session b3. national and regional activities developing …

©2012 Intelligent Energy Limited The information in this document is the property of Intelligent Energy Limited and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Intelligent Energy Limited. This information is given in good faith based upon the latest information available to Intelligent Energy Limited, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Intelligent Energy Ltd or any of its subsidiary or associated companies. 1

SESSION B3. NATIONAL AND REGIONAL ACTIVITIES

Developing a Hydrogen Market in the UK – Fuel Cell Electric Vehicles and Hydrogen Infrastructure

Pathways

Dennis Hayter

Intelligent Energy

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©2012 Intelligent Energy Limited. All Rights Reserved. The information in this document is the property of the Company and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of the Company.

• International power technology company with globally scalable business

• Commercialising our world leading fuel cell technologies with our business partners

• Technology and business leader

• Established in 2001

Intelligent Energy

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Intelligent Energy - commercial application across 3 key sectors

• Intelligent Energy fuel cell systems are applied across sectors and markets:

• Consumer Electronics; portable & extended operating power

• Stationary Power; CHP, on-demand, telecommunications, backup power, emergency power

• Motive Power; Two-wheeled vehicles, automotive, commercial vehicles

Design once, deploy many times

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Commercialisation through partnerships Commercialisation through partnerships

• Blue Chip customers with understood & scalable commercialization route

• Business model: from licensing to equity participations

• Scalability, cost reduction and manufacturing risks mitigated

• Accelerated and de-risked go-to-market plans

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Suzuki partnership - Smile FC System Corporation

• Suzuki Motor Company and Intelligent Energy have been partners for 6 years

• Crosscage and FC Burgman presented at 2007 and 2009 Tokyo Motor Shows

• World’s first fuel cell vehicle to gain European Whole Vehicle Type Approval (WVTA)

• Joint Venture Company formed February 2012 to develop and manufacture fuel cell systems for a range of industry sectors

• The Suzuki Motor Company and Intelligent Energy both have 50% stake in Smile FC System Corporation

• HQ in Hamamatsu-city, Shizuoka Prefecture.

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Fuel Cell Electric London Taxi Partnership

• Addressing a specific London fleet opportunity

• The 22,000 Black cabs in London, responsible for about a quarter of its air pollution

• The FCEV taxi is – Zero emission

– 250 mile range

– 5 minute refuel

– Superior acceleration, speed and ride comfort

– No loss of passenger space

– A Fuel cell battery hybrid – with no compromise in performance

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FCEV taxi Fleet deployment - London 2012 Olympics

• Five fuel cell Black Cabs operating over entire Olympics period • VIP guest service for Greater London Authority and the Mayor’s Office • Cleaner Air For London as a ‘legacy intent’

The fuel cell taxis refuelling at Heathrow

The taxis operating in London

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GLA VIP guests

• Business leaders (UK, China, Japan UK guests)

• Politicians

• Media

• Arnold Schwarzenegger

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GLA VIP guests

• Central London en-route to Excel

• Barbara Windsor

Regional Pathways: Japan FCEV Commercialization

•FCEV fleets and Mixed base H2 sources such as Nanjido: landfill-to-hydrogen

•Strong government commitment: Korea wants to supply 20% of world’s fuel cells

•Government announced program to finance and deploy 100,000 FCEV and 170 HRS by 2020

Regional pathways – South Korea

•New Energy Vehicles one of seven “new strategic industries” and fuel cell EVs part of the portfolio

•Stations in Beijing, Anting

• FCEVs (cars, buses) for 2008 Olympics; 3-4 stations in Shanghai for 2010 Expo

•Chongming green community project

Jiyang-Road H2 Station

FCEV Commercialization Targets - China

Distance to the next filling station

2012 2020

German Transport Minister Wolfgang Tiefensee

“Our aim is to continue consistent and systematic promotion of electromobility based on batteries and fuel cells....We are aiming at establishing the nationwide supply with hydrogen in Germany at around 2015 in order to support the serial-production of fuel cell vehicles,”

The number of retail stations grows to 198 in 2015 and 755 in 2020

50 stations recently announced

German Hydrogen Infrastructure Roll Out

▪ Public-private coalition of 17 companies evaluating a business case for a HRS refuelling station network and assessing options of forming a Joint Venture to invest in HRS

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Regional pathways – North America

• Variety of vehicle, bus fleet & H2 activities running for many years

• California providing a focus with Hydrogen Highway • New "Clean Fuels Outlet" act in California requiring

deployment of HRS

• Commercialisation Road Map recently established – 68 strategically placed refuelling stations

– Operational by end 2015

– Supporting 20,000 vehicles in 5 key clusters

– Additional stations to connect clusters into a regional network / capture major destinations

