Here we show you how to calculate the cost of hydrogen fuel for buses and cars and how to compare that cost with the cost of diesel fuel for buses. We examine the cost obstacles to the introduction of hydrogen vehicle fuel and ways to overcome these obstacles. We also show you how to calculate the capacity of the UK offshore wind resource.

There are three important aspects to consider here. The cost of making hydrogen, the value of the hydrogen produced and the productive capacity using available technology.


It is generally agreed that the initial cost of UK North Sea offshore electricity would currently be 6.5 pence per kWh. But, if a customer contracted to take all the electricity produced by an offshore generator at whatever time of day the electricity was produced and also accepted the peaks and troughs of output, then the price would fall to 5.5 per kWh.

Furthermore, it will probably be possible to arrange that the electricity qualifies for the newly proposed 'Green Certificates'. Hopefully, these will form part of the government's new policy for the support of renewable electricity generation.

It is expected that 'Green Certificates' will have a value of 2 pence per kWh and can be sold to other electricity suppliers. The cost of offshore generated electricity for hydrogen production will therefore be further reduced to 3.5 per kWh.

Using electricity costing 3.5 pence / kWh. from a variable source such as offshore wind power, the cost of producing hydrogen by the electrolysis of water is approximately 27 per Gigajoule delivered by pipeline.

(For the following calculations it is assumed that the market for hydrogen is sufficient to justify building a delivery pipeline but this will not be the case initially until the market for hydrogen develops. Please see below for how to deal with the problem of the cost of transporting small volumes of hydrogen from the location of the hydrogen production plant close to the source of renewable electricity to the city where the hydrogen is to be used.)

The energy content of diesel is approximately 30 Megajoules per litre

30 Megajoules = 0.030 Gigajoules

Therefore the cost of a quantity of hydrogen of equal energy content to one litre of diesel is:

27 x 100 x 0.030 = 81 pence.

If the diesel is used in a conventional internal combustion engine bus and the hydrogen is used in a hydrogen-powered fuelcell electric bus fitted with regenerative braking used in an urban area then the fuel utilisation efficiencies compare as follows:

The diesel internal combustion engine suffers from Carnot cycle losses which limit the maximum efficiency of the engine to approx. 40%, but in reality, because the engine is not working at optimum load most of the time, or is idling, the average fuel utilisation efficiency is only 15 to 20%.

Hydrogen-powered fuelcells and electric motors do not suffer from Carnot cycle losses and also maintain their energy efficiency better when working at part load levels and use no energy at all when on standby, the equivalent of idling. These factors result in corresponding fuel utilisation efficiencies of approximately 40 to 50% for vehicle applications.

It can be seen therefore that the fuelcell bus gets approximately 2.5 times as much energy from a given amount of hydrogen fuel as the diesel bus gets from the equivalent amount of diesel fuel.

Because the electric bus can utilise regenerative braking whereby the bus is slowed down by it's electric drive motor(s) working in reverse to charge a battery within the drive system then some of the energy used to accelerate the bus can be recovered for re-use. In typical city stop / start driving 33 % of the energy can be recovered.

So with regenerative braking the fuel utilisation efficiency of the fuelcell bus is increased to:

1.33 x 2.5 = 3.33 times that of the diesel bus.

This means that the amount of energy used by a fuelcell bus for a given distance travelled, all other factors being equal, will be 1 / 3.33 of the energy that would be used by a diesel bus.

Therefore the cost of the hydrogen used by a fuelcell bus to travel the distance that a diesel bus will travel on 1 litre of diesel will be:

81 / 3.33 = 24 pence.

The cost of diesel is about 10 pence per litre.

So the extra cost of using hydrogen fuel is 24 -10 = 14 pence per litre diesel equivalent.

A city bus will travel about 3 miles per gallon diesel, i.e. 2/3 mile per litre diesel.

Therefore the extra cost of hydrogen fuel is 14 x 3 / 2 = 21 pence per mile


Assuming 20 people on the bus, this gives an extra cost of 21/ 20 = 1 pence per passenger mile compared to typical fares, in London for example, of 25 pence per passenger mile.


