Hydrogen Refuelling Infrastructure Cost analysis

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1 Hydrogen Refuelling Infrastructure Cost analysis Provinciehuis Zuid-Holland, Den Haag, 25 March 2010 Presented by Gert Jan Kramer (Shell)

2 Overview Model for cost and economic analysis Main costs and economic parameters Results Conclusions 2

3 Overview Model for cost and economic analysis Main costs and economic parameters Results Conclusions 3

4 Considered costs and investments Production; large-scale steam methane reforming Liquefaction and transport Hydrogen station cost (refuelling unit): Equipment costs (installed) Cost of engineering, building, approvals, safety studies, Utilities and maintenance 4

5 Overview refuelling infrastructure cost model 5Rollo out scenario Refuel infra Netherlands Number of H 2 cars Direct cost Refuel infra worldwide Develop cost projection Quantity & Cost of H 2 delivered to station + Fixed cost + Amount H 2 dispensed Allocation & replacement Required investments Cost of energy, maintenance, etc Other cost = Calculate fixed cost Calculate direct cost Cost of H 2 dispensed

6 Illustration Typical cash flow analysis Investment A Revenue (a) Direct cost dispensing (b) Gross profit (c)=(b) (a) General Operational Earning Depreciation expenses income before tax (f) (d) (e)=(c) (d) (g)=(e) (f) Earning after tax (h)=(g) Tax Cash flow (i)=(h)+(f) A Discount factor (j)=(1+d.r.) -n Discounted cash flow (k)=(i) x (j) 6

7 Overview Model for cost and economic analysis Main costs and economic parameters Results Conclusions 7

8 Economic analysis parameters Local to Global factor: 10 Specific cost of H 2 delivered to station: Production; large-scale SMR Liquefaction and transport 2.2 /kg 1.0 /kg H 2 Refuelling Unit Cost (RUC) Equipment life time Maintenance Utilities; electricity variable (next slide) 15 year 3.5% of RUC 80 /MWh Miscellaneous; property tax, insurance, neglected 8

9 Hydrogen Refuelling Unit Cost Learning curves Cryo-storage Hydrogen Refuelling Unit Cryo-pump Boil-off compressor Buffers Dispensers Eq quipment cost Cumulative units Initial installed total equipment cost (TEC): M (Minimum) non-equipment cost: ~30% of installed TEC Final H 2 Refuelling Unit Cost: 70% of initial cost 9

10 Economic analysis main parameters Internal rate of return (IRR) 10% Corporate tax rate 25.5% Depreciation 10 years Capital charge rate 18.4% Economic life time 15 years 10

11 Results of the economic analysis Levelised cost of dispensed H 2 (in 2010 ) Total refuelling infrastructure: Cumulative Net Present Value = 0 for investments until 2050 Individual station perspective: Net Present Value = 0 for economic lifetime of project 11

12 Overview Model for cost and economic analysis Main costs and economic parameters Results Conclusions 12

13 Recap THRIVE scenarios Hydroge en cars [x1000] 50% % % % % 0% Year Hydrogen car penetration Policy focus Generic Infra Cars Infra & Cars Policy ambition level Low Medium Medium Medium High 13

14 Starting Point Infra & Car focus, high ambitions Hydroge en cars [x1000] 50% % % % % 0% Year Hydrogen car penetration Policy focus Generic Infra Cars Infra & Cars Policy ambition level Low Medium Medium Medium High 14

15 Sensitivity H 2 refuelling unit utilisation Hydroge en cars [x1000] 50% % % % % 0% Year Hydrogen car penetration Policy focus & ambition Infra & Cars, High Utilisation requirement High Medium Low 15

16 Effect of underutilisation on car penetration ,010,000 3,530,000 H2 Refu uelling Units ,040, Hydrogen cars [x1000] Policy focus & ambition Infra & Cars, High Utilisation requirement High Medium Low 16

17 Average utilisation and size of refuelling infra. Refuelling Units Utilisation % % 0% Policy focus & ambition Infra & Cars, High Utilisation requirement High Medium Low 17

18 Cost of dispensed hydrogen 8 7 Cost of H2 dispe ensed [ /kg] % 40% 55% 70% 85% 100% Average Station Utilisation Cost of Underutilisation Cost of H 2 Refuelling Unit Equipment Cost of H 2 delivered to Refuelling Station 18

19 Comparison cost of H 2 and conventional fuels 1 kg hydrogen gives about 100 km range (D-segment car) Current price of diesel / gasoline at the pump Equivalent price / cost of H2 [ /kg] ,5 1,0 1,5 2,0 2,5 Price of gasoline / diesel at the pump [ /L] Gasoline (+ taxes) Diesel (+ taxes) Gasoline (w/o taxes) Diesel (w/o taxes) Comparison of equivalent cost of dispensed H 2 with current price of diesel / gasoline 19

20 A need to standardise H 2 station installation Levelised co ost of H2 [ /kg] % 25% 50% 75% 100% Non-equipment cost as share of installed TEC Non-equipment cost include cost of safety studies, approvals, 30% is valid for a standardised approach only Current costs are much higher due to lack of standardisation 20

21 Early Investor Disadvantage Levelised cost of H2 [ /kg] Break-even in 15 years with a H 2 price of 22 /kg! Early Investor Disadvantage! Break-even in 15 years with a H2 price of 10 /kg Early investors Intermediate investors Late investors Year of first investment Policy focus Generic Infra & Cars Policy ambition level Low High 21

22 Overview Model for cost and economic analysis Main costs and economic parameters Results Conclusions 22

23 Conclusions Good prospects to reach fuel cost per km equivalent to current fuel cost for a well utilised refuelling infrastructure Meaningful penetration requires large upfront investments in refuelling infrastructure, initially suffering from underutilisation and thus leading to high initial cost Standardisation is a key factor for commercialisation First movers require stimulation to overcome significant first mover uncertainties and disadvantages 23

24 The THRIVE consortium gratefully acknowledges the Ministerie van Economische Zaken and SenterNovem for their financial support

Synopsis of Phase 1 Results. February 2013

Synopsis of Phase 1 Results. February 2013 Synopsis of Phase 1 Results February 213 Introduction FUEL CELL ELECTRIC VEHICLES (FCEVs) provide the potential to decarbonise road transport, create new economic opportunities, diversify national energy