The ski resort town of Whistler, British Columbia, is ending its hydrogen fuel-cell bus program, the world's largest demonstration of its kind, and switching back to diesel.

The 20-bus project was launched ahead of the 2010 Winter Olympics to showcase the technology before an international audience in a location with challenging terrain and climatic conditions. This month, the British Columbia Ministry of Transportation and Infrastructure confirmed it will not be continuing with the demonstration project after it concludes in March 2014.

The ministry refused an offer from the Canadian fuel-cell module provider Ballard Power Systems to run the buses for an additional five years, on account of the cost. The price tag of the completed five-year project was 89.5 million Canadian dollars, provided largely by the federal and provincial governments. The municipality of Whistler supplied CA$16.8 million of the total, which represents the estimated cost of operating 20 diesel buses over the same period.

The hydrogen buses themselves make up a large part of the cost premium. In addition, they require more frequent maintenance than their diesel counterparts. The Whistler program also used renewable hydrogen -- made from the electrolysis of water -- that had to be trucked in from Quebec, about 1,800 miles away.

Still, the project is being heralded as a success. Even with the carbon footprint incurred by transporting the fuel across the country, the pilot produced 65 percent less emissions than a 20-unit diesel fleet would have emitted. It's also being praised for advancing the development and adoption of hydrogen fuel-cell technology.

"The demonstration of this zero-emission bus fleet at Whistler has enabled industry to improve their knowledge of hydrogen fuel-cell buses, generating international business opportunities for this made-in-B.C. technology," said a British Columbia ministry spokesperson. "As a result, the next generation of buses are being deployed around the world."

Test programs in U.S. cities
Several U.S. cities are currently conducting smaller hydrogen fuel-cell bus test programs. Flint, Mich., has been operating a hydrogen bus since last summer. Cleveland launched a hydrogen bus program in January. And AC Transit, serving the East Bay Area of San Francisco, now runs 12 third-generation hydrogen fuel-cell buses in the region.

But in these and other cities, hydrogen fuel has yet to surpass the publicly funded demonstration level.

"What people have found, in general, is that yeah, these buses actually run, and they run well. It's a successful thing. But definitely things are not at a place where they can self-sustain," said Anup Bandivadekar, program director at the International Council on Clean Transportation.

"[Hydrogen buses] need funding, and if the funding has expired or is about to expire, these agencies are going to have to think very hard about where they're going to get the additional funding that would be necessary to continue for a few more years," he said.

One kilogram of hydrogen, which has roughly the same energy content as a gallon of gasoline, costs $7 to $8, or twice the cost of diesel. According to the consulting firm Strategic Analysis, fuel cells cost $43 to $52 per kilowatt for automotive systems and $191 to $233 per kW for larger bus systems.

For hydrogen fuel cells to be competitive with gasoline-hybrid technology, prices have to come down to about $30 per kW, which is roughly a decade away, Bandivadekar said.

"These things, by definition, will play out over a very long time frame," he said. "Let's not get tired of supporting [advanced technologies] in the short run if you don't see huge volume or a huge takeoff, because ... doing small investments in these things right now actually ends up having a big network effect later on."

Some of the advantages of hydrogen as an alternative fuel are that it produces zero tailpipe emissions, has a quick refueling process and has a high energy density relative to battery technology, so it is not as limited in range.

"The technical properties of hydrogen as a fuel for transportation are so attractive that it's most certainly worthwhile for governments to make small investments [in it], relative to the size of the transport system in the U.S.," said Nick Nigro, senior manager of transportation initiatives at the Center for Climate and Energy Solutions.

"I think it's definitely part of the long-term solution for climate," he added. "The technology is not quite as market-ready as electric vehicles. But it definitely has to be in the picture in the long term."

Market continues to grow in Europe and China
Today, the most active market for hydrogen fuel-cell buses is in Europe. Ballard Power Systems, the module provider to the Whistler project, is currently partnering with the Belgian bus manufacturer Van Hool to launch 27 hydrogen buses next year. Hydrogen bus fleets have also been deployed in Norway, Italy, Scotland, the Netherlands and elsewhere.

Thanks to these small-scale rollouts, the cost of fuel-cell buses has dropped dramatically, said Paul Cass, vice president of operations for Ballard. For instance, the 5-year-old Whistler buses cost $2.1 million, while the buses now on offer to Europe cost $1.5 million, he said.

The company's next-generation technology set to launch mid-2014 will drop the cost even further to below $1 million. "That will open up the market substantially, we believe," Cass said.

China, the world's largest bus market, is another fertile market for hydrogen fuel. Many of China's major cities have experienced record smog levels this year. The pollution has been so intense in Beijing and Shanghai that airplanes have been unable to land due to poor visibility. China's smog is also responsible for hundreds of thousands of premature deaths each year.

Government officials are now urgently pursuing ways to improve air quality.

The Chinese government has made the development of hydrogen and fuel-cell technology a high priority, and the industry is eager to grow. Ballard, for instance, announced in September that it will provide the license and related equipment to assemble its next-generation FCvelocity HD7 bus fuel-cell modules in China.

While, to date, hydrogen has been adopted more widely in the bus market, some see the fuel seeing greater use in the light-duty vehicle market.

Needed, more hydrogen fuel stations
At the Los Angeles Auto Show this fall, Hyundai Motor Co. announced that it will offer a hydrogen-powered version of its Tucson crossover for lease starting in 2014. Toyota Motor Corp. and Honda Motor Co. have announced that they will have hydrogen models available in 2015.

"The momentum is coming back to the fuel-cell car side in the sense that we're now seeing new vehicles being introduced," said Lisa Jerram, a senior research analyst at Navigant Research. "On the bus side, there are still bus orders and buses that are going to be deployed, but I think that momentum has slowed a bit. There just aren't the large numbers the industry has hoped for to bring down the cost."

Hydrogen buses have been in testing for well over a decade, and still they're too expensive for cash-strapped transit agencies to justify without significant financial aid. Meanwhile, commitments from some of the world's largest automakers to release hydrogen commuter vehicles in the coming years -- in large part to comply with California's zero-emission vehicle mandate -- means there could soon be thousands of them on U.S. roads, Jerram said.

The primary barrier to the adoption of hydrogen fuel-cell cars is infrastructure. Unlike electric vehicles, which can plug into the existing grid, hydrogen cars require the development of an entirely new distributed fueling network.

In this sense, hydrogen buses have an advantage, since they're fueled by professionals at central locations that can host private fueling stations. However, the availability of public hydrogen stations in the United States is rapidly increasing, led by California, which currently has nine public stations available and 19 more in development.

"If the infrastructure is in place, you could see a tipping point [in hydrogen vehicle adoption] around 2020," Jerram said.

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC., 202-628-6500