H2 MOBILITÉ FRANCE

Study for a Fuel Cell Electric Vehicle national deployment plan

v12

Source :

FRANCE DEFINED ITS HYDROGEN MOBILITY

IMPLEMENTATION PLAN

• Part of the Hydrogen Infrastructure for Transport (HIT) project• European project financed by the EU (TEN-T program)

• 4 Member States, 7 partners:• Dutch ministry of Infrastructure and the Environment, Air Liquide, AFHYPAC, Copenhagen

Hydrogen Network, HyER, Hydrogen Link Denmark, and Hydrogen Sweden

• Supported by the Ministry of Environment and Energy• DGEC + ADEME

• Endorsed by the whole Government• NFI plans « Energy Storage »

• Developed by the H2 Mobilité France Consortium• A strong and wide coalition

• Analytical support provided by Element Energy

2

Source :

Government

Energy

companies

Hydrogen and

HRS Producers

Vehicle and

Fuel Cells

Electrolyser

providers

Research

organisations

Regions

EU and French

Associations

H2 MOBILITÉ FRANCE

CONSORTIUM SPANS

FROM ENERGY

COMPANIES TO END

CUSTOMERS

3

H2 MOBILITÉ FRANCE

Outcomes of the study

ENVIRONMENT AND ENERGYBENEFITS

5

Source :

HYDROGEN MOBILITY WILL HELP FRANCE MEET ITS CO2

TARGETS AND SUPPORT AN ENERGY TRANSITION

6

Quality of life• Societal cost savings : 500million €2 over the 2015-2030 period

Societal cost of the CO2 emissions, noise and pollutants of an ICE vehicle: 510 € per year, reduced to 160€ for a FCEV1.

CO2 emissions• By 2030, the fleet of FCEVs will save 1.2Mt of CO2 per year

Equivalent to 780,000 diesel vehicles

• Annual CO2 savings from 1.2Mt p.a. in 2030 to 10.4Mt in 2050

Energy security and impact on

economy

• FCEVs improve the energy independence factor of France3TWhe of electricity used by fuel cell vehicles by 2030

• Value creation of 700M€ for H2 Sales in France

Energy transition

• H2 production through water electrolysers offers the opportunity to integrate renewable generation as well as smooth the loading factor of nuclear plants

• H2 can also be injected in the gas grid or combined with CO2 to produce synthetic methane and thus decarbonise other sectors

1. As per approach use by CGDD in their 2011 report on vehicle total cost of ownership that accounts for social cost of vehicles;

2. Discounted at 4%; EUR 850million undiscounted

Source :

HYDROGEN VEHICLES CAN REDUCE EMISSIONS FROM

TRANSPORT COMPARED TO DIESEL AND PHEVS

• Fuel Cell vehicles offer zero

tailpipe emissions

• No particulates, no CO2, no

NOx, no SOx, low noise

• H2RE-EV: 88% lower emissions

compared to diesel in 2015

• FCEV: 77% lower emissions

compared to diesel in 2030

7

ICE: diesel, BEV: Battery Electric Vehicle, H2RE-EV: H2 Range Extended EV,

FCEV: Fuel Cell Electric Vehicle, PHEV: Plug-In Electric Vehicle

H2 working group analysis based on:• Enerdata Balance scenario: CO2 intensity of

the electricity grid in 2030 – 67g/kWh• Diesel ICE efficiency based on consortium

vehicle manufacturer data

WTW, gCO2eq / km

0

20

40

60

80

100

120

140

160

2010 2015 2020 2025 2030

PHEV

BEV FCEV

H2 RE-EV

ICE diesel

99

37

23

9

2030 values

15

-54%-88%

-77%

Source :

HYDROGEN ENABLES THE WIDESPREAD USE OF

RENEWABLE ENERGY IN TRANSPORT

8

Reference scenario – reference CO2 pathway

By-productSMROn-site WE

• Hydrogen Production will become

decarbonized progressively thanks to

electrolysis and biogas

• Introduction of low carbon production

processes can reduce the carbon footprint

by a factor of two by 2030.

