3.4 City-level Energy Estimation and Assessment

3.4.1 R&D Goals

3.4.2 Result in FY 1998

3.4.2.1 Assessment of Scenario

1. The results of the modelling within Tokyo and London enable broadly similar conclusions to be drawn for the two cities; something that looked unlikely in previous versions of the model. However, the rapid pace of change within fuel cell technology; in particular the rate of cost reduction, has led the conclusions away from those in the previous reports. In both London and Tokyo the introduction of pure hydrogen is expected to be most cost-effective in the transportation sector in the short term. There is some merit to be derived from mixing hydrogen with the natural gas in existing pipelines to form hythane, for reduction of both local regulated pollutant emissions and CO₂. Revised data suggests that the natural gas provision within Tokyo is almost comparable to London in its range but much smaller in the volume of gas available.

2. Within the transport sector it can be seen that fleet vehicles, particularly buses, offer the best opportunities for pure hydrogen refuelling. They have high capital costs and are therefore insensitive to incremental additional costs in comparison with private cars; they also operate typically for much longer continuous periods. This means that reductions in operation and maintenance cost are more important for the public than the private owner. In addition, emissions regulations in this sector tend to be stringent and closely monitored, and there are existing programmes investigating alternative fuels such as CNG.

3. Worldwide trends suggest that the first fuel cell vehicles to be mass-produced will appear around 2004, or within Phase II of the WE-NET project. Buses and some other fleet vehicles are appearing sooner in many test sites. It is therefore imperative for the credibility of the project to embrace this rapid change and ensure that transitional strategies include the potential for use of these vehicles. This is a complex problem, as the fuel of choice for fuel cell cars does not appear to have been decided, though for buses hydrogen has been used almost exclusively. However, regulation and standardisation are key components of a strategy.

4. It has become clear that there is some difference between the Japanese Government's forward-looking attitude in funding the WE-NET hydrogen project and some existing country legislation. A key example is that at present it is not legal to run hydrogen-fuelled vehicles on Japanese public roads, and testing of the hydrogen cars that do exist has to take place only on private roads. If important demonstrations and eventual vehicle introductions are to take place the legislation must be amended. In addition, other alternative vehicle programmes and organisations within Japan seem to have limited interest in fuel cell or hydrogen vehicles, concentrating instead on CNG or LPG, for example. Again, this is an area that should be investigated with a view to providing additional strength to the WE-NET programme by using low-emissions vehicle programmes.

5. A number of existing alternative fuelled vehicle sites already exist within Tokyo. Both bus depots and the large LPG-fuelled taxi fleet feature strongly, though the latter is currently over-supplied and unlikely to be able to invest in new technology. For the purposes of a transitional strategy it is suggested that the most benefit in the short term could be derived from adapting one or more of these existing alternative fuel sites to provide hydrogen. These sites also tend to be associated with buses, already identified as one of the key transitional and future markets for hydrogen vehicles.

6. In the long term it is almost certain that a variety of feedstocks will be used to produce hydrogen, whether in Japan or elsewhere. In the short term it is important to understand how these feedstocks compare on cost, efficiency, emissions and other characteristics. Within the range of uncertainty of the modelling this has been difficult to achieve, and it is therefore suggested that the transitional phase also includes hydrogen brought in by tanker in its pure state; hydrogen from natural gas produced on-site and hydrogen from methanol produced on-site. This will enable real comparisons to be made.

3.4.2 Transitional strategies:

1. Existing CNG bus stations in Tokyo are fitted with small-scale steam reforming technology. This is based on, for example, the ONSI PC25 fuel processor, at potentially much lower cost than existing equipment. The natural gas is reformed on-site to produce hydrogen, which is compressed and used to fuel a small fleet of buses. These buses could be powered by internal combustion engines in the short term as they are likely to be cheaper than fuel cell technology. However, this is felt to be sub-optimal as the fuel cell will certainly come down in cost rapidly over the first phase of the trials, and fuel cell buses are already in test operation elsewhere.

2. At the same time, a selection of other bus depots should be fitted with methanol tanks (some already exist) and methanol processing equipment. The methanol is processed to provide compressed hydrogen once more, and used in the same way as previously.

3. In a third parallel set of tests liquid hydrogen is transported from overseas. This is only feasible in the short-term if some of the speculation regarding potential cheap LH₂ from Canada, for example, is proven true. This hydrogen is then also used in refuelling buses, but stored directly as LH₂ in the depot.

