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					GLOBAL WATCH MISSION REPORT



Fuel Cells –
the US Experience
Mission to the USA

JUNE 2003
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     Disclaimer:
     Whilst every care has been taken in compiling the information in this report, neither Synnogy
     Ltd., nor the UK Department of Trade and Industry can be held responsible for any errors or
     omissions. The views and judgements expressed in this document are those of the various
     authors and do not necessarily reflect those of Synnogy Ltd or the UK Department of Trade
     and Industry
                                                    US FUEL CELL MISSION




           Fuel Cells
– the USA Experience
                             DTI GLOBAL WATCH MISSION REPORT
                                                    JUNE 2003




Prepared by:
Celia Greaves                                  synnogy/Fuel Cells UK
David Hart                                  Imperial College London
Philip Sharman             DTI – International Technology Promoters
Kevin Pointon     Defence Science and Technology Laboratory (DSTL)
Bozkurt Aydinoglu                                    Voller Energy Ltd
Michaela Kendall                                        Adelan UK Ltd
Anthony Marrett                                     Microponents Ltd
Dennis Hayter                                   Intelligent Energy Ltd
Dave McGrath                                                 siGEN Ltd
Bruce Jenkyn-Jones                   IMPAX Asset Management Ltd


Edited by:
Celia Greaves                                    synnogy/Fuel Cells UK
Philip Sharman               DTI – International Technology Promoters
                                                                              US FUEL CELL MISSION



MESSAGE FROM THE MISSION LEADER
Celia Greaves, Synnogy/Fuel Cells UK




It was a real pleasure for me to lead this DTI    With the global fuel cell industry poised on
Global Watch Mission on fuel cells to the         the verge of commercialisation, the UK can
USA. The Mission provided an excellent            learn much from the USA. There are valuable
opportunity to gain valuable insights into the    lessons for both the public and private
drivers for fuel cell commercialisation in the    sectors, and this Report, as well as the
USA, and to see at first hand how these are       Mission Dissemination Seminar in
playing out in the marketplace.                   September, have been designed to highlight
                                                  these and other key messages.
The UK is facing considerable challenges in
terms of energy security, sustainable             Finally, I would like to express my thanks to
development and energy infrastructure             the many individuals and organisations who
renewal and modernisation. Fuel cells can         helped to make the Mission such a success.
play a key role in addressing these               These included: the many companies and
challenges. Moreover, fuel cell technology        other organisations who met with us in June,
has a wide range of applications, and is          all of whom were unfailingly enthusiastic and
anticipated to have an enormous impact on         hospitable; the British Embassy in
all aspects of energy deployment and use          Washington, DC, the Consulates-General/
across the developed and developing world.        Consulates in San Francisco, Los Angeles and
Over the next few years many new business         Boston and the Automotive Sector Specialist
opportunities, markets and jobs will emerge.      in Detroit, who provided valuable support and
There is a window of opportunity for the UK       local knowledge in planning the logistics of
to benefit from these developments.               the Mission; Philip Sharman, whose
                                                  contribution far exceeded his brief, and who
The USA is one of the world’s leading             was a pleasure to work with; Steve Ivatt, for
countries in the commercialisation of fuel        his unstinting support both in setting up the
cells. US companies are regarded as being in      itinerary and helping to develop the Report;
the vanguard of developing stack                  and the Mission Team, who made the whole
components, materials, manufacturability,         trip a memorable and hugely enjoyable
fuel reforming/handling/storage technologies,     experience.
air handling capability, power conditioning and
integrated systems for both proton exchange       I hope that you enjoy the Report and find
membrane (PEM) fuel cells and solid oxide         value in its contents.
fuel cells (SOFC). There is a long history of
Federal Government support for fuel cells in
the USA, and this has been reinforced in
recent times with substantially increased
funding at both the federal and state level.
This is helping to accelerate the rate of         Celia Greaves
technology refinement and reduce the              Chief Executive, Synnogy Ltd.
timescales for commercialisation.                 Coordinator, Fuel Cells UK




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EXECUTIVE SUMMARY
David Hart, Imperial College London
Philip Sharman, DTI – International
Technology Promoters


The USA has had what may be termed a fuel          simply to the size and geographical spread of
cell industry since the 1960s, when the first      the industry, it was not possible to visit all of
alkaline fuel cells were used in space             the organisations of note. However, an
missions. Both industrial and public funding       excellent cross-section was achieved, with
have continued since then, although only in        some 45 organisations consulted.
the last few years has this been a clear
priority in the energy and transport sectors,      Support for the US fuel cell industry comes
especially for Government. The USA spends          from the Federal Government, state initiatives,
the largest amount of public funding on fuel       regional and city-based organisations and
cells in the world (over $355 million of federal   funds, venture capital and corporate funding.
funds alone in 2003, compared with $220            The number of organisations involved in the
million in Japan), spread across energy,           industry is hence very large, with diverse
transport and defence applications. It also has    technology interests and a wide geographical
a very strong industrial and academic              spread. However, clusters of activity have
presence in the area, supported by a               nevertheless tended to form, for historical or
framework of national laboratories, many           logistical reasons. The Mission visited clusters
prominent universities and comparatively           in California, the Detroit area, around Western
easy access to finance of various types.           Pennsylvania and in the North-Eastern states
                                                   (others exist in e.g. Texas and Colorado). The
Over the last decade, Canada has been              general impression was of an industry that is
arguably more nimble in developing a strong        still clearly nascent, though in a period of
nascent industry with a much smaller funding       consolidation and rationalisation as it
and other resource base. However, the              approaches potentially significant market entry
strength and depth of the USA and the very         in some areas. Companies were generally
large amounts of funding available are             positive that a fully commercial industry would
undoubtedly returning it to the head of the        develop, although timescales were uncertain
race. The breadth of resource in the USA is        and most spoke of significant technology and
also impressive, with all fuel cell and            cost challenges still to be overcome,
hydrogen technologies under development,           conveying a strong sense of realism. Most
and organisations varying in size from single      cited continued government support for
person start-ups to the largest multinationals.    demonstration, education and research as
                                                   essential in this period, to bridge the gap
The primary aim of the Global Watch Mission        between prototype and market entry. The
was to help advance the development of the         electricity black-outs that affected the north
UK fuel cell industry by learning from both        eastern states of the USA and some Canadian
the work and the policy environment in the         provinces in August 2003 have heightened
USA, by developing opportunities for               interest in technologies offering uninterruptible
technology transfer and collaboration, by          power supplies, including fuel cells.
highlighting opportunities for fuel cells and by
enhancing awareness of new possible                The view of the UK was mixed. The UK is not
markets and applications. Extensive contacts       seen as a key market by many, although
were made and a wide range of organisations        some of the smaller companies were keen to
visited in working towards this aim. Due           develop links and supply products. However,
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the view of the UK science base and some          air quality and reinforcing weak power grids.
specific company strengths was very
positive. Some strong partnerships already        The mix of support is equally important –
exist – UK suppliers provide components, for      federal grants allied with local tax breaks
example, to some of the largest US                provide a range of mechanisms by which
companies, and many UK researchers and            uptake and demonstration can be made more
specialists have moved to work in the US          attractive. The state aid limitations in Europe
corporate and academic sectors, where             are not a problem in the USA, which can
funding is typically easier to access than in     choose to fund a high percentage of certain
the UK. This ‘brain-drain’ could well continue    projects, but co-funding is definitely expected
without strong action on the part of the UK.      with the proportion increased as products get
US companies and universities are very            closer to the market.
happy to cooperate and partner with UK
organisations, but the UK will probably have      A further form of government support is the
to be pro-active in developing these              strong network of national laboratories and
relationships.                                    centres of excellence working in fuel cells.
                                                  Several universities have specific
The companies and organisations visited by        programmes financed under, for example, US
the Mission participants covered the majority     Department of Energy (DOE) initiatives, and
of technologies under development in the          collaborate widely with industry. Another
fuel cell and hydrogen industries, from           strength is the availability of independent
hydrogen storage for transport applications to    testing and evaluation centres where
high temperature fuel cells for stationary        different prototypes and products can be
power applications. Unlike Canada (as was         compared and their performance better
evident during the Global Watch fuel cell         understood.
Mission in September 2002), the USA does
not have a specific technology focus; it can      Military spending is also a key part of
be said to be world-leading in a wide range of    developing the early US industry. Both
areas. Across these areas, several themes         advanced research under the Defense
emerged during the Mission, and are               Advanced Research Projects Agency (DARPA)
discussed below.                                  and early prototype deployment under the US
                                                  Department of Defense (DoD) have allowed
Strong government support has been crucial        companies to develop products and skills in
in developing the industry to this stage, and     an environment where cost matters less than
will be equally important in taking it further.   performance. Many of the companies and
The role of different government agencies in      other organisations visited had military
not only supporting fundamental research,         contracts of some form. UK companies can
but also the areas of infrastructure              benefit from these programmes to some
development and early prototypes, was cited       extent, but usually only as subcontractors.
by many companies as fundamental to
success. The rationale for government was         A number of specific technology themes
varied, with federal focus on developing new      emerged:
industrial strength and export products;
meeting environmental objectives and              • In transport, on-board reforming is not
reducing dependence on imported energy.             seen as the priority that it was several
Individual states are more concerned with job       years ago. While some companies
creation and some environmental initiatives,        continue to develop systems, the strong
and cities such as Los Angeles are clearly          feeling was that on-board hydrogen
focused on local problems, such as improving        storage, probably compressed, would be
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    the solution for transport for the                programmes in particular, as many
    foreseeable future, and possibly the long         universities have fuel cell-specific courses
    term.                                             or modules, and even high schools are
•   One result of this is a strong focus on both      developing curricula.
    hydrogen storage development and                • The capital markets are still very wary of
    hydrogen infrastructure programmes.               hydrogen and fuel cell technologies,
    Companies developing technologies in              although funding has been possible and
    these areas are amongst the world leaders.        specialised venture capital (VC) funds have
•   Small-scale hydrogen production from              been prepared to invest. Unlike Canada
    other sources, both fossil and renewable,         and even the UK, the USA does not have a
    was also a strong development area. An            fuel cell sector for VC, and some recent
    increase in interest in stationary fuel cells     funding rounds have been led by the
    operating on biomass-based gases is also          Canadian company Chrysalix. However,
    being seen across the country.                    corporate funding in the USA is strong.
•   The USA already has a large component
    and materials supply base.                      The overall picture in the USA is of a very
•   Advocacy organisations such as the US           strong set of technologies and organisations
    Fuel Cell Council (USFCC) and the National      working towards commercialisation with
    Hydrogen Association (NHA) are strong,          coherent government support. The only
    well-respected and have been active for         criticism that was raised was that the very
    some time. They are essentially industry        breadth of the industry, and eagerness for
    associations, with the power to advocate        different regions to capitalise can lead not to
    and recommend.                                  efficient competition, but to a lack of focus
•   The timescales to real commercial               and hence a dilution of return on investment
    products are the same as those seen             for public funding.
    elsewhere, although some automotive
    companies, for example, are more bullish        In meeting with the 45 companies and
    than the Government. Technology issues          federal and state government organisations
    still need to be addressed in almost every      during the course of this Mission, the team
    area, but industry is moving from hand-         developed a number of recommendations for
    built products towards design for               the UK fuel cell and hydrogen industries, the
    manufacture and assembly, outsourcing of        UK Government and its agencies, and UK
    components, and the early application of        academic institutions:
    high volume manufacturing techniques.
    These can all be seen as signs of               • It is recommended that, in order for the UK
    increasing maturity.                              fuel cell and hydrogen technologies
•   The USA is seen as a leader in the                industries to compete with the USA, routes
    development of solid oxide fuel cell (SOFC)       for cooperation and partnership should be
    technology, in particular, and the DOE’s          sought and encouraged. This will enable UK
    SECA Program is a key component of                companies to participate fully in the
    future development. The programme is              emerging global opportunities. Identifying
    wide-ranging and covers the majority of           UK strengths and complementary
    the US SOFC industry.                             technologies is critical. The role of Fuel
•   Education, training, public awareness and         Cells UK is central to such coordination.
    codes and standards are still seen as areas     • It is recommended that further
    where more work is required, and                  consideration be given to hydrogen
    international partnerships are welcomed.          production, delivery and storage
    However, the USA can be seen to be                technologies. A study should be
    advanced in the development of education          undertaken to gain a better understanding
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     of the UK hydrogen industry and to                 deployment of fuel cells and hydrogen
     evaluate the strengths and weaknesses of           technologies in the UK be encouraged and
     the industry and the opportunities and             supported by Government. These
     threats facing it.                                 activities, and the development of centres
•    It is recommended that Government                  of excellence, should form part of a
     support for fuel cells be increased                regional strategy covering these
     significantly. This support should address:        technologies, aiming to build on regional
     R&D activities (e.g. materials                     drivers, resources and technology
     development, testing facilities, etc.);            strengths and link and coordinate
     demonstration programmes (i.e. for                 complementary activities in order to
     product validation, customer and public            maximise the value of these initiatives to
     awareness, etc.); and market stimulation           the UK.
     mechanisms (e.g. through public                •   It is recommended that, given the highly
     purchasing, tax credits, etc.). Such               significant role of the US Department of
     increased support should be within the             Defense, consideration be given to the
     framework of an integrated strategy across         potential role of the Ministry of Defence in
     the various relevant government                    beta prototype testing and evaluation.
     departments (i.e. DTI, DfT, DEFRA, etc.).      •   It is recommended that a prototype UK
•    It is recommended that consideration be            hydrogen industry association be
     given to establishing a new                        established using Government seedcorn
     Government/industry/academe partnership            funding, along the lines of Fuel Cells UK.
     programme supporting the development,              Such an organisation would need to have
     demonstration and deployment of                    strong and complementary linkages with
     hydrogen production, delivery and storage          Fuel Cells UK and, after an initial period of
     technologies and addressing infrastructure         Government funding, would be likely to
     issues relating to the emergence of a              evolve into an industry association funded
     ‘hydrogen economy’ (See Section 4.1).              by a membership base.
•    It is recommended that the participation of    •   It is recommended that support be given
     UK companies and research organisations            by the Government to the establishing of a
     in US R&D, demonstration and market                clean energy ‘venture network’ in the UK
     stimulation programmes and schemes be              to overcome, at least in part, the lack of
     actively encouraged using mechanisms               venture capital track record for UK fuel cell
     such as the 10-year US/UK Memorandum               (and other clean energy) companies.
     of Understanding on energy R&D.                •   It is recommended that the UK science
•    It is recommended that greater                     base relating to fuel cell and hydrogen
     participation of UK companies and other            technologies be actively promoted. A
     organisations in activities being undertaken       review of research activities and
     in North America relating to the                   competencies should be produced and
     development of codes and standards for             maintained to complement the capability
     fuel cell and hydrogen technologies be             directory for UK companies currently being
     encouraged.                                        prepared by Fuel Cells UK.
•    It is recommended that the Government,
     Fuel Cells UK and other organisations look
     to engage UK utilities in the development,
     demonstration and deployment of fuel cell
     and hydrogen technologies.
•    It is recommended that regional activities
     relating to the demonstration and


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ACKNOWLEDGEMENTS




Many organisations and individuals
contributed to the success of this Technology
Mission to the USA. The Mission organisers
and participants wish to extend particular
thanks to:

• The Department of Trade and Industry’s
  Global Watch service

• The British Embassy in Washington, DC,
  the Consulates-General/Consulates in San
  Francisco, Los Angeles and Boston and
  the Automotive Sector Specialist in Detroit

• Steve Ivatt, for his unstinting support both
  in setting-up the itinerary and helping to
  develop the Report

• The 45 US companies, federal and state
  agencies and other organisations that
  hosted and met with the Mission team.




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TABLE OF CONTENTS




Message from the Mission Leader            i   7 Fuel Cell Stack Technology – Proton
Executive Summary                        iii     Exchange Membrane (PEM) Fuel Cell
   David Hart, Imperial College London           Systems                             33
   Philip Sharman, DTI – International           Dennis Hayter, Intelligent Energy
   Technology Promoters                          Bozkurt Aydinoglu, Voller Energy
Acknowledgements                         vii
Table of Contents                        ix    8 Fuel Cell Systems, Integration and
                                                 Applications                               42
1 Introduction                            1      Dave McGrath, siGEN
  Celia Greaves, Synnogy/Fuel Cells UK           Anthony Marrett, Microponents
  Philip Sharman, DTI – International
  Technology Promoters                         9 Financial Support for Fuel Cells and
                                                 Hydrogen Technologies                      48
2 Aims and Objectives of the Mission      4      Bruce Jenkyn-Jones, IMPAX Asset
  Celia Greaves, Synnogy/Fuel Cells UK           Management
  Philip Sharman, DTI – International            Philip Sharman, DTI – International
  Technology Promoters                           Technology Promoters

3 Overview of the Mission                 5    10 Major Outcomes of the Mission             72
  Celia Greaves, Synnogy/Fuel Cells UK            Philip Sharman, DTI – International
  Philip Sharman, DTI – International             Technology Promoters
  Technology Promoters                            Celia Greaves, Synnogy/Fuel Cells UK
  David Hart, Imperial College London             David Hart, Imperial College London

4 The US Context – Drivers, Funding,           Appendices                                   78
  Markets and Government Policy          11    A Mission Participants
  David Hart, Imperial College London          B Mission Coordinator – Synnogy/Fuel Cells
  Philip Sharman, DTI – International            UK
  Technology Promoters                         C Contact Details for US Organisations
                                               D Fuel Cell Clusters and Organisations in the
5 Fuel Production and Storage            19      USA
  Kevin Pointon, DSTL                          E Mission Discussion Topics and Questions
                                               F Fuel Cell Technologies
6 Fuel Cell Stack Technology – Solid           G Fuel Cell System Components and
  Oxide Fuel Cell (SOFC) Systems         26      Integration
  Michaela Kendall, Adelan                     H Further Information on US Federal
  Philip Sharman, DTI – International            Programmes for Fuel Cells and Hydrogen
  Technology Promoters                         I Further Information on US State Activities
                                                 for Fuel Cells and Hydrogen
                                               J US Universities with Active Research
                                                 Programmes on Fuel Cells and Hydrogen



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1 INTRODUCTION
  Celia Greaves, Synnogy/Fuel Cells UK
  Philip Sharman, DTI – International
  Technology Promoters


This Global Watch Mission needs to be             The resulting energy system in the UK 20
viewed in the context of new challenges           years – even 10 years – from now, will be
faced by the UK’s energy system.                  significantly different to today.

The UK, along with most other industrialised      Fuel cell technology, and, in the broader
nations, faces a number of key challenges in      picture, hydrogen production, delivery,
terms of its energy supply and use in the         storage and utilisation technologies, will
next 20 years:                                    undoubtedly form an important part of the
                                                  future energy system. The view in leading
  The challenge of security of supply             countries is that fuel cells will find increasing
  The challenge of environmental                  application within the 10 year timeframe (in
  stewardship                                     niche markets certainly within the next five
  The challenge of energy infrastructure          years, in premium markets within the next 10
  renewal and modernisation.                      years, and in mass volume markets beyond
                                                  that) and a steady transition to a hydrogen
However, these challenges also present            economy is likely within the 20 year
significant opportunities:                        timeframe. An acceptance of this view is
                                                  driving energy policy, basic research, applied
• the prospect of higher living standards;        R&D and demonstration activity, particularly
• the opportunity to develop, deploy and          in the USA, Japan and Canada, but also
  export world-leading energy technologies;       increasingly in Germany and other European
  and                                             countries, Iceland and elsewhere.
• the chance to take a leadership role in
  promoting competitive, reliable and             1.1 The Challenge of Security of Supply
  environmentally acceptable energy               As indigenous energy supplies dwindle, the
  solutions to a world with rapidly increasing    UK is shifting from being a net exporter to
  energy demands.                                 being a net importer. This makes the UK
                                                  potentially more vulnerable to interruptions in
International opinion and experience is           supply (due to regulatory failure, political
pointing to the fact that there is no single      instability, conflict, etc.) and price fluctuations.
winning technology or measure – no ‘silver
bullet’ – that will provide the answer to these   Supplies of gas, which currently accounts for
three challenges. Rather, a wide range of         39% of the UK’s primary energy demand, are
approaches is likely to be required. Such a       dwindling and the UK will become net
portfolio approach will certainly embrace         importers by around 2006, with the same
improved and reduced energy use on the            being true of oil (currently 35% of primary
demand side, plus, on the supply side, higher     energy demand) by around 2010. The UK
efficiency of electricity generation, the         already imports around half of the coal
greater use of low carbon fuels, cleaner use      consumed (currently 15% of primary energy).
of traditional fossil fuels, expanded renewable
energy and possibly new nuclear capacity.         The best way of maintaining reliability is by
                                                  having energy diversity – many different
                                                  sources, suppliers and supply routes, e.g.
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renewables, smaller-scale distributed energy        Industrial Revolution, the rate of increase
sources (including fuel cells), etc.                accelerating from the middle of the 20th
                                                    Century. The main cause of this increase has
The same is true of the USA, which currently        been the combustion of fossil fuels for power
imports 55% of the oil it consumes, with this       generation, transportation and industrial use –
figure likely to rise to over 60% by 2020; this     together accounting for more than 85% of
makes the USA very dependant on politically         CO2 emissions worldwide.
unstable countries for its oil supplies.
Technology options which reduce this                The UK currently emits approximately 0.55Gt
dependence, while providing reliable energy         of CO2 annually, with about 0.16Gt coming
supplies, are clearly of great interest.            from power generation and a further 0.12Gt
                                                    from the transportation sector, of which 95%
1.2 The Challenge of Environmental                  is associated with road transport.
     Stewardship
In industrialised nations, motor vehicle            While the UK may have set itself on a path of
exhaust emissions cause more air pollution          emissions reduction, the situation globally is
than any other form of human activity.              very different. The world’s population is set to
Vehicles account for nearly half of all             grow from the current level of about six
emissions of oxides of nitrogen, two-thirds of      billion to over eight billion by 2030 and global
carbon monoxide and as much as half of all          primary energy demand is likely to increase
hydrocarbon emissions. These pollutants are         by more than 60% over the same period
a major cause of photochemical smog and             (based on current policies). Much of this
low-level ozone concentrations.                     population growth and increased demand for
                                                    energy will take place in developing countries
In the USA, over 160 million tonnes of              in Asia, Africa and South America, where
pollutants are emitted from vehicles each           abundant resources of coal and other fossil
year, including over 4.5 million tonnes of          fuels will continue to dominate global energy
carcinogenic toxic air pollutants. More than        use to 2030 (and well beyond). As a result,
120 million Americans are living in areas           emissions of CO2 will increase by 70%
where at least one monitored pollutant              compared to current levels, with two-thirds
reaches unhealthy levels. The situation in          coming from developing countries.
developing countries is getting worse as
vehicle ownership and distances travelled           1.3 The Challenge of Energy
increase. Worldwide, over one billion people             Infrastructure Renewal and
living in urban areas are suffering from severe          Modernisation
air pollution and World Bank estimates              Much of the UK’s energy infrastructure needs
indicate that 700,000 deaths result each year.      to be updated in the next 20 years. Apart
                                                    from in relation to renewable energy, interest
Furthermore, there is a clear consensus of          in building new power plant has declined
opinion amongst the world’s leading                 since the ‘dash for gas’ in the 1990s. With
scientists that climate change is happening         impending European measures to limit
and that it is directly linked to human activity.   carbon emissions and improve air quality,
Although this link is not fully understood, it      modernisation, and possibly closure of most
seems clear that climate change is                  of the UK’s coal-fired plant, looks likely.
associated with increased concentrations of         Furthermore, without either new build or life
greenhouse gases in the atmosphere, the             extensions, nuclear power’s share of
most significant of which is carbon dioxide         electricity generation will shrink from its
(CO2). Atmospheric concentrations of man-           current level of around 23% to something like
made CO2 have been rising steadily since the        10% by 2020.
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Against this background, substantial
investments will be needed in the UK’s
energy infrastructure to enable a move from
traditional, centralised power operations
feeding the electricity distribution network to
a system more suited to renewable energy
sources (often in peripheral areas of the
country or off-shore) and smaller scale
distributed energy generation. Additional gas
transmission infrastructure will also be
needed as the country moves from being a
net exporter of gas to a net importer. As
these changes occur, the need for reliable
and ‘good quality’ energy will remain.