• Existing French electricity grid highly

favourable for producing low CO2 hydrogen

• Biogas reforming could help decarbonizing

SMR footprint

• Large renewable deployments have been

announced for coastal regions

• Hydrogen production supports integration of

high proportions of renewable electricity into

the grid

2020 20302025Current 2017

Source :

ON SITE H2 PRODUCTION BECOMES COMPETITIVE

DISTANCES GREATER THAN 150KM FROM INDUSTRIAL H2

PRODUCTION SITES

9

Assumptions:

• Excluding margin, compression and

distribution costs for onsite production

• 300 km round trip for delivered H2

• Hydrogen costs include revenues of

~1€/kg from balancing services

provided to the electricity grid

On-site water electrolysis

Centralised water electrolysis

5,76,16,47,8

7,27,3

EURO / kg for 80 kg/day hydrogen refuelling station

Large-scale (5-10t/day) WE unlikely to be built in this period

2015 2020 2025 2030

Electricity price assumption of 114 €/MWh for electrolysers in 2030, based on ‘Enerdata Balance’ scenario

Source :

THE FCEV MARKET COULD REACH 800 000 VEHICLES IN 2030

10

2022

602

252

96

355

2030

529

2028

169

2024

502

2026

80 kg/d

212kg/d

420kg/d

HRS Network

Large cars

Mid-size cars

Light commercial vehicles

FCEV parc, x1000

773

23

230

2026

120

203020282022

435

586

78

2024

45167

319

2022 20282024 2026 2030

22

316

3040

6 11

89

70

54

Hydrogen demand, tons x1000 p.a.

Electricity demand for electrolysis, GWh p.a.

3,251

2,269

1,526989

61436819011560 276

2022 20282024 2026 2030

800 000 vehicles

600 HRS

90 000t of hydrogen

3 TWh of electricity demand

MARKET APPROACH

11

Source :

A NATIONWIDE APPROACH WAS INVESTIGATED

AT FIRST

• We followed the approach based on UK and Germany data and methodologies

• For a real passenger car market, a nation-wide infrastructure is needed from the very start

• This requires large investments and generates operating losses the early years

Global H2 infrastructure deploymentNation-wide from scratch

600M€ on 10 years of investment

12

Source :

AN ALTERNATIVE APPROACH WAS THEN DEVELOPED THAT

MINIMIZES RISKS IN THE EARLY YEARS

• The infrastructure roll-out is focused on local fleets in the early years• Vehicles and HRS are deployed once enough local clients are identified

• A good HRS load factor is achievable from the beginning

• Initial investment capacity and risk of under-utilisation are greatly reduced

• We identified suitable market segments(1):

Fleet carsDelivery/utility Urban duty logisticsTaxis

13(1) Buses were not considered among the earliest market due to the current

high cost premium and refuelling patterns in private bus depots

Source :

FIRST ANALYSIS OF MARKET SEGMENTS HIGHLIGHTED

THE ROLE OF CLUSTERS OF CAPTIVE FLEETS

• Captive Fleet definition

• Fleet vehicles with predictable

driving and refuelling patterns

• Vehicles making regular visits to or

overnight parking at a depot

• Cluster definition

• Multiple fleets of customers within

a defined area

• One or a few Hydrogen Refuelling

Stations (HRS) per cluster

14

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

CAPTIVE FLEET APPROACH: A WAY OF STARTING THE

MARKET, AHEAD OF A 3 PHASE NATIONAL ROLLOUT

15

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 FCEV full scale commercialisation

2025

PRECISE HRS LOCATIONS TO BE DEFINED IN NEXT PROJECT STEPS

Source :

STARTING WITH RE-EVS: 65% LOWER VEHICLE COST

VS. FULL POWER FCEVS AT LOW VOLUMES

• Fuel Cell Range-extended Electric Vehicles offer a significantly lower cost route to market than full power FCEVs at low volume, due to smaller fuel cells and lower pressure hydrogen tanks

• At high volumes, purchase premium relative to EV falls to 3 000€ for the RE-EV and 6 000€ for the FCEV

ICE : diesel, BEV : Battery Electric Vehicle, H2RE-EV : H2 Range Extended EV, FCEV : Fuel Cell Electric Vehicle

16

-65%

FCEVH2RE-EVBEVICE FCEVBEVICE FCEVBEVICE

Comparison of van purchase costs including existing bonus/malus*

100 to 500 units/year(2015-2020)

1000 to 5 000 units/year

(2020-2025)

10 000 and 50 000 units/year(2025-2030)

-48%

-6%

H2RE-EV H2RE-EV

100%

Additional fuel cell powertrain costs

Battery cost premium(leasing or ownership model)

Vehicle glider cost (including bonus for electric powertrains between 2015-20)

* Current bonus of ~6 000€ reduces cost premium of electric powertrains relative to a diesel

van, although a cost premium due to the battery remains. By 2020, battery cost reductions

are expected allow a competitive EV cost without the bonus, and the remaining battery cost

will be offset by fuel cost savings during the life of the vehicle

Source :

