Alternative Transportation Technologies: Hydrogen, Biofuels, Advanced ICEs, HEVs and PHEVs Results of two Reports from the National Research Council National Petroleum Council 10-7-10 Michael Ramage 1

Committee on Assessment of Resource Needs for Fuel Cell and Hydrogen Technologies MICHAEL P. RAMAGE, NAE1, ExxonMobil Research and Engineering Company (retired), Chair RAKESH AGRAWAL, NAE, Purdue University DAVID L. BODDE, Clemson University DAVID FRIEDMAN, Union of Concerned Scientists SUSAN FUHS, Conundrum Consulting JUDI GREENWALD, Pew Center on Global Climate Change ROBERT L. HIRSCH, Management Information Services, Inc. JAMES R. KATZER, NAE, Massachusetts Institute of Technology GENE NEMANICH, ChevronTexaco Technology Ventures (retired) JOAN OGDEN, University of California, Davis LAWRENCE T. PAPAY, NAE, Science Applications International Corporation (retired) IAN W.H. PARRY, Resources for the Future WILLIAM F. POWERS, NAE, Ford Motor Company (retired) EDWARD S. RUBIN, Carnegie Mellon University ROBERT W. SHAW, JR., Aretê Corporation ARNOLD F. STANCELL, NAE, Georgia Institute of Technology TONY WU, Southern Company 1NAE, National Academy of Engineering.

Major Options for Reducing Oil Use Improved fuel economy; evolutionary. Biofuels; some new infrastructure required. Hydrogen fuel cell vehicles; major technical and infrastructure improvements needed. Battery-powered vehicles; major technical and some infrastructure changes needed.

Evaluate technology status Determine potential oil and CO2 savings Goals Establish as a goal the maximum practicable number of alternative vehicles and fuels the can penetrate the market by 2020 ( and beyond to 2050) Evaluate technology status Determine potential oil and CO2 savings Determine the funding, public and private, to reach that goal Establish a budget roadmap to achieve the goal Determine the government actions required to achieve the goal 4

Presentation Outline Scenarios Market Penetration Rates Technology Status FCV and PHEV Costs Oil and CO2 Savings Timing and Transition Costs to Achieve Market Competitiveness for FCVs and PHEVs Infrastructure Issues Conclusions 5

SCENARIOS Case1) H2 SUCCESS H2 & fuel cells play a major role beyond 2025 Case 2) EFFICIENCY(ICEV) Potential improvements in gasoline ICE and HEV technologies successful Case 3) BIOFUELS  Large scale use of biofuels, focus ethanol Case 4) PLUG-IN HYBRID SUCCESS PHEVs play a major role beyond 2025 Case 5) PORTFOLIO APPROACH More efficient ICEVs + biofuels + FCVs or PHEVs introduced

Case 1-Hydrogen Fuel Cell Vehicles

Hydrogen Fuel Cell Vehicles Hydrogen Production Routes Coal Reformer Gasifier Natural Gas Electric Power Plant Solar PV Hydrogen Primary Energy Resource Nuclear Hydro Renewables Wind Biomass Generator Nuclear heat Electrolyzer Steam Electrolysis CO2 Sequestration

Hydrogen Fuel Cell Vehicles Fuel Cell Progress Cost: $1000s/kW (1990s) → $300/kW(2000) →$100/kW (2007) :Target $ 30/kW $70/kW(2010) Durability: 1000 hr (2004) → 2000 hr(2007) 2500 hrs(2010) :Target: 5000hr Power Density: 440W/l (2004) → 580W/l (2006) :Target 650W/l On Board H2 Storage: Target 300 miles - Promising but challenging solution: H2 sorption on solid materials - Auto companies poised to use 5-10kpsi onboard storage Demonstration Vehicles: Growing number on the Road

Hydrogen Fuel Cell Vehicles Hydrogen Production & Delivery Progress H2 from natural gas at station forecourts: $3.00/gal gasoline equivalent vs. target of $2.50/gge (2010) target reached at today’s natural gas prices Longer-range H2 techs being pursued: Coal cost competitive if CCS viable Better understanding of biomass potential

Maximum practical penetration rate estimated assuming: Hydrogen Fuel Cell Vehicles Maximum Practical Penetration Rate Maximum practical penetration rate estimated assuming: Technical goals are met Consumers accept HFCVs Oil prices remain high (EIA high oil price scenario used as reference case) Policies are in effect to support HFCVs and hydrogen production.