In the USA, too, major infrastructure renewal
and modernisation programmes are
underway, with more needed. Reliability of
electric power supply has become a
paramount issue for power providers and
consumers, particularly since electricity
underpins and integrates the entire US
economy. In addition to rapidly growing
demand, the quality of power and costs
associated with power disruption have
affected the demands placed on the electric
power industry. The situation has been
exacerbated by the August 2003 power black-
outs, with heightened interest from both
electivity producers and users in technologies
offering distributed generation options and
uninterruptible power supply.

1.4 A Significant Future Role for Fuel
     Cells and Hydrogen
Fuel cell technologies, and the wider
opportunities associated with a hydrogen
infrastructure providing a part of the UK’s
energy system within the next 10-20 years
directly address each of the three critical
challenges describe above. For these
reasons, leading countries, particularly, the
USA, Canada and Japan are investing
substantial resources within the public and
private sectors to develop and commercialise
these technologies.




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2 AIMS AND OBJECTIVES OF THE
  MISSION
  Celia Greaves, Synnogy/Fuel Cells UK
  Philip Sharman, DTI – International
  Technology Promoters

2.1 High Level Aim
The key aim of the Mission was to foster the
development of the UK fuel cell industry by:

• improving UK awareness of fuel cell
  developments in the USA;
• developing opportunities for collaboration
  and technology transfer to help develop
  the UK fuel cell industry, for stationary
  power, transportation and portable power
  applications;
• highlighting opportunities around fuel cells
  for the UK; and
• enhancing awareness of new markets and
  applications.

2.2 Specific Objectives
The specific objectives were:

• To facilitate new relationships of potential
  value to UK industry.
• To support the development of the UK fuel
  cell industry through dissemination of
  Mission findings.
• To expose UK organisations to leading
  edge thinking and activity around fuel cell
  commercialisation, thus supporting their
  own development.




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                                                                               US FUEL CELL MISSION



3 OVERVIEW OF THE MISSION
  Celia Greaves, Synnogy/Fuel Cells UK
  Philip Sharman, DTI – International
  Technology Promoters
  David Hart, Imperial College London

3.1 Background to the Mission                     coordinating body’s costs of organisation and
The USA is one of the world’s leading             promotion. Full details of DTI Global Watch
countries in the commercialisation of fuel        Missions and other activities of the Global
cells. US companies are regarded as being in      Watch service can be found at
the vanguard of developing stack                  www.globalwatchonline.com.
components, materials, manufacturability,
fuel reforming/handling/storage technologies,     3.2 Overview of the US Fuel Cells and
air handling capability, power conditioning and       Hydrogen Industries
integrated systems for both proton exchange
membrane (PEM) fuel cells and solid oxide         The Framework
fuel cells (SOFC). All of these are of            Since the 1960s, the USA has had active fuel
considerable interest to UK companies.            cell and hydrogen research programmes, with
                                                  the use of alkaline fuel cell (AFC) technology
Given the USA’s leading position in the fuel      in NASA’s Apollo space missions providing a
cell industry, there was considerable             specific driver. The success of these 2.2kW
enthusiasm for a Global Watch Mission             AFC units secured a role for a larger, 12kW
amongst organisations such as leading UK          design in the Space Shuttle Program, with 24
companies and academic institutions, the          units used on 112 flights from 1981 onwards.
Department of Trade and Industry (DTI) and
UK Government posts in the USA.                   In recent years, the number of US
                                                  Government programmes and, more
In particular, the Mission had its roots in a     significantly, the associated budgets have
seminar which took place in Washington, DC        increased dramatically, with a particular focus
at the end of the Global Watch Mission on         on hydrogen as a fuel for transport in fuel cell
fuel cells that visited Canada in September       vehicles and, to a somewhat lesser extent,
2002. This enabled relationships to be built      for stationary distributed power generation.
with a number of key US stakeholders              The majority of large corporate entities in the
(including the US Fuel Cell Council, the          energy field also have some form of research
National Hydrogen Association, the US             and demonstration programme related to fuel
Department of Energy and various fuel cell        cell technology.
manufacturers) and provided a strong basis
from which to build the Mission.                  While the key drivers for fuel cells are
                                                  common (i.e. relating to their advantages of
The Mission was developed in line with the        clean and efficient energy conversion),
aim and objectives described in Section 2.        organisations promoting the development of
                                                  fuel cells do so for many different reasons,
The DTI’s Global Watch service backs short        depending on their different perspectives. The
fact-finding overseas visits by small groups of   US Government and many of the individual
technical experts from UK companies, to           states (e.g. Michigan, Connecticut, etc.) are
identify and learn from the best practice and     primarily concerned with developing
technological developments in leading             indigenous industries in fuel cells, and the
companies overseas. Global Watch service          Government in curbing the country’s
funds the travel costs and helps towards the      increasing dependence on imported oil
                                                                                                 5
US FUEL CELL MISSION



through the introduction of hydrogen. Some          entrepreneurial start-up companies with a
cities and states (e.g. Los Angeles and             handful of employees such as Anuvu.
California) are motivated by other issues,        • The US Department of Energy (DOE) has
such as air quality improvement or                  been one of the primary funding sources
greenhouse gas emissions reduction.                 for fuel cell and hydrogen technology
Nevertheless, the overall effect has been to        research and development, with several
catalyse a rapid growth not only in research in     major programmes and, increasingly,
fuel cell and hydrogen technologies, but also       coordinated and high profile initiatives.
in companies willing to exploit those               Programme activity supporting the
technologies.                                       development of fuel cells for transportation
                                                    started in 1987 with a budget of $0.9
While Canada has generally been seen as the         million, and the budget requested for 2004
leader in developing an indigenous industry         was around $70 million. These
until now, the USA appears to be in the             programmes are focusing on PEM fuel cell
stages of overtaking Canada, in part because        technology. Similarly, authorisation of
the financial resources being made available        support programmes for hydrogen
are so much greater. However, the USA and           technologies came about in 1992 with a
Canada are also in close collaboration over         budget of $2.5 million, with a total of more
such issues as the development of hydrogen          than $104 million being requested for
refuelling infrastructures, the development of      2004. Stationary fuel cell programmes are
industry codes and standards and the                comparably large, with total budgets
deployment of fuel cells.                           currently in excess of $34 million being
                                                    directed at SOFC, molten carbonate fuel
Key Features of the Industries                      cell (MCFC), PEM fuel cell and hybrid
Key features of the US fuel cells and               systems developments.
hydrogen industries are as follows:               • Additional DOE funding is directed at three
                                                    public-private partnerships focused on
• The industries are spread across the USA,         automotive and stationary power
  with particular pockets of concentration          applications of fuel cells – i.e. the
  (‘clusters’) on the east and west coasts,         FreedomCAR Partnership (with over $91
  and in one or two key areas where                 million requested for 2004), the 21st
  particular drivers or potential markets have      Century Truck Partnership (seeking over
  attracted companies to establish activities.      $57 million for 2004) and the Solid State
  California, New England, Michigan and             Energy Conversion Alliance (with a current
  Western Pennsylvania have an especially           budget of $34 million and seeking $24
  high concentration of activity, with Texas,       million for 2004). A further public-private
  Colorado and other east coast states also         partnership aiming to develop a zero
  having significant industry activity. Work is     emission coal-fired power plant
  also carried out at a wide range of               (‘FutureGen’), which may well incorporate
  universities and several of the national          fuel cell technologies, is currently being
  laboratories.                                     formulated.
• Industry representation spans a range           • The US Department of Defense (DoD) and
  from the major players in automotive and          the Defense Advanced Research Projects
  stationary power such as General Motors           Agency (DARPA) has been instrumental in
  and General Electric, through energy              supporting fuel cell and hydrogen related
  companies such as ChevronTexaco,                  R&D and in testing and validating systems
  established equipment manufacturers such          in the field. Across the various defence
  as Plug Power, to the smallest                    agencies and army, navy and air force


6
                                                                               US FUEL CELL MISSION



    services, between $20 million and $25             have strong, long-standing representation
    million is spent annually on these                to Federal Government in the form of
    technologies. This support, particularly for      industry bodies: the US Fuel Cell Council
    ‘beta’ prototype system testing, has been         and the National Hydrogen Association.
    crucial for a number of fuel cell developers.   • The US fuel cells and hydrogen industries
•   Total financial support from the US Federal       have strengths in almost all areas, with
    Government in support of fuel cell and            both research support and industrial
    hydrogen technologies amounts to                  development in:
    approximately $355 million annually
    (around £226 million/year).                       Hydrogen:
•   State organisations are very active in            – Production – thermo-chemical,
    supporting the development and                    electrolytic, photolytic processes;
    deployment of fuel cell and hydrogen              – Storage – pressurised tanks
    technologies. Some 36 states have an              (compressed gas/liquid hydrogen), metal
    incentive programme that may apply to             and chemical hydrides, carbon structures;
    fuel cells. Twelve states also have               – Fuelling – regulators, reforming,
    dedicated clean energy funds or                   infrastructure; and
    partnership schemes, typically financed           – Safety – sensors, modelling, codes and
    through levies on electricity production,         standards.
    and many of these specifically support fuel
    cells through these funds. Some (e.g.             Fuel cells:
    Michigan, Connecticut and New York State)         – PEM, SOFC, MCFC and phosphoric acid
    are aggressively targeting fuel cells as a        fuel cell (PAFC) technologies – mobile,
    future key industry. Together these state         portable, stationary, auxiliary power units
    funds manage between $117 million and             (APUs);
    $206 million annually relating to fuel cell       – Materials – flow plates, heat exchangers,
    technologies.                                     catalysts;
•   Power utility interest in fuel cell and           – Balance of plant (BOP) – air
    hydrogen systems is increasing. This is in        management, inverters, integration,
    part due to the focus on distributed energy       controls;
    resources as a means to strengthen                – Test stations – PEM, SOFC;
    energy security, and in part due to state         – Integration, i.e. fuel cell/hydrogen
    incentives, including being counted               ‘systems”; and
    towards a utility’s Renewable Portfolio           – Hybrid systems, e.g. fuel cell/micro-
    Standard in some states. This interest has        turbine systems.
    increased significantly in the wake of the
    recent power black-outs in the north              Support programmes are available for all of
    eastern states and adjoining Canadian             these areas, with good interaction
    provinces.                                        between universities, companies and
•   The finance industry is targeting fuel cells      other entities.
    and hydrogen technologies for venture
    capital and equity investment. Although the
    USA, unlike Canada and the UK, has no
    dedicated hydrogen and fuel cell technology
    venture firm, many energy technology,
    environmental technology and other funds
    continue to participate in the arena.
•   Both the fuel cell and hydrogen industries


                                                                                                  7
US FUEL CELL MISSION



3.3 Participants
The Mission was organised and managed by Synnogy/Fuel Cells UK (Celia Greaves). Other
participants comprised:

Michaela Kendall                Adelan UK Ltd
Kevin Pointon                   Defence Science and Technology Laboratory (DSTL)
Ray Eaton                       Department of Trade and Industry (DTI)
Philip Sharman                  DTI – International Technology Promoters
Bruce Jenkyn-Jones              IMPAX Asset Management
David Hart                      Imperial College London
Dennis Hayter                   Intelligent Energy Ltd
Anthony Marrett                 Microponents Ltd
Jonathon Lewis                  Rolls-Royce plc
Dave McGrath                    siGEN Ltd
Bozkurt Aydinoglu               Voller Energy Ltd.

Further details are provided in Appendix A and B.




The Mission team and representatives of the British Consulate General at the California Fuel Cell Partnership:
from left to right – Philip Sharman (DTI – International Technology Promoters), David Thompson (DTI), Jonathan
Lewis (Rolls-Royce), Celia Greaves (Synnogy/Fuel Cells UK), Kevin Pointon (DSTL), Michaela Kendall (Adelan),
David Hart (Imperial College London), Dave McGrath (siGEN), Bozkurt Aydinoglu (Voller Energy), Dennis Hayter
(Intelligent Energy), Sharima Rasanayagam (British Consultate-General), Bruce Jenkyn-Jones (IMPAX Asset
Management), Rachel Lawley (British Consultate General) and Anthony Marrett (Microponents).




8
                                                                                        US FUEL CELL MISSION



3.4 Itinerary
The Mission took place between 11 June and         along the full length of the fuel cell supply
21 June 2003. During that period, the group        chain, and across the USA. The schedule was
met with 45 private and public sector bodies,      as follows:
Date                  Location                  Visit/meeting
12 June               Sacramento, CA            UC Davis - Institute of Transportation Studies
                                                California Fuel Cell Partnership
                                                Nissan Technical Center North America
                                                California Air Resources Board
                                                Anuvu Fuel Cell Products
13 June               Los Angeles, CA           South Coast Air Quality Management District
                                                Los Angeles Department of Water and Power
                                                UC Irvine - National Fuel Cell Research Center
                                                Quantum Technologies Inc.
15 June               Los Angeles, CA           GE Power Systems
16June (sub-group)    Pittsburgh, PA            US DOE - National Energy Technology Laboratory (NETL)
                                                US DoD - Fuel Cell Test and Evaluation Center (FCTec)
16 June (sub-group)   Detroit, MI               Energy Conversion Devices Inc.
                                                Ford Motor Company
                                                General Motors Corporation
17 June (sub-group)   Baltimore, MD             Teledyne Energy Systems Inc.
17 June (sub-group)   Washington, DC            National Hydrogen Association
                                                US Fuel Cell Council
                                                Breakthrough Technologies Institute/Fuel Cells 2000
                                                US DOE
18 June               Hartford, CT              UTC Power
                                                UTC Fuel Cells
                                                United Technologies Research Center
                                                HydrogenSource
                                                University of Connecticut - Connecticut Global Fuel Cell Center
                                                Connecticut Clean Energy Fund
                                                Proton Energy Systems
19 June               Albany, NY                Plug Power Inc.
                                                University of Albany - Albany Nanotechnology
                                                New York State Office of Science, Technology and
                                                Academic Research (NYSTAR)
                                                New York State Energy Research and Development
                                                Authority (NYSERDA)
20 June               Boston, MA                Boston University
                                                Worcester Polytechnic Institute - Fuel Cell Center
                                                ZTEK Corporation
                                                Suffolk University
                                                GenCell Corporation
                                                Mechanology LLC
                                                Brown University
                                                Electrochem Inc.
                                                Acumentrics Corporation
                                                Allegro Ventures
                                                Massachusetts Institute of Technology
                                                Massachusetts Technology Collaborative - Renewable
                                                Energy Trust
                                                US Department of Transport - Volpe National Transport
                                                Systems Center


                                                                                                              9
US FUEL CELL MISSION



Contact details for these organisations and
further information concerning their activities
can be found Appendices C and D
respectively. The topics for discussion at the
various visits and meetings are listed in
Appendix E.

3.5 About this Report
This Report summarises the learning from
the Mission and considers the implications
for the UK. The Chapters which follow have
been produced by individual members of the
group (sometimes working together), in line
with specific areas of expertise.




10
                                                                         CANADIAN FUEL CELL MISSION



4 THE US CONTEXT – DRIVERS,                        A considerable period of time will be required
  FUNDING, MARKETS AND                             for any transition to hydrogen, but it is
  GOVERNMENT POLICY                                imperative that major demonstration projects
  David Hart, Imperial College London              take place to enable improved understanding,
  Philip Sharman, DTI – International              more targeted development and operational
  Technology Promoters                             experience to be gained in preparation for the
                                                   emergence of a hydrogen economy: The DOE
4.1 The ‘Hydrogen Economy’ Context                 issued a call for proposals for large-scale
In a hydrogen economy, hydrogen would be           infrastructure projects for the end of 2003
one of the primary energy carriers, or fuels,      with that aim in mind.
much as electricity is today: Like electricity,
hydrogen is not an energy source. Although it      Equally, cooperation between relevant parties
is abundant in nature, hydrogen is found in        and countries is understood to be
compound forms such as water, biomass and          fundamentally important, as developing both
fossil fuels and must be produced from such        technology and infrastructure will require
primary resources by means of                      more resources and skills that can be found
thermochemical processes or electrolysis (for      within any single national boundary. The USA
which the electricity required may come from       has been forthright in calling for formal
fossil fuel combustion, nuclear power or           cooperation, and Europe and the USA have
renewable energy sources). Because of              taken steps towards this end. US President
these different sources and routes, and in         George Bush, European Commission
different end-uses and technologies, the           President Romano Prodi and European
environmental and other impacts of hydrogen        Council President Konstandinos Simitis
use can vary significantly.                        signed an accord on 25 June 2003 in support
                                                   of an ‘International Partnership for the
The USA, Japan, Canada and the EU have all         Hydrogen Economy (IPHE)’ called for by US
invested in research and development to            Energy Secretary Spencer Abraham at an
foster the hydrogen economy, and the USA           International Energy Agency (IEA) Ministerial
has one of the larger programmes. The              Meeting in April. The key vision of the
primary motivation in the USA is to enable a       proposed IPHE would be to make hydrogen
reduction of the nation’s dependence on            vehicles and refuelling infrastructure widely
imported oil, especially for transport, although   available to consumers by 2020.
reducing emissions of greenhouse gases and
improving air quality are also important           In the USA, notwithstanding the fact that
factors.                                           Federal Government support for hydrogen
                                                   energy is strong, state support can be equally
While a single hydrogen                            important. The development of the ‘zero
production/distribution/storage system is          emission vehicle (ZEV) mandate’ in California
unlikely to be appropriate for all applications,   has had a fundamentally positive impact on
hydrogen produced from indigenous energy           the speed of development of hydrogen and
sources – renewables, coal or nuclear, for         fuel cell technologies. Equally, states may be
example – could be used in fuel cell vehicles      able to enact legislation more rapidly than
or in stationary applications. All of the          federal lawmakers, as well as offering specific
individual components and technologies for         incentives to hydrogen technologies. These
such a system exist, but the costs remain          issues, and the associated initiatives, are
generally high, and alternative means to fulfil    discussed in Section 4.2 and Section 9.3
the policy requirements above (such as             respectively.
demand management) are under
consideration.
                                                                                                11
CANADIAN FUEL CELL MISSION



4.2 Policy Issues and Initiatives for Fuel        The picture is somewhat different when
    Cell and Hydrogen Technologies                considering the fuel mix for electricity
    Development, Commercialisation and            production, where some 52% of the
    Deployment                                    electricity generated comes from coal,
                                                  sourced from indigenous resources, 17%
Background                                        from natural gas and 20% from nuclear
The drivers for the wider adoption of fuel cell   power. Renewables, primarily large-scale
technologies and, in the longer term, a           hydropower (5.4%), provide only a small
hydrogen economy have been described in           proportion (8%) of the total. This reliance on
the introduction to this report and can be        coal is likely to continue for the foreseeable
summarised as:                                    future.

