Hydrogen stations: planning and
investment in California
A California Roadmap
Catherine Dunwoody
California Fuel Cell Part...
FCEV market launch: 2015-2017
Stations must come first
• 68 stations provide coverage to
enable market launch
» Supports customer convenient fueling in
...
Building a statewide network
Map of 68 Hydrogen Fueling Stations: Existing, In Development and Needed
Los Angeles Area
Bay...
Emeryville
West Sacramento
Cupertino
Foster City
Mountain View
Open
In Development
Funded in 2013
Target areas for
future ...
Burbank
Torrance
Newport Beach
Irvine
Fountain Valley
West LA
Thousand Palms
Harbor City
Beverly Hills
Diamond Bar (upgrad...
Working with fuel retailers
NACS Magazine, August 2013
EIN cash flow model
• Offers a station-level view
» Allows user to consider multiple scenarios
www.einow.org
H2NIP: FCEV deployment scenarios
2010 OEM surveys
CARB ZEV
likely
compliance
¼ ZEV likely compliance
Hydrogen Network Investment Plan
H2 NIP: Capital cost share essential
Govt.
(65%)
Private
CostShare
Better for
Consumer
Better for
Station
Provider
Core Ma...
H2NIP: Important to cover O&M
Public Funds
IRR Capex Grant MAG Grant O&M Grant
No Incentive -7.9% 0 0 0
Capital Grant 9.5%...
H2NIP: Market assurance grants
Core market, 500 kg/day station, $2M station (65% cost share), $9/kg H2 ($5.50 wholesale) –...
H2NIP: Incentives vary by market
Open Today:
• Burbank
• Emeryville
• Fountain Valley
• Harbor City
• Irvine #1
• Newport Beach
• Thousand Palms
• Torrance...
New California funding for hydrogen
California ZEV Action Plan
• By 2015: California major metropolitan areas “ZEV-
ready” with infrastructure and streamlined...
Members
Air Liquide
Air Products
Alameda-Contra Costa Transit District
(AC Transit)
Automotive Fuel Cell Cooperation
Balla...
H2 Station Investments in California: F-CELL presentation 9/30/13
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H2 Station Investments in California: F-CELL presentation 9/30/13

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California is preparing for fuel cell electric vehicle market launch in beginning in 2015. Automakers have made their announcements and hydrogen stations are open, in construction and in planning. This presentation given by Catherine Dunwoody at FCELL in Germany focus on CaFCP's work to coordinate roll out of cars and stations.

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  • We are preparing for fuel cell electric vehicle market launch in California beginning in 2015. Automakers have made their announcements and we are preparing hydrogen stations so their customers can get fuel as conveniently as they do today with gasoline. Fuel cell buses are poised to enter the commercial market too, and we are supporting larger scale deployments to achieve serial production and reduce costs. Today I’ll focus on our work to coordinate rollout of cars and stations.
  • For passenger vehicles, the stations must come first. In 2012 CaFCP published A California Road Map. The roadmap represents the collective thinking and expertise of CaFCP members, including automakers, government and station providers, and uses the modeling expertise of our university partners at UC Irvine and UC Davis as well as NREL. It is the result of over 1 1/2 years of collaborative discussions and analysis.
  • We have one station, Emeryville, open in the San Francisco Bay Area today. Three additional stations were funded earlier this year. Many more are required to fully build out this cluster.
  • Most of our public stations in California are located in Southern California, and many more are in development. You can keep track of our progress by visiting our station map located on our website.
  • Most hydrogen stations in California are located at retail fuel stations. These fuel stations are owned by small- and medium- sized businesses who have several stations or who blend and deliver fuel to independent stations. For the most part, the big oil companies are out of the retail business in California. Station owners are interested in selling new fuels like hydrogen because gasoline sales are declining due to more efficient vehicles. They are interested because it is a potential new market, but are hesitant because the business model is different.
  • To better understand the fuel retailer perspective and to estimate the cost of a 68 station network, we worked with Energy Independence Now to develop a cash flow model with academic and stakeholder input. Our aim was to view selling hydrogen fuel in the same way a fuel retailer looks at selling gasoline today. A retailer gets a loan to install new equipment, and expects to incur negative cash flows for a period of time until their revenues exceed expenses and they become profitable. One of the key results is that the break-even point for hydrogen will be much longer than station owners are willing to tolerate. This is because FCEVs are just entering the market, yet the stations need to be there even if they are underutilized in the early years. This is why government incentives are so important to launch this new market.