CASE 1: H2 SUCCESS Scenario

Hydrogen Fuel Cell Vehicles Implementation Costs The estimated government cost to support a transition to HFCVs is roughly $55 B from 2008 to 2023. $40 B - the incremental cost of HFCV $8 B - the initial deployment of H2 supply infrastructure $5 B for R&D. Industry cost for H2 infrastructure $400 B by 2050 * -180,000 stations - 210 central plants - 80,000 miles of pipeline * 220,000,000 HFCVs

Case 2 - Fuel Economy Improvement add section title Add picture of ICE and Hybrid vehicle 1 picture use something from one of the auto presentations Add slide as what we did ie did not look at costs, but tech = penetration potential

Fuel Economy Improvement The Energy Independence and Security Act of 2007 raises fuel economy standards to 35 mpg by 2020. This study evaluated technologies to improve fuel economy but did not closely examine costs. Gasoline HEVs dominate; no FCVs or PHEVs Continued advancements in conventional vehicles offer significant potential 2.6%/year 2010 to 2025 1.7%/year 2026 to 2035 0.5%/year 2036 to 2050

Fuel Economy Improvement Technologies FE Improvement 2015 2025 Engine/Transmission: 14% 20% Variable valve timing & lift Cylinder deactivation Gasoline direct injection Weight, drag, tires: 8% 12% Accessories: 2% 4% Idle Stop: 3% 4%

Fuel Economy Improvement Fuel Consumption

Case 3 -Biofuels 12 foot Switchgrass

Biofuels Study analyzed Potential amount of sustainable biomass Technologies to convert biomass to fuels Fuel products Looked at technical potential but did not closely examine costs Study focus was on US oil and CO2 reduction

BIOFUEL SUCCESS Grain and Sugar based ethanol - maximum potential 12 billion gallons/year Sustainable biomass (million dry tons per year)* 300 mtpy current, 500 mtpy 2030, 700 mtpy 2050 Cellulosic ethanol has significant potential, 10 billion gallons/year by 2020 and 45 billion(gas eq) by 2050 ** Large portion of biomass could be converted other advanced biofuels after 2020 *crop residues, energy crops, forest residues ** gasoline equilvalent *** maximum practicable case

Biofuels Total Production

CASE 4 - PHEVS Chevy VOLT

CASE 4: PHEVS 2 mid-size vehicle types: PHEV-10s, PHEV-40s 2 market penetration rates: Maximum Practical (same as H2 FCVs but start earlier (2010) Probable 2 electricity grid mixes (business as usual and EPRI/NRDC scenario for de-carbonized generation in a 2007 study) PHEV gasoline and electricity use based on estimates by MIT, NREL, ANL In future work Strategic paths (PHEV-10->PHEV-30 ->pure batt. EV) allow tech. change over time.

PHEV Cost Analysis: Batteries are Key Need acceptable cost for reasonable range, durability, and safety

Batteries Looked at 10 and 40 mile midsize cars - PHEV-10s and PHEV-40s Battery packs with 2 and 8 kWh useable or 4 and 16kWh nameplate energy Start of life, not after degradation 200 Wh/mile 50% State of Charge range (increases to compensate for degradation) 28

