New Delhi: As a part of our collection, ‘The Alternate options in Propulsion Know-how’ whereby we delve deeper into the spectrum of alternate options, particularly Hydrogen-ICE, FCEV, CNG, Ethanol-Methanol, Hybrid techniques, and BEVs. In one in all our earlier articles on H2ICE, we handled the relevance of hydrogen mobility for heavy car phase decarbonisation. Right here we’ll give attention to the hydrogen expertise of the longer term, which is Gas cell primarily based electrical car (FCEV), the emergence of hydrogen within the sustainable mobility spectrum.FCEVs present sure benefits over BEVs within the heavy trucking phase, which warrant their consideration for sustainable mobility. They embody a better vary, shorter charging instances in addition to decrease weight penalty. Nonetheless, one key constraint which has impacted the adoption of gas cell autos has been the upper upfront prices than the ICE in addition to BEV autos.
As of 2023, for the heavy car phase, our evaluation exhibits that the value for FCEVs is ~6X that of ICE autos. With the gas cell costs anticipated to say no over the last decade by as a lot as ~40%- 70%, FCEVs can emerge as an acceptable choice for electrification of the heavy car phase. Within the interim, H2ICE adoption might help drive the expansion of the hydrogen refuelling ecosystem, which is able to then additional assist drive FCEV adoption.
Comparability of FECV with BEV and H2ICE
In case of heavy car segments, the upper gravimetric vitality density of hydrogen implies that the payload penalty as in comparison with a BEV is considerably lowered. Aside from decrease payload penalty, FCEVs have the benefit of decrease refuelling instances, sometimes ~10-20 minutes in comparison with ~60- 90 minutes for a typical heavy responsibility truck (330 KWh) utilizing a quick charger (240 KW). Within the context of charging of heavy responsibility autos, it is usually vital to notice that in a rustic corresponding to ours, provisions for quick charging, particularly for heavy responsibility autos will pose a problem for the grid and can want important investments for grid upgradation or the usage of battery storage system, each of which is able to contain extra prices.
To offer a perspective, a quick charging station for heavy responsibility autos with 240 KW quick chargers and 10 charging factors could have an hourly vitality consumption much like that of 10 households on a month-to-month foundation (common month-to-month family consumption in Delhi ~260 KWh). This turns into much more difficult if we contemplate the geographical unfold of such stations particularly in semi-urban and rural areas.
The selection between FCEV and H2ICE requires a extra nuanced strategy. Whereas H2ICE autos present a extra economically engaging resolution from an acquisition prices perspective, because of the effectivity features in FCEVs, which have a tank to wheel effectivity of ~40% in comparison with ~25% for H2ICE autos, from a ten 12 months TCO perspective, FCEVs are extra engaging. As the costs of gas cell stack fall by 2030, the attractiveness of FCEVs will enhance additional.
However in nation corresponding to ours, the upper acquisition prices will weigh on the FCEV adoption particularly on account of a fragmented business construction with a number of owner-drivers or fleet operators with lower than 5 vans thereby making the upfront price proceed to be a drag on demand for FCEVs, therefore H2ICE will function an vital interim resolution.
Additional, as a result of inherent traits of each applied sciences, there are use instances the place one could be most popular over the opposite. FCEVs have larger effectivity at low and medium masses and thus could be appropriate for lengthy haul vans and buses that are primarily getting used on expressways and highways. As FCEV effectivity reduces throughout excessive load purposes, H2ICE might be most popular for heavy responsibility purposes in rougher terrains corresponding to mining and different off-highway purposes.
Thus whereas H2ICE can serve within the interim whereas FCEV prices scale back, there are particular purposes which is able to proceed to make the most of these. As each the powertrains require the identical sort of hydrogen refuelling infrastructure, H2ICE adoption will assist convey down the prices for FCEVs and vice versa. Additional, each additionally share comparable hydrogen storage applied sciences, thus better adoption of each the varieties of autos, will assist scale back storage prices as a result of scale results.
Challenges to FCEV adoption
Though EV penetration within the 2W, 3W and passenger car phase has been rising, decarbonization within the heavy car phase continues to be a problem for the nation. FCEVs can play a key position in the long run decarbonization of this phase. Our evaluation reveals that by 2030, on a ten 12 months TCO perspective FCEV will obtain parity with ICE autos at a hydrogen retail worth of ~ USD 5/ kg. India is already planning massive scale manufacturing of inexperienced hydrogen for each industrial and mobility purposes below its Nationwide Inexperienced Hydrogen mission and the nation stands favourably on each the components which can be crucial to the price of inexperienced hydrogen manufacturing i.e. the renewable vitality prices and the electrolyser capex.
With majority of the nation receiving common international photo voltaic insolation > 4 KWh/m2/day and ~58% of the land space receiving common international photo voltaic insolation > 5 KWh/m2/day (thought of photo voltaic hotspots), India boasts of a few of the lowest renewable prices globally, that are additional anticipated to fall additional with rising home module manufacturing and optimization in operation and upkeep prices. For electrolysers, the federal government is already providing incentives of ~INR 4,400 crore for electrolyser manufacturing inside the nation, which is predicted to drive home manufacturing, thereby lowering prices.
