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California Energy Markets / Bottom Lines

[January 5, 2017 / No. 1469]

Agencies Assess Hydrogen Station Rollout

The California Energy Commission and the California Air Resources Board, in a new report assessing the time and cost needed to reach 100 hydrogen refueling stations in California, estimate the milestone can be reached by 2024, with a total outlay by the state of just over $201 million.

The cost estimate included in the 2017 assessment is about $25 million lower than the estimate included in the 2016 assessment, and is a result of lower station-development costs.

The report shows the state is making progress on the deployment of hydrogen refueling stations, said Keith Malone, a spokesman for the California Fuel Cell Partnership, a collaborative focused on expanding the market for hydrogen fuel-cell vehicles that includes auto manufacturers, energy companies, fuel-cell technology companies and government agencies, including the energy commission and CARB.

"If you work in this environment you see lots of lessons learned, but these lessons are incorporated pretty quickly on a year-to-basis," he said. "With each iteration of funding coming out of the state we learn new things."

The CEC has allocated $20 million a year toward hydrogen refueling-station deployment through its Alternative and Renewable Fuel and Vehicle Technology Program. The so-called AB8 report was a requirement of legislation that extended program funding to 2024.

Under the ARFVT program, the energy commission has provided a total of $131.6 million to date for capital expenditures and operations and maintenance support for 65 hydrogen stations in California, including 31 stations that are open to the public and another 34 in development. The 2017 assessment projects another $70 million in state funding will be needed to reach the 100-station milestone, and said the 100stations should be in operation by 2024. Stakeholders are pushing to find ways to accelerate station deployment so the target can be met closer to 2020.

The CEC awarded more than $33 million in grants to 21 stations last year. Based on its experience and lessons learned in earlier funding solicitations, the commission built safeguards into the solicitation that resulted in the 2017 awards to ensure developers could minimize the length of time it takes to permit and build stations. Those safeguards included limiting funding amounts for stations that take longer than 20 months to develop, for example. The commission also reserved the right to cancel a grant award if a station's location changes. Location changes historically have led to delays. Between 2010 and 2014, station development was cut to two years from about four years, and the commission expects the time to permit and build the stations funded last year will decrease further. It has also built in critical milestones, including requiring site control before expenses are reimbursed, as a way to cut down on delays related to siting issues.

Timing and Funding Needed to Open
100 Retail Hydrogen Fueling Stations

Source: California Energy Commission



Proposed CEC
Grant Funding

Open Retail



























The 31 stations open currently have a combined total refueling capacity of 14,875 kg/day, or enough to support more than 21,000 fuel-cell electric vehicles. According to Department of Motor Vehicles registration data from October, there were 2,473 FCEVs on the road in the Golden State at that time, and industry data shows there were 3,232 FCEVs leased or sold in the state as of Dec. 1.

That means the current network of stations—clustered mainly around Los Angeles, SanDiego, the BayArea and Sacramento, with connector stations in the San Joaquin Valley, Santa Barbara and near Tahoe—is severely underutilized, but regulators expect demand will grow in coming years. Regulators hope these early station deployments will provide real-world data on such things as fuel-supply logistics, station demand, and fuel-cell vehicle drivers—information that will be needed to overcome barriers to wider station deployment.

CARB projects there will be 13,400 FCEVs on the road in California by 2020, and 37,400 by 2023.

As the CEC looks to issue future funding solicitations, it is carefully evaluating not only the vehicle projections, but their distribution around the state. As the agencies stated in the report, the energy commission wants to ensure not only that it is funding station deployment, but the right station in the right place.

Station cost remains a big hurdle, but the new assessment highlights the fact that costs are coming down. In the CEC's 2017 solicitation [GFO-15-605], all-in costs for hydrogen refueling stations, including equipment, design, engineering, construction, project management and overhead, were about $2.4 million for a station dispensing 180 kg/day; $2.5 million for a station dispensing 310 kg/day; and nearly $4 million for a station with a 360 kg/day capacity.

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"Larger station capacities (300 kg/day and 600+ kg/day in certain areas) are needed in priority areas to avoid a projected hydrogen shortfall," the report states. "The first 100 stations need to be in the right places with appropriate design features to maximize market impact."

In the CEC's last solicitation, the average funding request per kilogram of capacity dropped to $6,409 from $9,689 a few years ago, according to the assessment.

The agencies are looking at ways to drive down costs further, and to speed up the overall funding process.

The CEC is also interested in boosting hydrogen produced from renewable sources that can be used solely for distribution and delivery to California's hydrogen fueling-station network. The commission on Dec. 22 released a solicitation through which it plans to award up to $4 million in grant funds for projects to design, engineer, build and operate a plant that produces 100 percent renewable hydrogen from in-state renewable sources. Pre-application forms are due for this solicitation Jan. 30. and final applications are due March 30.

The commission anticipates releasing another solicitation in the second quarter with up to $20 million in grant funding for hydrogen refueling infrastructure. –Mavis Scanlon

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