• Energy security (i.e. use of domestic           As a consequence of its large energy
  resources, distributed energy systems,          consumption and heavy dependence on
  etc.);                                          fossil fuels, the USA is responsible for
• Environmental considerations (i.e. climate      approximately 25% of the man-made
  change mitigation, air quality improvement,     emissions of CO2. Highway vehicles are
  etc.);                                          responsible for about 20% of CO2 emitted in
• Energy efficiency; and                          the US.
• Economic competitiveness and prosperity
  (e.g. worldwide technology leadership).         US Energy Policy and Fuel Cells and
                                                  Hydrogen
Clearly, each driver has a highly significant     The energy policy framework in the USA is
‘national/state’ dimension, as well as a          complex. Although the USA has declined to
‘commercial/company’ dimension. As a              sign the Kyoto Protocol for limiting
result, the US Federal Government (including      greenhouse gas (GHG) emissions, it
many of the national laboratories) and many       acknowledges the need to address climate
state governments have become increasingly        change and to develop carbon management
active in supporting the development of both      strategies and technologies, including,
fuel cell and hydrogen technologies.              significantly, those covering hydrogen and
                                                  fuel cells.
The USA uses over 96.5 ‘Quads’ (quadrillion
BTU), or approximately 102EJ of energy each       In 1996, the Hydrogen Future Act replaced
year, and this is projected to grow to 130        the earlier Spark M Matsunaga Hydrogen
Quads by 2020. Just under 40% of current          Research Development and Demonstration
primary energy is in the form of petroleum,       Act of 1990, and authorised additional
24% is natural gas, 23% is coal, 8% is            spending on the RD&D of hydrogen
nuclear energy, 3% is wood, waste and             production, storage, transport and use. This
alcohol, 2% is hydro-electric power and less      subsequent Act also required the Hydrogen
than 0.5% is from other renewable energy          Technical Advisory Panel (HTAP), formed in
sources. The 38 Quads from petroleum is of        1992 under the Matsunaga Act, to advise the
critical concern, since around 55% of the oil     Energy Secretary on the implementation of
consumed currently in the USA is imported,        DOE’s programmes in this area, to analyse
with this figure likely to rise to 60% by 2020    the effectiveness of the DOE’s activities and
and around 70% by 2030. The transportation        to make recommendations for future
sector accounts for nearly two-thirds of the      legislation, programmes and funding. HTAP
annual consumption, of which about 75% is         reported in August 1999, recommending
used to power highway vehicles.                   strengthening of the DOE’s efforts in:


12
                                                                          CANADIAN FUEL CELL MISSION



• R&D and technology – by continuing               voluntary 18% reduction in the ratio of GHG
  support of a well-balanced portfolio             emissions to gross domestic product (GDP)
  (especially in core R&D) to ensure               from 2002 to 2012, equating to a potential
  realisation of the vision and to retain          decrease of approximately 29 tonnes of
  critical capabilities and resources.                                              ,
                                                   GHGs per million dollars of GDP but a
                                                   continued increase in absolute emissions. To
• Coordination and outreach – by continuing        support the GCCI, an increase in funding for
  high-level coordination of hydrogen-related      climate change-related activities and
  activities across agencies to leverage           programmes from $3.8 billion to $4.5 billion
  resources, establish a shared knowledge          was proposed, including $1.3 billion for clean
  base and accelerate reaching a hydrogen-         energy technologies.
  powered future.
                                                   In the Clear Skies Initiative (CSI), President
• Legislation and funding – by extending the       Bush proposed significant reductions in
  Hydrogen Future Act beyond 2001 for five         emissions of sulphur dioxide (SO2), oxides of
  additional years with yearly funding             nitrogen (NOx) and mercury. This would
  increases to enable the nation to move           represent a considerable tightening of the
  more rapidly towards a hydrogen future; by       existing Clean Air Act Amendments (CAAA) for
  providing multi-year funding and                 SO2 and State Implementation Plans (SIPS) for
  minimising discontinuities to increase           NOx, as well as introducing limitations on
  efficiencies in advancing the technologies       mercury emissions for the first time.
  and in implementing the programme; and
  by supporting hydrogen as an option in           In addition, the Reauthorisation of the
  federal alternative-fuelled vehicle              Hydrogen Future Act (to cover the period
  programmes.                                                                             ,
                                                   2002 to 2006) is proposed in the NEP in-line
                                                   with the recommendations of the HTAP     .
The HTAP analysis, together with other strategic
analyses such as the Eleven National               As a result of these components of the NEP     ,
Laboratories’ Report on ‘Technology                specific recommendations were made for the
Opportunities to Reduce US Greenhouse Gas          development of energy efficient vehicle
Emissions’ (1997), were valuable inputs into the   technologies, including hybrid systems, fuel
work of the President’s National Energy Policy     cells and hydrogen-based systems. The NEP
Development Group, charged with the task of        is, therefore, a strong indicator of continuing
developing a comprehensive energy policy.          federal support for fuel cells and hydrogen
                                                   technologies and infrastructure in both the
In announcing the resulting National Energy        transportation and stationary power generation
Policy (NEP), President Bush launched two          sectors, as well as for portable power.
major initiatives – the Global Climate Change
Initiative and the Clear Skies Initiative in       The Bush Administration expected that these
February 2002.                                     proposed initiatives would form key parts of a
                                                   new Energy Bill to have been placed before
The Global Climate Change Initiative               Congress during the Autumn of 2002.
(GCCI) proposed a rigorous, technology-led         However, progress of the Energy Bill has
approach to stimulate the development of           been stalled due, inter alia, to issues
new technologies, identify market                  concerning the exploration for oil and gas in
mechanisms and cooperate internationally on        Alaska and deregulation of electricity markets.
finding solutions and, as the science justifies,   From various conversations during the course
to ‘stop and then reverse’ the growth in           of the Mission, there was some optimism
emissions. President Bush proposed a               (50:50+) that the Bill would clear the Senate
                                                                                                 13
CANADIAN FUEL CELL MISSION



committee stage before the August recess,          State and Local Government Initiatives –
and, if agreed by ‘Conference’ (i.e. both          an Overview
Senate and the House of Representatives), be       In addition to Federal Government initiatives,
approved by the end of 2003. This optimism         at the state and local government level there
has, so far proved to be well founded. As this     is a vast array of clean energy investment
Report goes for printing, the Bill has cleared     funds, grant/rebate schemes, loan
the Senate stage and proceeds to Conference        programmes, tax credit incentives, tax
in early October. The August power outages in      exemptions and business investment tax
the north eastern states of the USA have           incentives geared towards encouraging fuel
considerably strengthened the case for the         cell vehicles and alternative fuels such as
new Energy Bill.                                   hydrogen. Some 36 of the 50 states have
                                                   incentive programme that may apply to fuel
Despite the hiatus concerning the Energy Bill      cells, and 12 states also have dedicated clean
and the authorisation of the various initiatives   energy funds (normally financed through
contained within it, appropriations for existing   levies on electricity production) or partnering
programmes (and to some extent, new                schemes often specifically supporting fuel
activities) continue.                              cell development and deployment. More
                                                   details of state activity, with specific
Federal Government Initiatives – an                examples that the Mission covered in
Overview                                           California, Connecticut and New York State,
A number of Federal Government agencies            are included in Section 9.3 of the Report.
directly support fuel cells and hydrogen
technologies, principally the US Department        Overall, it was the general view of US
of Energy (DOE), the US Department of              companies and universities that state and
Defense (DoD) and the National Aeronautics         local government support for fuel cell and
and Space Administration (NASA). Section 9.3       hydrogen technologies was of a similar
of this Report describes the main                  magnitude to Federal Government support,
programmes and initiatives being undertaken.       and of equivalent importance. This view was
While the picture is a complex one, it is clear    supported by the Clean Energy States
that the Federal Government is investing in        Alliance, which estimates the total state
the order of $355 million (approximately £226      support for fuel cells to be between $117
million) in these technologies in 2003, with       million and $206 million each year.
this likely to rise to around $430-440 million
(£270-274 million) in 2004.                        National Hydrogen Energy Vision Roadmap
                                                   Before President Bush announced the $1.7
One major initiative, launched by President        billion FreedomCAR and Fuels Initiatives, the
Bush in January 2003 – the ‘FreedomCAR             DOE consulted widely amongst the business
                    ,
and Fuel Initiative” proposes that $1.7 billion    community, federal and state energy policy
be invested in RD&D in fuel cells and              officials, academics, environmental organisations
hydrogen infrastructure over the next five         and national laboratories. This led to the
years. This Initiative, which encompasses                                     ,
                                                   development of a ‘Vision” which identified some
many of the programmes described in                of the key drivers affecting the future of
Section 9.3, will do much to maintain the          hydrogen energy and suggested a way forward.
impetus of fuel cell and hydrogen
technologies RD&D. Likewise, the $1 billion        The major findings of the Vision were:
‘FutureGen’ initiative addressing zero
emission coal power plant, increases the           • Hydrogen has the potential to solve two of
focus on these technologies.                         the major energy challenges facing the
                                                     USA – reducing dependence on imported
14
                                                                          CANADIAN FUEL CELL MISSION



  oil and reducing pollution and GHG               • Hydrogen is currently three to four times
  emissions.                                         as expensive as petroleum. Its deployment
• Hydrogen could play an important role in           needs to be market driven.
  US energy in the future. However, the            • Fuel cells are approaching 100 times more
  transition to a hydrogen economy could             expensive than internal combustion
  take several decades.                              engines (this would be reduced to about
• The ‘technology readiness’ of hydrogen             10 times more expensive if high volumes
  energy systems needs to be accelerated,            i.e. >500,000 units/year were produced)
  particularly in addressing:                        and do not maintain performance over the
  – the lack of efficient, affordable production     full useful life of the vehicle.
  processes;
  – lightweight, small volume and affordable       Economic and institutional barriers:
  storage devices; and                             • Given the technology status and current
  – cost-competitive fuel cells.                     demand, the investment risk of developing
• There is a ‘chicken-and-egg’ issue                 a hydrogen delivery infrastructure is too
  regarding the development of a hydrogen            great.
  energy infrastructure. Even when                 • Uniform model codes and standards to
  hydrogen devices are ready for broad               ensure safety, insurability and fair global
  market applications, if consumers do not           competition are lacking.
  have convenient access to hydrogen (as           • Local code officials, policy makers and
  they currently have with petrol, electricity       general public lack education regarding
  or natural gas), then they will not accept         hydrogen safety and benefits.
  hydrogen as a fuel of choice.
                                                   The development of the Roadmap was
The Vision document (see                           undoubtedly a major factor in getting political
www.eere.energy.gov/hydrogenandfuelcells/)         ‘buy-in’ for the President’s Initiatives. The
also recommended the development of a              Roadmap (also available at the above
‘National Hydrogen Energy Roadmap’.                website) covers issues associated with
                                                   hydrogen production, delivery, storage,
A National Hydrogen Energy Roadmap                 conversion applications and codes and
Workshop was held in Washington in April           standards.
2002, and this, together with an industry-led
commercialisation strategy (‘Fuel Cells and        4.3 Market Segmentation and Timescales
Hydrogen: The Path Forward’) – see Section         Very few fuel cells are yet available on the
9.3 – led to the publication of the National       market, although both the 200kW PC25™ PAFC
Hydrogen Energy Roadmap by DOE in                  produced by UTC Fuel Cells, and the AFC
November 2002.                                     produced by the same company, and used in
                                                   the Space Shuttle, may be said to be true
The Roadmap identified the following barriers      products. However, many companies are in a
to a hydrogen economy; these are being             beta-test or pre-commercial stage of the market.
addressed through future programme
solicitations of the President’s FreedomCAR        Clearly, the big questions being addressed by
and Fuels Initiatives:                             these companies are:

Technology barriers:                               • What niche markets will emerge in the
• Hydrogen storage systems for vehicles are          short-term (e.g. 2003-2007) to enable
  inadequate to meet customer driving                growing sales of fuel cell and hydrogen
  range expectations without intrusion into          systems to be realised (and hence cost of
  vehicle cargo or passenger space.                  units to be driven down)?
                                                                                                 15
CANADIAN FUEL CELL MISSION



• What is the price sensitivity of these                  potential market for fuel cell and hydrogen
  markets?                                                technologies, namely the mass volume
• When will larger, premium application                   automotive market, requires not only much
  markets begin to emerge and what will                   greater reliability and much lower price
  they comprise?                                          (approaching two orders of magnitude), but
• When will mass volume applications in                   also support infrastructure in the way of fuel
  stationary power, portable power and the                provision and widespread skilled labour.
  automotive sector emerge?                               However, niche and premium automotive
                                                          markets, such as urban buses and fleet cars,
The small and portable power sectors                      will emerge earlier due to local drivers.
(particularly for uninterruptible power supply
(UPS), remote locations or environmentally                Figure 4.1 below gives an indication of
sensitive circumstances) are seen as                      possible introduction points for fuel cells in
promising markets in the short term, as they              terms of timing, plotted against the absolute
are commonly less price-sensitive and less                mature market size. The latter is clearly highly
conservative. Military applications are also              dependent on the success of fuel cell
important, providing early adopter markets                technology in displacing incumbent and
that enable fuel cell and hydrogen systems to             emerging competitors. However, the trend is
be field tested. Other niche applications (e.g.           clear, in that remote and UPS markets for fuel
fuel cell test stands for research                        cells (2003-2007) are expected to be followed
establishments) are similarly useful.                     by premium applications, including some
                                                          specialised vehicle sales (such as scooters in
At the other end of the spectrum, the largest             polluted regions), residential fuel cells and




                               FC scooter/micro
                                 vehicle sales




Figure 4.1: Possible introduction points for fuel cell applications
                                                                                      ,
From HART, D (2003) “Fuel Cells: the competitive option for an Eco-responsible future?” invited paper, World Gas
Conference, Tokyo, June 1-5

16
                                                                               CANADIAN FUEL CELL MISSION



MW-scale utility fuel cells (2008-2012).              • Reflecting population distributions,
Volume applications in stationary power,                e.g. areas of higher population tend to
portable power and automotive markets                   have more electrical utilities serving them,
(including private cars) could develop in the           better transport links, more universities,
longer term (2012 onwards).                             etc. This is a contributory factor in the
                                                        clustering of fuel cell and hydrogen
Equally important are the facts that initial fuel       companies in the north-eastern states and
cell markets are no longer five years away,             southern California.
and that developments in many areas will be           • Environmental drivers, e.g. the stringent
required to maximise the economic potential             emissions standards for vehicles and
of emerging systems. This urgency is clearly            power plants in southern California. In
shown in the positive attitude towards fuel             these cases, companies seeing the
cell and hydrogen technologies within the               opportunities created by such regulatory
USA.                                                    approaches may choose to locate their
4.4 The Geography of the US Fuel Cell                   operations locally (although they may
      and Hydrogen Industries                           choose not to manufacture locally due to
While companies in the fuel cell and hydrogen           those same regulations!).
industries can be found in most of the 50 states      • Clustering around a technology leader, e.g.
of the USA, an examination of the geographical          UTC and FuelCell Energy in Connecticut.
distribution of this activity reveals a small           (This is certainly true of the cluster in
number of areas with a high concentration of            Vancouver, Canada, where the presence of
companies. These ‘clusters’ have developed for          Ballard Power Systems led to a
a number of different reasons:                          concentration of companies.)
                                                      • Proximity to centres of technological
• Historical reasons, such as an association            innovation, e.g. entrepreneurial, high
  with the traditional locations of large               technology companies may spin out from
  concentrations of energy companies and                research institutions, universities or research
  their supply chains: e.g. western                     parks, or may choose to locate themselves
  Pennsylvania (coal) and eastern Texas                 in areas with a large supply of innovative
  (oil/gas). In these cases, established                professionals such as the ‘Research Triangle’
  companies may have
  diversified and developed new
  competencies in fuel cells and
  hydrogen, or new companies                  Vancouver

  or spin-outs may have
  established themselves in                                                                                 Boston
  these areas so as to have
  access to a skilled labour                                                                              NY/NJ
  resource.                                                                          Detroit Pittsburgh
                                          Sacramento
• Access to current or                                                                    Washington
                                           San Francisco
  prospective markets, e.g. the
                                           Los Angeles
  automotive manufacturers
  around Detroit, Michigan. In                San Diego

  these cases, it may well make
  sense to establish operations
  in the vicinity of major
  potential customers in order to
  facilitate technology                             Figure 4.2: The Clustering of US Fuel Cell and
  partnerships, strategic alliances, etc.           Hydrogen Companies

                                                                                                      17
CANADIAN FUEL CELL MISSION



North-Eastern Cluster
This cluster stretches 400 miles from
Washington, DC north to Boston in
Massachusetts, with over 20 companies as
well as industry associations, leading
universities and research institutes in DC,
Maryland (Baltimore), Delaware (Wilmington),
New Jersey (Newark), New York State
(Albany and Long Island), Connecticut
(Hartford and Danbury) and Massachusetts
(Boston/Cambridge). The key cluster drivers
are likely to be the technology leaders, state
incentives and the major population centres.

California Cluster
More than seven companies and some key
universities are concentrated around
Sacramento, San Fransisco, Los Angeles and,
to a lesser extent, San Diego. The regulatory
and incentive schemes of the California
Energy Commission, the California Air
Resources Board and the South Coast Air
Quality Management District and the large
population centres with typically early
adopters are key drivers.

The Detroit Area Cluster
More than seven companies are located
within 100 miles of Detroit, focusing mainly on
PEM fuel cell technologies, hydrogen storage
and balance of plant components for
automotive applications. The sheer size of that
prospective long-term market, coupled with
the focus of the auto industry around Detroit,
has provided a strong influence on the
establishment and rapid growth of this cluster.

The Western Pennsylvania Cluster
A small number of companies, mainly
focusing on SOFC technologies for stationary
power generation applications, are situated
around Pittsburgh. The leadership of Siemens
Westinghouse is a clear influence.

Other small clusters exist, e.g. around Houston
and San Antonio in Texas, around Denver and
Boulder in Colorado and in the ‘Research
Triangle’ in North Carolina. The Mission was not
able to visit these other clusters.
18
                                                                           CANADIAN FUEL CELL MISSION



5 FUEL PRODUCTION AND STORAGE                      Power Systems is currently using internal
  Kevin Pointon, DSTL                              reforming combined with a pre-reformer
                                                   based on catalytic partial oxidation (CPO).
5.1 Introduction                                   Also, although the Mission team did not visit
The fuel cell types that are set to feature        the technology developer, the Los Angeles
most as commercialisation progresses over          Department of Water and Power described its
the coming years are fundamentally hydrogen        portfolio of stationary fuel cell
technologies. However, hydrogen is not a fuel      demonstrations including several 250kW
in the normal sense, because it does not           FuelCell Energy MCFC units, known to use
occur in the free form in significant quantities   100% internal reforming.
on the Earth, despite its abundance
throughout the universe. Consequently, the         GE‘s fuel focus for stationary applications is
hydrogen required by fuel cell stacks will         firmly on natural gas at present; however, it
have to be liberated in some way from the          envisages adapting the technology to run on
chemically bound form and supplied direct to       the output of a gasifier in the future. It is also
the fuel cell or stored for later use. The         developing its CPO technology to run on
technologies to achieve this are therefore key     logistics fuels such as JP-8 jet fuel and diesel
enablers for fuel cells and are being              for military applications. Performance
developed in parallel with the fuel cell           achievements for its catalyst have so far been
technology itself, in some cases integrated        quoted as 700 operating hours with 10
with the fuel cell system, and in others not.      thermal cycles and sulphur tolerance of
                                                   1,000ppm as dibenzothiophene.
Current world hydrogen demand is around 50
million tonnes per annum, with little excess       GE lists optimisation of reactant ratios,
production capacity. In order for hydrogen to      minimising pressure drops and improving
supply only 10% of the World’s projected           heat loss as critical development challenges.
energy consumption in 2020, 18 times this          Cost is seen as an issue, but with the fuel
figure would be required. Therefore the            processor currently accounting for only 5% of
development and deployment of hydrogen             their system cost, it is not critical.
production and storage technologies and
infrastructure marks the beginning of a            HydrogenSource, a joint venture between
transition to a much larger hydrogen budget.       UTC Power and Shell Oil Company, was the
This Section examines the relevant technologies    only company visited on the Mission that
as they were seen by the Mission delegation.       was focused solely on the development of
                                                   external reformer technology. It uses a
5.2 Fuel Production                                patented CPO technology, the key attributes
                                                   of which are its compact size, integrated
Fuel Reformation                                   design and rapid start time. The company is
The transition to a hydrogen economy is likely     targeting the technology at PEM systems for
to be a lengthy one. During this period the        transportation (including vehicle APUs),
emergence of large hydrogen fuel cell              stationary power generation at various scales
markets is dependent on the supply of              and on-site hydrogen generation.
hydrogen with fossil fuels as a feedstock. The
Mission team was exposed to several                HydrogenSource’s residential scale product is
developers of reforming technology.                the Vega 5. This is a 5kW unit incorporating a
                                                   reforming train of desulphurisation, CPO, water
In the case of high temperature fuel cells, a      gas shift and preferential oxidation. The unit
mixture of internal and external reforming         also contains an air blower suitable for a PEM
approaches was observed. For example, GE           fuel cell and a catalytic burner to accept fuel
                                                                                                  19
CANADIAN FUEL CELL MISSION



cell anode off-gas. It is being offered to fuel cell   HydrogenSource recently demonstrated a
companies for evaluation as a plug-and-play            gasoline-to-hydrogen fuel processor for fuel
unit and is expected to be commercially                cell vehicles. This 78 litre system is designed
available in 2004, targeted at residential,            to fit under the chassis of a fuel cell-powered
premium power, UPS and back-up markets.                automobile and generates sufficient hydrogen
                                                       to operate a 50kW PEM fuel cell. It requires
The Vega 5 unit accepts natural gas as fuel and        less than four minutes to start from room
generates 4.5 cubic metres of hydrogen per             temperature to production of fuel cell quality
hour from a 420 litre, 9kg package. Carbon             hydrogen. HydrogenSource is currently
monoxide emissions are less than 10ppm. The            working on a next-generation on-board
specification claims 40,000 hours of operation,        processor that will achieve a 30 second start
200 start-stop cycles and 80% efficiency.              time, in a 35 litre, 35kg package.

