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Why is hydrogen so expensive? High production costs and limited competition, for starters: Roadshow

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Vernon Lindholm of Toyota attempts to fuel a vehicle at a new hydrogen fuel station along Norris Canyon Road on Tuesday, Oct. 10, 2017, in San Ramon, Calif. (Aric Crabb/Bay Area News Group)




Q: One of your readers asked about the hydrogen market and why the price had increased so much.

Hydrogen pricing is a function of whether it’s produced from renewables (“green hydrogen”), natural gas (“blue”) or including coal (“gray”), but there are also supply chain considerations. California requires hydrogen to be at least 33% green, so while hydrogen car emissions are 100% clean, production of the fuel is not required to be green.

There’s very limited competition. Only California has public hydrogen stations and there are only about 50 in the state. True Zero runs 70% of them. Reportedly, hydrogen at competitor Air Products stations is about two-thirds the price of True Zero, if you can find one in your area.

Hydrogen is still essential for long flights and, probably, for long-haul trucking, but EVs have captured the vast majority of clean driving. Even with our high cost of electricity, EVs are much cheaper to drive than hydrogen cars. With the coming massive buildout of EV charging stations, this doesn’t bode well for significant expansion of public hydrogen stations.

— Doug McKenzie, Berkeley

A: Jeff Wagner asked why the price of hydrogen had more than doubled since he bought his Mirai in August 2022.

Q: I’ve called and written Shell and Zero, but their customer support response is consistent with the sparse information available on https://h2fcp.org/stationmap.

Even more frustrating is that Shell has stopped supplying fuel to any of their stations for over a month, so most of their stations have been delisted. I’m not a conspiracy guy, but it’s clear Shell has ceased operation. There’s no explanation as to why.

It’s crazy, especially when you see the commitment being made in Europe.

— David Wilhite, San Francisco

A: And …

Q: I smile every time I park my Toyota Mirai and see a puddle of water as the only emissions.

Hydrogen fuel is expensive to produce. Until there is cheap green hydrogen, it will be generated by natural gas plants. Meanwhile, the Legislature and the Newsom administration in October agreed to carve out 15% of the $1 billion for expanding EV charging stations to expand the network for hydrogen filling stations.

CalMatters reported that the money should triple the number of stations in California from 65 to 200 in four years. I fill up my car at the station at Snell Avenue and Capitol Expressway in San Jose, which has been reliable. Shell, which had a number of stations with somewhat cheaper fuel, appears to have closed its network.

My Mirai is a second car. It wouldn’t be financially viable if I commuted in it daily. I hope the market takes off as an alternative to electric cars.

— John Fensterwald

A: Thanks, all, for weighing in on a rapidly changing market.


Look for Gary Richards at Facebook.com/mr.roadshow or contact him at mrroadshow@bayareanewsgroup.com.


Originally published at Gary Richards
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