Compressed natural gas (CNG) as a clean alternative to gasoline or diesel has strengthened the argument for CNG as a transportation fuel. Strict emission control mandates imposed by governments across the world has made CNG one of the most viable clean fuels. The global CNG market was worth US$56.32 billion in 2013. Price incentives and government initiatives are expected to fuel the market growth at a CAGR of 12.3% during the period between 2014 and 2020. The global CNG market is estimated to be worth US$126.19 billion by 2020.
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Why an Average Consumer is Hesitant to Shift to CNG?
Despite the compelling arguments in favor of CNG as a transportation fuel, consumers have not yet switched to the cleaner fuel as expected. Lack of adequate refueling infrastructure is one of the main reasons behind the slower adoption of CNG. For example, in the U.S., there are merely over 1,300 public and private natural gas stations that are clearly not sufficient for a country where CNG powers more than 150,000 vehicles. There are countless stretches of highway spanning hundreds of miles without any CNG refueling station. The situation is pretty much same in other countries as well.
Especially in rural areas, CNG is not easily available. The lack of refueling infrastructure can be traced to the high cost and operating expenses of compression equipment. Though a natural gas compression station should be ideally connected to a high pressure interstate pipe, the reality is different. The operating expenses further increase with lower natural gas inlet pressure. All these factors have led to the concentration of CNG refueling stations in urban areas only.
CNG Refueling Station Development: A Cost Intensive Effort
According to the U.S. Department of Energy, in 2010, the cost of installing a CNG fueling station could scale up to US$2 million. The cost depends on factors such as daily required throughput and the speed of fueling (time-fill or fast-fill stations). Time-fill fueling stations require smaller compression equipment, which reduces the cost significantly but at the expense of prolonged fueling duration. Fast-fill stations utilize powerful compression equipment and high-pressure storage system that raises the overall cost.
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Lack of public or private CNG refueling stations presents a daunting challenge especially to fleet operators for whom the fuel cost savings are lucrative. It has been observed that the development of CNG fueling infrastructure is based on four models: On-site private fueling, off-site private fueling, on-site fueling for fleets with public access, and off-site public fueling. Development of private fueling station at a fleet’s operating site compels a fleet operator to sign a long-term contract with adequate volume commitments to cover the cost of constructing the station. Though many third parties have come forward to build CNG refueling stations, it will take some time to gain the confidence of fleet operators as well as individual consumers regarding adoption of CNG.
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