During the next 10 years, offshore electricity generating costs will fall dramatically. With the benefit of tradeable 'Green Certificates', the price of electricity for hydrogen production will come down to 2.5 pence per kWh. so the costing calculation becomes as follows.

Using electricity costing 2.5 pence / kWh from a variable source such as offshore wind power, the cost of producing hydrogen by the electrolysis of water is approximately £19 per Gigajoule delivered by pipeline.

The energy content of diesel is approximately 30 Megajoules per litre

30 Megajoules = 0.030 Gigajoules

Therefore the cost of a quantity of hydrogen of equal energy content to one litre of diesel is:

£19 x 100 x 0.030 = 57 pence.

With regenerative braking, the fuel utilisation efficiency of the fuelcell bus is

3.33 times that of the diesel bus (see previous costing calculations).

Therefore the cost of the hydrogen used by a fuelcell bus to travel the distance that a diesel bus will travel on 1 litre of diesel will be 57 / 3.33 = 17 pence.

The cost of diesel is about 10 pence per litre.

So the extra cost of using hydrogen fuel is 17 - 10 = 7 pence per litre diesel equivalent.

A city bus will travel about 3 miles per gallon diesel, i.e. 2/3 mile per litre diesel.

Therefore the extra cost of hydrogen fuel is 7 x 3 / 2 = 10.5 pence per mile.


Assuming 20 people on the bus, this gives an extra cost of 10.5 / 20 = 0.5 pence per passenger mile compared to typical fares, in London for example, of 25 pence per passenger mile.


This still does not take into account the financial value to health and the environment of no pollution from the hydrogen-powered bus. If these external cost savings are added back as credits towards the cost of hydrogen then the fuel cost of a hydrogen-powered bus will be similar to a diesel bus.

There is still one problem with the above economics and that is the additional cost of moving small quantities of hydrogen from the point of production near to the renewable electricity generator to the cities where the hydrogen is to be used as fuel for buses and cars. When the quantity of hydrogen is large enough to justify a delivery pipeline then this problem does not occur because a hydrogen pipeline is one of the most efficient and cheapest ways of moving energy, it is more efficient than over head electricity pylon lines for example. But smaller quantities of hydrogen have to be moved in a container and this adds considerably to the delivered cost of the hydrogen.

There are two types of hydrogen container available at present. Steel cylinders that can store compressed hydrogen gas and cryogenic storage tanks which are super-insulated tanks that can store liquid hydrogen. The disadvantage of the steel gas cylinders is that they are heavy and so a lot of energy and lorry use would be wasted hauling tons of steel around the country to deliver small quantities of hydrogen. The disadvantage of transporting hydrogen as a liquid is that 29% of the energy in the hydrogen is required to liquefy it and this increases the cost of the delivered hydrogen pro-rata. But because the energy density of liquid hydrogen is high the number of hydrogen tankers that would be required is very mush less than with compressed gas in steel cylinders delivery and the delivery process is more efficient.

If we accept the energy cost of liquefying hydrogen, then there are real advantages in favour of having liquid hydrogen available from the users point of view if the hydrogen is being used as a vehicle fuel. Liquid hydrogen has a high energy density and so the fuel tanks on a vehicle can be much smaller than for compressed gas storage. This means for example that buses can have underfloor storage tanks which gives a more stable compact chassis design and double decker buses are viable with no need for roof top storage. Much more energy can be stored on board giving a range of operation the same as for diesel buses and fuel storage at the depot is much more compact meaning larger fuel reserves can be maintained against missed deliveries. Because the hydrogen is a liquid, refuelling can be carried out more quickly.

The availability of liquid hydrogen for cars transforms the onboard storage problem and compact hydrogen-fuelcell powered cars can have a range the same as petrol cars with no loss of passenger or luggage space.

So on balance if the hydrogen cannot be delivered by pipeline the use of liquid hydrogen is probably the best alternative rather than gas cylinders.