4. As the tests proceed, the real economics of each alternative will become clearer. This will enable some rationalisation if required, though it may also be possible to maintain the flexibility of using a variety of primary feedstocks until renewable hydrogen sources (the ultimate goal) become established in the long term. These time-based strategies will also depend on rapid changes in regulation allowing the use of hydrogen as a vehicle fuel.

5. As the number of fuelling stations providing hydrogen increases, these should also be opened to the public for private vehicle refuelling. This will enable more efficient use of the resources and ensure that private motorists are not dissuaded from buying hydrogen vehicles because of a lack of infrastructure. At the same time it will be possible to link some of the fuelling stations by gaseous hydrogen pipeline. This will also enable better management of the hydrogen production facilities and will form an initial network on which to build.

6. During this time - the first five-ten years of the strategy - small-scale fuel cell systems are envisaged to come into commercial production and potentially into widespread use. These will probably run on natural gas initially, but if there is a hydrogen refuelling facility close by it will be possible to use a feed from that to increase the efficiency of the fuel cell system and reduce emissions associated with its use. In a truly integrated design it might be possible to use the electricity from the fuel cell to compress the hydrogen, for example, when demand elsewhere is low. This may also depend upon deregulation of the electricity market.

7. Although Japan has limited energy resources, it is important that development of a strategy towards a hydrogen economy is not solely dependent upon imported hydrogen or primary fuels from which it can be made. While Tokyo may not be an ideal place to produce renewable hydrogen, there are areas of Japan that have strong winds, geothermal energy and high levels of insolation, and each of these merits further investigation.

8. As the depots are increasingly linked by hydrogen pipelines, the need for reforming facilities at the depot is reduced. While economies of mass-manufacture made the initial introduction of many small reformers appealing, economies of scale make it frequently more economic to use larger facilities. The landing points for LNG and methanol would be ideal points at which to situate a large-scale hydrogen production facility. Some of the Japanese refinery capability in, for example, Yokohama, will also produce hydrogen. The pipelines connecting the refuelling depots can then be extended gradually as the small-scale reformers are phased out, with pure hydrogen transported around the urban area. This will be an ongoing process to be undertaken between years ten and twenty, as the infrastructure widens to meet demand. Large-scale hydrogen production facilities would also enable CO₂ to be sequestered from the plant, as commitments to reduce greenhouse gas emissions begin to be honoured.

9. At the same time, as the fleet depots are linked by pipeline, the smaller passenger car filling stations can be connected to the hydrogen grid by spurs. This will enable them to provide hydrogen to their customers, who can then avoid having to find a local bus depot.

10. It is equally important to ensure that, after the very early stages of the project, equivalent developments are taking place in other urban areas. This will allow consumers to travel between these sites and once again ensures that they are prepared to buy vehicles that run on a fuel that is less readily available than conventional ones.

11. Although transport is seen as the key to introducing hydrogen into the urban area, it is important to link developments in fuel supply with developments in power supply. Fuel cells from the domestic scale (2-7kW) to much larger cogeneration schemes (2-10MW) will require fuelling, and while natural gas offers immediate benefits, optimal performance comes with the use of hydrogen. Therefore, as the pipelines linking fuelling stations are built, they must also be designed to allow for the fuel requirements of stationary equipment. Mixing hydrogen with natural gas in existing pipelines will allow higher efficiencies and reduced emissions in the short term, and should be done. However, pure hydrogen will require a change in the equipment capable of using the fuel. It is felt that developing a secondary fuelling network is more efficient than trying to convert existing supply systems to carry pure hydrogen, as newer equipment can thus be connected as necessary. Of course, the space available is limited and costs will be high; these issues have not been investigated in detail as the situation in Tokyo changes rapidly and costs are highly dependent upon local geography.

12. As time develops the strategy will probably require changing. However, the results to date suggest that fuel cell vehicles offer the most rapid potential for introducing pure hydrogen into the fuel mix in the short term. Japan's unique position in being almost entirely energy-import dependent acts in its favour, as it is possible to compare a variety of primary feedstocks for the production of hydrogen, and to use them all in tandem with imports of pure hydrogen in the future. It is likely that a variety of feedstocks will continue to be used to provide hydrogen for some time to come.