ADAPTING STATION SIZE TO EXPECTED FLEET DEMAND

ENABLES A 32% REDUCTION IN HYDROGEN COST

VERSUS LARGER STATIONS IN THE EARLY YEARS

17

• Starting with 350 bar refuelling

enables lower HRS costs, but HRS

remains compatible with 700 bar

vehicles

• HRS for captive fleets are easier to

size as a high utilization rate can be

achieved from the beginning

Dispensed H2 costs range for captive fleet HRS

Average dispensingcapacity (kg/day)

Target dispensing capacityfor captive fleets

10 20 30 40 50 60 70 80 90 100 110 210

350bar 35kg/day

350bar 80kg/day

350/700bar 80kg/day

350bar 212kg/day

350/700bar 212kg/day

-32%

€/H2kg

Source :

WITH H2RE-EVS, THE TCO1 GAP VS. DIESEL

COULD BE CLOSE TO 5K€ FOR CAPTIVE FLEETS

• Significant upside/externalities(2)

• Increased number of addressable duty cycles compared with battery electric vehicles

• Reduced accident rate for electric powertrains due to lower driver fatigue

• Increased vehicle availability due to rapid vehicle fuelling

• Restrictions in urban access with diesel vehicles anticipated• Increasing needs for clean vehicles

• The current ‘Bonus-Malus’ vehicle incentive system helps to reduce the TCO gap in the early years

18

(1) TCO: Total Cost of Ownership(2) Workshop with 10 French fleet operators held in Feb 2014

TCO of diesel

Remain-ingTCO

gap

Additional upside/

external-

ities

TCO of H2RE-EV

Final gap: 5k€

Current bonus

for zero

emission vehicles

Source :

VALLEY OF DEATH MUST BE OVERCOME TO

REACH ECONOMIC VIABILITY

19

• Losses in the early years are

reduced by 75% with the

captive fleet approach

• HRS investments after 2020

expected to be NPV positive

• TCO premium is ~EUR 15,000

per vehicle before incentives

in first 5 years

17 HRS CAPEX 11M€

338 HRSCAPEX 319M€

247 HRSCAPEX 247M€

Capex Operating cashflowFree cash flow of passenger car led HRS rolloutMillion EUR

2016 2020 2026

Source :

H2 PRICE STRATEGY MAXIMIZES EARLY REVENUES

AND ACHIEVES DIESEL PARITY AFTER 2020

20

Revenues from H2 sales, EUR/kg

Example of H2 revenues at EUR 13/kg for first 5 years (captive fleets)

Strong growth in FCEV passenger cars beyond 2020

Continued fall in H2 cost allows opportunity for fuel taxation while remaining competitive with diesel

Subsidies

TaxesCustomeracceptableprice

CONCLUSION AND NEXT STEPS

A REALISTIC PLAN FOR A FRENCH INFRASTRUCTURE ROLL-OUT IS POSSIBLE AND ALLOWS A QUICK START OF A PROFITABLE MARKET

21

Source :

GROWING CLUSTERS: THE STRUCTURE OF THE

NETWORK THAT COULD PROVIDE NATIONWIDE

COVERAGE BY 2030

Area where HRS provide coverage

Highway with HRS

HRS in place as of 20142017 2020 2030 2025

• The rollout of Hydrogen Refilling Stations and vehicles should be phased to reduce

investment risks in the early years

• The early clusters do not preclude initiatives starting in other regions

• The clusters should be demand-led and other clusters could form in the short term

• The mapped rollout does however show a progressive linkage of cities.

This minimizes the number of HRS on corridors in the early years, when low utilization level

would make them more unprofitable than HRS placed in cluster.

PRECISE HRS LOCATIONS TO BE DEFINED IN NEXT PROJET STEPS

Source :

THE NUMEROUS LOCAL HYDROGEN ACTIVITIES IN

FRANCE CAN ACT AS UNDERLYING STARTING POINT

23

X 5

X 1

QuadriX 10

X 2

X 50

X 2

X 1

X 20

X up to 10

X 1

X 1

demos (8) Planned 2014

By-product

Green H2: from photovoltaic, wind

energy, or waste biogas

in use (end 2014) on order

/planned

Steam Methane Reforming (SMR)

Hydrogen vehicles

Hydrogen refilling stations

Hydrogen production

Planned

Source :

PUBLIC AUTHORITIES’ SUPPORT IS STILL NEEDED

• Explicit recognition of FCEVs as a solution for future decarbonised mobility• In key public policies like the Energy Transition Law, national plans to

reduce polluting emissions, low carbon strategy etc.

