New Delhi: As a part of our collection, ‘The Options in Propulsion Expertise’ whereby we delve deeper into the spectrum of options, specifically Hydrogen-ICE, FCEV, CNG, Ethanol-Methanol, Hybrid methods, and BEVs. In one in every of our earlier articles on H2ICE, we handled the relevance of hydrogen mobility for heavy automobile section decarbonisation. Right here we’ll deal with the hydrogen know-how of the long run, which is Gas cell primarily based electrical automobile (FCEV), the emergence of hydrogen within the sustainable mobility spectrum.FCEVs present sure benefits over BEVs within the heavy trucking section, which warrant their consideration for sustainable mobility. They embody a better vary, shorter charging instances in addition to decrease weight penalty. Nevertheless, one key constraint which has impacted the adoption of gas cell automobiles has been the upper upfront prices than the ICE in addition to BEV automobiles.
As of 2023, for the heavy automobile section, our evaluation reveals that the worth for FCEVs is ~6X that of ICE automobiles. 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 appropriate possibility for electrification of the heavy automobile section. Within the interim, H2ICE adoption may also help drive the expansion of the hydrogen refuelling ecosystem, which can then additional assist drive FCEV adoption.
Comparability of FECV with BEV and H2ICE
In case of heavy automobile segments, the upper gravimetric power density of hydrogen implies that the payload penalty as in comparison with a BEV is considerably diminished. Aside from decrease payload penalty, FCEVs have the benefit of decrease refuelling instances, usually ~10-20 minutes in comparison with ~60- 90 minutes for a typical heavy obligation truck (330 KWh) utilizing a quick charger (240 KW). Within the context of charging of heavy obligation automobiles, additionally it is necessary to notice that in a rustic akin to ours, provisions for quick charging, particularly for heavy obligation automobiles will pose a problem for the grid and can want vital investments for grid upgradation or the usage of battery storage system, each of which can contain further prices.
To offer a perspective, a quick charging station for heavy obligation automobiles with 240 KW quick chargers and 10 charging factors could have an hourly power 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 automobiles present a extra economically enticing answer from an acquisition prices perspective, because of the effectivity beneficial properties in FCEVs, which have a tank to wheel effectivity of ~40% in comparison with ~25% for H2ICE automobiles, from a ten yr TCO perspective, FCEVs are extra enticing. As the costs of gas cell stack fall by 2030, the attractiveness of FCEVs will enhance additional.
However in nation akin 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 vehicles thereby making the upfront value proceed to be a drag on demand for FCEVs, therefore H2ICE will function an necessary interim answer.
Additional, attributable to inherent traits of each applied sciences, there are use circumstances the place one can be most well-liked over the opposite. FCEVs have greater effectivity at low and medium hundreds and thus can be appropriate for lengthy haul vehicles and buses that are primarily getting used on expressways and highways. As FCEV effectivity reduces throughout excessive load purposes, H2ICE might be most well-liked for heavy obligation purposes in rougher terrains akin to mining and different off-highway purposes.
Thus whereas H2ICE can serve within the interim whereas FCEV prices cut back, there are particular purposes which can proceed to make the most of these. As each the powertrains require the identical kind of hydrogen refuelling infrastructure, H2ICE adoption will assist convey down the prices for FCEVs and vice versa. Additional, each additionally share related hydrogen storage applied sciences, thus higher adoption of each the forms of automobiles, will assist cut back storage prices attributable to scale results.
Challenges to FCEV adoption
Though EV penetration within the 2W, 3W and passenger automobile section has been rising, decarbonization within the heavy automobile section continues to be a problem for the nation. FCEVs can play a key position in the long run decarbonization of this section. Our evaluation reveals that by 2030, on a ten yr TCO perspective FCEV will obtain parity with ICE automobiles 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 underneath its Nationwide Inexperienced Hydrogen mission and the nation stands favourably on each the elements which might be crucial to the price of inexperienced hydrogen manufacturing i.e. the renewable power prices and the electrolyser capex.
With majority of the nation receiving common world photo voltaic insolation > 4 KWh/m2/day and ~58% of the land space receiving common world photo voltaic insolation > 5 KWh/m2/day (thought-about photo voltaic hotspots), India boasts of a number 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 throughout the nation, which is anticipated to drive home manufacturing, thereby lowering prices.