  • From a station owner’s perspective, they see significant uncertainty as to when they can expect full utilization of a hydrogen station. The period of under utilization will vary greatly depending on how quickly automakers ramp up FCEV sales, and of course how quickly customers buy cars.These different scenarios represent different rates of vehicle roll out. The first scenario is based on a vehicle survey conducted by CaFCP, CARB and CEC in 2010. It is our most recent survey data. The second scenario is based on the California Air Resources Board’s ZEV regulation in which they project a “likely compliance scenario that results in approximately 10,500 FCEVs by 2017 and about 100,000 by 2023. The third scenario is a much slower rollout that represents a “worst case scenario” a fuel retailer might include in their business case analysis. It could reflect a single, poorly situated station that customers avoid, or an overall failure of FCEVs to gain market traction.This analysis shows that the rate of FCEV market uptake significantly impacts the ability of a H2 station owner to make a return on their investment.
  • CaFCP and several members engaged Energy Independence Now to develop a hydrogen network investment plan that would address fuel retailer and other market participant concerns and risks. They used this input along with a H2 NIP model (based on their original cash flow model) to evaluate and recommend incentives and network strategies to promote successful market launch and transition to self-sustaining business modelSome of their findings include:All market participants (autos, fuel station providers, investors) need to know the government will sustain investment all the way to and through market launch, and they need to see a clear plan to implement these investments (sufficient funding and state plan)Investors and station providers need more transparent FCEV projections (surveys)Automakers need to know stations will remain open through market launch (MAGs)Fuel station providers need assurance they can avoid operating losses in the early years (MAGs)Coordination among stakeholders is essential (station data monitoring, OEM location vetting, partners to help implement)There are many more analyses and recommendations regarding specific incentive tools, but I’ll highlight just a few:
  • Cost share of capital investment is absolutely necessary in early market. Early market stations cannot make money without this support because early stations are more expensive and they sell less fuel. This output from the H2 NIP model shows how station capital cost and fuel price impact return on investment for a core market station that receives a 65% cost share, assuming vehicles roll out according to the ZEV likely compliance scenario. California has offered at least 65% cost share for its funding opportunities, and this analysis demonstrates it will be important to continue funding at this level to enable hydrogen sales at a price competitive with gasoline.
  • FCEV market growth is a significant uncertainty for early station providers. If everything goes according to plan, a core market station may lose money for a couple of years, and an incentive to cover O&M costs during that time is enough to bump up the returns to an acceptable level.
  • But what if FCEVs come slower than expected, or a particular station location is less attractive to consumers? A market assurance grant would mitigate this downside risk by assuring station owners they will remain “whole”, although the payments should always be less than what they would earn by selling fuel. MAGs could be funded by government and others who want to ensure station operators don’t get discouraged and close stations prematurely.
  • Different types of station markets (core, emerging and connector) require different incentives. A 500 kg/day station in a core market (one that has lots of FCEV customers in early years) will need less capital cost share and less O&M support from the MAG fund than a 100 kg/day station in a connector market, such as the I-5 station between Southern and Northern California. In fact, it may be difficult to obtain proposals for the connector stations and these may need a different approach.
  • State investment today has brought us to this point. Today California has a small network of public hydrogen stations, and since 2010 has invested over $35M with station developers to expand that network. With investments to date we can expect between 25-30 public hydrogen stations in place by 2015. We are almost halfway to our goal.30, however, is not the 100 that we estimate is necessary to build the initial network.Notes: State and local funding to date: $65M (includes $3M for Oakland transit-only, plus funds for SFO which reverted). $35M funding since 2010 includes 2CEC PONs, contract with SCAQMD and SCAQMD cost share for CEC funded stations.
  • The California legislature recently passed Assembly Bill 8, and Governor Brown has publicly stated he will sign it. The bill authorizes extensions of existing programs to fund alternative fuels and air quality improvement programs that support California’s work to achieve clean air, reduce carbon emissions and shift away from petroleum fuels. One element of the bill allocates up to $20 million per year to fund at least 100 hydrogen stations. The California Air Resources Board survey’s automakers each year to determine their following 3 model-year projections for FCEVs, and with the California Energy Commission they evaluate progress toward achieving a network of stations that provides the coverage and capacity to support FCEVs. The bill allows the State to use innovative financing mechanisms to support the early market and achieve at least 100 stations. This is a significant commitment from the State of California, integral to achieving the goals set forth by Governor Brown in his ZEV executive order and action plan.