HydrogenSource’s larger scale product is a             Electrolysis
150kW unit being incorporated into UTC Fuel            The Mission team visited two organisations
Cell’s next-generation stationary PEM                  in the USA actively involved in developing and
system, but also being developed as a stand-           marketing electrolysis-based hydrogen
alone hydrogen production unit. This                   production technology. Teledyne Energy
generates 160 cubic metres of hydrogen per             Systems claims to be the only US
hour from a 4,600 litre natural gas-fuelled            manufacturer of off-the-shelf alkaline
package and is expected to be commercially             electrolysis equipment. It traditional business
available in 2004.                                     has been selling units into applications where
                                                       there is little option for obtaining hydrogen
For larger scale hydrogen production,                  locally, for example because there is no
HydrogenSource has been packaging                      natural gas infrastructure. These applications
together several PC25 fuel processors in               have included utility power plants, food
three-, four- or five-unit options. There are          processing, microelectronics production, float
approximately 10 of these in operation at              glass production and other industrial
customer sites. These are steam reformer               applications. Whilst it is now seeing more and
units operating principally on natural gas. The        more sales into the fuel cell industry,
production capacity of the larger units would          including fuel cell test laboratories and
be around 900 cubic metres per hour.                   alternative vehicle refuelling systems, its
                                                       focus is primarily on applications where it can
It is clear from the information given by the          sell profitably today rather than investing
companies visited on the Mission, together             heavily in order to realise future markets.
with the DOE’s declared intention to review            Markets into which the company expects to
the future of on-board reforming next year             sell in the future include industrial on-site
based on its performance against challenging           production in lieu of multi-year delivered gas
targets, that developers are moving towards            contracts, and refuelling equipment for
concentrating on stationary methods of                 military man-portable power.
hydrogen production. Interestingly,
HydrogenSource is continuing to include on-            Teledyne's electrolysis technology is
board reforming within their transportation            marketed under the name TITAN™. The
market focus. Its view is that it is still too         product line starts at 20 standard litres per
early to judge which way the DOE’s decision            minute (slpm), but the main business is in
will go and that continuing to pursue it now           the range 50-2,700slpm. The key products
will keep its technology options open.                 are:



20
                                                                           CANADIAN FUEL CELL MISSION



• TITAN HM - This is the small-scale product        170slpm sizes. Thus, Proton has not yet
  line, producing 50-200slpm at 100psig. The        scaled up to the sizes available from
  delivered hydrogen purity is 99.9998%             Teledyne’s alkaline technology. All its units
  (trace amounts of oxygen and moisture are         produce hydrogen at 200psig, but it has also
  present).                                         produced research units operating at
                                                    3,000psig and achieved over 5,000 hours of
• TITAN EC - This product line produces 500-        reliable performance with these. This is
  700 slpm of hydrogen at 60-115psig. An            significant because electrochemical
  optional purifier can deliver 99.9999% pure       compression is much more efficient than
  hydrogen.                                         mechanical compression. It is unclear
                                                    whether or not there is scope for producing
• TITAN HP- At the larger scale end of the          hydrogen to match the 5,000-10,000psig
  product line, capacities are 1,350-               capability of advanced composite tanks
  2,700slpm of hydrogen at 115-230psig. The         without mechanical compression.
  hydrogen is delivered at 99.7% purity or
  99.9998% with optional purifier.                  Proton is currently selling electrolyser units
                                                    into industrial markets such as semi-
Although the HM series is of appropriate scale      conductor manufacture and research
for home fuellers, Teledyne does not see this       laboratories, and is also targeting future
market as attractive. The larger scale end of       markets such as hydrogen filling stations and
the product line is at vehicle refuelling station   home fuelling stations.
scale, 2,700slpm being equivalent to around
70 passenger cars refuelled per day. Teledyne       5.3 Fuel Storage
believes this market to be more attractive.
                                                    High Pressure Cylinders
The stacks are bipolar (anode of one cell is        The storage of hydrogen gas in high pressure
the cathode of the next). The standard output       steel cylinders (typically around 170 bar) is a
pressure for Teledyne equipment is around           familiar technology. However, owing to the
100psi. They are currently developing higher-       low molecular weight of hydrogen, its density
pressure technology under DOE funding in            at this pressure is rather low. This, combined
order to minimise the duty required of the          with the fact that a significant thickness of
compressor in electrolysis-based vehicle            heavy steel is needed to contain the
fuelling stations.                                  pressure, means that the storage capacity of
                                                    these cylinders is poor – typically less than 1
Proton Energy Systems is employing a                percent by weight. Whilst this may be
fundamentally different approach to that of         acceptable for short-term intermittent niche
Teledyne, both technically and philosophically.     fuel cell applications such as small-scale
It is looking very much to emerging growth          backup power, it is patently unsuitable for
markets as the concept of the hydrogen              more demanding applications such as vehicle
economy gathers momentum. To capitalise             fuel tanks. The high pressure cylinder of
on these markets, it is focused on developing       choice for applications such as these is the
acid electrolysis technology based on proton        advanced composite cylinder. This technology
exchange membranes.                                 as it was presented to the Mission team is
                                                    the subject of this Section.
The smallest hydrogen generators in Proton’s
product line are the Chrysalis 300 or 600cc         The principle US developer of high pressure
models; these are capable of producing at           composite cylinder technology is Quantum
0.3-0.6slpm of hydrogen. The larger units are       Technologies. Quantum’s technology is the so-
known as HOGEN and are available at 17-             called “type IV” cylinder, a polymer lining with
                                                                                                  21
CANADIAN FUEL CELL MISSION



carbon fibre composite over-wrap. Its version,     Quantum recognises the need for
dubbed TriShield™, consists of a permeation        outstanding safety. For example, a safety
resistant polymer liner, a wound carbon fibre      factor of 2.25 is placed on the burst pressure
inner layer and an impact resistant carbon         of the TriShield™ design, and design for
fibre/resin outer shell. For extra ruggedness,     safety is clearly a feature of the in-tank
impact resistant domes can be fitted to the        regulator. In qualifying for vehicle use, the
more vulnerable cylinder ends.                     tanks have passed a number of safety-
                                                   orientated tests including vibration, shock,
The Mission team witnessed automobile              vehicle crash, severe mechanical abuse,
scale tanks being manufactured. Polymer            extreme temperatures and chemical attack.
granules are placed in a mould along with the
end boss, and tumbled while being radiantly        Quantum quotes the storage capacity of its
heated. The mould is then cooled and the           standard cylinders as being up to 8.5% by
finished polymer liner broken out. The two         weight. It is not clear if this includes the in-
outer layers are then added. The carbon fibre      tank regulator. If not, the capacity would be
winding is automated and fibre is applied in a     reduced somewhat since the regulator
specific pattern for maximum strength.             weighs around 10kg, but the capacity would
                                                   still be above ‘FreedomCAR’ goals (see
Quantum claims the following features              Section 9.3). Quantum’s “record”
differentiate its technology:                      achievement is above 11% by weight, but it
                                                   is unclear if this design would be a
• cross-linked, ultra-high molecular weight        commercial prospect. The company also
  modified polymer liner, optimised for            claims a 13.3% by weight achievement in
  improved low temperature flexibility;            tanks designed for the heavily weight
• in-tank regulator; and                           constrained Helios unmanned air vehicle.
• ultimate protection against corrosion            However, these were highly specialised and
  damage due to carbon fibre inner shell.          the burst pressure safety margin was
                                                   compromised in order to achieve the low
The in-tank regulator technology is particularly   weight required.
interesting. This is an integrated module
containing all the controls needed for             In order to improve the volumetric storage
supplying gas to a vehicle. These controls         density of their tanks, Quantum have
include the high pressure regulator and an         successfully developed a 10,000psig tank. At
electronically controlled solenoid shut-off        the time of the Mission, they were awaiting
valve, which closes when the vehicle engine        DOE funding to optimise this system and
is switched off, when the tank falls below a       obtain cost reductions.
predetermined pressure (determined by an
integral sensor) or if a catastrophic rupture      Quantum’s tanks exceed ‘FreedomCAR’
occurs externally to the tank. Also included in    goals for 2005 in every respect except one;
the module are a one-way valve for filling the     the cost is far too high. On a $/kWh basis,
tank and the necessary venting sensors and         the technology is around 20 times the DOE
controls to protect the tank in circumstances      target. Consequently, cost reduction is a
such as immersion in a fire. The advantage of      major part of Quantum’s R&D thrust.
this technology is that high pressure is           Reducing the material cost is seen as a major
confined to the tank and protruding parts are      target since the carbon fibre accounts for a
maintained at 100-400psig only.                    large portion of the overall cost (40-75%),
                                                   partly because production quantities of
In common with other developers of                 carbon fibre are relatively small. Quantum
hydrogen storage technology for fuel cells,        believes that there are significant
22
                                                                        CANADIAN FUEL CELL MISSION



opportunities to reduce this cost as the           capacity in 10 minutes. TOHS see
market for carbon fibre is burgeoning. It also     reduction of system weight, cost reduction
believes that economies of mass production         and meeting vehicle performance criteria
will bring the cost of its tanks down by up to     as being key development issues.
a factor of 10.                                  • Bulk hydrogen storage vessel - This is a
                                                   modular system with tubular modules that
High pressure operation does not lend itself       are designed to accept the output of an
well to the tank being anything other than         electrolyser at 100-500psig without a
cylindrical. However, Quantum is targeting a       compressor, and be integrated with a
conformable tank for the future. This will         stationary fuel cell of engine-based
operate at 5,000psig and should achieve a          generator. This has so far been developed
slightly higher volumetric capacity by             to the 6kg hydrogen scale incorporating
improving the packing density of multi-            the necessary auxiliaries and controls to
cylinder installations.                            allow fast cold start-up and reception of
                                                   fuel cell waste heat. Since charging time is
Quantum is a strategic partner to General          not critical for this application, a simplified
Motors and has supplied complete fuel              heat exchanger is employed. TOHS is
systems to numerous alternative fuel cell          targeting this technology at the fuel cell
vehicles and fuel cell applications. These         vehicle filling station forecourt.
include the Toyota FCHV-4 and the Toyota
Hino fuel cell bus.                              All of the above systems use TOHS’s ambient
                                                 temperature hydride. This has a material storage
Hydrides                                         capacity of 2wt% at 1,500psig charging
Energy Conversion Devices represents the         pressure. TOHS sees materials research as the
only developer of metal hydride systems          key requirement for increasing this storage
visited by the Mission team. It has              capacity. It also has a magnesium-based
established a 50:50 joint venture with           hydride, which can store 120kg/m3; in this case
ChevronTexaco to develop solid hydrogen          desorption takes place at about 300°C.
storage technology for a range of
applications, including UPS systems, APUs,       Carbon Nanotechnology
vehicle fuel tanks and fuel cell vehicle (FCV)   This is an extremely controversial technology
filling stations. The company, known as          for hydrogen storage due to the fact that
Texaco Ovonic Hydrogen Systems (TOHS), is        initial claims of exceptional storage capacity
developing three major products:                 couldn’t be reproduced and various
                                                 experiments have been discredited.
• Portable canister – This is a 6.5kg, 2 litre   Nevertheless, one organisation visited is
  cylinder, which stores up to 82g of            pursuing it. Albany Nanotechnology, based at
  hydrogen with a charging pressure of           the University of Albany has a project in
  250psi. This corresponds to a storage          progress to investigate hydrogen storage on
  capacity of 1.26wt% or 41kg/m3. TOHS           carbon nanotubes. Albany’s targets are:
  believes that this technology is now ready
  for commercialisation.                         • production of high purity carbon nanotubes
• On-board storage vessel – This is a larger       of controlled size at the 100g/h scale;
  60 litre system for use as a vehicle fuel      • reproducible 6wt% storage capacity at
  tank. It stores 3kg of hydrogen in a             room temperature;
  composite tank and weighs 190kg,               • cryogenic and pressurised tanks with
  corresponding to a storage capacity of           system level storage capacity of 6wt%;
  1.58wt% or 50kg/m3. Charging pressure is         and
  2,000psig allowing charging to 91% of          • projected system costs of $5/kWh.
                                                                                               23
CANADIAN FUEL CELL MISSION



At the time of writing no experimental results   1.3m x 0.5m not including the tanks. Plug
were available.                                  Power has engineered a similar system using
                                                 a natural gas reformer with pressure swing
Overview of Hydrogen Storage                     absorption for purification. This technology is
The US fuel cell industry does not yet appear    at the prototype stage and Honda is
to have solved the question of which on-         operating two of the systems.
board vehicle hydrogen storage technology
should be favoured, partly because each has      Most US fuelling station demonstration
unique attractive features. For example,         projects are following the traditional model of
compressed hydrogen is more suitable for         multi-vehicle facilities at the roadside. For
driver handling, but liquid hydrogen stores      example, the South Coast Air Quality
more hydrogen on a volumetric basis.             Management District in its Clean Fuels
Generally, metal hydrides are not favoured for   Program (see Section 9.3) is supporting five
this application in the USA, because it is       fuelling station projects employing a variety
believed that they will always be a heavy        of hydrogen production approaches including
option and won’t achieve DOE targets.            steam reforming, autothermal reforming,
                                                 electrolysis and bulk hydrogen deliveries.
GM’s planned fleet of fuel cell powered          There are also four stations within the
Zafiras will be equipped with a 50:50 mix of     California Fuel Cell Partnership (see Section
compressed hydrogen and liquid hydrogen          9.3). The station at the Partnership’s facility
tanks. Ford has used a methanol reformer in      consists of a 4,500 gallon liquid hydrogen
two cars in the past, but has moved to           tank, which supplies hydrogen via an ambient
compressed hydrogen. Ford’s Focus                air heat exchanger to a compressor, which
demonstration vehicles all use this method of    pressurises the hydrogen into several buffer
storage, supplied by Dynetek Industries          storage tanks. Two gas dispensers supply the
(Canada).                                        hydrogen, one at 3,600psi and one at
                                                 5,000psi. A third dispenser supplies liquid
5.4 Hydrogen Storage/Generation                  hydrogen direct from the tank.
    Systems
                                                 There is also a significant interest in the USA
The USA clearly recognises that the              in developing mobile or “satellite” fuelling
development of a viable refuelling               stations. By deploying these at strategic
infrastructure is a key element in the           locations, the commercial impact can be
widespread acceptance of fuel cell vehicles.     ascertained ahead of spending the large
The Mission team was exposed to a number         amount of capital needed to establish a
of projects aimed at combining the               permanent filling station.
technologies discussed above into complete
hydrogen fuelling solutions.                     5.5 Lessons for the UK

Several of the developers visited see a          Based on the information revealed on the
market for home fuelling stations, perhaps       Mission, some general conclusions can be
located in the user’s garage. Quantum has        drawn:
built such a system, which uses a
HydrogenSystems electrolyser, mechanical         • Following the DOE’s statement that it will
compressor and several of its own composite        examine on-board reforming with a view to
cylinders as the hydrogen store. The system        dropping the concept from its programme
can produce 3kg of hydrogen over a 24 hour         if its targets are not attained, there is a
period, but is probably rather large for wide      clear move away from on-board reforming
customer acceptance, being around 2.3m x           in the USA. This came through strongly in
24
                                                   CANADIAN FUEL CELL MISSION



    the comments made by Ford and General
    Motors.
•   In common with other geographical areas,
    many fuel cell companies in the USA are
    looking to start their businesses in niche
    hydrogen fuelled applications. There is,
    therefore, a demand for improved
    hydrogen storage technology.
•   With private funding less available now
    than in recent years (see Section 9.2),
    government funding is essential to
    progress technology from proof of concept
    to product commercialisation in the near
    term. The development of fuel production
    and storage technology in the USA
    benefits greatly from DOE and DoD
    funding at a level far in excess of that
    available in the UK.
•   US systems integrators are generally
    willing to source components from non-US
    sources. For example, a significant
    Canadian presence in the area of fuel
    production and storage was observed.
•   The USA holds a lead in hydrogen
    production and storage technology. Unless
    UK public sector funding increases, it will
    be very difficult for the UK to compete in a
    head-to-head manner in future markets for
    this technology. This places a premium on
    the UK focussing resources on its
    strengths and looking to partner the USA
    in a complementary way.




                                                                          25
CANADIAN FUEL CELL MISSION



6 FUELS CELL STACK TECHNOLOGY –                   establish commercial viability based on early
  SOLID OXIDE FUEL CELL (SOFC)                    risk capital and recent US state clean energy
  SYSTEMS                                         funds (e.g. Acumentrics). US air pollution and
  Michaela Kendall, Adelan                        national energy security policies remain
  Philip Sharman, DTI – International             extremely important drivers to deploy SOFCs
  Technology Promoters                            widely and quickly. However, at this point, US
                                                  federal and state level funding remain critical
6.1 Introduction                                  in achieving SOFC deployment in a vast range
                                                  of applications ranging from portable military
Over the years, many designs of solid oxide       devices through to the use of agricultural
fuel cells (SOFCs) have been devised,             biogas, transportation auxiliary power systems
starting from pressed thimbles and disks in       and large-scale stationary applications.
the 1930s (See Appendix F for a summary of
fuel cell technologies under development).        In particular, the DOE’s Solid State Energy
Since the 1960s, most stack development           Conversion Alliance (SECA – see Section 9.3
has focused on planar and tubular cells,          and Appendix H) programme has been an
leading to other geometries becoming less         essential instrument in pushing progress.
popular. This Chapter therefore describes the     Structured to break down commercial
two main current types of SOFC being              protectionism to aid progress and eventually
developed and commercialised in the USA –         benefit all, the programme has ambitious
planar and tubular.                               targets, transparent operation and a team
                                                  spirit. SECA has focused national political
Each of these designs has a number of             attention on SOFCs as an alternative energy
interesting variants; for example, the planar     technology and unified SOFC technologists
SOFC may be a square plate cell fed from the      through an efficient administration hub.
edges as in the GE Power Systems or Global        Awareness of UK and European SOFC
Thermoelectric (Canada) designs. The tubular      technologies is extremely high in the USA,
SOFCs may be of large diameter as in the          and SECA sees the current US technical
Siemens Westinghouse type, or of much             barriers as global. Technology, materials and
smaller diameter, for example the micro-          component suppliers can all theoretically be
tubular design of Acumentrics, which has          sourced through US-UK collaborations.
enhanced thermal shock resistance. Technical
advances in materials science have allowed
anode- and cathode-supported designs to           6.2 SOFC Products and Market Focus
emerge, with distinct advantages over the
more traditional electrolyte-supported            GE Power Systems
systems. Ingenious stack design will no           GE is one of the six current SECA Industrial
doubt become increasingly important.              Team leaders, who aim to develop a fuel
                                                  flexible planar SOFC system in the 3-10kW
No companies met on this Mission are              size range. Significant technical issues are still
currently selling SOFCs in the market and it is   to be addressed in order to develop such a
widely accepted that commercialisation is         system. The system has been operated for
some, arguably significant number of years        more than 3,000 hours, but significant
away. However, larger companies have              system performance degradation results.
established long-standing SOFC development        System costs also remain high, although
programmes through limited, pre-commercial        SOFC stack costs are currently lower than
sales (e.g. Siemens Westinghouse) and             the balance of plant costs (fuel processor
sustained government support (e.g. GE), and       5%; stack costs 23%; thermal management
smaller companies have been able to               9%; balance of plant costs 63%).
26
                                                                         CANADIAN FUEL CELL MISSION



