F-Cell – World of Energy Solutions

Lessons learned from European infrastructure

deployment programmes

October 2014

Ben Madden

Ben.madden@element-energy.co.uk

Element Energy Limited

About Element Energy

Element Energy is a leading low carbon energy consultancy . We apply best-in-class

financial, analytical and technical analysis to help our clients intelligently invest and create

successful policies, strategies and products.

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We operate in three

main sectors

We offer three main

services

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Transport • Electric vehicles

• H2 vehicles

• Market uptake

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3

Germany, UK, France and Scandinavia all have advanced hydrogen mobility initiatives

H2

Focus of this

presentation

• Very strong tax incentives

• Network biased on

stations in strategic

locations

• Joint venture including

leading firms

• Aiming at an early

nationwide coverage of

stations

Other nations are also

beginning hydrogen

rollout planning

4

Existing demo

stations

Small university scale refuelers also exist in (not shown):

• Birmingham

• Coventry

• Glamorgan (S. Wales)

• Isle of Lewis

• Loughborough

• Nottingham

There are currently 13 existing and planned hydrogen refuelling

stations in the UK + a series of small university demos

Planned

HRS sites

are indicative

1 Publically accessible upon request

Existing HRS

Existing HRS ‘behind a fence’1

Planned HRS

| 5

London has been a particular focus of hydrogen activities for the

UK, making heavy use of EC funds

‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15

2003–2007

3 hydrogen buses on

fare-paying service:

>90% reliability

2011–ongoing

TfL running a fleet of

H2 buses, refuelled at

a depot in east

London

2011–ongoing

HyTEC project – 5 H2 taxis,

Hyundai vehicles and a

publicly accessible station

2002

LHP established to promote

H2 in London;

2013–ongoing

London Hydrogen

Network Expansion – 5

H2 cars, 6 vans, and 1

new station

2014-15

HyFIVE:

Different OEM

cars

2012/13

UK H2Mobility

Phase 1 and

Phase 2

6

• A 20 station network provides coverage at a 7km

level

• Stations can be positioned alongside major roads

and intersections without sacrificing coverage of large

population centres.

• A medium sized network of 13 stations can provide

comprehensive coverage based on 10km radii

• A basic network (based on existing funded stations

with one additional HRS) provides full coverage with

13km radii.

Geographic modelling suggests that an initial network of 6–20

HRS could provide full coverage of Greater London

20 stations

13 stations

6 stations

Travel time to

HRS (mins)*

Avg. 10

Max. 15

Avg. 14

Max. 21

Avg. 18

Max. 27

* Based on an average traffic speed across London of 29km/h.

The economic implications of alternative approaches to HRS network

development are explored in the refuelling network analysis section below.

| 7

Much of the current infrastructure is designed for stand-alone un-manned

operations

The design for future permanent retail stations is still under development:

– Forecourts preferred by private customers

– Numerous integrated stations already present worldwide (e.g. US, Germany)

– Permitting for forecourts currently difficult in the UK, due to lack of detailed

guidance that regulators can use

– UK demonstration of forecourt solution expected to be deployed in 2015

Regulatory issues are being addressed in the UK to allow medium

term deployment of forecourt-integrated hydrogen stations

Source: Air Products, Shell

| 8

Open topics from UK demonstrations

Hydrogen purity – UK demos have used electrolysis or liquid H2 OR allowed lower

purity requirements than ISO 14687

H2 metering – metering requirements have been less strict than will be needed in a

commercial deployment

Siting – finding sites in dense urbane areas has proved very time consuming

Vehicle technology readiness - A number of classes of vehicle have demonstrated

an insufficient technology readiness for widespread roll-out (buses, taxis, vans)

An improved investment case is required - Individual stations in demonstration

projects have very poor economics which makes securing investment challenging

Vehicle pricing and sales volumes – demonstrations alone do not provide sufficient

confidence to begin rollout of national infrastructure

A number of important topics have not yet been satisfactorily

addressed by the demonstration activities

Suggests the need for co-ordination between industry and

government to begin the commercial rollout of H2 vehicles

| 9

UK H2Mobility is a public/private initiative co-ordinating the rollout

of fuel cell vehicles from 2015

• The UK H2Mobility project has evaluated the role of hydrogen

transport in the UK and is building a business case for

national rollout of vehicles and infrastructure.

• The project, which is a partnership between industry and

government, completed its first phase in 2012 and second

phase in 2013.

UK H2Mobility members (2013)

http://www.ukh2mobility.co.uk/

| 10

Phase 3:

Implementation plan

Phase 2:

Business case

development

UK H2Mobility is now completing its third phase: planning to

implement the rollout strategy

Phase 1:

Role of hydrogen

transport in the UK and

strategy for rollout

2012 2013 2014

Project timeline taken from UK H2Mobility: Phase 1 Results (April 2013).