With the anticipated fall in inexperienced hydrogen prices, hydrogen primarily based mobility will more and more develop into a contender within the decarbonization push for the heavy automobile section. Given the relevance of FCEVs, a number of gamers have already developed merchandise or are growing merchandise for this section e.g. TATA motors had in 2021 received a young to provide 15 FCEV buses to IOCL. The corporate provided the primary of those buses final yr, that are being assessed for potential mass transit options for intra and intercity commute. Final yr, Bharat Benz in collaboration with RIL, additionally displayed an intercity luxurious idea coach powered by gas cells with a variety of ~400 kms.
The alternatives
Whereas FCEVs maintain vital potential, their widespread adoption faces sure crucial challenges. Firstly, as mentioned earlier for FCEVs to be aggressive with conventional ICE automobiles even in 2030, the hydrogen retail costs have to be decrease than USD 5/kg. Secondly, automobile adoption might be depending on the event of an satisfactory refuelling community and lastly there must be an aggressive discount in acquisition value of FCEVs to make these a viable various to present ICE automobiles. Given the prevalent possession construction within the heavy automobile section consisting of numerous owner-drivers, together with unorganized and arranged fleets, the upfront value discount turns into paramount.
Excessive prices of inexperienced hydrogen
Hydrogen prices will impression the adoption of both of the hydrogen mobility choices. The present LCOH (levelized prices of hydrogen) in India fluctuate from USD 4 – USD 9/ kg which interprets to pump costs of USD 9- USD 12/kg (ex-taxes). For FCEVs to develop into viable by 2030, these costs have to be beneath USD 5/kg. As mentioned beforehand, the 2 prices levers when it comes to discount in Renewable Vitality (RE) and Electrolyser costs are crucial for reaching LCOH discount.
Relying on the mode of manufacturing, the open entry prices additionally develop into essential in driving RE prices. Thus, rationalization of grid prices can be an necessary lever to scale back RE prices.
Hydrogen refuelling community
Hydrogen manufacturing and refuelling footprint will rely on a number of elements 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 possibility. The excessive capex of hydrogen refuelling stations will additional add to the price of hydrogen to finish client and thus could have a bearing on the refuelling community footprint as effectively.
H2ICE adoption will play a crucial position in making certain {that a} significant refuelling community exists within the nation for hydrogen automobiles, which can assist 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 automobile availability
One of many key elements that may drive FCEV adoption is the discount in automobile acquisition prices. With the present FCEV costs for heavy obligation automobiles at ~6X to an equal ICE automobile, with fall in gas cell and storage tanks costs, these are anticipated to scale back to ~2 X by 2030. Nevertheless, for the autumn in gas cell costs to translate to the Indian market, there’s a want for home ecosystem growth. Partnerships between world gas cell producers and home OEMs, akin to that between TATA Motors and Cummins, with a deal with home manufacturing won’t solely assist cut back prices however may also set up the nation as an export base for world manufacturing.
Conclusion
The adoption of FCEVs will majorly be decided by the price curve the know-how takes vis-à-vis the opposite powertrain choices being thought-about available in the market. As beforehand mentioned, home manufacturing is usually a key enabler of potential gas cell value discount. There are two key elements which might catalyse home manufacturing growth, securing gas cell know-how and uncooked materials provide chains. Not like EV battery know-how and manufacturing, it’s the European and American gamers who dominate PEM (proton change membrane) gas cell ecosystem and given the geopolitical situation, this will present a chance for India, whereby Indian gamers can tie-up with world gamers for home manufacturing.
One other issue, which might drive home gas cell manufacturing is the expansion of the hydrogen electrolyser manufacturing throughout the nation. For the reason that core PEM know-how stays the identical, there’s a potential alternative for electrolyser producers to diversify into gas cell merchandise.
When it comes to 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 akin 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 necessary uncooked materials. When it comes to 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 availability chain for these supplies.
Lastly, to make sure that gamers are incentivized to spend money on growing these capabilities and there’s adequate demand available in the market, authorities help to this know-how within the preliminary part might be wanted. Steps akin to pilots with FCEV e.g. these performed by IOCL may be expanded to develop merchandise extra suited to Indian wants. Going additional, inclusion of FCEVs into authorities applications akin 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.)
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