HOUSTON — Randall MacEwen is the president and CEO of Ballard Power Systems, a company whose activities put him at a unique place in the transition to cleaner energy: It makes fuel cells.
Those fuel cells would ingest hydrogen, creating electricity that would then power an electric engine in a vehicle. The end result, if the hydrogen is considered “green” hydrogen, created by using wind, solar or nuclear, is that the car or truck with the fuel cell would be a true zero-emission vehicle.
MacEwen was on a panel at the CERAWeek conference in Houston, a giant multiday energy gathering that has attracted at least 5,500 people after skipping the past two years. And hydrogen has been the star of the show, particularly against a backdrop of record-breaking jumps in oil prices because of the Russian invasion of Ukraine and the refusal by many customers to consume Russian oil.
CERAWeek is now owned by S&P Global (NYSE: SPGI), after its recent merger with IHS Markit. It is produced by S&P’s Commodity Insights division.
The numerous hydrogen-themed panels at the conference are not all the same, but they don’t stray too much from the same message: Hydrogen has a strong future but still has many hurdles to cross.
In an interview with FreightWaves after the panel ended, MacEwen echoed comments he had made to the audience that rail has strong potential to be a market for hydrogen, though it doesn’t get as much attention as applications like trucking.
Ballard is participating in an ongoing test of hydrogen-fueled locomotives being conducted by Canadian Pacific (NYSE: CP). The locomotives use fuel cells provided by Ballard.
“In the ’50s the rails moved from steam to diesel, and the theme in North America from 2020 on will be to change diesel to a fuel cell,” MacEwen said.
Under the CP plan, three locomotives will be outfitted with fuel cells: one for linehaul, a second known as a switcher and a third known as a shunter. The last two move trains small distances in railway facilities.
MacEwen said the locomotives will be tested in 2023, and if the test is successful, “we’ll look at a changeout.”
Locomotives are retrofitted about every 15 years, MacEwen said, and about 2,700 need that work annually. It could be at that point that a fuel cell is installed.
Whereas fueling hydrogen-powered trucks is a significant issue — where will the facilities be built? — MacEwen said railroads have the advantage of having dedicated major lines where refueling can be built along the right of way. The point-to-point system can be set up “so you get the range you need,” he said.
Additionally, a second train can be placed behind the locomotive, carrying more hydrogen that can be used to refuel the main locomotive when it’s required.
A company like Ballard depends to a certain degree on the progress of others: a steady supply of hydrogen is needed for end users to stick fuel cells in their vehicles and run on electricity. MacEwen said he was “most excited about the capital going toward the supply of hydrogen, and in particular green hydrogen.”
He estimated that based on electrolysis projects planned around the world, global capacity to produce green hydrogen will be between 100 to 150 gigawatts. Current global capacity is less than one gigawatt, he said.
“I believe the supply of green hydrogen will surprise to the upside in the next five years,” MacEwen said.
And costs are coming down. MacEwen said the various pathways to make green hydrogen should be producing at an average of $5 per kilogram by 2026, “and in some cases we could have that today.” He said longer term, Ballard sees hydrogen at $3 per kilogram in 2027 and $1 by 2030.
But MacEwen also said he sees the price of fuel cells coming down, with Ballard on a project to take down the costs of the equipment by 70% by 2024.
Regarding government incentives to boost the use of zero-emission vehicles, like fuel cells powered by green hydrogen, MacEwen doesn’t think small. “If we had a CO2 price that drove the market nationally or globally, then the externalities of fossil fuels, like energy security and the climate crisis, would be embedded in the final market price,” he said.
And the numbers he threw out weren’t tame: “If we had $150 (per metric tonne of carbon), $200 or $300 for CO2, you’re talking about an economic model where zero-emission vehicles can compete on an apples-to-apples basis,” he said.
But he conceded that such numbers would not be “practical.” Yet even without such a levy, MacEwen looks over the landscape of countries or, in the case of California, a state, and sees rules to ban internal combustion engines over the next 10 years or more. “Those requirements mean that battery electric and fuel cell vehicles are the only two options,” he said.
If MacEwen is confident about the supply of hydrogen, he is not as sanguine about the vehicles themselves. “What we’ve seen recently is that it is the end users, the fleet operators, not the OEMs, that are demanding the zero option,” he said.
Asked what companies are stepping up, he cited two by name. One is Germany’s Quantron, which announced a partnership with Ballard last year to build fuel cell-powered trucks. The other is the U.K.’s Tevva, which had a significant fund raise last year to build fuel cell-powered trucks.
“The OEMs are taking too long to bring zero-emission options to these operators,” he said.
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