With the anticipated fall in inexperienced hydrogen prices, hydrogen primarily based mobility will more and more turn into a contender within the decarbonization push for the heavy car phase. Given the relevance of FCEVs, a number of gamers have already developed merchandise or are creating merchandise for this phase e.g. TATA motors had in 2021 gained a young to produce 15 FCEV buses to IOCL. The corporate provided the primary of those buses final 12 months, that are being assessed for potential mass transit options for intra and intercity commute. Final 12 months, Bharat Benz in collaboration with RIL, additionally displayed an intercity luxurious idea coach powered by gas cells with a spread of ~400 kms.
The alternatives
Whereas FCEVs maintain important potential, their widespread adoption faces sure crucial challenges. Firstly, as mentioned earlier for FCEVs to be aggressive with conventional ICE autos even in 2030, the hydrogen retail costs must be decrease than USD 5/kg. Secondly, car adoption might be depending on the event of an enough refuelling community and lastly there must be an aggressive discount in acquisition price of FCEVs to make these a viable different to present ICE autos. Given the prevalent possession construction within the heavy car phase consisting of a lot of owner-drivers, together with unorganized and arranged fleets, the upfront price discount turns into paramount.
Excessive prices of inexperienced hydrogen
Hydrogen prices will affect the adoption of both of the hydrogen mobility choices. The present LCOH (levelized prices of hydrogen) in India range from USD 4 – USD 9/ kg which interprets to pump costs of USD 9- USD 12/kg (ex-taxes). For FCEVs to turn into viable by 2030, these costs must be under USD 5/kg. As mentioned beforehand, the 2 prices levers when it comes to discount in Renewable Power (RE) and Electrolyser costs are crucial for reaching LCOH discount.
Relying on the mode of manufacturing, the open entry costs additionally turn into essential in driving RE prices. Thus, rationalization of grid costs could be an vital lever to scale back RE prices.
Hydrogen refuelling community
Hydrogen manufacturing and refuelling footprint will depend upon a number of components together with the LCOH for hydrogen manufacturing and distance between manufacturing and demand centres. The transportation between the manufacturing and demand centres might be influenced by the trade-off between the amount transported and the capex for a selected transportation choice. The excessive capex of hydrogen refuelling stations will additional add to the price of hydrogen to finish shopper and thus could have a bearing on the refuelling community footprint as properly.
H2ICE adoption will play a crucial position in making certain {that a} significant refuelling community exists within the nation for hydrogen autos, which is able to support FCEV adoption. As mentioned in our earlier article, a cluster primarily based strategy concentrating on main highways for establishing refuelling community, will assist in optimizing the infrastructural spend.
FCEV acquisition prices and car availability
One of many key components that may drive FCEV adoption is the discount in car acquisition prices. With the present FCEV costs for heavy responsibility autos at ~6X to an equal ICE car, with fall in gas cell and storage tanks costs, these are anticipated to scale back to ~2 X by 2030. Nonetheless, for the autumn in gas cell costs to translate to the Indian market, there’s a want for home ecosystem growth. Partnerships between international gas cell producers and home OEMs, corresponding to that between TATA Motors and Cummins, with a give attention to home manufacturing is not going to solely assist scale back prices however also can set up the nation as an export base for international manufacturing.
Conclusion
The adoption of FCEVs will majorly be decided by the price curve the expertise takes vis-à-vis the opposite powertrain choices being thought of available in the market. As beforehand mentioned, home manufacturing generally is a key enabler of potential gas cell price discount. There are two key components which may catalyse home manufacturing growth, securing gas cell expertise and uncooked materials provide chains. Not like EV battery expertise and manufacturing, it’s the European and American gamers who dominate PEM (proton trade membrane) gas cell ecosystem and given the geopolitical state of affairs, this will present a chance for India, whereby Indian gamers can tie-up with international gamers for home manufacturing.
One other issue, which may drive home gas cell manufacturing is the expansion of the hydrogen electrolyser manufacturing inside the nation. Because the core PEM expertise stays the identical, there’s a potential alternative for electrolyser producers to diversify into gas cell merchandise.
By way of uncooked materials, we at the moment are seeing efforts to extend home manufacturing of crucial battery minerals, with the federal government holding auctions for 20 blocks of crucial minerals corresponding to lithium, in addition to efforts in the direction of collaboration with international locations in South America together with Chile, Bolivia, Peru and Argentina, that are wealthy in mineral reserves. For gas cells, platinum group metals are an vital uncooked materials. By way of geographic focus, ~70% of the world’s annual manufacturing of platinum and ~80% of the iridium manufacturing is concentrated in South Africa. Thus, efforts have to be made to safe the provision chain for these supplies.
Lastly, to make sure that gamers are incentivized to spend money on creating these capabilities and there’s enough demand available in the market, authorities help to this expertise within the preliminary section might be wanted. Steps corresponding to pilots with FCEV e.g. these carried out by IOCL will be expanded to develop merchandise extra suited to Indian wants. Going additional, inclusion of FCEVs into authorities applications corresponding to that for decarbonization of 800,000 intercity and intercity buses, can function a catalyst to kick begin the FCEV journey within the nation.
(Disclaimer: Ashim Sharma is Senior Companion and Group Head at NRI Consulting & Options, and Nishant Shekhar is Supervisor, NRI Consulting & Options. Views are their very own.)
