Network operator True Zero is continuing to drive down the cost of hydrogen in California with its Oakland hydrogen station currently retailing at $12 per kilogram (kg).
At the moment, the average price at a hydrogen station in California is approximately $16.
Shane Stephens, Founder and Chief Development Officer at True Zero, said this big movement in price is as a result of two things: the State of California’s policy and regulatory structure and a shift to larger-capacity stations based on liquid hydrogen.
“A new policy implemented by the California Air Resources Board (CARB) within their Low Carbon Fuel Standard program has been pivotal to us driving down the price of hydrogen at the pump sooner than we could have otherwise,” he told H2 View.
“This new policy builds upon the years of groundwork laid and market growth spurred by the California Energy Commission’s (CEC) grant funding program for retail hydrogen stations, which enabled and encouraged us to make smart, market-based decisions on equipment and hydrogen supply.”
“Those two policies, at the CARB and the CEC, are primary policy mechanisms that enable us to drive the price down sooner than we could have otherwise.”
The other major factor, Stephens explained, is the decision by FirstElement Fuel, who owns the True Zero brand, to transition to larger capacity stations based on liquid hydrogen supply.
The Oakland hydrogen station has three times the capacity of previously built open retail True Zero stations and has two fuelling positions with three nozzles – two at H70 and one at H35.
“When selling fuel, scale and larger capacity help drive down costs. We have worked with a great set of suppliers, Tatsuno and Linde on the equipment side, and Air Liquide on the liquid hydrogen supply side, in order to implement a model for retailing hydrogen that will scale and get us to a positive business case,” he said.
This shift in price is a big step towards the optimum price of $10 per kg of hydrogen that True Zero is hoping to achieve in the future.
“…we think it makes sense to get rid of the tax on hydrogen at the pump for the next five or six years… it would do a lot to encourage the market and make a zero emission fuel more competitive with conventional fuels”
“For us, there is a near-term target that gets us to around price parity with gasoline in California and we think that is around $10 per kg,” Stephens highlighted.
“$12 is a big move towards that direction and we see $10 within our sites. Beyond that, we think we can continue to drive costs out of the retail hydrogen to the consumer.”
So, what would it take to get to this optimum price of $10 per kg in California?
“Two things, firstly we need to continue opening our next generation of larger capacity stations,” Stephens said. “We are in process to open 11 more of these larger capacity stations during the course of the coming year.”
“The second thing is a continuation of implementing smart, market-based policies in the State of California.”
“One example is that we think it makes sense to get rid of the tax on hydrogen at the pump for the next five or six years. During this time, hydrogen sales will be relatively minor so the impact to the State would be small, and it would do a lot to encourage the market and make a zero emission fuel more competitive with conventional fuels.”
“We are lucky to have a great assemblywoman representing our company’s district, Cottie Petrie-Norris, and earlier this year she sponsored a bill to temporarily remove the tax on retail hydrogen. Hopefully we can get more of that support to help us through the early growth period of the next five or six years.”