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Essay on Economics of Fuel Cell Technology
Definition:
The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next best purpose the asset could have been used for. Opportunity cost analysis is an important part of a company's decision-making processes, but is not treated as an actual cost in any financial statement. The economics of hydrogen as a fuel derive from the comparison with our existing hydrocarbon fuel framework. Once you take into account the cost of releasing hydrogen from molecules, the use of hydrocarbons to produce hydrogen, the less-than-hoped-for benefits of decreased emissions, the costs of inputs, the much lower energy intensity of hydrogen relative to hydrocarbons, and the costs of transporting hydrocarbons and/or water so they can be processed into hydrogen on-site, it becomes pretty clear that hydrogen is not likely to be ready for economic prime time for a while. Most estimates put commercial fuel cell vehicles at 10-30 years in the future.
Importantly, companies are investing in the research to push that commercial timeframe closer to 10 years. Given those time frames and the risks associated with the research, companies must be investing in anticipation of large future returns.
Nonetheless, there are some who speculate that hydrogen is simply too dangerous to ever be safely used for cars. Peter Voyentzie of Danbury, Connecticut’s Energy Research Corporation, which makes large stationary fuel cell power plants, is skeptical about automotive applications. “Hydrogen is a strange beast,” he says. “It’s the smallest molecule, and it leaks out of everything. You also can’t see it burn. In a car, it has to remain stable through collisions and constant agitation. That’s a lot to expect.......