– Incentive funding model

– $65M cost

Regional pathways – UK

UK a ‘quiet achiever’ in the development and deployment of ultra low carbon technologies Multiple technologies and developers Supportive governmental framework and strong involvement of devolved regions (Scotland and Wales) Technology funding made available at the fundamental (academic + industry) and field trial level Regional implementation (Midlands, North East) London as a key implementation City with fleet deployment and first mover ambitions Consolidated industry partnerships

• Ultra Low Carbon vehicle fleets

−‘Cabled’ programme for the Midlands based on

public and industry fleet testing of 200+ electric and

hydrogen powered vehicles; Plugged in places; ‘E-

cities’: driving experience with e-vehicles

• First steps of Hydrogen highways

−Wales to Thames Valley; Midlands Hydrogen Ring

• Hydrogen London

−Follow on to CUTE programme; 5 FC buses and H2

facilities with further buses under CHIC; HyTEC

programme and LHNE activities. Strong push via

Mayors London Hydrogen Partnership Plan

• National & Regional support

−BIS, OLEV, DECC, TSB, DfT, DEFRA, Cenex +

Scotland and Wales

Regional pathways – UK

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Hydrogen transport - could drastically reduce emissions, create new economic opportunities diversify energy supply

Comparably lower infrastructure requirement, because of a centralised geography (4 main metropolitan centres London, Birmingham, Liverpool-Leeds area, and Glasgow) and low dependency on neighbouring countries

3rd largest car market in Europe by vehicle sales, 4th largest by vehicle production

Entry point for Japanese OEMs, due to right-hand drive

Strong political support for low carbon technologies (e.g., through plug-in car grant) including carbon capture and storage (CCS)

Surge in renewables deployment creates opportunity for water electrolysis

The UK is well-positioned due to …

Reduce CO2 emissions per vehicle by 75% by 2030 (well to wheel emissions of ~ 35g/km) and completely eliminate local emissions

Establish UK as a lead market

Create economic opportunities for the UK by increasing the share of the fuel cell vehicle and supply chain located in the UK

Diversify energy supplies by reducing dependency on fuel imports and enabling deployment of renewables through flexible power demand

Hydrogen transport could …

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UK H2Mobility: a joint industry-government project; evaluating the potential for hydrogen as a transport fuel and developing a roll-out strategy

Fuel retailers

Fleet operators and lease companies

Valuation companies

Grid operator

Companies interviewed in Phase 1A

UK Government departments

Hydrogen providers/ producers and utilities

Technology providers

Public-private partnerships

Car OEMs

Fuel retailers

Goal

Evaluate the potential for hydrogen as a transport fuel and develop a rollout strategy that will contribute towards Decarbonising surface transport

Creating new economic opportunities

Diversifying energy supply

Reducing local environmental impacts

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UK H2Mobility stage-gated approach; Phase 1 will conclude at the end of 2012

Phase 1a: Role of hydrogen transport in the UK

Phase 1b: Hydrogen rollout strategy development

Phase 2: Business case development

Phase 3: Implementation plan

Establish a robust evidence base for the role of H2 in the UK market

Develop strategy for H2 rollout in the UK and stress-test alternative scenarios to prove robustness of plans

Develop an agreed business case

Facilitate coordinated action to deliver the vision for hydrogen rollout

Core activities

End products

▪ A blueprint for hydrogen rollout in the UK, stress tested against key sensitivities

▪ Range of infra-structure and vehicle roll-out scenarios, including likely investments and revenues

▪ A detailed plan for structuring rollout of hydrogen vehicles and infrastructure in the UK

▪ Public report summarising activities of the consortium

▪ An agreed business case and implementation plan for rollout of hydrogen vehicles and refuelling infrastructure in the UK

▪ Commercial, synchronised deployment of fuel cell electric vehicles and hydrogen refuelling infrastructure in the UK

Dec 2011-Mar 2012

Apr 2012-Dec 2012 Jan 2013-Aug 2013

Aug 2013-Dec 2013

Timeline

Status ( )

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Overview of selected achievements of UK H2Mobility

H2 production

and supply roadmap

Assessment of H2 production technologies on cost and CO2 emissions, e.g. SMR2 vs. water electrolysis

Definition of H2 production and supply mixes focusing on CO2 abatement and economic efficiency

Analysis of wider benefits of water electrolysis to energy system

Initial rollout scenario

Description of an initial cross-industry perspective

Financial assessment of rollout scenario including NPV, investment required, payback time

Evaluation of additional levers to improve scenario

Investigation of barriers, market failures and intervention options

Achievements Selected end products

PriceGBP/kg H2

Total carbon footprintkg CO2/kg H2

Low emission

Base Case

with CCS

Low cost

Base Case

Rollout scenarios for H2 station network

and FCEVs

Development of H2 station rollout and network requirements (e.g., density, sizes, location)

