DOE’s Fuel Cell Technologies Office (FCTO) conducts routine hydrogen-related analysis and is also providing analysis in support of its participation in H₂USA, a public-private partnership. This partnership aims to promote commercial introduction and widespread adoption of FCEVs across America to overcome the hurdle of establishing hydrogen infrastructure.

In this RFI, the FCT Office requests information on best financing practices of the business community deemed to be applicable in similar financial undertakings. The infrastructure development required to launch of FCEVs requires a viable business case for each of the following supply-chain elements:

• Category 1: Hydrogen fueling station operators. This is the least developed supply chain element at this time. LDV fueling infrastructure for hydrogen has been demonstrated at a variety of scales nationally and internationally. Multiple equipment suppliers participate in this market and some are vertically integrated with hydrogen producers and distributors.

  Installations of public access dispensing have been sited at existing retail gasoline stations. Operation of such stations is largely a cost center of the infrastructure development. Early fueling expertise is projected to be under-utilized when vehicles are first introduced in the market.

• Category 2: Hydrogen distributors. This function is often vertically integrated with hydrogen production. Most hydrogen today is produced adjacent to the point of use (such as refineries and fertilizer production plants). The majority of hydrogen distribution today is accomplished through pipeline delivery, as that delivery mode is most economical at large volume.

  In contrast, introductory fueling stations will be relatively small-scale and stations will be dispersed over large geographic areas. It is anticipated that other delivery modes, such as gaseous and liquid hydrogen truck delivery or onsite production, will likely dominate early infrastructure deployment.

• Category 3: Hydrogen producers. This branch of the supply chain is the most developed at this time. Hydrogen production today uses natural gas—a very low cost, domestically produced commodity. Hydrogen is produced in industrial scale for petroleum refining, fertilizer production, and metals processing. Smaller quantities are also produced to supply a variety of industries such as plastics manufacturing, electronics production and food processing.

  Hydrogen today is a commodity product and enough hydrogen is produced today to support tens of millions of vehicles. Support of early market introduction of hydrogen vehicles will leverage this industry, while its incremental increase in demand is not expected to impact the commodity’s price.

• Category 4: Fuel cell vehicle suppliers. Automotive original equipment manufacturers (OEMs) have stated plans to begin offering FCEVs in the US market as early as 2015. Multiple OEMs will likely begin to provide small numbers of vehicles (approximately 1,000 per OEM) in that year and accommodate significant market uptake in subsequent years. However, FCEV market launch will require significant hydrogen infrastructure development to supply hydrogen fuel to meet the demand of the FCEVs.

  Regional introduction of hydrogen-based transportation must be preceded with fueling infrastructure before vehicles can be deployed. The overall supply chain is segmented, and the critical component (dispensing), would initially operate at a loss. The time span of such a loss period is regionally dependent and sensitive to local vehicle fleet sizes, hydrogen costs, and price of gasoline among many others. In favorable markets, net income can become positive within approximately 2-3 years, while in other markets, net income may be negative for significantly longer periods.

  Analytic studies of a national rollout of FCEVs suggest the required upfront capital to be on the scale of $10s of billions during the first 5-15 years of hydrogen infrastructure development.

DOE would like to solicit input and feedback on hydrogen infrastructure investment financing and business strategies from a wide range of stakeholders, including the business and investment community, automotive industry, hydrogen equipment suppliers, energy companies, utilities, industrial gas companies, and others. The agency is also seeking novel financial strategies to accommodate the early market hurdles of negative cash flow and risk mitigation.

Responses are due by 31 January 2014.