NZ's future is electric cars, not hydrogen-powered, Z Energy concludes

Thursday, 1 August 2019

In the car industry, hydrogen is effectively a way of transporting and storing energy, rather than an alternative to electric generation or gas.

Electric vehicles rather than hydrogen-power cars have the most potential to green the transport industry, Z Energy has concluded in a report.

The process of creating hydrogen from sources such as natural gas or the electrolysis of water uses more energy than can be created from burning the hydrogen that is then produced.

That means hydrogen can be better thought of as an alternative way of storing and transporting energy first created from electricity or hydrocarbons – so akin to a battery – rather than as an alternative original fuel source.

An advantage of hydrogen fuel cells over lithium batteries as a means of storing energy is that they have a higher power-to-weight ratio, allowing hydrogen cars to have a longer range than EVs.

But Z Energy said electrification was becoming the dominant 'alternative fuel' of choice as it could use established infrastructure and the rapidly growing number of EV models and 'increasingly energy efficient battery technology'.

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'Direct use of electricity does not require new handling infrastructure that would be required with hydrogen, and is more efficient on a 'well to wheels' basis – at least twice as efficient as hydrogen, due to lower conversion losses,' it said.

Z's report concluded that while the role of hydrogen could not be 'dismissed', EVs would dominate the light vehicle fleet in New Zealand.

'Range anxiety issues are expected to be overcome with the newer generations of electric vehicles with significant improvements in range.'

The Ministry of Business, Innovation and Employment (MBIE) is currently assuming 44 per cent of New Zealand's light vehicle fleet will be comprised of EVs by 2050.

But it believes the figure could be 74 per cent if self-driving vehicles take off or battery technology improves faster than expected.

It has slashed its expectation for petrol consumption, assuming that will now drop by about 47 per cent by 2050.

Z Energy spokeswoman Vic Crockford said there was no way of knowing exactly what the future demand for petrol might be.

'That said, there is absolutely no doubt that in the long term, demand for petrol in New Zealand will be significantly less than what it is today,' she said.

'As we've said, this is no 'Kodak moment' for us – the short to medium-term projections show a stable demand for our current core business. We don't intend to sit on our hands and watch the sun set during this time, however.'