Memorandum submitted by Air Products PLC
ABOUT AIR
PRODUCTS PLC
Air Products is the world's largest hydrogen
manufacturer and the market leader in hydrogen fuelling stations,
having built over 100 stations and completed more than 90,000 safe
vehicle fuellings. The company is leading efforts to develop a
hydrogen infrastructure here in the United Kingdom, having supplied
hydrogen fuelling facilities to Transport for London, the University
of Birmingham, the University of Loughborough, Yorkshire Forward
(Rotherham), CnEs Stornoway and Camden Council. These innovative
projects represent the first steps in establishing hydrogen's
place in the UK energy mix.
1. Executive Summary
1.1 Air Products is concerned that the UK
is failing to prioritise the need to invest in hydrogen. As a
transport fuel, hydrogen is a reality today and the UK is at a
tipping point in terms of the need for investment.
1.2 Hydrogen and the necessary infrastructure
can address long term issues associated with carbon emissions,
air pollution, safety and energy storage.
1.3 A "hydrogen fuel cell—electric
hybrid" vehicle solves the problems associated with both
emissions by conventional vehicles at the point of use and the
inability of electric vehicles to offer equivalent range and performance
of conventional vehicles. "Hydrogen fuel cell—electric
hybrid" vehicles provide the same value proposition as the
petrol/diesel vehicles we drive today.
1.4 Hydrogen is also a solution to the problem
of intermittent energy associated with some forms of renewable
energy and the demands that electric cars would put on the grid.
1.5 Government procurement has the potential
to drive hydrogen towards commercialisation. However it can also
undermine the roll out of hydrogen development by focusing only
on electric vehicles and recharging infrastructure.
1.6 Investment in low carbon technologies
has the power to drive the UK economy and generate new jobs across
sectors, including manufacturing and research.
1.7 New plasma gasification and molten carbonate
fuel cell technologies are being positioned for UK roll out by
Air Products to allow the generation of renewable power and/or
green hydrogen from biogas or municipal solid waste thereby helping
the government achieve multiple objectives.
2. Has the Government done enough in its
stimulus package?
2.1 The £250 million investment
pledged by the Government into ultra low carbon vehicles is welcome.
It is crucial that the UK Government builds the infrastructure
for low carbon vehicles and offers incentives for the purchase
of low carbon vehicles.
2.2 The proposals for low carbon transport
announced in the budget were, however, too focused on the short
term solution of plug-in electric vehicles. All of the £250 million
additional funding is going towards electric cars, with the vast
majority used as an incentive for consumers to buy electric powered
vehicles and to build the recharging infrastructure.
2.3 The Government should not neglect the
need to build a wider technological infrastructure needed to support
hydrogen fuel cell—electric hybrid vehicles as part of this
initiative.
2.4 Centralised green hydrogen and synthesis
gas production technologies should be also supported and not just
hydrogen fuel cell applications in order to facilitate a wider
industry transition to green technologies to allow the majority
of supplies to the new hydrogen applications to be sustainable.
3. Which technologies have the biggest potential?
3.1 The future of low carbon technologies
will include a mixture of different technologies and solutions.
One of the key transformational technologies that will be in that
mix is hydrogen fuel cell technology. UK investment in hydrogen
fuelling infrastructure and hydrogen production technology is
already starting to tackle the carbon emissions that are causing
climate change and cutting air pollution in our cities. The UK
has the potential to be a leader in hydrogen technologies creating
jobs and driving the UK economy.
3.2 It is important that the Government
does not only focus its energies on traditionally supported renewable
energy sources at the expense of energy sources which can provide
multiple products including green hydrogen. These other "sustainable"
energy sources have larger carbon footprints equivalent to renewable,
but they have the potential to leap frog existing technologies
if given the right government support.
3.3 A "hydrogen fuel cell—electric
hybrid" vehicle has a much broader user-potential than current
plug-in electric vehicles. The batteries used to power electric
vehicles cannot offer the same range, performance and refuelling
time of a conventional vehicle and will therefore be attractive
only to a niche market. By contrast, electric-hydrogen hybrid
vehicles can compete with conventional vehicles in terms of range,
performance and refuelling time and like electric vehicles give
off no emissions at the point of use.
3.4 Hydrogen also addresses the further
problem of air pollution. The only emissions from a hydrogen vehicle,
at the point of use, are water and energy. The UK is subject to
the highest levels of dangerous traffic fumes of any country in
Europe and most of these fumes are focussed on Britain's cities.
Air pollution is linked to respiratory disease, strokes and lower
life expectancy as well as more minor ailments like eye and lung
irritation.
3.5 A further benefit of hydrogen is that
it addresses problems associated with the intermittent energy
generated by renewable energy sources. The UK offers a vast resource
in terms of renewable energy sources. In the future, it may be
possible to generate large amounts of energy from this island's
access to offshore wind and tidal power. There have, however,
been problems identified with wind and other renewable forms of
energy because of their intermittent nature. The outcome of sourcing
energy from most renewables is that the energy supply is subject
to uncontrollable conditions, including seasonal variation and
is therefore not available on demand.
3.6 For intermittent renewable energy sources
to be effective there needs to be facilities for the energy produced
to be stored and large-scale electricity storage is not possible
with current technologies. Batteries are not suitable for this
purpose because they typically lose energy over time and so would
not be effective for long term energy storage. By contrast, hydrogen
is a very efficient energy carrier. Excess energy created by a
renewable energy source can therefore be used to generate hydrogen,
which can be converted back to electricity to feed the grid when
required or alternatively used to fuel cars.
