H2Education - Hydrogen Education - Missoula, Montana

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Hydrogen Economy  >>  Economics and Impacts





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Economics and Impacts

A common problem discussed in the development of the hydrogen economy is what will come first: fueling stations or hydrogen powered cars?

This is a legitimate question because if you by a hydrogen powered vehicle you need somewhere to fill it up. Conversely, the energy companies will not build hydrogen fueling

Honda FCX at a Shell hydrogen fueling station

Honda's FCX fuel cell vehicle at the Shell hydrogen fueling station in Washington D.C. Photo by Niels Maumenee

stations if there not customers who want hydrogen for their vehicles.

If we look back in history, we see that this same question was posed when the first automobiles began to hit the market. As the market grew, more fueling stations were built to meet the demand. This is a somewhat more difficult proposition at the onset of the development of the hydrogen economy. Consumers of petroleum have come to rely on the abundance and convince of modern day fueling stations. Auto manufacturers and energy companies cannot expect consumers to give up convince for more environmentally benign products. That is why there needs to be support from government and key members of the industry. One example is the California Hydrogen Highway Project.

Hydrogen powered technology is technologically competitive but it is not yet economically competitive. In order for the hydrogen economy to get rolling there need to be “early adapter” who see hydrogen technology as beneficial not just for economic reasons 1. These buyers typically have a need for reliability and efficiency that demands cutting edge technology and the money to purchase the technology. One such example may be government or fleet vehicle operators. The collective purchasing power of many “early adapters” will help to drive the cost of manufacturing down and set into motion the economies of scale that will make hydrogen powered products more affordable for everyone.



CITATIONS:
1   National Hydrogen Association 2004 - The Hydrogen Economy Hydrogen Fact Sheets
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