We will now look at the additional costs of a liquid hydrogen delivery system over a gas pipeline system. The dominant extra cost that does not have a similar cost in the pipeline system is the energy cost of liquefying the hydrogen. The liquefaction process will require 29% more electricity over the electrolysis requirement and so the delivered cost of liquid hydrogen will cost approximately 1 / ( 1.0 - 0.29 ) = 1.4 times the delivered cost of hydrogen as a gas.

Therefore if the electricity costs 3.5 pence per kWh. as in our example then the cost of the hydrogen produced if it is in liquid form is:

1.4 x 24 = 33 pence per litre diesel equivalent.

The other extra cost associated with liquid hydrogen delivery is the cost of operating a road tanker. This vehicle would be a superinsulated tanker of similar size to diesel / petrol tankers currently in use on the road.

The volume of liquid hydrogen carried by a tanker would be similar to that presently carried by diesel / petrol tankers, i.e. 35,000 litres. But the weight of the hydrogen would only be 1/10 of the weight of petrol carried by the same size tanker, i.e. 2.5 tonnes compared with 25 tonnes. So the fuel cost of moving the hydrogen would be lower and the power of the the tanker could be less than for a petrol tanker.

The energy density of liquid hydrogen by volume is 8.4 GJ /cu.m. compared with 32.3 GJ /cu.m for diesel. So, if the fuel utilisation efficiency for the hydrogen bus being supplied is 3.33 times that of the equivalent diesel bus,

then the ratio of the volume of liquid hydrogen equivalent to diesel is

Therefore, the usable energy per unit volume for hydrogen and diesel is about the same.

The cost of a 300 mile round trip (Lincolnshire Coast to London) for the road tanker taking one day would be of the order of £800.

So the delivery cost of the liquid hydrogen is

Say 3 pence per litre diesel equivalent allowing for handling at both ends of the trip.

Therefore the delivered cost of hydrogen in liquid form will be 33 + 3 = 36 pence per litre diesel equivalent.

Therefore the extra cost over the cost of diesel will be 36 - 10 = 26 pence / litre diesel equivalent (assuming diesel costs 10 pence / litre).

Therefore the extra cost of hydrogen fuel per bus mile (assuming 3 miles per gallon of diesel) is


If there are an average of 20 passengers on the bus, then the additional cost is


If the cost of bus fares is based on 25 pence per passenger mile, then this additional cost is only


There are several ways to pay for the extra cost of hydrogen bus fuel, as follows:

1) We don't think an extra 2 pence per passenger mile on a typical fare of 25 pence per passenger mile is much extra cost for a totally pollution free clean quiet bus. The buses we are proposing have zero emissions, they only discharge water vapour into the city air. They are very clean all electric vehicles that emit no black smoke or particles, no pm10s, no oil on the road at bus stops and no smell of diesel exhaust. They are very quiet electric vehicles with no vibration, you could hold a quiet conversation on board with no difficulty.

So the first option is to absorb the extra cost in the early stages of hydrogen introduction in higher bus fares or better still provide a subsidy from public funds as everyone will benefit from zero pollution and the quiet running of the bus.

2) When the UK government wanted to encourage car owners to switch to leadfree petrol it lowered the duty on leadfree petrol by 10 pence per litre. The same sort of thing could be done to subsidise the extra cost of hydrogen fuel for buses. You will find more details of how this approach could be used in our What's New section.

3) Over recent years the government has regularly raised taxes on vehicle fuels by more than inflation to deter fuel use and to encourage fuel economy to reduce CO2 output from the road transport sector but it has not worked. Growth in transport has resulted in more CO2. We are using more petrol and diesel than ever.

What this does show however is that transport costs can be raised if government wants to increase taxes. If a similar increase was continued but the extra money raised was used to help finance the initial costs of introducing hydrogen as a transport fuel it would lead to the development of hydrogen-fueled vehicles that would eventually eliminate CO2 emissions from road transport altogether even with increasing traffic. So a failed taxation policy could be transformed into a successful policy achieving it's stated aims of reducing CO2.