  • The ZEV Action Plan calls out specific actions for hydrogen. Governor Brown’s staff have taken a strong leadership role to coordinate state agencies and stakeholders to implement both plug-in and fuel cell electric vehicles. We are preparing local governments to deploy infrastructure by providing permit guidance and support, co-funding investments in infrastructure, coordinating planning activities and reaching future customers so that we can grow ZEVs in the California to exceed 1.5 million in the next 10-12 years.
  • Enabling a successful hydrogen station network will be essential to achieving California’s ZEV goals. Automakers are producing excellent fuel cell vehicles, and we know customers will embrace FCEVs if they can fuel as conveniently as they do today. There is a lot of work ahead, and we have the tools in place to make it happen.
  • Thank you for your attention, and please visit us at www.cafcp.org.
  • H2 Station Investments in California: F-CELL presentation 9/30/13

    1. 1. Hydrogen stations: planning and investment in California A California Roadmap Catherine Dunwoody California Fuel Cell Partnership September 30, 2013
    2. 2. FCEV market launch: 2015-2017
    3. 3. Stations must come first • 68 stations provide coverage to enable market launch » Supports customer convenient fueling in early markets » Enables travel throughout early market regions and state
    4. 4. Building a statewide network Map of 68 Hydrogen Fueling Stations: Existing, In Development and Needed Los Angeles Area Bay Area Locations based on: • Demographic information • Individual OEM market assessments • CEC/CARB Vehicle Survey • Hybrid and alt fuel vehicles registrations • Geographic distribution of Clean Vehicle Rebate Program
    5. 5. Emeryville West Sacramento Cupertino Foster City Mountain View Open In Development Funded in 2013 Target areas for future funding Northern CA Public Hydrogen Stations Contact: Joe Gagliano Infrastructure Business Development Specialist JGagliano@cafcp.org | 714-393-2520 August 2013 Managed by BKi
    6. 6. Burbank Torrance Newport Beach Irvine Fountain Valley West LA Thousand Palms Harbor City Beverly Hills Diamond Bar (upgrade) Hawthorne Hermosa Beach Irvine (upgrade) Irvine North San Juan Capistrano Los Angeles Santa Monica West LA Westwood Anaheim Chino Mission Viejo Woodland Hills Open In Development Funded in 2013 Targets areas for future funding California Fuel Call Partnership www.cafcp.org/stationmap Southern CA Public Hydrogen Stations
    7. 7. Working with fuel retailers NACS Magazine, August 2013
    8. 8. EIN cash flow model • Offers a station-level view » Allows user to consider multiple scenarios www.einow.org
    9. 9. H2NIP: FCEV deployment scenarios 2010 OEM surveys CARB ZEV likely compliance ¼ ZEV likely compliance
    10. 10. Hydrogen Network Investment Plan
    11. 11. H2 NIP: Capital cost share essential Govt. (65%) Private CostShare Better for Consumer Better for Station Provider Core Market, ZEV Likely Compliance, $2m 500kg/day Delivered Gas Station, Built in 2015: *Market Assurance Grants not included Appropriate Cost-Share Depends on Many Factors IRR of a 2015 Core Market: 500-DH2 Station Vehicle Sale:ZEV Likely Compliance If long term Hydrogen Retail Price 9% $8.00 $8.50 $9.00 $9.50 $10.00 $10.50 $11.00 $11.50 $12.00 $1,000k -2.7% 11.4% 21.0% 28.8% 36.0% 43.0% 49.9% 56.7% 63.4% $1,100k -3.8% 10.1% 19.5% 26.9% 33.7% 40.2% 46.6% 53.0% 59.1% $1,200k -4.9% 9.0% 18.0% 25.2% 31.7% 37.8% 43.7% 49.7% 55.5% $1,300k -5.8% 7.7% 16.7% 23.7% 29.9% 35.6% 41.3% 46.8% 52.4% $1,400k -6.7% 6.5% 15.5% 22.3% 28.2% 33.8% 39.1% 44.4% 49.6% $1,500k -7.6% 5.4% 14.3% 21.1% 26.8% 32.1% 37.1% 42.1% 47.1% $1,600k -8.3% 4.4% 13.3% 19.9% 25.4% 30.6% 35.4% 40.2% 44.9% $1,700k -9.1% 3.4% 12.3% 18.8% 24.2% 29.2% 33.8% 38.4% 42.8% $1,800k -9.7% 2.5% 11.4% 17.8% 23.1% 27.9% 32.4% 36.7% 41.0% $1,900k -10.4% 1.7% 10.4% 16.9% 22.1% 26.7% 31.1% 35.2% 39.3% $2,000k -11.0% 0.9% 9.5% 15.9% 21.1% 25.6% 29.9% 33.9% 37.8% $2,100k -11.5% 0.1% 8.6% 15.1% 20.2% 24.6% 28.7% 32.6% 36.4% $2,200k -12.1% -0.6% 7.7% 14.3% 19.3% 23.6% 27.6% 31.5% 35.1% $2,300k -12.6% -1.3% 6.9% 13.5% 18.5% 22.7% 26.6% 30.4% 33.9% $2,400k -13.1% -1.9% 6.2% 12.7% 17.7% 21.9% 25.7% 29.3% 32.8% CapitalExpenseofStation
