1. ICHS Round Table “Industrial Perspective”
Les Shirvill
Shell Global Solutions
Good afternoon. It is a real honor to be here with you today celebrating Professor Brandon’s new chair. I would like to thank the conference organizers for giving me and Shell Hydrogen the opportunity to share our views and perspectives on the emerging hydrogen economy. My intent this afternoon is to share some of the thinking that led Shell to conclude that there was and is a real business opportunity for Shell in the Hydrogen Game, but also, a little of what needs to be done to accelerate the emergence of a hydrogen fuel based industry from both technical and commercial perspectives.

2. Shell is already experienced in producing and handling H2
Experienced at H2 production: Shell has more experience in the safe and productive handling of H2 & traditional fuels than any other company
Shell produces more than 7000 tons H2 per day and has been producing H2 for over 40 years
Shell is leveraging the most cost-effective, safe and available infrastructure to address the security, supply and responsible acceleration of the H2 industry
Shell is well connected to advance a greener hydrogen economy via Wind, Solar
Shell is currently producing H2 using a range of production technologies, such as: SMR, Oil gasification, coal gasification, and platforming
Finally, Shell is already well-experienced in producing and managing hydrogen. A vast knowledge of hydrogen production, and fuel provision, are paramount for being a successful player in the market
We are expereinced at producing H2 – we are the fourth largest producer of H2 and have been producing for over 40 yrs
We will be able, therefore, to leverage a cost effective and safe existing infrastructure
We have wind and solar businesses – as discussed earlier hydrogen is a good storage medium for wind and solar energy
We have a good position in hydrogen production technologies.

3. Shell Hydrogen: Learning and investing in hydrogen as a fuel
Joint ventures
storage solutions
hydrogen purification
Demonstrations & partnerships
Refuelling
Low emission power Siemens
N. America Iceland Europe Japan
Home refuelling Vandenborre/Hydrogenics
Investment funds

4. And going from Research to Reality
Iceland
Europe
Japan
North America

5. For a long time chemical conversion of fossil fuel and biomass will be key for future hydrogen production scenario’s….
Nuclear Energy
Renewable Energy
Fossil Energy
Heat
Biomass
Mechanical Energy
Photo- electrolysis
Fermentation
Electricity
Chemical Conversion
Thermolysis of water
Electrolysis
Biophotolysis
The other major route to hydrogen is through chemical conversion of fossil fuels and biomass. Today, large scale steam-methane reforming is probably the most cost efficient and mature technology for producing hydrogen. Several other technologies are also widely used to produce hydrogen, either on purpose or as a by product, including gasification of coal, oil or biomass, refinery platforming, and steam cracking of gas or naptha to produce lower olefins with some hydrogen byproduct.
Most of these tecnologies produce CO2 as a byproduct with Hydroge. Well- if these are the key production technologies for hydrogen, does use of hydrogen still make sense as a way to reduce GHG emissions. Let’s look at this a bit more deeply.
But all these routes produce carbon dioxide as a byproduct of hydrogen manufacture. The question is then do energy efficiency gains from fuel cell applications compensate for the CO2 produced along with hydrogen that is used to fuel the fuel cells?.
Hydrogen
CO2
Steam-methane reforming (SMR, ) Gasification (coal, oil biomass…)
Platforming, Steam cracking
Adapted from John A. Turner, Science, 285, 687 (1999)

6. .. with Central Production economically favoured relative to On-site Production
Total Delivered Cost
[$/kg H2]
On-site electrolysis
25 fills (0.1 ton/day)
On-site reforming
50 fills (0.25 ton/day)
10 ton/day
500 ton/day
100 ton/day
500 ton/day
CENTRAL SMR & LH2 TRUCK
Central production
CENTRAL
SMR & GH2 TRUCK 50
100
150
200
250 km
Distribution (km) from production site

7. ….. and CO2 Capture and Storage (CCS) being an important element in the H2 CVP in a migration pathway to renewable H2 ’s
H2 from
existing
SMR
H2 from
fossil feedstock
w/ CO2
Capture
and
Storage
(CCS)
H2 from
Renewables
CO2
Emissions H2
Production
(t/d)
H2 Ren.
H2+CCS
H2 + CO2
100’s
< 10 years years >30-50 years
Time from now