4) See What's New.

In 10 years time when the cost of offshore generated electricity for hydrogen production is down to 2.5 pence per kWh, and when the volume of hydrogen being produced justifies the building of pipelines, the need for liquefaction of hydrogen for small volume transport will disappear. Hydrogen fuel for buses and cars will be seen to cost no more than diesel or petrol and special schemes to help hydrogen to market will no longer be required. New technologies for storing hydrogen as a gas will also mean liquefaction is no longer required.

Outside of cities the economics described here are more favourable to diesel because with less stop/ start driving the efficiency of the diesel engine increases and the benefit of regenerative braking for electric buses becomes less. However it is in cities where the problems of pollution are the most serious and this is where all the factors favour hydrogen-powered-fuelcell buses and so inner city buses will be the first major application of hydrogen-powered vehicles.

Pollution in cities is a serious health problem that is getting worse and so has to be tackled, this means that hydrogen-powered buses will be introduced into cities because the value and cost of hydrogen fuel for buses are compatible in this application. The same applies to cars and taxis for city use.

While we still have to use fossil-fuels for transport it will be best to use diesel and petrol where it is most efficient, i.e. on non-stop intercity buses and out of town car use. In due course when diesel and petrol become more expensive or people get really worried about global warming as well as city pollution then intercity buses and cars will also switch to hydrogen fuel.

There are currently two additional problems with hydrogen powered cars. Cars do not have the rooftop storage space for gas cylinders that buses have, although this problem is avoided with liquid hydrogen fuel, and cars do not operate from a central depot for refuelling and no public refuelling infrastructure will exist for many years. In due course these problems will be solved with more compact storage systems and investment in hydrogen fuel infrastructure.

The fuel storage problem for cars will also be mitigated by improving the fuel economy of cars and by social and traffic management changes whereby maximum speeds way above legal speed limits are no longer required so that smaller fuelcells and less on board hydrogen storage is required.

The hydrogen fuel infrastructure may initially be based on reforming natural gas to make hydrogen at refuelling stations or at home. Hydrogen produced at home would also be used for the cogeneration of domestic electricity and heat using fuel cells. When the car is parked at home the fuel cell is available to provide extra power for the home. Eventually in the long term the hydrogen for car and home will come from offshore wind power or PV power in North Africa via the national hydrogen gas grid.


Offshore wind power is the only large UK resource of clean renewable electricity that is likely to be available in the near future. Sufficient onshore wind power capacity is unlikely to get planning permission and the other renewables do not have sufficient capacity and will already have contracts in place for the sale of the electricity they are generating. The hydrogen will be manufactured in factories at the coast to minimise electricity transmission distance losses.


Wind turbines currently available that are suitable for offshore applications are already in the 1.5 to 2 Megawatt power range and so by the time significant offshore wind power capacity is being installed 2 MW turbines or larger will be readily available. Much bigger turbines are proposed, up to 5 MW, the trend is towards bigger machines and the bigger the turbines the lower the cost of the electricity generated.

2MW turbines can be installed on a grid measuring 400 metres by 500 metres giving 5 turbines per square kilometre. The declared net capacity over one year of modern wind turbines is conservatively put at 0.33 times peak output. This means that a 2 MW turbine will have an average output over the whole year of : 0.33 x 2 x 1000 = 667, say 700 kW.

Therefore the average output from five 2MW turbines in one square kilometre of sea will be 3,500 kW which is 3.5 Megawatts. The average total UK electricity demand is 35,000 MW. 10% of this demand is 3,500 MW and this could be generated from an area of the Southern North Sea of area:-

3,500 / 3.5 = 1,000 square kilometres using 5,000 wind turbines of 2 MW power.

1,000 sq. km. is a relatively small area, as the following example calculations illustrate.

South of The Dogger Bank, which lies about 200 km off Newcastle Upon Tyne, the Southern North Sea is generally shallow with large areas less than 30 metres deep. This area of sea bounded by the East coast of England from The Wash to Whitby, the Norfolk coast, The Netherlands and Denmark measures approximately 500 km by 200 km which is an area of 500 x 200 = 100,000 sq. km.