• Give a safe and stable regulatory framework• To local authorities, solutions providers and customers

• Support significant demonstration projects

• Develop incentives to promote these solutions and build deployment volumes to allow a self-sustaining future

24

Source :

REGULATIONS ARE EVOLVING INTO AN INTEGRATED

FRAMEWORK TO MINIMISE BARRIERS TO DEPLOYMENT

• Regulation Codes and Standards (RCS) authorities• Strong involvement over the last few years (DREAL, Regions...)

• Lots of recent progress made in the H2 regulatory framework

• FCEVs• Registration of vehicles allowed under the EC Whole Vehicle Type Approval(1)

• Fire authorities are already actively involved in the safety procedures

• Underground car parks, tunnels and building/car park insurance to be defined next

• H2 production and transport• Harmonization of authorization of procedures across France

• Definition of new thresholds for hydrogen industrial production (ICPE 1415)

• No identified barriers relating to transport of Hydrogen

• HRS siting• Regulations are needed by end 2014 for captive fleets and by mid 2016 for fully public

passenger car refuelling stations

25

(1) Regulations 79/2009 and 406/2010 applied through Arrêté of 22 mars 2011 (DEVR1108437A) in France

Source :

STRATEGY UNTIL 2020

HRS + FCEV: NUMBER AND TYPE, PHASES…

• Core Customers identified

• First clusters should be deployed• 500-700 fleet Vans

• Tens of Trucks

• 15 to 20 HRS

• Bi-pressure dispensing close to borders

• 350bar for local fleets

• Mixture of on-site production and delivered H2depending on relative advantages at each site

• Levels of ambition among the regions will determine early locations

• And create trans-border corridors• German corridor towards Dusseldorf

• Belgian corridor towards Brussels and Netherlands

EARLY CITIES AND FIRST CORRIDORS

26

Source :

2014 – 2015 PLAN

POTENTIAL DEPLOYMENTS

• 5 HRS – 80 kg/day (yellow dots)• 1 dual pressure

• 4 x 350 bar

• 400 FCEVs• 300 RE-EVs Vans

• 100 FCEVs

2014-2015 CITIES

27Green dots: Existing or under construction HRS

Source :

FUNDING NEEDS (FIRST ESTIMATE)

28

2014 2015 - 2019 2020-2024 2025-2030

FCEV/U (k€) 100,0 60,0 40,0 25,0

H2RE-EV/U (k€) 50,0 30,0 23,0 19,0

HRS 35MPa (M€) 0,9 0,9

HRS Medium (M€) 1,2 1,2 0,8 0,6

HRS Large (M€) 0,9 0,7

Vehicles (units) 150 1200 119500 760300Total CAPEX (M€) 6,5 9,0 4414,5 18045,7

Funding need (M€) 1,7 2,0 0,0 0,0

HRS Deployments (units) 7 15 319 247Total CAPEX (M€) 4,9 11,5 319,0 246,9

Funding need (M€) 3,8 10,5 95,7 0,0

Total Fundings (M€) 5,4 12,5 95,7 0,0

Private partners HRS 1,2 1 223 247

Source :

GROUPING THE EXISTING H2MOBILITY INITIATIVES CREATES

THE START OF A EUROPEAN HYDROGEN NETWORK

29

TEN-T Corridors

165 km 175 km

120 km150 km

150 km

150 km

120 km

160 km

230 km

70 km

270 km

85 km

70 km

45 km

75 km

220 km310 km

130 km

150 km

75 km

95 km

370 km

120 km

THANK YOU

30

THE SOCIETAL COST SAVINGS BROUGHT BY FCEVS DISPLACING DIESEL ICE WILL

AMOUNT TO C. EUR500MILLION OVER THE 2015-30 PERIOD

Source: Element Energy 1 – As per societal cost used by the CGDD, before applying a discounting factor 2 – Discounting factor of 4%, as per CGDD approach, undiscounted annual savings = EUR260m, 2015-30 savings = EUR850m

Annual CO2 emission savings (WTW), tCO2, 2030

0,4

1,6

-1.2

Diesel ICE FCEV

Quality of life

15,600km p.a.