• UK-specific fact base

• Vision for hydrogen

transport in the UK

• Role of hydrogen

transport in meeting

strategic objectives

• Detailed business

case for delivering

the vision

• Consensus on how to

overcome key

barriers and market

failures

• Define roles of all

actors participating in

the rollout

• Detailed work to

prepare for station

installation e.g.

funding,

specifications,

locations

11

Pricing, production volumes and choice of launch markets have not yet been

declared by car manufacturers

Key focus of H2Mobility discussion in the UK and worldwide, as this affects the

speed and economics of the infrastructure rollout

The early station network will support the 1st generation of

commercial fuel cell vehicles

Commercialisation dates

Company Previous demos Before 2015 2015-2016 2017-2018 2019-2021

BMW 7 generations of H2

ICE saloons

Daimler >100 B-Class

vehicles

Honda >100 FCX clarity (C-

Class FC car)

Hyundai Now deploying a

fleet of ix35 SUV’s

Nissan 30 X-Trail SUV in

US/Japan

Toyota ~100 SUV vehicles

US/Japan/Germany

Source: company press releases

| 12

A relatively slow ramp-up is expected to 2020, with considerable

acceleration by 2030 (from public report)

Source: UK H2Mobility: Phase 1 Results (April 2013).

Overview

• Initial deployment of 65 stations, ~300 stations by 2025, ~1,150 by 2030.

• Around 1.6m FCEVs on the road by 2030, c.300k sales/yr in the UK

• In reality, rollout is likely to be linked to sales volumes rather than time to reduce

investment risks

| 13

The hydrogen station rollout will be phased, reflecting the

relatively low 1st generation vehicle sales

Source: UKH2Mobility Phase 1, public report

A station network strategy based on income,

car ownership and traffic densities has been

developed

An initial nationwide deployment of 65 stations

before 2020 is targeted to ‘seed’ the roll-out

This will be focussed initially around clusters

of stations in major urban centres

Linkage between clusters via major national

roads

The Phase 1 study revealed the importance of

securing more than one station in a region

to create consumer confidence

65 station network to 2020

(Phase 1 report)

| 14

The French H2 Mobilité project has prepared a National

Implementation Plan for hydrogen vehicles

Objectives

Develop a low-risk,

‘bankable’ deployment

plan, even in the early

years of the rollout

Ensure H2 plays a

strong role in the

broader ‘energy

transition’ in France

| 15

The use of ‘captive fleets’ could offer a lower risk pathway to a

national hydrogen station network

Captive fleet definition:

Fleet vehicles with predictable driving

and refuelling patterns, as well as

regular visits to or overnight parking

at a depot

Potentially suitable market segments:

Fleet cars Delivery/utility

Medium duty logistics Taxis

Rationale

Lower cost ‘range-extended’ fuel

cells could reduce ownership

costs of early vehicles

Can allow lower pressure fuelling

Benefits from existing fleet

regulations e.g. zero emissions

logistics/urban access restrictions

H2 stations and fleets could be

matched to improve utilisation

and economics

Fleet ‘anchor loads’ can support

early clusters, which can then be

connected to form corridors and

national coverage

| 16

The captive fleet model allows a start on infrastructure rollout

whilst waiting for the right conditions for nationwide investment

Area where HRS provide coverage Highway with HRS HRS in place as of 2014

Clusters

2017 2020 2030

Clusters

• Affordable investments • Maximises HRS

utilisation rate

National-scale deployment

• Widespread network for passenger car drivers

• Sufficient vehicles to create viable business case for refuelling stations

Investment TRIGGERS

Supply of series FCEVs

• 2nd generation FCEV drives cost decrease

• Policy support • Evidence consumers will

buy

• Regulation barriers addressed

Linkage of clusters Full scale commercialisation

2025

PRECISE HRS LOCATIONS TO BE DEFINED IN NEXT PROJECT STEPS

| 17

Series-produced FCEVs will be

launched in 2014 and 2015 by Hyundai,

Honda and Toyota respectively

Pricing and choice of launch markets

will influence how national H2 mobility

programmes evolve

Resolving practical barriers and

deploying the initial network needs to

begin now

A wide variety of infrastructure

deployment plans and business

structures will be needed, reflecting the

conditions in each country

Sustained public support is also likely

to be required to de-risk the investments

before volume vehicle sales take-of

2014-2017 will be a crucial period for preparing launch markets

for the first generation of fuel cell vehicles