Current PHEV Battery Pack Cost* Estimates Compared ($/kWh nameplate) $700-1500/kWh (McKinsey Report) $1000/kWh (Carnegie Mellon University) $800-1000/kWh (Pesaran et al) $500-1000/kWh (NRC: America’s Energy Future report) $875/kWh (probable) NRC PHEV Report $625/kWh (optimistic) NRC PHEV Report $560/kWh (DOE, adjusted to same basis) $500/kWh (ZEV report for California) *Unsubsidized costs 29

Future Cost* Estimates Compared ($/kWh nameplate) $600/kWh (Anderman) $400-560/kWh in 2020 (NRC PHEV) $360-500/kWh in 2030 (NRC PHEV) $420/kWh in 2015 (McKinsey) $350/kWh (Nelson) $168-280/kWh by 2014 (DOE goals adj.) NRC estimates higher than most but not all Assumed packs must meet 10-15 year lifetime Dramatic cost reductions unlikely; Li-ion technology well developed and economies of scale limited *Unsubsidized costs 30

Vehicle Costs PHEV-40 PHEV-10 Total Pack cost now $10,000 - $14,000 Total PHEV cost increment over current conventional (non-hybrid) car: $14,000 - $18,000 PHEV cost increment in 2030: $8,800 - $11,000 PHEV-10 Total Pack cost now $2500 - $3,300 Total PHEV cost increment over current conventional (non-hybrid) car $5,500 - $6,300 PHEV cost increment in 2030: $3,700 - $4,100 31

Electric Infrastructure No major problems are likely to be encountered for several decades in supplying the power to charge PHEVs, as long as most vehicles are charged at night. May need smart meters with TOU billing and other incentives to charge off-peak. Charging time could be 12 hours for PHEV-40s at 110-V and 2-3 hours at 220-V. Thus home upgrade might be needed. If charged during hours when power demand is high, potential for significant issues with electric supply in some regions. 32

CASE 4: PHEV Market penetration Maximum Practical (with optimistic tech development estimates): 4 million PHEVs in 2020 and 40 million in 2030 Probable (with probable technical development): 1.8 million PHEVs in 2020 and 13 million in 2030 Many uncertainties, especially willingness and ability of drivers to charge batteries almost every day. 33

CASE 4: PHEV Fuel Savings Relative to Efficiency Case 34

Efficient ICEVs + Biofuels + Adv. FCV+PHEVs CASE 5: PORTFOLIO APPROACH Efficient ICEVs + Biofuels + Adv. FCV+PHEVs

CASE 5: PORTFOLIO APPROACH Efficient ICEVs + Biofuels + Adv. Veh. FCV or PHEV Same number of FCVs as in Case 1, but assume that gasoline ICEVs become more efficient and that hybrid vehicles take over (as in Case 2), while an increasing fraction of liquid fuel comes from biofuels (as in Case 3). ICEVs assumed to use advanced biofuels and gasoline

Case 5:Portfolio Fuel Savings Efficiency + Biofuels: ICEVs assumed to use advanced biofuels and gasoline 37

Case 5:Portfolio GHG Emissions BAU Electric Grid 38

Case 5:Portfolio GHG Emissions De-carbonized Electric Grid(EPRI/NRDC) 39

Potential Transition Costs for HFCV and PHEVs

PHEV-40 Sensitivity Cases TRANSITION COSTS: PHEVs and H2 FCVS PHEV-10 PHEV-40 PHEV-40 Sensitivity Cases High Oil DOE Goal HFCV Success Partial Success Breakeven Year 2024 2040 2025 2023 2033 Cum. Cash flow to breakeven ($billion) 24 408 41 22 46 Cum. Vehicle Retail Price Diff to breakeven ($ billion) 82 1639 174 40 # Vehicles at breakeven (million) 10 132 13 5.6 Infrastructure Cost at breakeven ($ Billion) (in-home charger @$1000) 8 (H2 stations for first 5.6 million FCVs) 19 (H2 stations for first 10 million FCVs) 1-3 decade transition time; Transition cost $10s-100s Billions; Results very sensitive to oil price and vehicle (battery& fcell) costs 41