H2 production mix: WE (75%), by-product (20%), SMR (5%)

PM

1.6

SO2

kg per year

NOX

42

161

EUR, 2030

High population density

Low population density

Emissions of EURO 6 diesel ICE and corresponding cost1

121180

FCEVDiesel ICE

-59

• The societal cost of the CO2 emissions, noise and pollutants of a ICE vehicle amounts to EUR510 per year vs. EUR160 for a FCEV in 2030

• Accounting for discounting of savings, the cumulative benefits of the FCEV parc will be EUR140million per year in 2030 and c. EUR500million over 2015-20302

CO2 EMISSIONS

A FCEV has no tailpipe emissions, and even accounting for WTW emissions, offer significant savings over a diesel ICE (c. -50% in 2020, increasing to -75% by 2030). This translates into a saving of 1.2tCO2 per year by vehicle in 2030, when the societal cost of CO2 is evaluated at EUR105/tonne1

AIR QUALITY

Air pollutants (e.g. NOx, Particulate Matter, SO2) affect people’s health and life expectancy. Air quality targets are not met in 15 areas in France, leading to the risk of fines by the European Commission. The parc of FCEVs will avoid 1,300 tonnes of air pollutants by 2030, representing EUR98million annual societal cost savings

Societal cost of noise1, EUR/year, 2030

NOISE

Noise also impacts on health, leading to further benefits from FCEVs that are quieter than equivalent diesel vehicles

CO2 EMISSION SAVINGS ARE EXPECTED TO REACH 1.2MT P.A. IN 2030 AND 10MT P.A. IN2050, HELPING FRANCE MEET ITS EMISSION REDUCTION TARGETS

FCEV parc, cars and vans, million Annual CO2 emission savings, WTW, Mt

• METHOD: FCEV sales projections as developed by the European Climate Foundation1 are combined with annual sales assumptions to estimate the number of vehicles in circulation (parc size), taking a 15 year life assumption, in line with the CGDD approach.

• This results in a parc increasing from 0.8 million in 2030 to 7.3 million FCEVs by 2050 (17% of total light vehicles parc, broadly in line with the ANCRE ‘decarbonisation through electricity’ scenario2)

% parc

2%

9%

17%

% current light vehicle emissions

1%

5%

9%

• Despite the limited parc share that FCEVs represent by 2030, their cumulative savings amount to 4Mt of CO2

between 2015-2030. The annual saving in 2030 (1.2Mt) is the equivalent of taking 780,000 diesel ICE vehicles off the road

• The annual savings will increase from 1.2Mt p.a. in 2030 to 10.4Mt p.a. in 2050, which represent 9% of current WTW emissions of light vehicles

• FCEVs will allow the decarbonisation of long distance vehicles that cannot transition to pure electric powertrain

CO2

emissions

2

8

6

4

0

2030 2040

7.3

2050

3.7

0.8

0

2

4

6

8

10

12

2015 2020 2025 2030 2035 2040 2045 2050

Source: Element Energy ANCRE: French National Alliance for Energy Research Coordination CGDD: General Committee of Sustainable development 1 - ‘Fuelling Europe’s future’ European Climate Foundation report, June 2013 2 – This ANCRE scenario implies an FCEV share of 5% new passenger car registrations in 2030, rising to 20% in 2050

A TRANSITION TO HYDROGEN VEHICLES WILL IMPROVE THE TRANSPORT ENERGY

TRADE BALANCE AND ENERGY SECURITY

Source: Element Energy 1 – ‘Fuelling Europe’s future’ ECF report, 2013 2 – As electricity is mostly generated from renewables or based on nuclear for which the strategic storage is equivalent to 1 year of demand vs. 3 months of storage for diesel 3 – CCFA

Energy security and impact on

economy

2030

SMR

WaterElectrolyser

By-product

100%

2025

100%

2020Current

100% 100%

H2 production share, % At the EU level, the evaluation of macro economic impacts of

the transition to low emissions vehicles1 shows it would have a positive impact on GDP. Net additional jobs have been evaluated at between 660,000 and 1.1 million by 2030, across all industry sectors

At France level, the development of the FCEV market presents two opportunities for the transport energy balance trade and for employment:

H2 mobility will allow a move away from diesel (for which value is mostly created abroad) to H2 production that relies mainly on electricity, an energy vector with a higher energy independence index than diesel2. The production and sales of H2 for vehicles in France would represent a value of over EUR700million p.a. by 2030

The automotive industry is still a large employer in France (135,000 employees in manufacturing and over 200,000 for OEMs supply chain3). The skilled workforce will present the opportunity of attracting the manufacturing of high-tech FCEVs in France and thus sustain/ provide further employment opportunities 700

Hydrogen value chainBased on assumption that 88% of electricity value is created in France in 2030 (See Appendix B for details)

x c. 0.8 million FCEVs paying EUR1k

p.a. in H2

Value creation for 2030 in France from H2 salesmillion EUR

France Abroad

86%14%