| The introduction of hydrogen fuel for passenger vehicles faces many technology development and policy challenges. These include the establishment of a hydrogen refueling infrastructure, limitations of hydrogen storage technologies, high fuel cell production costs, lack of public awareness of the benefits of hydrogen, and production of inexpensive hydrogen from low-carbon energy sources. Of these major challenges, the coupled deployment of refueling infrastructure and vehicles, often referred to as the chicken-and-egg problem, will require significant technology innovation, policy intervention and business initiative.; One hydrogen infrastructure development strategy is to install a large number of refueling locations within a short period of time, providing a minimal level of refueling availability to a significant percentage of the general population before hydrogen vehicles are introduced. This initiation strategy, if coordinated with the mass production of hydrogen vehicles, could reduce many of the risks posed to major stakeholders, including vehicle manufacturers, fuel providers, government agencies and consumers. This strategy has been modeled on a national scale, relying upon: (1) estimates of a sufficient number of early hydrogen stations, (2) a cost analysis of hydrogen stations employing onsite steam-methane reformer technology, and (3) a characterization of relative station sizes within urban refueling station networks. Installing 9,200 hydrogen stations within major U.S. urban areas and along major interstates would require approximately {dollar}5.1 billion in capital. As hydrogen vehicles are deployed and infrastructure utilization rates increase, the cost of hydrogen is reduced over time. In an optimistic deployment scenario, the average cost of hydrogen could approach {dollar}3.50 per kg by 2030.; The high risk and interdependent nature of stakeholder decisions during the early phases of hydrogen infrastructure development suggests that some type of government intervention will be required to ensure the successful introduction of hydrogen fuel for vehicles. Based upon challenges posed by the structure and rate of deployment of early hydrogen station networks, it is proposed that a regulatory environment supporting longterm development goals could ensure adequate early stakeholder coordination. As hydrogen fuel markets become robust, competitive mechanisms could be introduced to ensure efficient use of resources and stimulate further technological innovation. |