Development of FCEV roll-out scenarios and forecasts with car OEMs (e.g. number of FCEV in different passenger car and LCV1 segments)

2015 2030

Market research on consumers and fleet managers

▪ Application of qualitative and quantitative market research to understand customer attitudes on hydrogen, FCEV and HRS infrastructure

▪ Quantification of customers’ willingness-to-pay for hydrogen and FCEV and segmentation of customers

1 Light Commercial Vehicles 2 Steam Methane Reforming

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A Analysis focused on linking deployment to vehicle sales to minimise risk of low utilisation & customers’ needs are met

Aim

Ensure that enough stations are available in early years to meet needs of early adopters

Link the subsequent rollout of hydrogen refuelling stations (HRS) to the deployment of FCEVs over time

Fixed number of HRS deployed

No further HRS built until FCEV parc reaches agreed threshold

Advantages

# HRS

# FCEV

time

Approach minimises risk of low station utilisation – further expansion of HRS conditional on FCEV sales growing

Provides customers with confidence that infrastructure will grow

Provides confidence to OEMs that new customers will be unlocked as coverage increases

Initial seeding of HRS

Mass-market rollout

HRS deployed to match vehicle sales

FCEV to HRS ratio set to ensure profitability of infrastructure

Concept

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Expected HRS network Rollout approach

Tier 1

Tier 2

Tier 3

Tier 1 roads

Tier 2 roads

Classification of regions and motorways in 3 tiers based on scoring of population, traffic etc.

▪ Tier 1 covered by 2020 Focus on major population centres, enable long distance travel between Tier 1 regions- covered by 2020

▪ Tier 2 by 2025 Extend close-to-home refuelling to 70% of the population, full coverage of major road network

▪ Tier 3 by 2030 Extend close-to-home refuelling to the whole of the UK, including less populated regions

A Staged hydrogen rollout strategy to enable a nationwide coverage in 3 phases

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A Roll-out of hydrogen for transport could provide opportunities across the entire value chain & decarbonising transport (1/2) Overview of potential benefits of hydrogen transport in the UK

Support creation of hydrogen infrastructure as requirement for the launch of hydrogen fuel cell vehicles

Accelerate road to achieving mandatory CO2 reduction goals

Participate and shape establishment of industry standards, e.g. for refuelling protocols

Interact with industry players and government to enable decarbonisation of road transport

Vehicle manufacturers

Achieve significant CO2 reductions and avoid local emissions Secure energy supply and reduce reliance on oil imports Create new high-skilled jobs within the UK Provide benefits to the wider energy system, such as load balancing, creation of strategic demand etc.

Society

Utilise existing network and assets to secure future business opportunities

Expand into environmentally friendly business field, thereby supporting green image

Attracting new customers into stores and petrol stations

Fuel retailers

http://www.sxc.hu/browse.phtml?f=download&id=888077&redirect=photo

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Overview of potential benefits of hydrogen transport in the UK

Assist in creation of multi-billion GBP hydrogen market for transportation Use assets and capacities to expand into new business application Enter new business field by providing refuelling technology

Benefit from additional demand for electricity (e.g. for water electrolysis) and for renewable energy sources

Take advantage of benefits of hydrogen to wider energy system, e.g. load balancing, creation of strategic demand

Participate in and shape establishment of industry standards, e.g. for refuelling technologies and protocols

Create additional and accelerated demand for own technology by helping to fast-track establishment of hydrogen market

Secure return through early involvement in first financing rounds Interact with industry players and government to develop options for financing aspects of the roll-out strategy

Hydrogen providers

Utilities

Technology providers

Investors

A Roll-out of hydrogen for transport could provide opportunities across the entire value chain & decarbonising transport (2/2)

http://www.sxc.hu/browse.phtml?f=download&id=1155004&redirect=photo

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Conclusions

- De-carbonisation the transport (and energy) sector and air quality improvement mandates are continuing

- Enhanced options to green H2 for transport based on bio, waste, renewables, CCS and energy storage pathways are increasingly feasible - Auto OEM commitment to FCEVs and rollout for 2015, plus government support for the auto sector as a mechanism for continued innovation, employment, productivity and manufacturing sets the timeline requirement

- Breaking the infrastructure versus vehicle dilemma is critical for early mover and fast follower regions

-Establishing FCEV and HRS clusters as a rollout basis with selected infill to cater for longer journeys and long distance networks more appropriate than concentrated corridors and highways

-Business models or/and support mechanisms that provide a payback (even if longer term then typical) for investors providing early infrastructure is critical

session b3. national and regional activities developing …

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