New Report Describes Joint Opportunities for Natural Gas and Hydrogen Fuel-Cell Vehicle Markets

Hydrogen and natural gas share a number of common entry to market barriers. (Image from DOE-EERE Fuel Cell Technologies Office.)

Sandia, supported by the DOE’s Vehicle Technologies and Fuel Cell Technologies offices (within the DOE Office of Energy Efficiency and Renewable Energy, EERE), recently released “Transitioning the Transportation Sector: Exploring the Intersection of Hydrogen Fuel Cell and Natural Gas Vehicles.” The September 2014 workshop considered common opportunities and challenges in expanding hydrogen and natural gas use as transportation fuels. Organized by Sandia, the American Gas Association, and Toyota, workshop participants included the auto industry, freight delivery fleets, gas suppliers, gas-storage developers, utilities, academia, industry associations, national laboratories, and federal/state governments.

Stakeholders identified substantial potential for co-locating natural gas and hydrogen stations rather than building them separately. As natural gas and hydrogen fuels are unlikely to compete for the same market segments (natural gas for fleets and hydrogen for consumers), and station operators could cater to both types of users. Because hydrogen production can use natural gas as a feedstock, selling both fuels could also take advantage of common supply chains.

Well-to-wheels greenhouse gas emissions for a 2035 mid-size car. Fuel-cell electric vehicles powered by hydrogen from renewable sources have the potential to be one of the cleanest alternative technologies. (Figure from DOE Program Record Offices of Bioenergy Technologies, Fuel Cell Technologies, and Vehicle Technologies, 5/10/2013.)

Similarly, the workshop report finds that if companies shift away from separate approaches and toward using common equipment, similar pressures, and the same manufacturing processes, they could enable economies of scale for storage equipment and handling. Common equipment could further improve the business case for co-locating infrastructure, driving down the costs and expanding the market for both fuels.

Other observations included:

• Expanding markets are creating opportunities for new players and partnerships in transportation fuels.
• Multiple generations of vehicle and fueling infrastructure will co-exist and are likely to suit different niches.
• While the growth of alternative fuels will be unpredictable, early station development can provide lessons learned for long-term expansion.
• Thorough system requirements & cost assessments are needed to quantify the benefits of co-developing natural gas and hydrogen.
• Different policies may be more effective for different fuels.  For example, aggressive deployment programs for natural gas vehicles have stimulated the development of complementary, unsubsidized fueling infrastructure. In contrast, zero emission vehicle mandates and public investment in early hydrogen infrastructure have motivated automakers to produce hydrogen fuel cell vehicles.