Planar SOFCs employ the same materials for        cells has been increased to 2.2cm. Today’s
the single cell as other cell designs. The most   commercial prototype contains lanthanum-
common cell materials are yttria-stabilized       manganite-based cathode-supported cells
zirconia (YSZ) for the electrolyte, lanthanum     with a 2.2mm wall-thickness. The cell tube is
strontium manganite (LSM) for the cathode         closed at one end. Typically, 50-90% of the
and nickel/zirconia cermet (Ni/YSZ) for the       fuel is utilised in the cell and gas exhausts at
anode. Planar SOFCs can either be self-           600-900°C, depending on the operating
supporting or external-supporting, and single     conditions. Cells have been electrochemically
cells can be designed as electrolyte-supported,   tested as the tubular cells have been
anode-supported, or cathode-supported. In the     developed, some for as long as eight years.
external-supporting arrangement, the single       These cells perform satisfactorily for extended
cell is configured as thin layers on the          periods of time under a variety of operating
interconnect or a porous substrate.               conditions with less than 0.1% per 1,000
                                                  hours performance degradation. The tubular
The planar cell design offers high power          SOFCs have also shown the ability to be
density but has the significant problem that      thermally cycled to room temperature from
high temperature gas seals are needed at the      1,000ºC over 100 times without any
edges of the plates to isolate the oxidant        mechanical damage or electrical performance
from the fuel. Difficulties in successfully       loss. Operation at elevated pressures (15atm.)
developing such high temperature seals have       yields a higher cell power at any current
slowed the development and use of planar          density, and permits higher stack efficiency
design cells for SOFC generators. However,        and greater power output. With pressurised
SOFC stacks in the 1-25 kW size utilising         operation, SOFCs can be successfully used as
planar cells are now being designed,              replacements for combustors in gas turbines
fabricated, and electrically tested. Also,        for SOFC/turbine hybrid systems.
power systems (up to several kilowatt size)
based on planar SOFCs have been                   The single biggest advantage of tubular cells
assembled and tested. These difficulties of       over planar cells is that they do not require
sealing associated with planar designs have       any high temperature seals to isolate oxidant
led to development of tubular designs.            from the fuel. However, the present Siemens
                                                  Westinghouse tubular manufacturing costs
Siemens Westinghouse Power                        are high and their real power density is lower
Corporation                                       (about 0.2W/cm2) compared to planar cells
Another SECA Industrial Team leader is            (from up to 2W/cm2 for single cells to at least
Siemens Westinghouse Power Corporation,           0.5W/cm2 for stacks). The volumetric power
which was unfortunately unavailable to meet       density is also lower than planar,
with the Mission team. However, it has            approximately 0.2kW/cm3 compared to
pioneered SOFCs since the 1960s and has           around 1kW/cm3 for close-stacked planar
become one of the most important players in       cells. For this reason, large diameter tubular
US SOFC development as a result. It is            SOFCs are mainly suitable for stationary
currently selling small-scale SOFC systems        power generation and not very attractive for
for integration into stationary uninterruptible   transportation and military applications.
power supplies (UPS) and                          Tubular SOFCs and stacks have been the
cogeneration/combined heat and power              most successful technically so far. Such cells
(CHP) demonstration systems.                      have run for several years, have proven
                                                  performance and have been demonstrated in
The Siemens Westinghouse tubular cells have       several locations in North America.
become longer (150cm) over a 15 year              Pressurised systems offer very efficient
development period and the diameter of the        power generation. On the downside are the
                                                                                                27
CANADIAN FUEL CELL MISSION



low power density, the long start-up times          Industrial Team leader, but was yet to sign the
(around seven hours) and the expensive              contracts with the DOE in June 2003.
process techniques. In stationary power
applications, large-scale systems around            Micro-tubular SOFCs are especially useful for
1MWe are now being made. Residential                small systems, giving both rapid start-up and
systems of around 5kW are now being                 high power density. The reason for this is the
produced in collaboration with the Canadian         small diameter of the tubes plus the low wall
company FuelCell Technology.                        thickness which prevent the build-up of
                                                    damaging thermal stresses. Start-up in one
UTC Power                                           minute is possible, and leaks can be
UTC Power is part of the United Technologies        prevented by bringing the micro-tubes
Corporation group and its fuel cell group –         through the insulation and sealing them in
UTC Fuel Cell – is primarily known for              the cold zone. On the negative side,
operating over 250 PAFC installations around        interconnection and assembly issues are
the world, including one at a leisure facility in   significant, and it seems likely that micro-
Woking in the UK. The capital costs of these        tubular systems will be especially applicable
systems remain high and are met largely by          in small portable systems.
government and private financing schemes
such as DoD schemes (see Section 9.3 and
Appendix H), which co-financed the Woking           DoD’s Fuel Cell Test and Evaluation Center
unit. SOFCs are being investigated as part of       (FCTec) – see Section 9.3 and Appendix H)
a SECA grant, although the project is very          Located at Concurrent Technologies
much at the research stage and few technical        Corporation’s Environmental Test Facility at
details were made available to the Mission          Johnstown, PA, this is a national resource for
team. However, the leader of the fuel cell          the independent, unbiased testing and
research team asserted that, because of the         validation of fuel cell power plants for military
high efficiencies that can be achieved when         and commercial applications. SOFC
operating in combined heat and power                demonstrations are planned but are less
applications, SOFC systems were the                 common than alternative systems despite
ultimate fuel cell technology.                      the acknowledged benefits. A key problem
                                                    with evaluating SOFC systems is the
Acumentrics Corporation                             commercial sensitivity of the technology;
Acumentrics is a profitable, distributed            therefore the DoD Climate Change Rebate
generation and power quality company of 90          Program is used to co-finance fuel cell
employees based in Connecticut. The                 projects in exchange for operational data.
company is developing micro-tubular SOFCs
based on the patents of Prof. K Kendall et al.      University of California, Davis – Institute
(now Birmingham University), purchased              of Transportation Studies
from Keele University in 2000. Direct internal      UC Davis primarily conducts a Fuel Cell
reforming allows the SOFCs to operate on a          Vehicle Modeling Program which is funded by
range of fuels including natural gas, propane,      a consortium of automotive and energy
methanol, ethanol and hydrogen.                     companies as well as three government
Investments in the company total $36 million;       agencies. Other activities include
these are derived from a combination of             development of catalysts and nanomaterials,
corporate (General Dynamics and                     energy cycle analyses and investigation of the
ChevronTexaco) and state government                 use of fuel cells for auxiliary power on trucks.
(Connecticut Clean Energy Fund) sources.            In a project supported by the South Coast Air
Acumentrics is a newly announced SECA               Quality Management District (SCAQMD), the


28
                                                                              CANADIAN FUEL CELL MISSION



California Air Resources Board (CARB) and
the DOE, UC Davis is developing an APU
system for use in diesel trucks.

University of California, Irvine – National
Fuel Cell Research Center (NFCRC)
Located at UC Irvine, the NFCRC is the
central academic research facility in California
for the demonstration and promotion of fuel
cell technologies. Limited research is focused
on stationary power and its role as a
distributed generation technology. While
some work is being done on fuel cell
components, most of the research is looking
at integration and infrastructure issues, such
as deployment and connectivity. This research
covers five areas: systems, operations; cycle
analyses, components and markets, and
SOFC research and demonstration projects
are ongoing.

University of Connecticut – Connecticut
Global Fuel Cell Center
This centre, recently founded with seedcorn
funding from the education and outreach            Research into solid oxide tubular technology at the
programme of the Connecticut Clean Energy          Connecticut Global Fuel Cell Center.
Fund (see Section 9.3), aims to be ‘a leading,
world-class centre in fuel cell research,          away. However penetration of new
design, education and training, and product        technologies into emerging markets is always
development’. Currently, research activity is      difficult to predict. It is possible that SOFCs
being undertaken on extrusion process for          will find niche and expansive new market
SOFC tubes, and the centre is anticipating         applications owing to their unique system
establishing facilities to undertake               characteristics.
characterisation and durability trials for
SOFCo and UTC Fuel Cells to augment                The primary challenge for SOFC
existing activity on direct methanol fuel cell     commercialisation remains cost. Currently,
(DMFC) technology for the US Army and              SOFC systems cost approximately,
PEM research activity.                             $4,500/kW (by comparison, diesel gen-sets
                                                   and gas turbines cost $500-800/kW). The
6.3 SOFC Commercialisation                         DOE’s SECA initiative has established an
                                                   ambitious target of reducing this cost to less
The debate on SOFC commercialisation               than $400/kW by 2010, while simultaneously
continues, but one thing is sure: Nobody can       improving efficiency, operability and
predict when SOFC commercialisation will           maintainability. This order of magnitude
occur, nor whether SOFCs will win out over         decrease in overall system costs will require:
competing fuel cell technologies or                • innovating smart SOFC system designs to
alternative technologies. Significant market          reduce costs;
penetration in existing markets is predicted –     • reducing the balance of plant costs;
with some agreement – to be some 10 years          • reducing manufacturing costs through
                                                                                                         29
CANADIAN FUEL CELL MISSION



  moving from small-to high-volume                   During the Mission, discussions took place
  manufacturing technology;                          with a number of companies and the DOE
• reducing the costs of the electrodes by            concerning the SECA cost targets. The SECA
  using cheaper alternative materials; and,          Program target dates for SOFC
• reducing interconnect material costs in            commercialisation are widely accepted
  planar designs.                                    amongst government, industry and academia,
                                                     although it is clearly recognised that the
In terms of use of alternative materials, it is      intermediate cost target for 2005 and, to a
anticipated that the cost of a SOFC stack            lesser extent, the long term target of
could be reduced by around $200/kW.                  $400/kW by 2010 are very challenging.
Reducing the temperature of operation from,
say, 800ºC to 700-750ºC would allow a                The EU and the USA have now signed a
broader range of materials to be used,               memorandum of collaboration allowing
enabling significant cost reductions:                international SECA collaborations on:
Conversely, new, lower cost materials may be
developed capable of operating at the                • APUs;
elevated temperature.                                • codes and standards;
                                                     • SOFC and high temperature fuel cell
The six SECA Industry Teams are each                   systems; and
developing different low cost manufacturing          • assessment of availability of essential
routes applicable to high volume production            materials.
(e.g. tape casting, screen printing, co-sintering,
two-stage sintering, stack extrusion, dip            While over 75% of the work (i.e. project
processing and plasma spraying). The SECA            spend) must be carried out in the USA, there
goal of $400/kW by 2010 (with $800/kW to be          is scope for UK companies to participate in
achieved by 2005) assumes a manufacturing            this programme.
capacity of over 50,000 units/year. As the
volume of production increases, costs are            In addition to SECA, various other US national
expected to fall in a linear manner.                 policies provide a stimulus and, in some cases,
                                                     potential funding for SOFC technologies. US
A study was conducted by Arthur D. Little in         policy initiatives in transportation, military and
2000 to investigate the likely cost of a             agriculture are all applicable to SOFCs for the
conceptual 5kW system design. While some             development of truck APU systems, small
of the assumptions made in this study are            portable SOFC devices and the use of biogas
open to argument, the study concluded that a         in SOFCs. The President’s FreedomCAR and
cost as low as $372/kW was achievable. The           Fuel Initiative, and FutureGen (both described
breakdown of this cost was:                          in Section 9.3 and Appendix H) are both
                                                     $1billion plus programmes that are potential
• 32% for the SOFC stack;                            sources of funding for SOFC development. All
• 32% for the fuel and air supply; and               are open to UK collaborating participants as
• 36% for the remaining balance of plant             subcontractors.
   (11% for controls and power electronics, 9%
   for reforming and desulphurisation, 5% for        At present, a $1,000/kW subsidy is available
   piping, 2% for insulation and 10% for labour,     from the DOE to encourage the deployment
   depreciation and other indirect costs.)           od SOFC systems. This provision looks likely
These study findings are similar to those of a       to continue under the new Energy Bill being
study undertaken by CERAM Research Ltd               considered on Capitol Hill. To date, this level
for the DTI.                                         of subsidy has not been sufficient to offset
                                                     the very high capital cost of SOFC systems.
30
                                                                        CANADIAN FUEL CELL MISSION



Furthermore, many state governments              considerably. SECA officials estimate that
provide funding to support SOFC research,        some 25MW of SOFC capacity will be in
principally for environmental and employment     place by 2012, with this rising to a ‘saturation
purposes, and many US SOFC companies             level’ of 40GW by around 2025. By
have benefited from these schemes                comparison, the California Stationary Fuel Cell
(including UTC [Connecticut Clean Energy         Collaborative, through its annual
Fund] and Acumentrics [Massachusetts             manufacturers’ survey in 2002, estimates that
Renewable Energy Trust]). Again, UK              some 600MW of capacity will be in place by
companies may collaborate, but the local         2005, with an estimated cost of $1500/kW.
emphasis of these policies is more               This latter estimate of installed capacity was
prohibitive.                                     regarded by the Mission team as unrealistic.

The California Stationary Fuel Cell              6.4 Key Points of Interest to UK
Collaborative supports pilot projects and
promotes stationary SOFC applications in         • SOFCs are seen as the ultimate fuel cell
California. This collaborative initiative is       technology by some US fuel cell
described in Section 9.3.                          companies (e.g. UTC) particularly in
                                                   stationary applications, due to the capacity
While commercialisation of SOFC systems is         for multi-fuel use and high efficiencies in
arguably some time away, some companies            combined heat and power (CHP) mode.
have begun to achieve ‘pre-commercial’ sales     • SOFCs are being developed for early
of SOFC products. Siemens Westinghouse             application in the vehicle auxiliary power
has contracts in place to sell and distribute      unit (APU), CHP and uninterruptible power
SOFCs for CHP applications for a series of         supply (UPS) system areas.
field trial demonstrations with FuelCell         • SOFC commercialsation in the USA of
Technology (Canada). UTC Power too predict         APU/CHP/UPS systems is targeted to be
the high-grade waste heat of SOFCs as a            around 2010 and market uptake is currently
large selling point enabling multiple SOFC         led by government-funded agency
CHP options. However, UTC Power                    schemes. Large-scale stationary
acknowledged that without a proven system,         applications are expected to emerge with
it is difficult to predict the other uses of       the development of MW-scale hybrid
SOFCs.                                             systems around 2015.
                                                 • The USA is currently the front-runner in
Acumentrics too has developed strategic            developing and commercialising SOFC
alliances with potential customers who are         technology. However, significant cost
able to buy and test units. The company is         reductions are necessary for SOFC
also pursuing both direct (to government,          systems to compete with alternative
retail and telecommunication sites for             technologies such as diesel gen-sets and
stationary power, and to automotive                gas turbines, this despite the
companies for auxiliary power) and indirect        environmental benefits delivered by
sales (through resellers/distributors of UPS       SOFCs. Costs need to be reduced from
and portable power and integrators for             current levels of around $4,500/kW down
deployable military applications).                 to less than $400/kW. While much of this
                                                   reduction can be achieved through volume
As a result of the uncertainty about when          manufacturing, major technology
commercial SOFC units will be available and,       challenges need to be addressed for
hence, what markets/technologies they will         certain company-specific technologies.
be competing in/with, estimates of the size of   • For this reason, a huge long-term
the overall market for SOFCs vary                  investment programme is ongoing in the
                                                                                               31
CANADIAN FUEL CELL MISSION



  USA to develop and commercialise fuel
  cell technologies, including SOFC. There
  are multiple schemes at the federal, state
  and private/charitable level. Some schemes
  are open to UK scientists and companies,
  and the UK supply chain appears to be
  able to benefit initially. However, longer-
  term security in the supply chain is
  unknown with the threat of subordination
  to the customer through strict licensing
  agreements. Based on the example of
  vehicle manufacture, non-specialist
  suppliers are likely to be sourced in lower
  cost countries over time.
• The size of the market for SOFCs in the
  short-, medium- and long-term is the
  subject of much debate. The SECA
  estimates of 25MW and up to 40GW of
  installed SOFC capacity by 2012 and 2025
  respectively were considered realistic.
• The UK science base is enormously
  respected in the USA. This means that UK
  scientists will continue to have
  opportunities in the USA and there is huge
  potential for an accelerated brain-drain in
  the coming years to fulfil the US fuel cell
  industry employment demand.
  Alternatively, there is an opportunity to
  promote and capitalise on the British
  science base abroad while securing UK
  companies, technologists and IP through
  targeted funding.
• The US SECA Program offers an
  outstanding example of how to
  communicate politico-technical goals to
  SOFC scientists, combining political
  commitment and financial support, with
  operational transparency and flexibility.
  Similarly structured research programmes
  are widely used in the USA in other areas
  of science. The process tries to promote
  cooperation and competition (‘co-
  opetition’) between researchers in
  academia, national research laboratories
  and industry.




32
                                                                                 US FUEL CELL MISSION



7 FUEL CELL STACK TECHNOLOGY –
  PROTON EXCHANGE MEMBRANE
  (PEM) FUEL CELL SYSTEMS
  Dennis Hayter, Intelligent Energy
  Bozkurt Aydinoglu, Voller Energy

7.1 Introduction                                   Current PEM systems generally divide into:
                                                   • from around 10W to 800W for battery
The USA has been a leader in the                     replacement, portable and standby power
development of fuel cell technology and PEM          applications;
systems since the first applications were          • from around 1kW to 25kW for portable
developed for space and military purposes in         and stationary power systems (and
the 1960s (See Appendix F for a summary of                                          ,
                                                     combined heat and power, CHP or co-
fuel cell technologies under development).           generation) for domestic or commercial
PEM fuel cell technology is based around an          requirements; and
electrochemical process to generate                • from around 25-30kW to up to 250kW for
electricity and heat by passing hydrogen and         motive power generation.
air through the fuel cell’s catalytic membrane.
The resulting systems (see Section 8.4) are        Among companies in the USA with PEM
relatively small and lightweight, operate at       interests, the Mission visited Anuvu Fuel Cell
low temperatures (up to 85°C) and emit             Products, Ford Motor Company, General
power, heat and water as the only products         Motors Corporation (GM), Plug Power,
of their electrochemical process.                  Teledyne Energy Systems and UTC Fuel
                                                   Cells. Of these, Ford is not a PEM developer
PEM technology has a number of key                 in its own right; it has halted its own earlier
attributes in terms of mass, power density,        development activities and works now
efficiency, start-up time and ability to load      exclusively with Ballard Power Systems of
follow. This means that PEM systems are            Canada for the supply of PEM fuel cell
highly suited to automotive and motive             engines which are then integrated into
power applications, together with a range of       various hybrid vehicles. Conversely, GM
stationary power applications. They also have      develops its own PEM based engines for
useful attributes for portable and ‘personal       automotive integration and is also now
power’ applications due to their availability in   pursuing stationary power applications.
lightweight materials.
                                                   Teledyne and UTC Fuel Cells are senior
PEM technology is now relatively mature in         players with well established activities,
stack design, with varying approaches taken        diverse fuel cell portfolios and advanced
by different developers to bipolar plate and       market positions, partly as a reflection of their
flowfield design, use of metallic and non-         military product supply involvement. Each has
metallic plates and other available stack          one or more PEM products in its line-up that
materials to achieve high power densities.         are ‘commercially’ available today. Plug Power
The recent and continuing focus for PEM            is focused on one sector alone – distributed
developers has been on integration of              generation for domestic and commercial
complete systems for specific applications         power and CHP systems. Anuvu has
and the use of advanced materials and other        developed stacks which are offered for supply
approaches to increase performance,                to integrators and has systems for
durability and reliability, at lower cost.         automotive and marine applications.



                                                                                                  33
US FUEL CELL MISSION



The following reviews the activities of these    Anuvu also undertakes contract development
PEM companies (in alphabetical order) in         and is currently involved in the development
terms of corporate background,                   of a fuel cell water taxi, which will also utilise
products/technology and approach taken to        a set of four 1.5kW stacks. A fuel cell ferry is
commercialisation. Lessons to be learnt for      also scheduled as a later project and is to be
the UK are also considered.                      based on a 250kW propulsion system using
                                                 12kW stacks as a base stack building block.
7.2 PEM Products and Market Focus
                                                 Ford Motor Company
Anuvu Fuel Cell Products                         Ford does not directly develop its own fuel
Anuvu is a privately funded firm based in        cells but has an exclusive agreement with,
Sacramento, California, with 20 employees.       and a major equity stake in, Ballard Power
Although the firm’s founders have worked         Systems. Ford supplies the fuel cell balance
with various technologies, including solar       of plant and undertakes the systems
gen-sets and fuel reforming, the main focus      integration covering the battery system,
at present is on PEM stack and system            regenerative braking, electric powertrain and
development, with specific designs worked        traction module, and hydrogen storage.
up to proof of concept stage.
                                                 Ford has been involved in fuel cell vehicle
Anuvu’s core technology is its ‘Power-X’         prototypes since the early 1990s. It has
water cooled PEM stack, which uses non-          worked with various Ballard PEM-based stack
metallic bipolar plates and reinforced MEAs,     and system designs of around 70kW, and has
with metallic end-plates. The basic stack        developed a series of vehicles involving
building block is capable of 1.5kW peak or       different combinations of battery technology
1kW at a constant operating point. There are     (currently using Ni-MH) and re-generative
plans to provide a 3kW stack by the end of       braking systems/traction motors, controllers,
2003 and a 12kW stack in 2004. Anuvu             etc. This has resulted in a new vehicle
considers its stack technology to be ideal for   system every year since 1998.
replacement of conventional batteries.
                                                 With few exceptions, these vehicles have
Anuvu’s stacks are currently supplied at a       been based on gaseous hydrogen as the on-
fixed price point of $5,000 per stack            board fuel. Ford considers that any fuel
($3,500/kW). Typical customers were              reforming will be done off the vehicle and is
indicated to be research and educational         an issue that will be addressed by entities
institutions.                                    that will be ‘somewhere between
                                                 conventional fuel companies and utilities’.
The company undertakes systems
development for proof of concept                 Ford’s interest in fuel cells is purely in the
applications in the automotive sector. In this   automotive context – ‘sustainable mobility
context, it has developed a ‘clean urban         technologies’ – that will keep the company at
vehicle’ using four manifolded 1.5kW stacks      least on par with other auto OEMs in the
to operate as a battery electric vehicle re-     move to widespread supply of zero emission
charge and range extender. The proof of          vehicles. It has predominantly worked on
concept vehicle used is a re-engineered          hybrid propulsion, but has also considered
‘standard’ station wagon with 600lb of lead      the development of APUs (approximately
acid batteries. A hydrogen storage cylinder is   5kW), in conjunction with Visteon, for
fitted in the luggage compartment.               premium/luxury vehicles which can spend
                                                 relatively long periods with their engines The


