Total unconvinced by hydrogen cars as France unveils subsidies

Bloomberg

France’s biggest energy company expressed skepticism about the economics of hydrogen-powered vehicles as the government unveiled subsidies to promote the gas as way of cutting fossil-fuel consumption and fighting climate change.
“We find it difficult to be convinced it has a future in 10 years time,” Total SA Chief Executive Officer Patrick Pouyanne said in an interview with local daily Ouest France published. “This is still very expensive.”
The French government announced plans to spend 100 million euros ($117 million) by 2023 to subsidise the purchase of vehicles powered by hydrogen and encourage cleaner production of the gas. The policy aims to cut France’s carbon emissions caused by the production of hydrogen — used in everything from oil refining to the production of glass, steel and fertilisers — by 10 percent within five years, while encouraging a more than 20-fold increase in vehicles powered by the gas.
The government will subsidise private companies to help them purchase 5,000 vans and 200 trucks, buses, boats and trains powered by hydrogen by 2023, it said in a presentation. That compares with just 260 vehicles currently using hydrogen cells in France. It will also subsidise the installation of electrolysers to help manufacturers produce hydrogen on site instead of trucking it in.

HYDROGEN ADVOCATES
French companies such giant gas producer Air Liquide SA, McPhy Energy, a maker of electrolyser and hydrogen filling stations, and Engie SA, the country’s second-largest utility, are advocating greater use of hydrogen to power vehicles. However, carmakers PSA Group and Renault SA have fallen behind Japan’s Toyota Motor Corp. and Korea’s Hyundai Motor Co. in that domain, focussing instead on developing battery-electric cars.
Proponents of hydrogen point out that the fuel cells can run for a lot longer than batteries, and filling a car tank takes just a few minutes. It’s also a way to produce and store clean energy if electrolysers are using excess wind and solar power, as fuel cells create electricity by chemically fusing with hydrogen with oxygen in the air, emitting just steam in the process.
“Hydrogen will be a necessary complement to the electric mobility,” Engie head of business to business, Franck Bruel, said at a conference in Paris. “It’s the solution to the intermittency of new energies” and will “therefore contribute to the decline in their costs.”
France’s Alstom SA is testing a hydrogen-powered train in Germany, while McPhy said it has a pipeline of “very short term” commercial opportunities worth 80 million euros. McPhy is in “advanced talks” for electrolyser projects of more than 100 megawatts, CEO Pascal Mauberger said, as he welcomed the government plan.
However, hydrogen fuel cells remain expensive, while huge investments in lithium-ion battery technology are pushing down prices of electric vehicles. There is also limited availability of hydrogen filling stations.
“The electric battery is still one step ahead,” said Pouyanne, adding that Total will develop a network of electrical charging stations while investing in natural gas for trucks.

FRENCH TARGETS
Big Oil is preparing for a future in which fossil fuels are diminished in the energy mix. In April, Total agreed to buy Paris-based utility Direct Energie, after previously acquiring French battery maker Saft Groupe SA and taking a minority stake in France’s Eren Renewable Energy SA.
Rival Royal Dutch Shell Plc has said hydrogen may offer a solution to storing power in the long term, and last year raised the idea of a grid based on the lightest element. Shell entered a joint venture with partners such as Daimler AG to dispense hydrogen from its filling stations in Germany, aiming to roll this out at 400 locations by early 2020s.
France targets 100 hydrogen stations by 2023, up from about 20 currently. That number would rise to between 400 and 1,000 by 2028 to supply as many as 50,000 vans and 2,000 heavy vehicles, the government said. France will also test the injection of a fraction hydrogen in natural gas networks.