Tokyo Olympics: The high cost of low carbon Games

The Tokyo 2020 Olympic Games, also referred to as the ‘hydrogen Olympics’ has indeed utilised a great deal of the clean energy resource, however, lowering emissions has come at a hefty cost to the country.

While Japan celebrates the success of the hydrogen-powered fuel-cell vehicles, Toyota Mirai’s, stadiums, and Olympic village, it appears as if the impact on the bottom line is becoming increasingly clear.

The total cost for Japan to host the Games is $15.4 billion.

The fuel cell buses, for example, although easy to drive, come with a steep cost. A fuel cell bus from Toyota costs ¥100m ($900,000) for a six-year lease. A diesel bus costs ¥24m ($220,000) and has a useful life of 15 years, according to FT.

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To get the initial 100 buses into service, the local and national authorities paid hefty subsidies covering 80% of the lease cost, however, this is insufficient to make them competitive.

Daisuke Harayama, in charge of operations at Tokyu Bus, a private company that has introduced two of the fuel-cell vehicles (FCVs), said: “The fuel costs are also higher. The fuel cost is 2.6 times higher for FCVs over diesel.”

The Toyota Mirai currently costs close to $58,000, making it an expensive alternative to sedans or battery-electric equivalents. Also, hydrogen stations cost five times as much to build as a regular gas station. Tokyo will ameliorate that with an 80% subsidy on new hydrogen stations, which brings them to cost parity with gas stations. The vision is for 200,000 fuel-cell vehicles on the roads and 150 active fueling stations by 2030.

The fact is that the cost of capital is still high when it comes to hydrogen infrastructure, as much of the technology is in developmental infancy. Japan is therefore paying top Dollar as early adopters, in their race to lead the global hydrogen economy.