Major Findings Significant fuel and CO2 reductions can be achieved over next 20 years with efficient ICE/HEV technologies and biofuels. PHEVs and HFCVs have greater long-term potential for fuel savings. HFCVs can greatly reduce CO2 emissions, but savings from PHEVs dependent on grid fuel source. A portfolio of technologies has potential to eliminate oil and greatly reduce CO2 from US light duty transportation by 2050 The U.S. could have tens of millions of H2 FCVs and PHEVs on the road in several decades, but that would require tens or hundreds of billions in subsidies Technology breakthroughs are essential for both fuel cells and batteries; cost reductions from manufacturing economies of scale will be much greater for fuel cells than batteries 42

Backup Slides

Hydrogen Fuel Cell Vehicles Polymer Electrolyte Membrane Fuel Cell 80°C

Hydrogen Fuel Cell Vehicles Infrastructure Cases

AEO 2008 High Oil Prices Case and EPRI/NRDC 2007 AEO 2008 High Oil Prices Case and EPRI/NRDC 2007. Environmental Assessment of Plug-In Hybrid Electric Vehicles. Volume 1: Nationwide Greenhouse Gas Emissions. 46

PHEVS CONCLUSIONS Lithium-ion battery technology has been developing rapidly, especially at the cell level, but costs are still high, and the potential for dramatic reductions appears limited. Costs to a vehicle manufacturer for a PHEV-40 built in 2010 are likely to be about $18,000 more than an equivalent conventional vehicle, including a $14,000 battery pack. The incremental cost of a PHEV-10 would be about $6,300, including a $3,300 battery pack. PHEV-40s are unlikely to achieve cost-effectiveness before 2040 at gasoline prices below $4.00 per gallon, but PHEV-10s may get there before 2030. Presently unpredictable battery breakthroughs may accelerate these schedules. At the maximum practical rate, as many as 40 million PHEVs could be on the road by 2030, but various factors are likely to keep the number lower. A more plausible rate would result in 13 million PHEVs by 2030.

PHEVS CONCLUSIONS cont PHEVs will have little impact on oil consumption before 2030 because there will not be enough of them in the fleet. More substantial reductions could be achieved by 2050. PHEV-10s will reduce oil consumption only slightly more than can be achieved by HEVs. PHEV-10s will emit less carbon dioxide than nonhybrid vehicles, but show little advantage over HEVs after accounting for emissions from the electric power generation. No major problems are likely to be encountered for several decades in supplying the power to charge PHEVs, as long as most vehicles are charged at night. A portfolio approach to research, development, demonstration, and, perhaps, market transition support is essential.

Liquid Fuel Demand Global, United States, and U.S. Imports

Carbon Emissions

Hydrogen Fuel Cell Vehicles Policy Policies designed to accelerate the penetration of HFCVs into the U.S. vehicle market must be durable over the transition time frame, but should be structured so that they are tied to technology and market progress, with any subsidies phased out over time.

Transportation Energy Policy Hydrogen fuel cell vehicles and other emerging technologies collectively - potential to eliminate oil demand from LDT 2050. - reduce GHG emissions to less than 20% of current Policies must support a portfolio of technologies to achieve these results and be durable and sustainable

Type of Hydrogen Supply over Time Case 1 (Hydrogen Success) 2020 2035 2050 No. of cars served (percentage of total fleet) 1.8 million (0.7%) 61 million (18%) 219 million (60%) Infrastructure capital cost $2.6 billion $139 billion $415 billion Total No. of stations 2,112 (all on-site SMR) 56,000 (40% on-site SMR) 180,000 (44% on-site SMR) No. of central plants 113 (20 coal, 93 biomass) 210 (79 coal, 131 biomass) Pipeline length (miles) 39,000 80,000 Hydrogen demand (tonnes per day) 1,410 (100% NG) 38,000 (22% NG, 42% biomass, 36% coal with CCS) 120,000 (31% NG, 25% biomass, 44% coal with CCS) NOTE: NG = natural gas.