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Revisiting Our 2020 Predictions: How’d We Do?

Dec 8, 2020

    1. The momentum for the “hydrogen highway” will stall out.  Battery electric vehicles are proving to be superior to hydrogen fuel cell vehicles in almost every way.  As a result, sales of hydrogen fuel cell vehicles are lagging expectations and hydrogen sales have grown slowly.  About 152,000 battery-electric and plug-in hybrids were sold in the state in 2019, compared to about 1500 fuel cell electrics.  Only 8 FCEVs were sold in the last quarter of 2018 in our ten-county region.  Probably fewer than 30 were sold here in all of 2019.  The total registrations for FCEVs in the state stand at about 6,000 at year-end, while the total for battery and plug-in electrics is about 616,000.  (Exact data as of end of 2018 are 248,332 battery electrics, 216,042 plug-in hybrids, and 5,391 FCEVs).  In 2017, the Air Resources Board projected that there would be 13,400 FCEVs in 2020 and 37,400 by 2023.  At one time, the goal was a million FCEVs by 2030.  None of these will be even close to being realized. 

      A huge reason is that hydrogen fuel has turned out to be much more expensive than gasoline and particularly more costly than electricity.  Currently, hydrogen is priced at about $12.50 per kg, with equivalent energy to a gallon of gasoline but with a fuel cell double the efficiency of an engine, the equivalent of gasoline is more like $6.25 per gallon.  Stated another way, gasoline costs about 12 cents per mile (at $3.15 per gallon), hydrogen 25 cents, and electricity 6 cents. 

      This leads us to make several predictions for 2020:
      • Sales of FCEVs in our region will fall below 10. 
        RESULT:  We got the number wrong, but it was still small.  Partial credit.  According to the CEC database, 21 were sold through Oct. 30.  At the same time, a combined total of 6,357 battery-electric (4,675) and PHEVs (1,682) were sold in the region.  A total of 105,099 EVs of all types were sold statewide through Oct. 30, including 562 FCEVs.  In 2019 a total of 147,347 EVs were sold.  In all likelihood, the number sold through the end of 2020 will not reach the 2019 level, probably topping out at 125,000 or so.  The drop-off in FCEV sales is more dramatic with more than 3 times as many sold in 2019 (2,084) compared to 2020.   
      • The number of hydrogen refueling stations will barely reach 50 statewide (there are 44 now, with 3 in our area).  Governor Brown’s goal was 100 stations by 2020, 200 stations by 2025, and 1000 by 2030.  We may never see 100 stations in California.
        RESULT:  According to the Fuel Cell Partnership, there are now 42 stations statewide as of 11/1/2020, with two more under construction.  There remain just 3 in our region.

      • The price of hydrogen locally will not fall below $10 per kilogram. 
        RESULT:  Correct.  The pump price at the station in West Sacramento shows a price of $16.53 per kilogram, up 32% from $12.50/kg last year.

      • A major auto company will announce it is dropping its FCEV production. 
        RESULT:  Correct.  In October, VW announced in Germany that it did not support the government plan for more hydrogen vehicles, calling the push “nonsensical.”  That pretty much ended its plans for more of its HyMotion FCEVs.  Kia quietly dropped its Borrego FCEV over the last few years and no longer lists any FCEVs on its site.  Mercedes Benz leased 60 of its FCEVs in Europe and the US, but has no plans to produce more.  The major FCEV manufacturers remain Honda with the Clarity, Toyota with its Mirai, and Hyundai with its Nexo model.  At the same time, several manufacturers in China announced plans for new FCEVs.
    2. The number of EV charging stations around Sacramento will exceed 1000.  According to ChargeHub, there are currently 566 charging stations within 15 km of downtown Sacramento.  Of these 478 are Level 2 (220 V) chargers and 88 are Level 3 (480 V, 110 A).  We believe the total for this area will exceed 1000 by the end of the year with over 200 being Level 3.  We may also see the first fast chargers go into existing gas stations, an interesting development in itself. 

      RESULT:  Partial credit.  There are now 517 Level 2 stations and 97 Level 3, for a total of 614 within 15 km of downtown, 48 more than last year.  For comparison according to the CEC, in the total ten-county region, there are now 2,812 public and shared private Level 2 chargers and 559 public and shared private fast Level 3 chargers.  Most of these are in Sacramento and Yolo counties.  So there are more than 1000 chargers “around” Sacramento, but the number in the downtown area didn’t grow as fast as we predicted.

    3. One more independent EV company in the US will announce it is beginning manufacturing.  The field is getting crowded and one might think some companies would drop out.  They may, but at the same time we think there will be at least one more entrepreneur who will take the plunge. At the same time, we could see some other established car companies announce full battery-electric cars this year. 

      RESULT:  Correct.  There have been many announcements.  Lucid Motors in Arizona has completed its $700 million factory with a capacity to produce 30,000 cars per year.  It hopes to upgrade to 400,000 cars per year with a five-fold expansion of its first million square foot plant.  Lucid is targeting a luxury EV sedan with a 1,080 hp top-of-the-line $169,000 model with 465 miles range in 2021.  It will also have lesser models including an SUV.   Ford made a splashy announcement that it would have full-electric versions of its most popular models.  GM and Fiat-Chrysler had joined the party years ago.  Independent EV truck manufacturers did promise to go ahead with deliveries in 2021.  These include Rivian (with the gear tunnel that can be outfitted with a slide-out kitchen and can spin like a tank), Lordstown (looks pretty conventional), Bollinger (cool 16 foot-long passthrough cargo compartment), and the Electric Hummer.  Nikola canceled plans for its Badger truck after partner GM backed out.   Tesla has postponed the Cybertruck to 2021.