    12. 12. H2NIP: Important to cover O&M Public Funds IRR Capex Grant MAG Grant O&M Grant No Incentive -7.9% 0 0 0 Capital Grant 9.5% $1,300k - - Capital Grant + MAG or O&M 12.8% $1,300k $114k - Private Total Grant Capex TOTAL COST - $2,000k $2,000k $1,300k $700k $2,000k $1,414k $700k $2,114k Core market, 500 kg/day station, $2M station (65% cost share), $9/kg H2 ($5.50 wholesale) – $2.18 net margin ZEV likely compliance (10,500 FCEVs by 2017): ($100,000) ($50,000) $0 $50,000 $100,000 $150,000 $200,000 $250,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 $peryear Sta on Opera onal Profit (EBITDA), MAG Payments O&M Support (not MAG) Debt Payment Opera onal Profit without MAG Opera onal Profit with MAG/O&M 2015 Core Market: 500-DH2
    13. 13. H2NIP: Market assurance grants Core market, 500 kg/day station, $2M station (65% cost share), $9/kg H2 ($5.50 wholesale) – $2.18 net margin ¼ ZEV Likely Compliance (2,625 FCEVs by 2017): ($150,000) ($100,000) ($50,000) $0 $50,000 $100,000 $150,000 $200,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 $peryear Sta on Opera onal Profit (EBITDA), MAG Payments O&M Support (not MAG) Debt Payment Opera onal Profit without MAG Opera onal Profit with MAG/O&M 2015 Core Market: 500-DH2 Public Funds IRR Capex Grant MAG Grant O&M Grant No Incentive -16.6% 0 0 0 Capital Grant -7.2% $1,300k - - Capital Grant + MAG or O&M 0.1% $1,300k $427k - Private Total Grant Capex TOTAL COST - $2,000k $2,000k $1,300k $700k $2,000k $1,727k $700k $2,427k
    14. 14. H2NIP: Incentives vary by market
    15. 15. Open Today: • Burbank • Emeryville • Fountain Valley • Harbor City • Irvine #1 • Newport Beach • Thousand Palms • Torrance • West LA #1 In Development: • Beverly Hills • Diamond Bar • Hawthorne • Hermosa Beach • Irvine #2 • Los Angeles • San Juan Capistrano • Santa Monica • West LA #2 • West Sacramento • Westwood • Woodland Hills • Mountain View • Mission Viejo • Cupertino • Foster City • Chino • Anaheim Hydrogen stations in California
    16. 16. New California funding for hydrogen
    17. 17. California ZEV Action Plan • By 2015: California major metropolitan areas “ZEV- ready” with infrastructure and streamlined permitting • By 2020: California ZEV infrastructure can support up to 1 million vehicles » Including widespread use of ZEVs for freight and public transit • By 2025: Over 1.5 million ZEVs in California 17 Visit www.cafcp.org/toolkits/cities to download the ZEV Action Plan
    18. 18. Members Air Liquide Air Products Alameda-Contra Costa Transit District (AC Transit) Automotive Fuel Cell Cooperation Ballard Power Systems California Air Resources Board California Department of Food and Agriculture California Energy Commission California State University-Los Angeles Center for Energy Efficiency and Renewable Technologies (CEERT) Chrysler Daimler Energy Independence Now General Motors Honda Hydrogenics Hyundai Institute of Transportation Studies, UC Davis Linde North America, Inc. National Fuel Cell Research Center, UC Irvine National Renewable Energy Laboratory (NREL) Nissan Powertech Labs Proton OnSite Sandia National Laboratories South Coast Air Quality Management District Southern California Gas Company SunLine Transit Agency Toyota U.S. Department of Energy U.S. Department of Transportation U.S. Environmental Protection Agency U.S. Hybrid Volkswagen www.cafcp.org

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