions, alongside the
scale-up of infrastructure and increase in model choices, are a prerequisite to
stimulate customer acceptance of the technology.
·
The Hydrogen Council
estimates that investments of $280 billion are required through 2030. About 60
percent of this investment would go into scaling up the production, storage,
and distribution of hydrogen, and 30 percent into series development,
production lines, and new business models. Less than 10 percent—some $20
billion—would be required to build the global hydrogen-refueling infrastructure
of 15,000 stations, the lack of which currently constitutes the main bottleneck
to FCEV adoption.
·
Scaling up
infrastructure deployment must bring hydrogen costs down further. Building a midsize
filling station in Germany already costs half as much as it did five years ago,
around $1 million, but further decreases are needed to support the rollout into
the mass market. With scale, the Hydrogen Council estimates that infrastructure
costs of less than $1,000 per FCEV are possible. Similarly, vehicle costs need
to decrease further to support the rollout into the mass market.
While the annual total
investment need of $20 billion to $25 billion until 2030 is a major step up for
the hydrogen industry, the world already invests more than $1.7 trillion in
energy each year, including $650 billion in oil and gas, $300 billion in
renewable electricity, and more than $300 billion in the automotive industry.
In the medium term, the investments could create a self-sustained market,
turning over more than $2.5 trillion and creating some 30 million jobs along
the value chain—based on current multipliers of around 12 jobs per $1 million
dollars in sales in the automotive, equipment, and oil and gas industries—if
the 2050 visi
By Bernd Heid, Martin Linder, Anna Orthofer,
and Markus Wilthaner November 2017
https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/hydrogen-the-next-wave-for-electric-vehicles?cid=other-soc-twi-mip-mck-oth-1711
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