3.7 In addition, electric cars all being
charged for several hours at a time during the same period of
time stands to put considerable pressure on the grid and could
potentially lead to "brown outs". Hydrogen would be
able to take some of the pressure off of the grid by reducing
the amount cars that are charged.
3.8 Plasma gasification plants and "bio
gas energy stations" also offer tremendous potential to produce
heat, power and hydrogen from renewable sources.
3.9 The UK regions have begun to already
invest in hydrogen and infrastructure but it needs political support
and further investment if the UK is to realise its potential to
be a leader in low carbon transport.
4. What is needed to achieve the development
and deployment of them?
4.1 Hydrogen should be included in the RTFO
as a matter of urgency.
4.2 The potential of supplying hydrogen
and power from renewable feedstocks should be recognised in terms
of improved support as a facilitator for future positioning of
green hydrogen supply technology for when the vehicle market begins
to open.
4.3 Sustainable green hydrogen supply from
sources which have the option to supply both power and hydrogen
should have the incentives for hydrogen supply equalised to that
of power ie RoCs and other power support methods.
4.4 A minimum zero or ultra low emission
quota for large car companies should be considered to accelerate
the introduction of clean vehicles.
4.5 The incentive applied to electric cars
should also apply specifically to hydrogen vehicles. Hydrogen
vehicles are a form of electric vehicle only that the power is
coming from a fuel cell rather than a battery or both. Even if
this is not something that consumers can act on immediately, it
would demonstrate that the UK Government has not discounted the
potential of hydrogen and keep it in the forefront of people's
minds.
4.6 In order to deliver the full potential
of hydrogen as a low carbon fuel a hydrogen infrastructure, including
the means to distribute hydrogen from the producer to the end
user, to be created (ie fuelling stations). Hydrogen vehicles
need to be produced in higher numbers to create economies of scale.
It should be recognised in Government policy that the technology
exists today to mass produce hydrogen powered vehicles and to
put in place the necessary infrastructure. Daimler, Honda and
Toyota have all said they expect the first stage mass production
of hydrogen vehicles to begin to occur between 2013 and 2015.
This is likely to be before any serious family sized, mass produced
battery vehicle will.
4.7 Government investment in hydrogen powered
fleets, as Transport for London is doing by using five hydrogen
buses on a bus route from 2010, will be essential in moving these
vehicles from demonstration to a commercial phase. Public procurement
can make new technologies more cost effective by bringing the
technology down its cost curve, more visible and can help to reduce
the early adopter risk of investing in these technologies and
thereby encourage their further development.
4.8 The car scrappage scheme is a welcome
policy in terms of its potential impact on consumers purchasing.
It is disappointing, however, that the Government has sought,
through this scheme, to subsidise the car industry in the UK by
encouraging people to buy new cars, without insisting on research,
development and deployment that would hasten the move away from
conventional fuels.
5. How realistic are the Committee on Climate
Change's projections for the use of different types of new technologies?
5.1 The projections made by the Committee
on Climate change are very conservative in their expectations
for hydrogen. They suggest that hydrogen does not have a future
for all forms of transport and that they will only be an option
should battery technologies fail to materialise.
5.2 In fact, hydrogen vehicles are closer
to commercialisation than many think. Hydrogen is already a realistic
transport fuel today. In California an extensive hydrogen powered
fleet already exists with further plans to extend the network
of fuelling stations. Honda recently announced it will put hydrogen
vehicles on sale in selected show rooms within the next five years.
5.3 The primary production method envisaged
for sustainable hydrogen throughout much of the King report has
been via wind energy and electrolyser. In actual fact, whilst
there will be a niche for green electrically produced hydrogen,
it will not be the primary method used to achieve the most reliable,
lowest cost product. Energy stations and plasma gasification processes
offer substantially reduced costs at scales industry will require
to deliver the necessary quantities. Hydrogen liquefaction integrations
with other process plant have been patented and designed and are
waiting for the volumes to materialise before companies begin
to commit to build them.
5.4 If industry has to pay a realistic price
for carbon emitting solutions to avoid such costs will become
more commercial. They will likely be large scale and reliable.
These will offer the building blocks for the future sustainable
hydrogen economy.
6. How important is it to the UK economy
that it becomes a leading developer and exporter of low carbon
technologies? What Government policy needs to be in place to do
this?
6.1 Investing in the development of hydrogen
in the UK is one of a number of ways that the UK can seize the
opportunity to become a world leader in the environmental markets.
Other countries, including Japan and the US State of California
are already investing heavily in research and development around
hydrogen and fuel cell technologies through "hydrogen highway"
initiatives.
6.2 The UK has some of the most innovative
fuel cell companies in the world. Investment in new green technologies,
such as hydrogen fuel cells, has the potential to generate new
sources of revenue for the UK as well as new skilled jobs. A large
number of permanent scientific and industrial jobs could be created
from manufacturing parts, to building the hydrogen infrastructure
and developing technology. Government needs to ensure that development
and scientific expertise is not leached away from the UK by countries
which offer an accelerated market penetration potential in the
early stages of this technology transition.
7. Are we seeing impacts of a downturn on
demand and investment in low carbon technologies? If so, how can
this be addressed given the need to meet long term targets? What
obstacles to investment are there?
7.1 We believe we are seeing companies be
much more selective in the technologies they pursue. Larger companies
are not commercialising the innovations of the entrepreneurial
SME sector. Some companies are hoping to delay market change because
investment in new manufacturing and plant cannot be made at the
moment.
7.2 In general hydrogen business is down
20% because oil demand is down and electronics/consumer products
are down.
May 2009
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