In January 2004, California Gov. Arnold Schwarzenegger introduced the California Hydrogen Highway Network to accelerate the introduction of a hydrogen-powered transportation system in California. Its purpose is to create a network of hydrogen stations throughout the state by 2010, reaching 2,000 stations and 2 million vehicles by 2030.
Is it viable? Many in the field seem to think so.
The Hydrogen Highway Financial Innovations Laboratory held Nov. 18 at the Institute brought together 30 experts in public and private finance, technology, industry and policy to discuss viable pathways to creating a "hydrogen economy." At the end of the day, the participants, who broke into focus groups addressing financing mechanisms, technological development, societal issues and cross-cutting solutions, came up with recommendations to be submitted to Schwarzenegger.
The essential ingredients of a viable hydrogen economy, the group agreed, were political will and cash. Despite formidable barriers to implementation, motivation is also a driving force toward achieving that end. Early-stage key players identified by the group were hydrogen producers and equipment manufacturers. These include government, project financiers, big auto OEMs, energy utilities, hydrogen retailers (stations) and renewable-energy players. Initial end users identified were fleets and government, and only in the long-term, public consumers.
A clearly identified downside was the lack of private capital available for infrastructure. Venture capitalists are not interested in government-subsidized markets, nor will private investors fund projects that have no revenue stream for at least five years. Private investors need clearly defined, focused opportunities, they said, as well as a broader market than one limited to California. On the upside, while infrastructure will have to be funded by public means, models exist for converting government-built infrastructure to private projects, among them, the solar industry and the defense industry.
In the technology and public policy arenas, members determined that the central issue is how to direct current technology toward the policy of hydrogen economy. They also looked at existing infrastructure that could be utilized in this regard, including railroad and cell-phone infrastructure, military bases and Cal Trans stations, and agreed to study natural gas to determine the existence of a parallel track.
Among the societal drivers cited were energy scarcity, energy diversity, carbon dioxide emissions and global warming, yielding benefits such as better air quality, job creation and export opportunities.
The general consensus emerged that hydrogen is the energy future, leaving the question of how California becomes a leader in that future. Public awareness and buy-in were considered critical by the group and they raised the possibility of an initiative similar to the voter-approved stem cell initiative as a starting point.
The technology team felt that, realistically, hydrogen would gain a major foothold among the population closer to the year 2030, citing the cost of the car as one factor and hydrogen's adoption as a commodity by major oil companies as another.