8. Shell Hydrogen Vision for H2 Market Takeoff
We expect market takeoff between 2015 and 2025
Under supportive circumstances we see the potential for 5 to 10 million FCV’s in 2020, growing beyond 100 million between 2030 and 2040
Growth of H2 Market will depend on funding the transition to mass production
Dependent on public policy developments – incentives
Future landscape is being shaped now
Players developing H2 policies and positions
This is our view of the growth in numbers of fuel cell vehicles over the next 30 or 40 years. We developed this view by working closely with many of the top OEM’s and by looking at the rates at which other new technologies penetrated markets and displaced existing technologies. We expect that substantial markets for hydrogen-powered fuel-cell vehicles are most likely to start developing around 2015 to 2025 but could be even sooner as remaining technical hurdles do not require technology breakthroughs. We believe tht 5 to 10 hydrogen-powered cars could be o the road by 2020, over 50 million by 2030 and approximately 150 million by 2040 (these numbers are projections based on our best scenario work to date – they are not firm but expectations SH works with to develop its business).
Growth of H2 Market will depend on funding the transition to mass production
Dependent on public policy developments – gov inventives to vehicle & fuel-cell manufacturers and fuel providers
Future landscape is being shaped now
Governments, regulatory authorities, competitors, suppliers and customers are already developing policies and positions on H2
Cusp of new energy transformation. Now is the time to begin investing. Think of the unknown potential of personal computers 20 years ago and mobile phones just 10 years ago.
When these technologies were first introduced to the market there was skepticism about their potential. Investments had to be made when they were neither attractive nor affordable for consumers in the short term. Today, entire new economies and lifestyles are emerging as a result. The same can be said for hydrogen. This is a marathon, not a sprit, but the industry is well beyond the starting line.
THE NEXT STRETCH
Ok, So we are making progress and hydrogen looks like it could have a promising future. But the biggest hill we have yet to climb in our marathon - the one we must struggle up before we really hit our stride - is not technical, it is financial.
Let me explain why this is. We believe the current gasoline infrastructure offers the best model for automotive refuelling in a hydrogen economy. It has the benefits of familiarity, convenience, and acceptance in society. Additionally, immense investments have been made in putting gasoline stations on many street corners. We estimate the cost of getting a first pass infrastructure in place as approximately 20 billion dollars for the US, with a similar figure for Europe, and about a third of that for Japan.
But (But) here is the key problem - before the first mass-produced fuel cell vehicles roll off the assembly lines, much of the basic hydrogen infrastructure, especially minimal hydrogen production, delivery and dispensing capabilities needs to be in place. From the point of view of an energy company, this will require large capital investments, but these investments will then face poor utilization for 10 or more years as fuel-cell vehicle manufacturing is ramped up.
This is sometimes referred to as the “chicken and egg” problem of the hydrogen economy. What comes first – mass production of hydrogen Fuel Cell Vehicles or the development of a broadly accessible hydrogen-refuelling infrastructure? This is the key challenge for the hydrogen economy. So how do we get past it?
Well, as I have suggested, the transition to hydrogen will not happen overnight. Rather, hydrogen fuel and Fuel Cell Vehicles will probably become established in geographic pockets. Reflecting this, we at Shell believe it is time to move past stand-alone cost shared demonstration projects, and develop a new generation of projects, bigger in scope and complexity, but still representing an intermediate step towards the fully developed hydrogen infrastructure.
We call these “Lighthouse Projects” because they point the way to a brighter future – to the hydrogen economy.

9. Shell Hydrogen Vision for Market Development
Stand alone projects – hydrogen-fuelled buses out of depots (e.g. Amsterdam and Luxembourg)
Second generation sites, with public access, but separate from existing fuel stations (e.g. Iceland station)
Fully integrated hydrogen and gasoline fuel stations (e.g. Benning Road Shell Station in Washington DC)
Within next 5 years – Lighthouse projects: integrated stations within mini-networks
2010 – 2020 connecting the mini-networks with corridors and filling the white spaces
We have a clear road map for making the next stretch of the industry happen.
Go through these points
First – there are stand along projects like the CUTE projects in which fuel cell buses are fuelled out of depots – like the Amsterdam and Luxembourg stations that we are supporting.
Second generation sites alow public access but are still somewhat separate from a petrol refueling station. An example is the Shell branded Reykjavik station.
Third is full integration of hydrogen into gasoline fuel stations – which is what we did last November when we opened our first Shell Operated US station at Benning Road in Washington DC
As a fourth step in this migration path, we see over the next five years, the development of lighthouse projects – integrated stations operating within mainly urban mini-networks of hydrogen supply and other retail stations.
Finally, in the 2010 to 2020 time frame, be see the mini-networks getting connected with hydrogen stations placed along the corridors between urban areas.
Technically speaking, we are entering phase four of this migration path – development of mini-networks.
We need to accelerate the process today by coordinating with politicians and the public in order to build effective public/private partnerships and realize semi-commercial lighthouse projects and mini-networks in key early adopter areas. But I want to be clear, we were facing a marathon - not a sprint - and that the journey on the road to a hydrogen economy has only just begun.

10. The Next Stretch Need for:
Addressing technical/manufacturing challenges
Codes & standards
Political awareness and public education
Lighthouse Projects and Mini-networks; Funding the transition to higher volumes

11. Hydrogen Safety Codes & Standards
For the public to use hydrogen as a vehicle fuel, customers must be able to handle hydrogen with the same degree of confidence, and with comparable risk, as conventional gaseous and liquid fuels.
For the safe design of retail facilities, through the development of codes and standards, it is essential to understand all the hazards that could arise following the accidental release of hydrogen.
Hydrogen is simply different from conventional hydrocarbon fuels in several respects and a good quantitative understanding is required to ensure that it is handled safely.
We have a clear road map for making the next stretch of the industry happen.
Go through these points
First – there are stand along projects like the CUTE projects in which fuel cell buses are fuelled out of depots – like the Amsterdam and Luxembourg stations that we are supporting.
Second generation sites alow public access but are still somewhat separate from a petrol refueling station. An example is the Shell branded Reykjavik station.
Third is full integration of hydrogen into gasoline fuel stations – which is what we did last November when we opened our first Shell Operated US station at Benning Road in Washington DC
As a fourth step in this migration path, we see over the next five years, the development of lighthouse projects – integrated stations operating within mainly urban mini-networks of hydrogen supply and other retail stations.
Finally, in the 2010 to 2020 time frame, be see the mini-networks getting connected with hydrogen stations placed along the corridors between urban areas.
Technically speaking, we are entering phase four of this migration path – development of mini-networks.
We need to accelerate the process today by coordinating with politicians and the public in order to build effective public/private partnerships and realize semi-commercial lighthouse projects and mini-networks in key early adopter areas. But I want to be clear, we were facing a marathon - not a sprint - and that the journey on the road to a hydrogen economy has only just begun.