California transit agencies are leading the US public transport sector's shift to hydrogen fuel cells, using them to meet zero-emission bus requirements ahead of state deadlines.
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The California Air Resource Board has mandated that 25% of all new bus purchases by 2023 are be zero-emission, rising to 50% in 2026 and 100% in 2029, with a full transition by 2040. This rule parallels a state requirement that starting in 2026, 35% of new passenger vehicles sold must be considered zero-emission, rising to 51% in 2028, 68% in 2030 and 100% in 2035.
As a result of the state mandates, fuel cell-powered bus use is growing in California, with four private hydrogen fueling stations now supplying transit operators, with another four planned.
North County Transit District, in San Diego County, for example, plans to open a fueling station in spring 2024 to be managed by private operator Trillium Energy, said Chris Orlando, chief planning and communications officer.
"NCTD has ordered 12 [hydrogen fuel cells] buses, which we expect to place in service in 2024," Orlando said. The agency plans to buy at least 13 more HFC buses by 2025, he added.
Supplying hydrogen fuel
Given expensive retail hydrogen prices in California -- Platts' last monthly assessment was $25.49/kg on June 1 -- and fuel availability restraints, transit agencies attempt to avoid high prices at public fueling stations and instead secure contracted supplies. This is done either directly with suppliers or by establishing refueling stations operated and maintained by third party providers.
"Operators are going out to bid on the hydrogen station infrastructure and the fuel together," a public transport agency executive who asked not to be identified said on the sidelines of the World Hydrogen North America conference in May. "They are structuring their contracts as one would contract out for diesel and certified natural gas. Part of your request for proposals is to produce a price of $7 or less and locking them into a price. By locking in a price, one avoids the volatility."
Golden Empire Transit in Bakersfield operates 10 fuel cell buses with four more on order, to be delivered in the first quarter of 2024, according to Chris James, the agency's maintenance director. Golden Empire has a fixed two-year supply contract for liquid hydrogen at $8-$9/kg that started in March, James said. This is for gray hydrogen, with 33% of the content renewable, matching the California Energy Commission's requirement.
SunLine Transit Agency, serving the Palm Springs area, has its own fuel station that uses proton exchange membrane electrolysis to produce hydrogen, with an estimated production capacity of 900 kg/d, enough for 32 buses. The agency has 16 fuel cell buses, according to SunLine's website, and has had to buy hydrogen beyond its fixed-cost contract, the National Renewable Energy Laboratory in Washington said in a 2022 report.
SunLine did not respond to queries from S&P Global Commodity Insights.
Fixed delivered cost per kilogram
Other transit agencies like Orange County Transportation Authority have their own hydrogen stations using operations and maintenance contract. OCTA's is in Santa Ana and is run by Air Products.
"The main difference between [SunLine and OCTA] is that OCTA only gets delivered hydrogen and so has a fixed delivered cost per kilogram, while SunLine generates their own hydrogen with electrolysis and gets delivered hydrogen as needed because they don't generate as much as they use," Matthew Post, hydrogen systems research at the National Renewable Laboratory in Washington and the author of the July 2022 NREL report, told S&P Global.
As California transit agencies move towards hydrogen fuel cell fleets, some producers in the state are taking their own steps.
"Some hydrogen producers are taking some risk to lock in future customers," the transport agency executive said. "They're willing to mark down their price to get in that market space, secure financing and beat out the competition, while [large hydrogen producers] who have excess molecules available aren't yet recognizing the future."