Shell closes California hydrogen stations

Firm cites supply complications in decision to cease operations for seven light-duty refuelling spots

Shell closes California hydrogen stations
Hydrogen refuelling prices had risen to twice normal levels amid supply crisis

Shell has closed its light-duty hydrogen station network in California, citing hydrogen supply complications and other "external" market factors.

The firm operated seven stations – four in the San Francisco Bay area, two in Sacramento and one in San Jose.

These were the first stations built as part of a proposed network of 51 such refuelling locations announced in 2020, supported by a $40.5mn grant from the California Energy Commission (CEC). 

But the firm discontinued further buildout of the Californian network last year, and temporarily closed five of the seven light-duty stations amid supply concerns.

It has now closed them permanently as part of a company strategy announced last year to focus on "value over volume".

Supply struggle

Many hydrogen refuelling stations in California struggled to secure adequate supply in 2023, according to California’s Hydrogen Fuel Cell Partnership (H2FCP).

Those hydrogen refuelling stations that did remain open saw prices at over $30/kg at the pump, about twice typical levels.

Downtime at hydrogen production plants and temporary plant outages across the entire hydrogen network have caused the supply issues, according to Andy Marsh, CEO of Plug Power, one of the main suppliers of hydrogen to the California network. 

“Over the past several months, there has been enormous challenges associated with the availability of hydrogen,” he said on the firm’s third quarter results last year. “For many days, demand outstripped supply.”
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Data from the H2FCP shows that of 113 retail hydrogen station planned in California at the end of 2023, only 5 are under construction and 84 have funding but are no longer in development. 

Shell says it will continue to operate three heavy-duty hydrogen refuelling stations in southern California and adds that it stands by the technology as a long-term option for road transport decarbonisation.

“We maintain that hydrogen is an important low-carbon energy solution for the future, and will continue to invest in hydrogen in a disciplined manner, with a focus on sectors that cannot be fully electrified, like heavy industry and transport,” says a spokesperson. 

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