The square patch of sea bounded by Humberside, Lincolnshire and Norfolk from Flamborough Head to the north coast of Norfolk, is an area of 12,500 sq. km. The majority of this area is less than 20 metres deep.

Off the Lincolnshire coast, the sea is less than 10 metres deep for an average distance of at least 20 km. offshore. The Lincolnshire coast from the Humber to The Wash is 80 km. long and offers one of the best starting places for UK offshore wind generation of electricity. The area of shallow water is 1,600 sq. km.

All around the UK coast there are 100s of thousands of sq. kms. of sea space and so it can be seen that there is great potential to get a significant part of our energy needs from offshore wind power. Not just our needs for electricity but also transport fuels as already described in this section.


The number of buses and cars that wind turbines can sustain may be calculated as follows.

Large diesel buses have a fuel consumption of about 3 miles per gallon of diesel and so in cities, where traffic speeds are about 10 miles per hour, a large bus uses about 3.3 gallons of diesel per hour, this is 15 litres per hour. Diesel contains approximately 43 Megajoules of energy per kg. 1 litre of diesel weighs 0.72 kg, therefore the bus uses 15 x 0.72 x 43 = 465 MJ per hour.

Hydrogen-powered-fuelcell buses with regenerative braking operating in cities have approximately 3.3 times the fuel utilisation efficiency of diesel buses under the same operating conditions. Therefore a hydrogen-powered fuelcell-bus with regenerative braking on equivalent services as the diesel bus needs 465 / 3.33 = 140 MJ per hour. 1 kWh. = 3.6 MJ, therefore 140 MJ per hour = 140 / 3.6 = 39 kW. This is the average power demand of the bus expressed as electric power. As this power is to be supplied using hydrogen as the energy carrier to transfer electrical energy generated by offshore wind powered turbines then a factor has to be introduced to allow for the losses of energy involved in converting the electrical energy from the wind turbines into hydrogen. Because we are looking some time into the future we will assume that the hydrogen is delivered as a gas by pipeline. A reasonable factor for the conversion from electrical energy to energy in the hydrogen would be 0.70.

Therefore the power of wind turbine to supply the energy for the bus would be : 39 / 0.70 = 55 kW. But we also need to consider the operating period of the bus and the availability of generation from the wind turbine. The bus operates say 16 hours per day but the turbine average output is based on 24 hours per day working. Therefore the average power of turbine required to sustain the bus is 55 x 16 / 24 = 37 kW. Wind turbines have an average output conservatively calculated as 0.33 x peak output so the peak turbine power required per bus is 37 / 0.33 = 112kW. Therefore one 2MW turbine will sustain 2,000 / 112 = 18 buses.

The average petrol consumption of small to medium cars in city driving is approximately 0.5 gallons per hour, say 2 litres per hour. This is 15 / 2 = 7.5 times less fuel than the bus described above. We need to increase this to 1 / 6 of the bus fuel consumption because cars will benefit less from regenerative braking. Cars in cities are used for a much smaller proportion of the day than buses, say 2 hours for the car against 16 hours for the bus, a ratio of 16 / 2 = 8.

Therefore the wind turbine capacity to sustain a car in typical city use is

1 / 6 x 8 = 1 / 48 times the turbine power required for the large bus.

Therefore a 2 MW wind turbine will sustain 48 x 18 = 864 cars.

In summary then, a 2 MW offshore wind turbine will sustain the hydrogen fuel production to run 18 large buses or 864 cars operating under city driving conditions.

The 5,000 2MW turbines described in the previous section would sustain 4,320,000 small / medium-sized hydrogen-fuelcell cars each travelling 10,000 miles per year. Assuming each hydrogen-powered car replaces a car achieving 27.5 miles per gallon (imperial), which corresponds to an annual consumption of petrol of 365 gallons (imperial), i.e. 1 gallon (imperial) per day.



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