The California Energy Commission’s (CEC) recent investment into hydrogen infrastructure in the sunshine state – the largest since 2015 – is the key to transitioning hydrogen refuelling and mobility to a self-sustaining business case, Shane Stephens, founder and Chief Development Officer of FirstElement Fuel told H2 View today.

As California’s biggest hydrogen station developer and operator, FirstElement Fuel was the highest scoring applicant in this competitive grant solicitation receiving 45% of the funding, the largest amount a single applicant could win. This means over the next five years (2020 to 2025), FirstElement will build somewhere between 41 and 49 new stations in California.

“The way the grant was structured – it’s a multi-year grant – this starts to transition companies to providing more private funding and relying less on direct public funds. I think at the end of this, we’ll be in a position to start getting off public funds altogether,” Stephens explained.

irstElement Fuel will build 21 stations in the first batch with a $20.5m contribution from the CEC, and a further 20 to 28 stations in a second and third batch. The company plans to contribute $98.5m of matching funds to the construction of all 41 to 49 stations.

“Despite some of the challenges the world is having, the hydrogen piece is moving really strongly, as the results of this solicitation from the energy commission show. The solicitation was highly competitive with some really compelling applications, and the result is a huge mandate for us to expand our hydrogen network here in California,” Stephens said.

“There’s another really important policy mechanism in California, the Low Carbon Fuel Standard (LCFS) programme. With that programme in place and this last funding solicitation, I think we’re in a place to transition to where we will rely on that LCFS policy and then private investment to continue to grow the market. So we’re looking for more market-based mechanisms, maybe tax incentives, to compliment the LCFS programme and unlock further private investment. But I think looking beyond the 2025 timeframe, we probably won’t need grants and direct public funds to continue to expand the network.”

Stephens said since FirstElement Fuel first started building hydrogen stations in 2014, the dollars invested per car that you can fill has dropped by something like 80%.

“The station cost has gone up a little bit, but the performance has increased about four or five times. If our original hydrogen stations were around $2.5m to build, our new hydrogen stations are a little over $3.5m to build. But they’ve gone from one fuelling position and the capability to fill 50 cars a day, to now four fuelling positions and the ability to fill 300 or even 400 cars a day,” he explained.

With currently 42 hydrogen stations open in California, this latest solicitation from the CEC means the state could have 123 new stations in total, including other grant awardees Shell and Iwatani, to expand its early commercial light-duty hydrogen refuelling and fuel cell electric vehicle markets.

“We’ve always viewed California as the tip of the spear for the roll out of fuel cell cars and hydrogen mobility. I think what these new stations do is it take away the chicken and the egg question because vehicle manufacturers now have a view into what’s going to happen over the next several years with development of hydrogen stations,” Stephens said.

“I think the other thing it does is encourages a lot of private investment because you’ve now seen a huge shift in companies coming in with bigger private dollars compared to the amount of public funds and that reflects an ability to scale up, build bigger stations that can perform better and show a better business case.”

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