34
                                                                        CANADIAN FUEL CELL MISSION




Mission team examines one of Ford’s fuel cell    • Quantum Technologies for hydrogen
powered vehicles.                                    storage and vehicle integration.
                                                 It is also working with Toyota on a pre-
idling. An APU could provide sufficient power    commercial basis across areas of general fuel
to keep heating, cooling and other systems       cell-related research.
running, without the need for the main           GM’s primary technology development focus
engine to operate.                               is around fuel cell integration on board
                                                 vehicles. This covers:
General Motors Corporation
GM has developed its own fuel cell               • systems packaging and interface issues
technology for vehicle propulsion, with the        (e.g. with DC-DC converters to take
current ‘engine’ based on a 75kW stack of          current off the stack, to supply at 12V for
approximately 200 cells. This has been             standard systems and 42V for new
integrated this into a variety of demonstrator     equipment);
vehicles (e.g. a fuel cell Zafira).              • cold start capabilities (the company has
                                                   achieved cold starts down to -20ºC);
GM has two US locations for fuel cell            • use of wheel hub motors versus
technology development (in New York State          conventional powertrains;
and California) and additionally utilises:       • air and thermal management; and
                                                 • hydrogen supply (both compressed and
• fuel cell technology from Hydrogenics            liquid storage).
  Corporation of Canada (GM has a 23%
  equity investment in Hydrogenics with a        Significantly, GM stated that it is not working
  corporate alliance for technology transfer     on hybrid fuel cell plus battery electric
  and joint development, engineering,            systems, but has moved direct to primary
  branding and marketing of fuel cells);         fuel cell propulsion (‘there are no battery
• Giner for electronics systems; and             packs involved – why complicate it’). It was
                                                                                               35
US FUEL CELL MISSION



further stated that it is not pursuing APUs for   Plug Power’s primary facilities are in Latham
vehicles (have to be competitive with internal    (NY): comprising 50,000sq ft of production
combustion engines and auto sector price          plant and the home base for 90% of its 350
points) and nor is it considering SOFC as an      employees (the balance being in the
alternative to PEM for auto applications.         Netherlands where the focus is on fuel
It has, however, looked at non-automotive         reforming technology and systems
sector applications in distributed generation     development). The company has two core
and has recently announced an agreement           products aimed at different segments of the
for the supply of multiple PEM systems to be      stationary power market:
installed at a Dow petro-chemical plant in
Texas. These would utilise surplus hydrogen       • GenSys: integrated systems that operate
generated as a by-product of refining as the        on natural gas (or LPG where there is no
primary fuel.                                       natural gas network), and combine fuel
                                                    processor, power generation, power
Plug Power                                          electronics and thermal management
Plug Power was formed in 1997 as a joint            modules. These 5kWe units are designed
venture between Edison Development                  for residential or commercial CHP markets
Corporation (a utility) and Mechanical              – either for primary power supply (grid
Technology Inc. In 1999 General Electric (GE)       independent) in remote locations or grid
took a 10% stake in the firm and created a          parallel for power on demand, standby and
strategic relationship in purchasing, supply        UPS provision.
chain, marketing and distribution activities.
Plug Power focuses on the design,                 • GenCore: 5kW systems combining stack,
development and production of PEM                   power conditioning and thermal
systems for stationary markets with light           management modules, together with
industry and residential complex distributed        gaseous compressed hydrogen storage in
generation applications. Its main product is a      a single insulated cabinet for back-up and
fully integrated, grid parallel 5kW system that     UPS power needs. These are targeted in
operates on natural gas.                            the short term at the telecommunications
                                                    and cable communications sectors as well
Plug Power recently (end 2002) acquired H           as UPS applications across industry and
Power which had been developing similar             commercial sectors. These segments are
systems for distributed generation. In              considered to be less concerned with the
addition to GE, the company has strategic           technology and more concerned with
relationships with:                                 standby/UPS power provision where
                                                    battery reliability is questionable.
• Vaillant GmbH of Germany – as a co-
  developer for domestic CHP systems;             To date, Plug Power has accumulated a
• Honda R&D Co. – for a domestic CHP              deficit of $256 million in product
  system that generates hydrogen in off-          development activities and has supplied 127
  peak periods to provide a ‘home refuelling’     systems. Between January 2002 and March
  capability for fuel cell vehicles;              2003 Plug systems generated 2 million kW
• Engelhard Corporation – for development         hours of heat and electricity. Its largest recent
  and supply of advanced catalysts to be          order was from the Long Island Power Utility
  used in the fuel processors; and                for 45 units at a cost of $3 million. This is part
• Celanese GmbH – for development of high         of a programme to enhance local power
  temperature MEAs.                               supply and is part funded by the New York
                                                  Clean Energy Initiative. The systems are sited


36
                                                                               US FUEL CELL MISSION



outdoors and supplied with natural gas from       awarded a multi-year $1 million contract from
the main pipeline network. They are               NASA in 2001 for the development of a
monitored and managed remotely with               hydrogen/oxygen PEM system for the
software and controls.                            Reusable Launch Vehicle which will be the
                                                  replacement for the existing Space Shuttle
Plug Power’s activities with Vaillant are for     fleet. This has resulted in the recent delivery
development of grid-connected indoor CHP          of four 5kW demonstration units with all
units for single/multiple residential dwellings   components and controls to allow unattended
and commercial premises. Plug’s focus is on       operation and testing against simulated flight
energy and hot water management, with the         profiles.
fuel cell peak load following.
                                                  TES has also developed a prototype 3kWe
Teledyne Technologies Inc. – Teledyne             stationary power plant with standard pipeline
Energy Systems                                    grade natural gas as the fuel. This is aimed at
Teledyne Technologies Inc is a major US           remote residential and standby/UPS
aerospace, defence and energy firm with           applications.
5,300 employees and a turnover of $770
million. Teledyne Energy Systems (TES) was        In the automotive sector, TES has developed
created by the merger of Teledyne                 a propulsion system for small fuel cell plus
Technologies Energy Systems and Energy            battery electric vehicles (the John Deere
Partners Inc.                                     ‘Gator’) and larger battery electric passenger
                                                  cars (the Chevrolet Lumina). However, this is
TES is majority owned by Teledyne                 not a primary target market and the auto
Technologies Inc. and is a global supplier of     sector is seen as likely to be increasingly
hydrogen and oxygen gas generator systems,        controlled be a few large suppliers, such as
including hydrogen re-fuelling stations,          Ballard Power Systems. Its focus will
thermoelectric products for active heating        therefore remain on the ‘more profitable’ high
and cooling in extreme conditions, and fuel       reliability, high systems integrity power
cell testing equipment. Energy Partners was       markets in the aerospace and defence
a developer and supplier of PEM fuel cells,       sectors, with its hydrogen/oxygen systems as
and its activities in stacks, systems and         a technology differentiator.
components have been added to the TES
portfolio.                                        UTC Fuel Cells
                                                  UTC Fuel Cells (previously known as
TES has developed PEM systems for both            International Fuel Cells) is part of United
motive and stationary power applications.         Technologies Corporation (other divisions
They are relatively unique in their fuel design   include Carrier, Otis, Sikorsky, Pratt &
flexibility, covering pure hydrogen and dilute    Whitney and Hamilton Sundstrand, together
hydrogen (from reformed hydrocarbon fuels),       comprising a $29 billion turnover
with oxidants of either air or pure oxygen.       conglomerate).

Its hydrogen/oxygen systems provide access        UTC Fuel Cells has a technology portfolio that
to specialist closed environment power            includes AFC, PAFC, MCFC and SOFC
supply – for submarine, submersible               systems, as well as PEM systems. Its PEM
unassisted vessels (UAVs), space,                 systems were first developed for on-board
underground and other applications where          electricity for Apollo space missions in the
atmospheric air is not readily available. The     1960s and are now focused on automotive
largest TES stack size provides 55kW peak         and stationary power applications. Its
power on hydrogen/oxygen. TES was                 automotive PEM systems for passenger
                                                                                                37
US FUEL CELL MISSION



vehicles are based on a 75kW stack                 are scheduled (in Vancouver, with five
operating under ambient (un-pressurised)           vehicles and under the DOE’s five-year
conditions. These are supplied under               programme).
development agreements to Hyundai, Nissan
and Renault. As a bus fuel cell engine, two        Ford considers that there are key institutional
75kW stacks are integrated for transit bus         barriers to be addressed concerning
vehicles, as installed by Thor Industries in the   hydrogen storage on board vehicles and
USA and Irisbus in Europe.                         associated infrastructure barriers concerning
                                                   hydrogen generation and supply at the local
Its ongoing development targets cover three        level. Here the company has experienced a
areas:                                             diverse approach to the interpretation and
                                                   application of local regulations for hydrogen
• extending operational lifetime (which is an      generation, storage and transfer by local Fire
  MEA durability issue being addressed with        Departments.
  Johnson Matthey, and is influenced by
  start/stop cycles with low and high loads);      Beyond that, Ford is focusing on continuing
• system control and mitigation to cope with       PEM technology integration and interface
  freeze and thaw conditions; and                  issues, together with the early development
• system costs.                                    of a manufacturing strategy. For the future,
                                                   the various options for packaging fuel cell
7.3 PEM Commercialisation                          vehicles (i.e. with no drive lines, belts,
                                                   pulleys, etc. but electronic controls and
The firms involved have quite different            systems management) will have significant
approaches to commercialisation and, partly        implications for the manufacture and
as a reflection of corporate heritages and         assembly of fuel cell engines and
strategies for technology portfolio                powertrains, as well as other vehicle
development and roll-out, differing                components.
perspectives on timing and focus.
                                                   General Motors Corporation
Anuvu Fuel Cell Products                           GM also acknowledges that
Anuvu, the smallest of the PEM developers,         commercialisation is still some years away,
is effectively passive in ‘market making’. It      although has recently announced that it
has its stacks as core products and is             intends to have 10,000 FCVs in the market by
prepared to supply these on a commercial           2010 with an incremental cost of $5,000-
basis. The company will undertake contract         10,000 per vehicle compared to conventional
development of specific systems for mainly         internal combustion engine vehicles. GM
motive power applications and will, therefore,     have the aim of taking vehicle purchase and
move in line with the overall market.              production decisions out of the
                                                   environmental arena. It is GM’s goal to be the
Ford Motor Company                                 first mover in the fuel cell automotive market,
Ford acknowledges that commercialisation of        and demonstration projects are key to its
fuel cell passenger vehicles is some way off       further development plans. These include a
and has pursued market development                 six vehicle public-use project in Washington,
through a series of prototype, proof of            DC, and GM’s key role in the DOE’s $300
concept, cars. These have helped the               million vehicle demonstration project.
company to ensure that it learns through
running small numbers of each generation of        The level of funding from the DOE is
vehicle – and that its competitors do not get      considered a departure from previous policy,
too far ahead. Further vehicle demonstrations      which saw a wider dispersion of funds but, in
38
                                                                                    US FUEL CELL MISSION



the view of GM, resulting in little in the way     taking advantage of state initiatives (e.g. Texas)
of major technology breakthroughs. Some            as well as DoD demonstration and buy-down
twenty US state governments are particular         funding of PEM systems. If the proposed
proponents of fuel cell technology                 Energy Bill, is passed, then Plug Power will
development and deployment but, in GM’s            have access to tax credits worth $1,000/kW of
view, do not have ‘serious money’ for support      stationary fuel cells installed. The same Bill
and instead work with tax rebates, offsets,        would seek to set uniform interconnect
land grants and research grants.                   standards and net metering requirements.

Hydrogen production and storage is a national      In Europe, Plug Power and Vaillant have
issue; in GM’s view, hydrogen should be            installed 13 domestic heating systems under
‘undeclared’ as a hazardous product and            an EU ‘Virtual Power Plant’ programme.
should be treated as a conventional fuel.
Codes and standards should be templated for        A barrier to technology adoption identified by
convenience of interpretation and application      Plug Power is the relationship with the utility
both nationally and locally, and federal           operating the local network; the utility can
agencies should be directed to utilise fuel cell   impose significant constraints on installation
technology in their operations.                    and grid interconnection arrangements.
                                                   Essentially, if the utility is not ‘friendly’, it can
Plug Power                                         block the development of fuel cell-based
Plug Power has undertaken continuous               distributed generation.
improvement to its PEM systems for
stationary power and distributed generation        Teledyne Energy Systems
markets. It has adopted a modular system           TES takes a divergent view to demonstration
architecture with a view to design                 projects – which it considers to just result in
simplification and significantly reduced unit      accelerated cash burn. Instead, the company
cost, weight and parts count. Early commercial     will develop its PEM technology only for
markets being targeted are back-up and             markets and applications which have reached
standby power (for the likes of the                an advanced state of readiness. Given its
telecommunications sector), UPS across             background, this would imply specialist
multiple sectors and remote residential power.     defence, space and aerospace segments,
                                                   together with specific industry segments,
Strategic partnerships (with GE, Vaillant, Honda   where its hydrogen/oxygen systems have
and others) are a key to both rapid product        unique advantages for power supply in
development and accessing specific market          enclosed areas.
opportunities that Plug Power’s partners can
provide in the USA and Europe. In particular,      TES has the advantage of a portfolio of
the company’s distribution agreement with GE       products and technologies which enables it to
Fuel Cell Systems provides GE with worldwide       attain economies of scale in R&D and
rights (with the exception of four US states) to   selective development of PEM systems as
market, distribute, install and service Plug       demand matures. It is also prepared to make
Power’s PEM systems for stationary                 acquisitions to strengthen or widen its PEM
applications, with Plug Power being the            technology base or enter specific markets.
exclusive supplier to GE.
                                                   UTC Fuel Cells
Field demonstrations of product lines are          UTC has taken advantage of US Federal
considered an essential means of influencing       Government and state support for installation
government and consumer perceptions of fuel        and demonstrations of PEM systems over a
cell technology. In the USA, Plug Power is         number of years. It observes that early funding
                                                                                                      39
US FUEL CELL MISSION



of demonstrations is vital, as 95% of the issues        • strategic partnering, alliances, joint
around the application of the new technology              venturing based development and supply
come from operational experience in the field –           agreements.
for both stationary and motive power
applications. However, it also notes with the           Continuing issues that PEM developers face
extent of state interest in attracting and              include:
promoting fuel cell technology and development
activities (and university research centres) in its     • Fuel source and infrastructure – Gaseous
region, there is a significant risk of ‘distraction’.     hydrogen has been and remains the
                                                          primary fuel approach (only GM has opted
UTC echoes the point made by Plug Power                   to utilise both gaseous and liquid hydrogen
concerning the potential barrier which                    storage options). Most of the companies
incumbent utilities represent; these need to              visited have worked with (or developed
be part of the process of fuel cell-enabled               proprietary) fuel processing technology for
distributed generation – if such generation is            integrated power supply products,
seen as a threat, they will fight any move                primarily using natural gas and LPG as
towards it.                                               reformate fuel sources. Hydrogen
                                                          refuelling stations are a current focus of
Codes and standards are a continuing issue                development and seen as a means of
in product design and installation, as are                supporting the roll-out of PEM vehicles.
interconnection issues for grid-embedded                • Systems integration – With the exception
systems. In particular, UTC would like to see             of Anuvu, which offers to supply stacks
ANSI and CE standards aligned so that more                only, all firms have focused on fully
product can be supplied into Europe without               packaged systems. Own development and
need for exceptional checking throughout                  strategic partner or/and supplier
system construction and assembly.                         development have been required to obtain
                                                          core components and related balance of
7.4 Key Points of Interest to UK                          plant and other sub-systems. This has
                                                          created a strong supplier base. System
These firms represent some of the world’s                 integration, product packaging and remote
leading players in PEM for their specific                 systems control and monitoring is now a
applications (automotive, stationary and                  core expertise of the PEM majors.
aerospace/defence), with established                    • Codes and standards – Although these
development, prototyping, production and                  cause problems, the variability of
roll-out/demonstration processes. Excluding               interpretation and application has not
Anuvu, each has indicated a significant                   prevented product development or product
corporate resource commitment to long term                demonstration and application so far. It
technology development and accepts that                   may, however, impact on wider technology
fully commercial applications are at some                 roll-out.
distance into the future. Product                       • Utilities and distributed generation – Grid-
development, prototyping and product                      embedded distributed generation can be
enhancement have been driven through                      blocked or significantly slowed if utilities
predominantly internal funding, but with                  are not ‘on side’ in the deployment of fuel
additional support derived from:                          cell power plant systems.
                                                        • Cost, performance and durability –
• government buy-down grants and tax                      Although PEM system costs are still high,
  incentives (Federal and State);                         performance (load following, ability to deal
• defence related and military programmes;                with freezing conditions, duty cycle
• national R&D funds/programmes; and                      reliability under part and full loads, etc.)
40
                                                                                US FUEL CELL MISSION



  and durability are as important in achieving       achieving these objectives than multiple
  competitiveness with incumbent                     small projects with limited funding levels.
  technology. Gaining field-based operational    •   Support programmes to create market
  experience is critical in moving to the next       demand and move PEM products into
  iteration of product design and integration;       wider use are also critical; buy-down
  it is for this reason that demonstration           grants and tax credits can be a significant
  programmes have typically been sought              determinant in deciding to install PEM
  and promoted by PEM developers.                    systems. Furthermore, the use of
                                                     government purchase of fuel cell systems
The key lessons for the UK and potential             to emphasise acceptance of the
users of PEM systems and packaged                    technology could be a further stimulus as
products are:                                        part of a package of support initiatives.
                                                 •   Publicly supported R&D, materials
• There has been significant and continuing          development and testing facilities (and/or
  investment in building PEM technology              university centres) that provide low cost
  capabilities over many years and this has          space and support services (such as
  created and sustained a supply base of             hydrogen and other fuel supply, computer
  related materials, components and sub-             simulation, non-destructive testing, etc.)
  assembly items around stacks, balance of           have supported the overall pace of PEM
  plant, electronics/power conditioning, fuel        and related technology development. (At
  processing and hydrogen storage                    present, there are no similar facilities in
  technologies.                                      the UK). However, the activities of some
• The focus of PEM development is on fully           36 states in promoting and attracting fuel
  integrated, often modular, systems that are        cell development (see Section 9.3) has
  lighter, achieve better performance and            been viewed by some as diluting attention
  have higher power densities and better             and effort in moving PEM technology
  durability than in the past. Other                 forward; not all can be the national centre
  requirements are the ability to achieve cold       of excellence in fuel cells.
  start and operate in ‘extreme’ conditions,     •   Codes and standards have not so far been
  while being remotely monitored and                 a significant barrier, but could delay
  controlled.                                        commercialisation if national and
• PEM systems are near to being                      international institutions are not aligned or
  commercially competitive in the USA for            aware of the extent to which barriers may
  applications such as remote power supply,          be created or reinforced.
  standby power and UPS. The price               •   Utilities are in a position to prevent or at
  differential for defence and aerospace             least hinder the creation of fuel cell-based
  applications makes these a continuing              distributed generation. Uniform
  focus for development and supply of                interconnection and net metering
  specialist products.                               standards are essential.
• Demonstration programmes are essential
  instruments for achieving product
  validation and next stage product
  enhancement. They also promote
  customer and public awareness and help
  to develop supporting infrastructure and
  appropriate codes and standards.
  Significantly, fewer and larger
  demonstration projects with ‘serious’
  funding support may be more effective in
                                                                                                 41
US FUEL CELL MISSION



8 FUEL CELL SYSTEMS, INTEGRATION                 coming to market 2-4 years later, when it
  AND APPLICATIONS                               may displace PEM in some markets,
  Dave McGrath, siGEN                            particularly applications where the heat
  Anthony Marrett, Microponents                  produced will be useful (e.g. distributed
                                                 generation via CHP). The Mission also
8.1 Introduction                                 covered DMFC technology for low power
                                                 battery replacement to some extent, and
This Section discusses the issues and trends     MCFC technology was mentioned. UTC Fuel
emerging around fuel cell generators and         Cells’ PAFC technology is to be phased out in
systems; it restricts itself largely to PEM      favour of its PEM technology, and Energy
technology, as this is by far the most           Conversion Devices seems determined to
developed of the technologies seen and           continue to produce AFCs.
closest to commercialisation. However, there
is also reference to SOFC and MCFC.              The USA has an incredible legacy in fuel cells
                                                 as a direct result of NASA’s programmes. This
All fuel cell applications must:                 dates back to the late 1950s and was manifest
                                                 at Teledyne Energy Systems and UTC Fuel
• be met and serviced by complete installed      Cells. The intellectual capital, experience and
  and commissioned fuel cell systems;            know-how provide a tremendous competitive
• comply with all applicable codes and           advantage. The older companies visited are
  standards for the location in which they are   much more measured in the pace and take a
  fitted; and                                    more pragmatic business view: However,
• be supported throughout their lifetime with    across the board the fuel cell euphoria has
  in-field service and fuel supply, as well as   been displaced by sober realisation that
  eventually disposal (which may include         commercialisation is an imperative.
  partial recycling).
                                                 There is strong evidence of the emergence
Therein lies enormous value added economic       of traditional manufacturing and trading
activity.                                        approaches in the industry as it begins to
                                                 scale up for production. This is described in
The opportunities for fuel cells broadly         more detail below.
encompass:
                                                 A full description of the fuel cell supply chain
• displacement of any combustion engine,         can be found the in Appendix G. In summary,
  from the smallest portable generator to        it comprises the following elements, with each
  the massive standalone generator (up to        step representing a value added opportunity:
  several MW);
• displacement of large sections of battery      • Raw chemicals and compounds.
  technology, from portable hand-held            • Membrane electrode assemblies (MEAs)
  devices to large battery banks; and              and flow-plates, made up from the raw
• battery augmentation products.                   materials above.
                                                 • Stack – an assembly built up of series of
However, these very opportunities present an       MEAs and flow-plates with end-plates and
enormous threat to indigenous technology           manifolds/connectors.
supply bases.                                    • Generator – a stack surrounded by balance
                                                   of plant to control stack inputs and
In the USA, the dominant technologies              outputs.
emerging are PEM and SOFC. PEM is                • Installed end-user system – see Section
expected to commercialise first, with SOFC         8.4 below.
42
                                                                                US FUEL CELL MISSION



During each value added process additional        balance of plant. This serves to control the
components are added, assembly costs are          input to and output from the stack, as well as
incurred and the component progresses to          the overall performance of the generator.
the next stage in the supply chain. In            Further details can found in Appendix G. The
addition, there is typically a mark-up of 50-     provision of balance of plant components and
100%, which contributes towards the               equipment is considered an important area of
company’s overheads, R&D/product                  emerging opportunity.
development, marketing/selling, distribution
and profit. At each stage a three- to five-fold   The key observations relating to fuel cell
increase in product value can be expected.        generators derived from the Mission are:

8.2 MEA and Stack Developments                    • Production costs are on the way down,
The focus for MEA development is on                  Plug Power has reported costs reduction
optimising performance, reliability and the          of one third for each of the last two years
costs of production. A 10:1 reduction in fuel        and predicts a further reduction of one
cell stack costs has been defined as a target        third for the next product iteration.
over a 10 year horizon by General Motors,         • Simpler balance of plant and, thus, cost
and there is evidence this will be achieved.         and reliability gains are clearly occurring in
                                                     current and next generation products.
Particular attention is being given to new        • Design for assembly is emerging.
manufacturing techniques and processes as a       • Generator footprint and weight is reducing
means of reducing cost; in particular:               dramatically.
                                                   • There is a focus on product reliability,
• New systems are being developed for                design for production/field service, driving
  stack and MEA manufacture (e.g.                    out production costs and product
  continuous production).                            standardisation.
• Novel construction techniques are               • Certification of products is a key issue to
  addressing both carbon monoxide                    enable commercialisation, and is being
  intolerance in PEM units and platinum              addressed quickly.
  loading reduction.                              • Product standardisation is occurring and
• Approaches used in other industries (e.g.          discussions on interface standardisation
  semi-conductor and micro-electronics) are          are starting.
  being adopted (e.g. the use of thin film        • The supply chain structure is maturing with
  manufacturing techniques for high                  the result that some manufacturers are
  temperature SOFC plates).                          concentrating on their core generator product
• New approaches are being taken with                rather than complete end user systems for
  materials (e.g. the introduction of dopants        onwards sale to OEMs (e.g. Plug Power,
  to the membranes, higher temperature               Anuvu, etc.). These manufacturers are looking
  PEM cells, and nanostructure design).              for OEM customers.
                                                  • Conversely, manufacturers are depending
These types of developments provide many             increasingly on expert suppliers for
opportunities for companies supplying into the       generator system components and making
sector, and materials and MEA companies are          less and less themselves.
beginning to generate revenues.                   • An increasing number differing generator
                                                     products is becoming available.
8.3 Fuel Cell Generators                          • The early emergence of volume
                                                     manufacturing infrastructure and the
In basic terms, a fuel cell generator                establishment of lean manufacturing
comprises a fuel cell stack and associate            processes are apparent.
                                                                                                 43
US FUEL CELL MISSION



• Volume production is coming within view.              • According to UTC Fuel Cells (and in the
• Manufacturing strategies are becoming more              context of PAFC), the bulk of system
  in-line with traditional industrial practice. (Fuel     failures were associated with balance of
  cell companies previously often felt that they          plant.
  were best placed to make everything; now              • There are continued reductions in total
  they are moving towards vendors to supply               system size, footprint and weight (and,
  components and sub-systems to clearly                   thus, costs).
  defined specifications).                              • Most systems have the capacity to be
                                                          monitored and controlled via the internet.
8.4 Fuel Cell Systems                                   • There is more frequent use of
                                                          hydrogen/oxygen systems, mainly for
A fuel cell system comprises the fully                    NASA applications but also for some sub-
installed unit delivering power to the end-               sea applications.
user. Further details are provided in Appendix          • Federal Government/state support is still
G.                                                        required to achieve early breakthroughs
                                                          (occurring in abundance in the USA).
A vertically integrated company such as UTC             • The overall focus is on system reliability.
Fuel Cells provides the complete system,
whereas others, such as Plug Power, offer               System Fuelling
the generator to other systems integrators.             A broad spectrum of system fuelling options
The customer does not care what is ‘inside              is available and under development. Options
the box’ so long as it meets the technical,             for established technologies include:
environmental, safety, reliability and
performance specifications and there is an              • Pressurised hydrogen is widely used, with
after-sales support service in event of a                 10,000 psi accepted as the norm by many
problem.                                                  players (e.g. Quantum, Ford, GM).
                                                        • LNG and LPG are being used as
General Observations                                      reformates for PEM, with low-sulphur
A number of general system observations                   diesel under development. However, the
were derived from the Mission visits and                  auto industry is moving away from on-
discussions:                                              board reformates in favour of high
                                                          pressure hydrogen.
• An absence of OEM takers and systems                  • Gaseous refuelling stations are being
  integrators represents a major barrier to               installed, particularly by the California Fuel
  progress.                                               Cell Partnership, which has both fixed and
• Possible deployment paths for fuel cell                 portable facilities.
  systems are shown in Figure 4.1. The early            • Much attention is being given to home
  focus is on niche markets to generate                   refuelers: However, at present these
  sales, experience and early volumes.                    remain very large, very bulky and
• Increasing numbers of systems are being                 expensive.
  deployed and this is helping to gather                • HydrogenSource and Teledyne Energy
  performance data.                                       Systems anticipate volume hydrogen
• Although certification of installations is              production from LNG and electrolysis.
  irregular, this is being addressed.
• Operating temperature performance was a               Further details can be found in Section 5.
  revelation, with stated operation ranges
  starting from as low as minus 40-50ºC:                Increasing attention is being given to
  Normally, it is assumed fuel cells need to            alternative fuel sources, particularly digester
  operate above 0ºC.                                    sourced methane. For example:
44
                                                                                US FUEL CELL MISSION



• UTC Fuel Cells has fuel cell systems               typically APUs for trucking and shipping
  installed employing a variety of fuel              refrigeration plant; and
  sources, including anaerobic digesters.          • Heat and power – Domestic CHP systems
• California sees the increasing use of              (5kW).
  digesters as a mechanism to recover the
  innate energy content of organic waste.          8.5 Development Status and
• The use of renewable energy sources,                 Opportunities
  particularly wind, is on the increase.
                                                   Possible introduction points for fuel cells are
Chemical carriers were less in evidence.           discussed in Section 4.3. Most observers
                                                   agree that the market development path will
System Innovation                                  be dictated by installed cost/kW.
A spectrum of systems is being researched
and developed and becoming available.              Demonstrations
Systems innovation is focusing on maximising       The USA has developed a great legacy of
the technologies’ capability, efficiency and       experience from installed systems across the
flexibility, with engineers identifying novel      nation and internationally. This field
applications and opportunities often               experience is feeding back into the design
unrecognised by the original inventors.            cycle and offers the USA a significant
Underlying this trend is the acceptance that       competitive advantage. Examples of
the underlying technology works.                   current/planned demonstrations include:

The most cited system developments centre          • 127 Plug Power 5kW systems;
on maximising the use of electrical and            • 260 UTC Fuel Cells PAFC units world-wide;
thermal energy. Heat from the fuel cell can        • 10 residential 5kW SOFC for the South
be used for:                                         Coast Air Quality Management District
                                                     (SCAQMD);
• space heat;                                      • five 25kW APUs for ‘Class 8’ Trucks for the
• water heat;                                        SCAQMD;
• to produce steam (from high temperature          • 1.2MW MCFC system for California Cast
  fuel cells, e.g. SOFC and MCFC);                   Metals;
• for cooling fluids for refrigeration, freezing   • 150kW UTC PEM system for Disney World
  or air conditioning; and                           for the SCAQMD;
• for generating electrical power.                 • CARB supported funding for 250 cars in
                                                     California by 2008;
Evidence of the following was observed:            • SunLine Transit battery fuel cell hybrid bus
                                                     in fare paying operation, with seven further
• Electrical power – Fuel cell and gas turbine       buses planned (three with Ballard stacks
  for distributed generation (150kWe fuel cell       and four with UTC stacks); and
  +50kWe turbine);                                 • military funding of tactical and non-tactical
• Electrical power plus subsidiary heat –            applications, primarily for battery
  Industrial applications remote from grid (5-       replacement.
  150kW);
• Electrical power plus subsidiary cooling –       As discussed elsewhere (see especially
  Fuel cell and absorption chiller (150kWe         Section 9.3) levels of public sector funding for
  fuel cell +40kWe turbine);                       demonstrations are high and considered
• Heat plus subsidiary electrical power (6kW       essential to help accelerate the commercial
  to 1MW);                                         breakthrough required for this industry.
• Refrigeration – Fuel cell chiller and heater,    There appears to be no state aid limitations
                                                                                                 45
US FUEL CELL MISSION



like the ‘EC State Aid’ rule limitations             existing workforce is more than adequate to
imposing restrictions on companies and               meet this need. Risks to operatives, service
organisations in the USA. EC state aid rules         technicians and the public are being designed
harshly limit state aid available to companies       out of products and systems. In many
in the EC particularly SMEs. Absence of such         instances, the intention is that overseas
restrictions in the USA heavily advantages US        partners will receive training as part of the
companies.                                           package from the US companies as
                                                     distribution channels develop.
Standards
A common thread through many of the                  Education
discussions during the Mission was the issue         A number of key universities have been
of codes and standards. This could become a          central to this industry since its inception in
critical milestone in fuel cell roll-out (see also   the late 1950s. These and others are
Section 7). Many existing codes and                  recognising the emerging new energy
standards were not devised with fuel cells in        paradigm and the opportunity that this
mind and require adaptation. Harmonisation           represents. Some imaginative initiatives are
of standards is another issue, which has yet         coming forward in response to industry
to be resolved.                                      demand. Specifically:

Key points arising from the Mission were:            • Demand is rising for undergraduate
                                                       programmes in universities.
• Alignment of ANSI and CE standards is              • In response, undergraduate programmes
  recommended.                                         are developing quickly across all
• Manufacturing and interface standards are            universities visited.
  required.                                          • There is an increasing interest in systems
• Performance standards, which are higher              engineering and applications.
  than necessary, act as a barrier to                • However, it also appears that education is
  commercialisation.                                   starting right back in the high schools.
• Hydrogen should be un-declared as a
  hazardous material and treated as a fuel           8.6 Key Points of Interest to UK
  gas.
• A national template for codes and                  Summary of the US Situation
  standards should be developed.                     • The USA’s strong historical legacy plus
• As new technologies and product/system               current resources provide a massive
  configurations are emerging, existing                competitive advantage.
  classifications are inappropriate. This leads      • The industry is beginning to emerge into
  to a possible need for new agencies.                 the volume production, and the business
• Emergency response guides are being                  model is changing.
  developed in California.                           • The industry is maturing fast; while this
• Training of fire departments helps to build          may not be as fast as some would like, it
  their support for fuel cell roll-out.                is perhaps faster than the auto industry
• Education and training of local inspectors           suggests.
  will be essential.                                 • Companies with the longest pedigrees
                                                       seem least anxious to rush to market and
Training                                               will only do so profitably.
In order to support installed fuel systems,          • Consolidation is beginning to occur.
field service training is clearly an important       • The pace of development is accelerating
issue. US companies met during the Mission             rapidly.
seemed comfortable that training of the
46
                                                                             US FUEL CELL MISSION



• US manufacturers are reaching out across         simple contract builders opportunities are
  the world seeking partners to take forward       available. This could increase the
  their technologies internationally.              throughput and utilisation of existing
• Federal Government and state support for         fabrication capacity in UK manufacturers.
  demonstrations is still considered essential     The manufacturing skills of UK fabricators
  and it is being supplied.                        can be applied effectively to fuel cell
                                                   systems design driving out production
UK Opportunities                                   costs.
There are many opportunities throughout the      • System Integration: This is a weakness
value chain for UK manufacturers. However,         across the board. The UK has a very good
to realise these, UK companies must                opportunity to fill this space in companies
proactively seek them out from the USA; the        like siGEN.
USA will not seek out the UK companies. It       • Codes and standards: These are extremely
is the responsibility of UK companies to           important and there is ample opportunity
establish relationships, promote skills and        for the UK to play its part in their
draw the opportunities to themselves. If UK        establishment and implementation.
companies do not act quickly the opportunity     • Field deployment and service: As products
will pass them by.                                 are deployed in the field there will be
                                                   increasing opportunities for training and
Key areas of opportunity are:                      field service support.

• Chemicals and MEAs: The UK already has         Although only covered to a limited degree,
  a relatively strong position with              DMFC technology is at a state of
  established players such as Johnson            development which means that opportunities
  Matthey and Morgan Fuel Cell. UK semi-         still remain throughout supply chain.
  conductor industry may find new
  opportunities emerging from the work at
  Albany Nanotechnology on thin film
  fabrication of MEAs.
• Component Supply: A wide range of
  components required in generator and
  system manufacture could be provided by
  UK companies. Microponents, for
  example, has customers worldwide.
• Stack Manufacture: Although opportunities
  remain in this area, the space is becoming
  crowded, and the US knowledge legacy is
  a major barrier to entry. Intelligent Energy
  is well placed here. However,
  opportunities still remain here for larger
  companies of substance with IPR and
  know how readily available.
• Generator Manufacture: Many companies
  are offering stacks to UK companies. The
  UK has a presence in Intelligent Energy
  and Voller, but there is space for many
  more players.
• Licensing/Partnering: Stack, generator or
  system manufacture under license or
                                                                                              47
US FUEL CELL MISSION



9 FINANCIAL SUPPORT FOR FUEL                             down to levels where they are competitive
  CELLS AND HYDROGEN                                     with those of conventional technologies a
  TECHNOLOGIES                                           large amount of further capital will need to be
  Bruce Jenkyn-Jones, IMPAX Asset                        found. This is notwithstanding the progress
  Management                                             that has been made and is described in
  Philip Sharman, DTI - International                    earlier sections of this Report.
  Technology Promoters
                                                         A substantial amount of the funding will need
9.1 Introduction                                         to come from governments and the Mission
                                                         saw how the USA is responding to this
Financial support for companies engaged in               challenge. Beyond that, the private sector
developing and commercialising fuel cells and            sees fuel cells and hydrogen as an exciting
hydrogen technologies can come either from               growth area for the future where there
private sector investment (i.e. cash-flow from           should be an opportunity for risk-tolerant
corporate parents, capital raised in public              investors to make good returns. This Section
markets or venture capital) or from public               reviews the current perspectives of the
sector support (i.e. Federal Government                  financing groups involved in the US fuel cell
agencies or state/local government). Very                industry.
often the necessary financial support comes
from both these routes together, i.e. through            During the Mission, three investment groups
public-private partnerships.                             from the private sector were identified as
                                                         investing in the fuel cells and hydrogen sector:
This Section of the Report addresses these
two routes for financial support.                        • cash-flow from corporate parent;
                                                         • funding from public markets; and
9.2 Private Sector Financing and Venture                 • funding from venture capital/angels.
    Capital
                                                         Table 9.1 lists the main companies that were
Overview                                                 either visited or spoken to according to these
‘… no point trying to play this game                     three categories.
unless you have very deep pockets…’
This was the brutal (and perhaps self-serving)           In striking contrast to three years ago, when
assessment by a major US automotive                      public markets and venture capital groups
company of the capital requirements for new              invested over $1 billion in fuel cell and
entrants seeking to get involved in the                  hydrogen companies in the USA, the biggest
emerging fuel cell and hydrogen markets.                 investors are currently the large corporations
Although billions of dollars are being spent in          who see the sector as a new extension to
the sector, in order for the costs to come               their existing business.

Cash-flow from corporate            Funding from public markets        Funding from venture capital/angel
parent
Ford Motor Company                  Energy Conversion Devices          Anuvu Fuel Cell Products

General Motors Corp.                Plug Power                         Electrochem

Teledyne Energy Systems             Proton Energy Systems              Mechanology

UTC Fuel Cells                      Quantum Technologies               ZTEK Corporation

Table 9.1 – Financing of Companies Visited During the Mission

48
                                                                                   US FUEL CELL MISSION



Cash-flow from Corporate Parents                     and the increased support from new
As is well documented, fuel cells have               companies getting involved in the sector and
important stationary, portable and automotive        bringing fresh capital to particular areas of the
applications that will impact activity in a number   value chain. Two recent examples in the USA
of key sectors, including transportation, energy,    are Entegris (bipolar plates) and Modine
utilities, defence, and electronics. The             Manufacturing (heat exchangers); both are now
incumbent companies operating in these               offering new products to the fuel cell market.
markets see fuel cells as both a threat and an
opportunity. For this reason many are investing      The UK’s involvement in the fuel cell industry
substantial capital in order to secure first mover   has, until recently, principally been via the
advantage or just to maintain a foothold in this     route of large corporate companies investing
emerging technology.                                 cashflow in this new growth area. Johnson
                                                     Matthey, Rolls-Royce, Porvair, Morgan
Although detailed budget information was not         Crucible, and Victrex are all well-known in the
available from the companies visited, the            US fuel cell market and are using cash from
overall annual budget of these companies can         more established businesses to develop fuel
be assumed to run well into the several              cell and hydrogen technologies.
hundreds of millions. The companies stated
that the recent downturn in the economy in           Public Markets
general, and the automotive sector in particular,    The public markets’ willingness to finance the
had not diverted funds from this important           fuel cell and hydrogen economy has changed
investment area which is still, in many cases,       dramatically since the technology boom of
categorised as research and development.             2000; since then the focus has shifted to
                                                     profitable, cash-generating companies and
The large corporate companies visited all have       ‘concept’ stock has fallen out of fashion. The
their own fuel cell programmes; the Mission          enthusiasm for fuel cell investing in the USA
team heard a number of examples of risk-             began in the fourth quarter of 1999 with the
sharing for the development of specific              initial public offering (IPO) of Plug Power. This
technologies and it was interesting to learn of      was followed by several other alternative
the different ‘bets’ that companies are making       energy companies in both the USA and Canada,
regarding the future evolution of the hydrogen       all of which raced to very aggressive valuations
economy. (It should be noted that virtually all      buoyed first by the technology euphoria and
of these corporate programmes benefit from           later by the California energy crisis.
matched funding through public-private
partnerships). One interesting example is the        The boom rapidly turned to bust in line with
financing of HydrogenSource as a joint venture       the overall equity market, and this was
between UTC Power and Shell Hydrogen to              exacerbated by the failure of the alternative
develop reformer technology (See Section 5.2         energy companies, in general, and fuel cells,
for further details). UTC Power has also been        in particular, to find short-term markets for
working with two UK companies (Porvair and           their products. The fall in the share prices
Johnson Matthey) to develop bipolar plates           coincided with the realisation that the
and membrane electrode assemblies.                   companies would need to raise more capital
Meanwhile General Motors, since it started           to fully-finance their business plans which, in
working on fuel cells, has made equity               turn, further depressed the share prices.
investments in a number of companies which
it describes as ‘best in class’ (See Section 7.2).   The bottom of the market for fuel cell
                                                     companies was reached in October 2002.
Both UTC Fuel Cells and General Motors               Since then, share prices have picked up first
commented on the ‘rapidly growing’ industry          along with equity markets in general and then
                                                                                                    49
US FUEL CELL MISSION



as a result of President Bush’s State of the            conditions. Table 9.2 lists the main North
Union address and the announcement of a                 American-quoted fuel cell companies
proposed $1.7 billion budget for fuel cells and         (including Hydrogenics Corporation and Ballard
hydrogen. The largest independent fuel cell             Power Systems from Canada), describes the
company, Ballard Power Systems (Canada),                business and cash position and indicates how
has since raised $100 million on the equity             they have responded to the changing market
markets. This is the first substantial public           environment. The responses can be divided
equity funding of a fuel cell company since             into four categories depending on the
2001 and effectively defined the bottom of              strength of the business and cash position:
the market.
                                                        • Acquire cash through purchase of weak,
Overall, the WilderHill Fuel Cell Index                   cash-rich company (e.g. Plug Power’s
(www.h2fuelcells.org/wh_index) has risen to               acquisition of H Power).
93.0 (4 September 2003) which represents a              • Acquire profitable, cash generating
42% rise since September 2002 but still a fall            company (e.g. Proton Energy System’s
of over 75% from the peak. The public                     acquisition of Northern Power Systems).
markets continue to be an uneasy place for              • Focus on profitable parts of fuel cell value
fuel cell companies to raise capital, and, even           chain (e.g. Hydrogenics Corporation).
following the August 2003 black-outs in the             • Restructure and cut costs (all companies).
USA, there is little possibility of a ‘fuel cell
IPO’ in the current climate unless the                  The table demonstrates the dramatic change
company has substantial revenues and is                 that has taken place since 2000 when capital
close to cashflow breakeven.                            was cheap, components were developed in-
                                                        house, every market was addressed, revenue
With the market unwilling to finance fuel cell          expectations were huge and capital-raising
companies, pure-play companies have been                was not an issue. From an investor point of
changing their strategies to fit the market             view, the pain of ‘concept’ stocks lingers on:


Company                  Business          Cash position      Strategic Action

Ballard Power Systems    Mixed             Weakening          Cut costs/restructure, raise $100 million
(Canada)

Energy Conversion        Slower            Weakening          Cut costs, buy out partners, seek
Devices                                                       to raise capital

FuelCell Energy          Delayed orders    Strong             Cut costs, expand technology portfolio by
                                                              acquiring a SOFC company

Hydrogenics Corp.        Good              Average            Focus on profitable markets (e.g. testing)
(Canada)

Plug Power               Some delays       Weak               Cut costs, acquire H Power for cash, seek to
                                                              raise more capital

Proton Energy Systems Product failure      Strong             Acquisition of profitable company and dividend
                                                              payout

Quantum Technologies     Good              Weak               Develop cash-generating consultancy business,
                                                              raise capital

Table 9.2 – Strategic Actions of North America-Quoted Fuel Cell Companies to Weak Public Markets
                                                                                    US FUEL CELL MISSION



The hydrogen economy still has a conceptual         This group of investors have invested in many
feel and will continue to do so until an            of the ‘first wave’ of fuel cell and hydrogen
increase in revenues and progress towards           companies that have made the transition to
profitability are apparent.                         the public markets in the short window of
                                                    2000/01, so there is a track record in the
Effectively what has happened in the last 12        sector. The main focus of the venture capital
months is an evolution of the US fuel cell          houses has been in the micro fuel cell and
industry as the stronger companies survive          stationary applications as the time horizon for
while the weaker companies (without the             automotive is thought to be too long term.
required technology, capital and management
skills) have disappeared. This leaves a more        In the last 18 months, these groups have not
robust sector in the USA that is more likely to     participated in any new fuel cell and hydrogen
find support as the industry develops. This is      investments. However, in the last nine
not the case in the UK, where there still is no     months, a small number of hydrogen-related
fuel cell company quoted on the public markets.     investments, two of which (H2Scan and Avista
                                                    Labs) have been led by the Canadian VC firm
Compared to the USA, the UK has a higher            Chrysalix, have occurred. In both cases the
proportion of specialist funds in the alternative   transaction was supported by more generalist
energy and environmental area including             VC firms in the USA, indicating the value of a
Merrill Lynch New Energy and IMPAX                  specialist fund and its ability to catalyse deals.
Environmental Markets as well as Jupiter,
Morley and Henderson who all have dedicated         The sector is well supported by the CleanTech
funds for investment in environmental and           Venture Network which coordinates the
socially responsible investment.                    investors and others with young companies
                                                    operating in the clean technology sector.
Venture Capital                                     CleanTech currently hosts two North
The market for venture capital (VC) in the          American Venture Forums annually which are
USA has some links to the public markets            a showcase for venture-grade, emerging clean
and venture capitalists look to the IPO as one      technology investment opportunities. It also
way of achieving an exit from an investment.        provides information related to clean
With the public markets being weak and with         technology venturing in its quarterly
the focus turning to companies with strong          publications which includes deal tracking, deal
revenues and cashflows, the contribution of         profiles, international activity and a first look at
venture capital to funding the fuel cell sector     some of the most promising technology
was very low in 2002 but is showing some            areas. The network is valued by the main
signs of improvement in 2003.                       energy technology VC firms.

