CALIFORNIA HYDROGEN HIGHWAY
ECONOMY TOPIC TEAM
Conference Call July 16, 2004
10:00 a.m. – 12:00 noon
Locations: Call In #:1-916-263-1364
Agenda Items in Blue
Action Items in Red
1. Roll Call (26 present)
2. Chip Update on new Team Tool Box
a. Our team has two objectives: determine 1) What it’s going to cost,
2) where its going to come from.
b. For part 2, we have four different tool areas:
i. Franchise concepts
iii. Cross-subsidies: reprogramming public funds from one
program to another
iv. Direct/New Subsidies: new sources of public capital
v. Other: new ideas of funding mechanisms
c. Any suggestions on how to better categorize the funding
i. Mike: we need to benchmark where we need to be in order
to attract private capital.
d. Brad: what about loan guarantee programs (falls into new subsidy)
e. Bob Harrer: what about VC activity, donations; how do they fit in?
non-profit contributions? The word “Franchising” may be a bit too
narrow (what about “private funds”)
f. Chip: How do we succeed in creating a climate of defensible
commercial position to be sufficient to attract private capital.
g. Woody to Chip: define what you mean by the different concepts.
h. Need something so that early participants get some level of
protection against market failures. State becomes the issuer of
franchises to early participants.
i. Chip idea: Require stations that seek permit renewal need to install
some h2 fueling capability.
i. Use public policy requirement to cause private funds to be
expended to be able to defend their prior investments.
ii. Bob: energy companies would be opposed to this idea.
j. Let’s come up with ideas (specific examples) for each of these
categories in a week’s time. Fill the toolbox. We need to present all
ideas, including dissenting opinions (minority reports).
i. Put your thoughts down, specific initiatives, send them to
Chip, he’ll put them in the boxes.
3. CalPERS call update:
a. Purpose: we the need to pull in institutions with investor and
finance perspective. William Chu will give perspective on where
they see this market going, what kinds of tools they could suggest.
They look at companies with good growth prospects. Look at
prospects of technology innovation, invest in portfolios.
b. Steven and Jessamyn to work with CalPERS staff to get specific
example of market development in other industries. CalPERS will
share expertise and connect the Team to it’s network of fund
c. CalPERS will also share examples of regulatory policies that have
spurred market development and ones that have killed it.
d. Once we come up with recommendations, CalPERS will critique it
to see how it will affect the market. They’ll look at our
recommendations through their lens.
e. Woody: look at biotech model
i. Flat panel display consortium info coming soon
f. Need ideas on how to engage CALPERS
4. Policy Sub-group update
a. Public funding options
i. Mike: they are convening a joint policy subgroup
ii. Will look at policy categories that will look at stimulating h2
production, encourage station construction, stimulate
market pull (vehicle side)
iii. Two week time period to come up with their ideas. By
Tuesday 7/20, fill up bucket with specific items
iv. Lots of reps from SocBen side, not so many from economy
v. Wendy James is tied in. Communications plan will be
guided by results from this team.
vi. Subgroup formed to capture all the policy ideas/options
from people involved in all the teams.
vii. Policies on DG: $4.5/kW subsidy and $2.5/kW for fuel cell
distributed generation. Looking to renew this subsidy.
viii. Tina suggestion: coordinate with DOE H2 technologies and
ix. Woody: need to look at USDOD, DOEducation, DOT, and
DOLabor; these are the non-obvious players in this that need
to be tied in.
x. Ed Stevenson: Solar integrated technologies: he knows of a
program up for renewal or expansion. Mike will read and
send readers digest summary of report. If anyone has
knowledge of any of these programs?, send them to Mike.
5. Steve and Jessamyn Private Financing Update
a. Created slideshow of what worked for EU wind industry, what
b. Next step: take this knowledge and try to make a recommendation
for H2 highway. Ex. Guaranteed price mechanism.
c. Woody: has anything been done on the Solar industry in the EU?
Check with Eurorpean Hydrogen Association.
d. Paul: compare effectiveness of European methods with what has
been done in the states. Similar incentives exist in the solar
industry. Production tax credits.
6. Update from Jonathan Weinert – Economic Station Modeling
a. In the process of contacting industry (equipment suppliers and
station builders) regarding the costs of hydrogen stations and
equipment. So far, I’ve contacted
i. Bob Harrer is working on getting the internal Chevron
Texaco Energy Station report and getting other data to
ii. Stuart is working on pulling data together
iii. Stephen Torres (FCE) has provided data on their fuel cell
b. All: Look through CHREC spreadsheet (emailed out to group) to
verify data, look for suspect data, add data.
c. Will be gathering data over the next two weeks.
d. H2A analysis- Steve Lasher
i. Group sponsored by DOE, group of researchers, reps from
1. Delivery Team
2. Forecourt team: On-site production of hydrogen
3. Centralized Production Team
4. Assumptions are well vetted by industry.
5. This does not do transition analysis
6. Does base case/reference case to compare (100kg/day
and 1500 kg/day station).
7. Woody would like to know assumptions.
8. Marianne Mintz: Discounted cash flow rate of
analysis. An engine for calculating the costs of
making hydrogen from any technology. SMR, future
NGref, nuclear, electrolysis, other…
9. It’s main value is it provides a methodology for
calculating the costs of hydrogen
10. Looks at moderate production volume (100-500
11. Look at NHA presentation for assumptions from
12. Stefan Unnasch to work with Jonathan on this model.
e. NREL study briefing on stationary economics
7. CHBC Survey – Elias Azrak
a. They will be convening soon to discuss at a working group meeting
b. Elias will put Jonathan directly in touch with members willing to
talk about costs.
c. Survey will go out Wednesday 7/21
a. Economy Team Website will soon be active, agendas and meeting
minutes will now be posted
9. Update on Cost/benefits Team: health care costs of petroleum uses. Send
comments on paper back to Tom (Plenys?). Cory Bock and Naveen, could
you forward info on externalities related to petroleum uses? They may
have some info on alt fuels that they could forward. Feriduhn may have
a. Rupert, Gustavo, Dan, Mike: how are we going to use this info,
how it will be plugged into the presentation? Do we want to map
this with cost data.
b. Woody: follow up with LBNL, CPUC has also done work on Life
c. Oak Ridge NL, Pace University.
d. Look at GAO report that talks about $120/barrel oil. GAO report is
a couple years old.
e. Bob Harrer: how will quantitative information be used?
f. Info will be coordinated with SocBen Team.
10. How do we loop the automakers in on this discussion. How do we
support the vehicle side of the equation?
a. Convene group call to talk about vehicle issues.
b. How should we move forward on this
i. Plug in CaFCP, they have recommendations for the
ii. We can’t just look at FCVs, need to include ICE stakeholders.
iii. Paul will take lead on putting subgroup together.