    4. There will be at least 15 nominees for Sustainable Innovation of the Year.  Stoel Rives and the Sacramento Business Journal will be conducting this contest again in 2020, the fourth year for it.  It has been a good way to highlight the best and brightest in clean tech.  The number of companies nominated has been an indicator of interest in sustainability and the of the level of activity in the clean tech community.  The first year, there were 16 nominees, but the number has trended down ever since.  We believe there has been a surge in bringing innovations to market in our area and that should be reflected in the number of nominees. 

      RESULT:  Wrong, but not because there weren’t more good companies.  The pandemic forced the cancellation of the Sustainable Innovation of the Year award.  We are hoping we will have one in 2021.

    5. Prices for a ton of carbon emission reduction in 2020 will still not break $20.  It has been rising slowly both in the prompt and futures markets, but the supply of carbon emission reductions has continued to grow, keeping a lid on prices.  The most recent price for California carbon allowances for 2021 cleared at $19.53 per ton of CO2, so maybe next year we will have to take a closer look. 

      RESULT:  Correct.  The prices for California carbon allowances never cracked $20, although they came close.  The slowdown in economic activity with the pandemic took off the buying pressure.  The Dec. 2020 price is now $17.32 and for Dec. 2021 is $18.08 according to BGC Environmental Brokerage Services.  In Europe, prices spiked above $30 in the past 30 days, but had been as low as $13 in April at the height of the Covid-19 concern.  For most of the year the prices danced around $25. 

    6. The installed cost of solar PV will rise modestly.  We were wrong about this one last year.  But with the new requirements for solar on all new homes and the continuation of the tariffs on Chinese panels, we cling to the idea that the cost will be pushed up a few cents from its current $4.50 per kW on homes. 

      RESULT:   Correct.  It did increase modestly to $4.65/watt for installations of less than 10 kW in size, according to californiadgstats.ca.gov/charts.

    7. The revenue generated by our regional clean tech companies will top $6 billion.  The last time we collected this information in late 2018, the total was $5 billion, but we see an upswell in sales success.  Maybe it will result in 20% growth over two years.  Wouldn’t that be nice? 

      RESULT:  Not sure.  Covid-19 also interfered with canvassing all the cleantech companies in our region, so we don’t have anything quantitative to rely on.  It is clear that some of the biggest employers on the list are having a down year, but our early research shows that 28 companies have been added to our list since the 2019 update and companies like Terzo, Hank, and Capitol Energy Systems are showing significant growth in sales.

       

    8. A bill will be introduced in California to extend generous subsidies to homeowners to install storage.  The subsidies for PV panels are declining.  There are subsidies for grid-scale storage, but not much for the homeowner.  We expect there will be a move to change this, but it won’t pass.  Maybe 2021.

      RESULT:   Wrong.  No bill, but actually there was a subsidy program for homeowners at the time this prediction was made.  In 2018, the Legislature added home energy storage to the list of resources that could get a Self-Generation Incentive payment (SB 700 – Public Utilities Code Section 379.6).  The CPUC implemented that program in 2019.  It provides a basic incentive of $250/kWh capacity, plus two enhancements, one for those in disadvantaged areas ($850/kWh) and those seriously affected by the public safety power shutoffs ($1,000/kWh).  Details are here.  The Legislature did not take any additional action.  The California Energy Storage Alliance reports there is now 4,189 MW of storage capacity under contract to the utilities and the CPUC has said there would be 8,900 MW needed by 2030.  SMUD did create its own StorageShares subsidy program for commercial customers in January 2020.

    9. Two renewable-based microgrids with over 1000 customers each will be established in Northern California.  The power shutoffs of last year are accelerating the interest of communities in creating sections of the grid that can be powered more reliably.  Already, PG&E has trucked-in engine-generators to provide power during shutoffs, but people are demanded cleaner solutions.  Some clever communities, whether as part of the CCA movement or separately, are looking at solar, wind, hydro and battery combinations to give them better reliability.  Dozens if not hundreds of communities are having these discussions.  There are already about 100 microgrids in the state serving a few large customers each in most cases.  The question is whether this will spread to larger aggregations of customers and to the use of renewables.  There are many obstacles, so getting two done in 2020 is actually a pretty aggressive prediction. 

      RESULT:  Partially correct.  Activity related to microgrids blossomed in 2020.  However, we haven’t yet seen in Northern California the kind of project we were thinking of.  One happened in Southern California, though.  A pioneer all-renewable microgrid of substantial size (4 square miles, 28,000 residents) was launched in Southern California, funded in part by the CEC through a $9 million contract.  It will consist of rooftop PV solar, community solar, electric vehicle (EV) charging and battery energy storage.  Total costs will be $20 million.  In Northern California, Concentric Power Is installing a 35 MW microgrid in Salinas that is partially based on renewables.  Tthe $70 million microgrid will use solar and energy storage with natural gas in a supporting role; specifically, 14.5 MW-AC of solar, 10 MW/27.5 MWh of battery energy storage, and 10 MW of flexible natural gas-fired, engine-based thermal generation.  FERC Order 2222 adopted in September will make it easier to install distributed systems in the future.

    10. One cleantech startup in our region will be acquired for a substantial sum.  We know there are several discussions underway.  Just waiting for the shoe to drop.

      RESULT:  Correct.  There were actually two that fit our definition.  Regional solar pioneer Aztec Solar was acquired by Virginia-based Sigora Solar, with operations in 14 states.  And Jump Bikes in West Sacramento was acquired by Lime.  The proposed acquisition of SunWorks for $14 million by Peck Co. from Vermont was rejected by Peck shareholders, so it doesn’t count.  


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