But electricity grid of a country/jurisdiction significantly.

But why is it important for
governments to allocate incentives in a way that all technologies are supported?

Although these
technologies may be considered as competitive technologies, each of them have
its own unique characteristics.

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The
complimentary characteristic of these technologies can be explained in three
areas:

Complimentary in Energy supply side: The time of charging of BEVs may affect the
electricity grid of a country/jurisdiction significantly. This means that if
BEV and PHEV owners decide to charge their vehicles in a time of peak demand,
the electricity system has to provide more peak electricity generation
capacity. Additionally, the widespread use of BEVs and PHEVs in a
country/jurisdiction may lead to a need for the upgrade in electricity
transmission and distribution infrastructure.

However, the time of refueling of FCVs will not
have a significant effect on the electricity system as hydrogen can be produced
using off-peak electricity and be used at any time without affecting the
demand. In other words, there is the possibility of producing hydrogen using
off-peak electricity, storing hydrogen and skip producing hydrogen needed to
fuel FCVs in the times of peak electricity demand.

Although using smart devices that control the time
of charging for BEVs and PHEVs, these challenges can be addressed to some
extent, having a fleet that is a mix of BEVs and FCVs also makes sense as it
can reduce the burden on electricity grid. In this sense, PHEVs are also useful
as most of their driving range is supplied by gasoline. So they can use
gasoline in times of peak electricity demand and be charges in times of low
demand.

Having a mix
fleet of vehicles, governments and municipalities can arrange the charging and
hydrogen production timing using smart meters and incentives/disincentives in a
way that minimum peak electricity generation capacity and grid upgrade is
needed.

Complimentary in transition to emission-free
transportation: Although PHEVs
are more polluting than BEVs and FCVs but they are a cleaner alternative for
ICEVs. However, PHEVs are still an attractive alternative for ICE
vehicles for reducing GHG emissions if fueled by biofuel 6.

 This means
that by incentivizing PHEVs, we can reduce emissions continuously while
providing the needed time for the diffusion of charging and refueling stations
for BEVs and FCVs and for the further development of technologies used in BEVs
and FCV. Additionally,

As BEVs need less extensive charging
infrastructure and can even be charged at homes, they can have a significant
role in emission reduction short-term and medium-term while with the increase in number of HRSs, FCVs
can contribute to emission reduction in the longer-term time frames.

Complimentary in vehicle size: If we consider the total cost of ownership (which
includes both upfront costs, fuel cost, and maintenance cost), PHEVs are more
cost-efficient that BEVs and FCVs in the short term 6. However by 2025, all types of electric vehicles
are competitors with ICE vehicles. It is also predicted that by 2030, PHEVs and
BEVs are competitive for small cars, BEVs and FCVs are competitive for medium
cars and FCVs will have an advantage for large cars. The TCO of FCVs is also
predicted to be significantly lower than ICE vehicles by 2050. However, all
technologies will have competitive TCO by 2050 for medium cars. BEVs will keep
their advantage over FCVs for small cars in 2050 6.
So it can be concluded that BEV technology is more suitable for
smaller-size cars and short trips (urban driving) due to their charging time
and energy storage capacity (driving range) 6.   FCVs can provide options for longer trips
and can also be used for medium/larger cars as they have short refueling time
and have higher range compared to BEVs 6.

This means that a scenario in which small vehicles
are replaced with small cars and medium and large vehicles are replaced with
FCVs is more cost-efficient than a situation when all ICE vehicles are replaced
with the same technology (either it is BEV or FCV). In other words, a portfolio
of different vehicle technologies will replace the current single dominant
technology (ICEVs).

Regarding the cost of hydrogen refueling structure
development for FCVs is comparable to development of charging infrastructure
for BEVs and PHEVs if the cost needed for upgrade of electricity system is
excluded 6. This means that considering the cost of charging
infrastructure, the cost for developing the charging infrastructure for BEVs
and PHEVs may even be higher than hydrogen refueling structure development for
FCVs. 

Deployment of
EVs is more appealing in early stages. People can install chargers at home at a
price of about 1200 US$ and also development of public charging stations is
much less expensive than a hydrogen refueling station (although a charging
station supports fewer cars than a HRS). However, in the long term investing on
FCVs is more cost efficient

As a result, increase
in the number of FCVs needs a strong support policy from the governments at the
early years because of two reasons: FCVs are more expensive than BEVs and PHEVs
and for having a considerable amount of FCVs we need an appropriate number of
HRSs which are very expensive to develop and may also not be profitable
investments while FCVs are not common in a country/jurisdiction.

However, the
deployment of FCVs in long-term will be more cost efficient because hydrogen
can be generated when there is surplus power and be stored to be used in time
of demand. As a result, there will be no need for the upgrade of electric grid
(transmission lines, transformers, etc) and there will be less need for the
increase in electricity generation capacity and probably no need for peak
supply capacity increase.

 

Although incentivizing BEVs seems more appealing
right now, it should be noted that FCVs will be more cost-efficient in
the future.

It should be
noted that in long-term, market mechanism will play the first role so for the
subsidies should cover all technologies as they are only efficient in the
short-term 11.
So although FCVs can reduce the cost of decarburization in the future, their
development will be negligible if regulations towards its support
are not available 11.

From all of this we conclude that, although FCVs
are more expensive right now, but they are able to play a critical role in the
future transportation mix. So they should be subsidized for the improvement of
technology and refueling infrastructure.

The important issue in investing on HRS is that in
the initial stages, the investment carries a high risk because the investment
is going to support a limited number of FCVs (meaning a limited number of FCVs will be
fueled through that station and thus the revenue will also be limited).
However, with the increase in the number of FCVs, the risk for investment in
HRS will decrease in the long-term.

This issue is not necessarily true about
electrical charging points. BEV and PHEV owners can install a charging point at
their homes with a reasonable price and can use it every day to charge their
vehicles.

This comparison shows that hydrogen refueling infrastructure
development needs more support from public funding compared to electric
charging infrastructure.