There has been a long history of venture            As with the public markets, the UK does
capital investment in the alternative energy        have a network of venture capital groups that
sector since the 1980s. The groups with             are focussed on the fuel cell and hydrogen
exclusive funds for alternative energy are          sector including the Carbon Trust, Conduit
Arete Corporation, Nth Power, Enertech and          Ventures and Core Technology Ventures.
Rockport Capital. In addition, there are larger     Mainstream groups such as Apax are also
venture capital houses (e.g. Perseus Capital,       interested in the sector. However, it is still
Advent International, and Zero Stage Capital)       the case that there is not a venture capital-
that have individuals that specialise in the        backed fuel cell company in the UK which is
alternative energy sector. None of these            important to demonstrate to other investors
groups have an exclusive focus on the fuel          that fuel cells and hydrogen can be profitable
cell and hydrogen sector.                           and provide momentum for the sector.
                                                                                                     51
US FUEL CELL MISSION



9.3 Government Support                              US Federal Government Activities
                                                    A significant number of US Federal
As has already been described in Section 4.2,       Government agencies are directly involved in
many of the drivers for the wider adoption of       supporting fuel cells and hydrogen
fuel cell technologies and, in the longer term,     technologies:
a hydrogen economy have major significance
at a ‘national/state’ level, as well as a           • US Department of Energy (DOE)
commercial/company level. As a result, the          • US Department of Defense (DoD) and The
US Federal Government and many state                  Defense Advanced Research Projects
governments have become increasingly                  Agency (DARPA)
involved in supporting the development of           • National Aeronautics and Space
both fuel cell and hydrogen technologies.             Administration (NASA)
                                                    • US Department of Transportation (DOT)
A number of the US Department of Energy’s           • US Department of Commerce (DOC) –
(DOE’s) national laboratories are actively            National Institute for Standards and
involved in R&D in these areas, with this             Technology (NIST)
work often being directly associated with           • US Environmental Protection Agency (EPA)
federally funded programmes. Likewise, a            • National Science Foundation (NSF)
large number of universities are pursuing           • National Park Service.
scientific investigations, basic research and
applied R&D – often in conjunction with             Clearly, with so many federal bodies involved
industry and federal programmes.                    in this field, coordination is necessary to
                                                    optimise the value extracted from public
In addition, the roles of industry organisations    expenditure. While this has been achieved, to
such as the US Fuel Cell Council (USFCC) and        a large extent, in the past, the huge increase
the National Hydrogen Association (NHA)             in expenditure called for in the last year, and
have been critical in coordinating industry         the launch of several new initiatives, will
views and advising the Federal Government.          require greater coordination in the future.

This part of the Report draws on meetings held      Detailed descriptions of ongoing (and, in
during the course of the Mission with the DOE,      cases where relevant, recently closed
the US Department of Defense (DoD),                 predecessor) federally-funded programmes,
Concurrent Technologies Corporation (managers       together with web addresses, are presented
of the US DoD’s Fuel Cell Evaluation and Test       in Appendix H. The ongoing programmes and
Center), the California Air Resources Board         initiatives are summarised below.
(CARB), the California Fuel Cell Partnership, the
Connecticut Clean Energy Fund, the Los              Department of Energy Programmes
Angeles Department of Water and Power               As a result of the technical barriers and high
(LADWP), the New York State Energy Research         investment costs that have largely prevented
and Development Authority (NYSERDA), the            fuel cells from being economically
New York State Office of Science, Technology        competitive with existing energy
and Academic Research (NYSTAR), the South           technologies, the DOE has had a number of
Coast Air Quality Management District               active programmes supporting R&D in the
(SCAQMD), the USFCC, the Breakthrough               area of hydrogen technologies (since 1978)
Technologies Institute/Fuel Cells 2000 and the      and fuel cells (since 1984). Programmes
NHA to describe the Federal Government, state       associated with transport applications
governments, institutional and academic             generally fall within the remit of the Office of
community’s support for fuel cell and hydrogen      Energy Efficiency and Renewable Energy
RD&D and deployment.                                (EERE), while those associated with
52
                                                                                   US FUEL CELL MISSION



stationary power generally come under the               and other research institutes, as well as at
Office of Fossil Energy (FE).                           traditional and non-traditional automotive
                                                        industry suppliers.
The number of programmes, together with
the manner in which they are often presented            DOE funding for the FreedomCAR
in conjunction with other programmes (or                Partnership is $74.5 million in financial year
parts of programmes) to form initiatives, as            (FY) 2003, with a request made for $91.1
well as recent re-alignment/re-organisation of          million in FY 2004.
programme structures and budgets, all
makes for a complex picture. Within this              • The 21st Century Truck Partnership
detailed picture, it is difficult to get an overall     This partnership, launched in 2000, is a
perspective on how much is actually being               cooperative effort among key members of
spent in total on fuel cell and hydrogen                the heavy vehicle industry, truck
technologies, and how this overall budget is            manufacturers, hybrid propulsion
divided between fuel cells (in turn broken              developers, engine manufacturers and
down into transport and stationary power)               several federal agencies.
and hydrogen.
                                                        The aims are similar to the FreedomCAR
The following paragraphs are an attempt to              Partnership, but focused on enhancing
do this; in order to be concise, only brief             technologies for heavy vehicles to improve
overviews of the existing programmes and                safety, efficiency and environmental
initiatives are given. Further details can be           performance. Ultimately, the Partnership
found in Appendix H.                                    seeks to develop trucks and buses that
                                                        use sustainable and self-sufficient energy
The importance of DOE’s activities in                   sources, thereby enhancing the industry’s
supporting fuel cell and hydrogen                       competitiveness.
technologies cannot be overstated. The level
of funding and the cooperative partnerships             DOE funding for the 21st Century Truck
created through DOE projects, programmes                Partnership is $70.1 million in FY 2003,
and initiatives, are some of the most                                                 .5
                                                        with a request made for $57 million in FY
significant factors positioning the USA in the          2004.
forefront of developments in these areas.
                                                      • FreedomCAR and Vehicle Technologies
• FreedomCAR Partnership                                (FCVT) Program
  The FreedomCAR (Cooperative Automotive                Launched in 2002, the FCVT Program is,
  Research) Partnership was launched in                 essentially, a bringing together of the
  2002 (building on several previous                    FreedomCAR Partnership, the 21st
  programmes). The partners in                          Century Truck Partnership and various
  FreedomCAR are DOE and USCAR, a joint                 other activities in other EERE programmes
  venture formed by Ford, General Motors                of relevance to fuel cells and hydrogen
  and DaimlerChrysler.                                  technologies.

   Activities focus on collaborative, pre-              The FCVT Program aims to expand its
   competitive, high-risk research to develop           emphasis on energy storage and materials
   affordable passenger cars and light trucks.          technologies critical for fuel cell and hybrid
   This includes relevant work on                       internal combustion engine (ICE)/electric
   manufacturability and hybrid electric                vehicles to include: new propulsion and
   vehicle (HEVs). R&D activities are being             light weight materials for fuel cell and
   funded at national laboratories, universities        ICE/electric hybrid vehicles; and an
                                                                                                    53
US FUEL CELL MISSION



     increased emphasis on long-term energy            see below). This sum is split into $5.0
     storage concepts.                                 million for coal-to-hydrogen activity, and
                                                       $6.5 million for gas-to-hydrogen activity.
     The ‘other’ elements from EERE                    Similarly, the DOE’s Office of Nuclear
     programmes that are included in the FCVT          Energy (NE) has requested $4.0 million for
     Program are receiving $8.9 million of             the hydrogen production aspects of it’s
     federal support in FY 2003, with a request        ‘GEN4’ programme (see below).
     for $9.0 million in FY 2004. This means
     that the FCVT Program has a total federal       • The President’s FreedomCAR and Fuel
     budget of $153.5 million in FY 2003 and is        Initiative (also known as the Hydrogen Fuel
                      .6
     requesting $157 million in FY 2004.               Initiative)
                                                       President Bush, in his January 2003 State
• Hydrogen, Fuel Cells and Infrastructure              of the Union Address, proposed an
  Technologies (HFC&IT) Program                        initiative to reverse the USA’s growing
  The HFC&IT Program was launched in                   dependence on imported oil by developing
  2001 and replaced a number of previous               hydrogen and fuel cell technologies and
  programmes (i.e. the Fuel Cells for                  infrastructure for transportation and
  Transportation, Fuel Cells in Buildings and          electricity generation.
  DOE Hydrogen Programs).
                                                       The Initiative’s goal is to enable automotive
     The programme supports and directs R&D            manufacturers and the energy industry to
     and validation of fuel cell (systems, sub-        make commercialisation decisions
     systems and components) and hydrogen              regarding fuel cell vehicles and hydrogen
     (production, delivery and storage)                infrastructure in 2015, thereby ensuring
     technologies for transportation and               that fuel cell vehicles (FCVs) are
     stationary/distributed power generation           commercially available in car showrooms
     applications. It aims to overcome the             and, equally importantly, hydrogen is
     technical, economic and institutional             available at fuelling stations by 2020.
     barriers to hydrogen and fuel cell
     commercialisation, and works with the             President Bush proposed an overall $1.7
     national laboratories and industry partners       billion for FCV and hydrogen fuel R&D over
     through public-private partnerships and           the next five years. This effectively
     demonstrations. Codes and standards,              comprises $1.2 billion for fuel cells and
     safety and education and public outreach          hydrogen (including the FreedomCAR
     are also addressed.                               Partnership and HFC&IT Program with
                                                       $0.72 billion of new funding, and $0.5
     The DOE’s budget for the HFC&IT                   billion for hybrid vehicle technologies R&D
                                      .4
     Program for FY 2003 totals $97 million            (existing activity, including activities on bio-
                               .5
     (broadly divided into $57 million for fuel        derived liquid fuels, lightweight vehicles,
     cells and $39.9 million for hydrogen), with       etc.).
     a request made for FY 2004 amounting to
     $165.5 million (broadly divided into $77  .5      The Initiative consists of accelerated,
     million for fuel cells and $88.0 million for      parallel track R&D and validation activities
     hydrogen).                                        for hydrogen production, hydrogen storage
                                                       and fuel cells. In addition, cross-cutting
     In addition, the DOE’s Office of Fossil           activity will be supported, including analysis,
     Energy (FE) has requested for FY 2004             development of codes and standards,
     $11.5 million for hydrogen-related activities     validation of fuel cells and hydrogen
     in it’s work programmes (i.e. ‘FutureGen’ –       infrastructure, vehicle and hydrogen fuelling
54
                                                                             US FUEL CELL MISSION



‘learning’ demonstrations (the subject of a        IEA and through the proposed
current DOE Solicitation with a budget of          development of an international forum on
$150-240 million over five years), linkages to     hydrogen – an ‘International Hydrogen
stationary fuel cell R&D, etc.                     Economy Partnership’. It is understood that
                                                   this international partnership will be
Also included in the Initiative are relevant       established later in 2003.
activities being undertaken through
programmes of DOE’s Office of Nuclear            • Office of Fossil Energy Stationary Fuel Cell
Energy and Fossil Energy. In NE, a                 Program
hydrogen production from nuclear power             This aim of this programme, operating
with cogeneration programme, ‘GEN4’,               since the mid-1970s, has been to develop
has been proposed, with a Solicitation of          power units for centralised and distributed
$1 billion over ten years. In FE, a                generation applications, and for auxiliary
programme to develop a zero-emissions              power applications. Such units may be
coal plant to generate hydrogen and                used on a stand-alone basis, integrated
electricity, ‘FutureGen’, has been proposed,       with other generators (hybrid systems) or
with a Solicitation of a further $1 billion        connected into the electricity grid.
over 10 years. The budgets requested for
these activities for FY 2004 are presented         The Stationary Fuel Cell Program includes:
under the description of the HFC&IT
Program budget above.                              – a Systems Development sub-programme
                                                   (focusing on large scale, second
The total proposed budget for the                  generation high temperature fuel cells
FreedomCAR and Fuel Initiative for FY              such as MCFC and SOFC systems for
2004 is $273 million. This sum is made up          central/distributed power) – budgets of
of the $182 million budget requested for           $9.9 million and $6.0 million for FY 2003
the HFC&IT Program ($77    .5m fuel cells          and FY 2004 (requested) respectively;
component and $104.2m hydrogen                     – Vision 21 Hydrids sub-programme (fuel
component – including the NE and FE                cell/turbine hybrid systems) – budgets of
additions), plus the $91.1 million requested       $13.4 million and $5.0 million for FY 2003
by the FreedomCAR Partnership.                     and FY 2004 (requested) respectively;
                                                   – an Innovative Concepts sub-programme
Coordination with other Federal agencies           (the Solid State Energy Conversion Alliance
is particularly important for an initiative on     – see below) – budgets of $33.8 million
this scale and this will be achieved through       and $23.5 million for FY 2003 and FY 2004
the formation of a Task Force led by the           (requested) respectively; and
White House Office of Science, Technology          – an Advanced Research sub-programme
and Policy (OSTP). In addition, state and          to identify new, innovative electrochemical
local governments will be involved in              technology concepts and address cross-
developing codes and standards, public             cutting high temperature electrochemical
education and field validation trials.             issues – budgets of $3.5 million and $10.0
                                                   million for FY 2003 and FY 2004
International collaboration is also seen as        (requested) respectively.
important. Energy Secretary Spencer
Abraham, speaking at an International              The total budget for the Stationary Fuel
Energy Agency (IEA) Ministerial event in           Cell Program in FY 2003 is $60.6 million,
April, stated that international cooperation       with the original budget requests for FY
will be actively encouraged through the            2004 amounting to $44.5 million (as
pre-competitive R&D programmes of the              shown above). However, indications are
                                                                                               55
US FUEL CELL MISSION



     that the overall programme will receive at        the world. The sourcing of hydrogen from
     least $60 million and possibly up to $68          indigenous coal will help the USA in terms
     million, with all sub-programme areas             of energy security.
     continuing to be funded at around the
     2003 levels or higher.                            The prototype will establish the technical
                                                       and economic feasibility of flexibly
• The Solid State Energy Conversion Alliance           producing electricity and hydrogen from
  (SECA)                                               coal while capturing and sequestering the
  SECA, part of the Stationary Fuel Cell               CO2 generated in the process. The project
  Program (see above), was formed in 1999              will be supported by activities under the
  as an alliance between government,                   DOE-managed President’s Coal Research
  industry and academics to promote the                Initiative – particularly the Clean Coal
  development of SOFC technology for                   Power Initiative (a $2 billion, 10-year
  virtually all markets requiring clean,               programme) and the DOE’s Carbon
  affordable and reliable electric power. The          Sequestration Program – as well as work
  programme aims to produce a core solid-              being undertaken by the DOE FE’s
  state fuel cell module (3-10kW) that can be          Stationary Fuel Cell Program (including
  mass produced at a cost of no more than              SECA) on fuel cell/turbine hybrids.
  $400/kW, thus enabling it to compete with
  gas turbines and diesel generators from              The project will require 10 years to complete
  2010. As the market grows, unit costs will           and will be led by an industrial consortium
  be reduced as high volume manufacturing              representing the coal and power industries.
  technologies are used (>50,000                       Other countries will be invited to participate
  units/year). SECA has established a target           in the FutureGen demonstration project
  of 25MW of installed power by 2012, and              through a recently inaugurated Carbon
  a ‘saturation’ level of 40GW by 2025.                Sequestration Leadership Forum, of which
                                                       the UK is a member.
     The programme is structured into an
     ‘Industry Group’ (six projects currently        DOE’s National Laboratories
     accounting for around 60% of the SECA           Research and development activity in support
     budget, i.e. around $20 million/year) and a     of various DOE programmes is undertaken at
     ‘Core Technology Program’ (currently 45         a number of the DOE’s national laboratories,
     projects).                                      notably: Argonne National Laboratory (ANL),
                                                     Illinois; Lawrence Berkeley National
     SECA is a key part of the larger fossil fuel    Laboratory (LBNL), California; Lawrence
     energy programmes. SECA’s 2005, 2010            Livermore National Laboratory (LLNL),
     and 2015 aims are designed to coordinate        California; Los Alamos National Laboratory
     with a series of other activities culminating   (LANL), New Mexico; National Energy
     in a hybrid-based plant design under            Technology Laboratory (NETL),
     ‘FutureGen’ (see below) by 2015.                Pennsylvania/West Virginia; National
                                                     Renewable Energy Laboratory (NREL),
• The Integrated Sequestration and                   Colorado; Oak Ridge National Laboratory
  Hydrogen Research (‘FutureGen’) Initiative         (ORNL), Tennessee; and Pacific Northwest
  The $1 billion FutureGen Initiative is a           National Laboratory (PNNL), Washington
  Federal Government sponsored (80%)                 State.
  project to develop a coal-fired, zero
  emission, electricity and hydrogen                 Further information on activities undertaken
  producing prototype power plant that will          at these laboratories is given in Appendix H.
  be the cleanest coal-fired power plant in          Department of Defense Programmes
56
                                                                                 US FUEL CELL MISSION



In order to maintain an effective and              user of fuel cell power in the USA, with units
efficient military, there is a requirement for     operating in hospitals, mess buildings and
different power source technologies for            barracks throughout the country. This
different applications. This ranges from           utilisation has helped to start reducing the
<10W power units for hand-held weaponry            costs of fuel cell systems and increase levels
and communication devices, up to MW-               of confidence in certain markets.
scale power plant for ships and
submarines. In all cases, the power                Detailed descriptions of ongoing DoD-funded
technology must be compact, lightweight,           programmes, together with web addresses,
rugged, quiet and have a low thermal               are presented in Appendix H. These ongoing
signature and low emissions. Furthermore,          programmes and initiatives are summarised
since fuel typically represents around 70%         below:
of the weight of materials moved in a
military operation, any increase in fuel           • The US Army Engineer Research and
efficiency is important.                             Development Center’s Construction
                                                     Engineering Research Laboratory
Any new power source technology must be              (ERDC/CERL) Fuel Cell Program
capable of operating from the current range          ERDC/CERL, the US Army Corps of
of defence logistics fuels. Fuel remains a           Engineers’ R&D organisation based at
central challenge to DoD, with the concept of        Champaign, Illinois, has a number of
a single, non-petroleum based battlefield fuel       activities under its Fuel Cell Program.
(e.g. hydrogen) high on the agenda.                  These can be summarised as:

For all these reasons, fuel cell and hydrogen        – The DoD Fuel Cell Test and Evaluation
technologies are of considerable interest to         Center (FCTec ) (est. 1999): a collaboration
DoD and all the Armed Services it controls.          between ERDC/CERL and Concurrent
                                                     Technologies Corporation (CTC) for the
Fuel cell research within DoD can be divided         independent, unbiased testing and
into two groups; the first deals with                validation of complete fuel cell systems up
applications for which defence is a significant      to a 300kW rating for both military and
driver (e.g. fuel cells replacing batteries in       commercial applications. FCTec’s primary
portable equipment), whilst the second               goal is to significantly accelerate the
entails defence leveraging off civilian              development and commercialisation of fuel
applications. This latter group consists mainly      cell systems.
of fuel cells for significant (i.e. kW) power        – The PAFC Demonstration Program: the
generation. Both the US Army and US Navy             largest demonstration of phosphoric acid
are active in this area.                             fuel cell plants in the USA, with 30 200kW
                                                     plants installed at DoD facilities between
During the Mission, it became very clear that        1994 and 1997 to demonstrate PAFC
DoD programmes have been a major factor in           capabilities in real world situations, stimulate
certain fuel cell technologies moving quickly        growth of scale in the fuel cell industry and
towards commercialisation. This is partly to         determine the role for fuel cells in the DoD’s
do with funding making projects that would           long term energy strategy. Up to the
otherwise not proceed happen. More                   beginning of 2003, over 847    ,000 hours of
critically, it enables monitored and evaluated       operation had been achieved, with over 66%
field trials of beta prototypes to occur in real     power plant availability.
world situations.                                    – The Residential Demonstration Program:
                                                     a demonstration of US-produced PEM fuel
The Army Corps of Engineers is the largest           cells at US military facilities. The units
                                                                                                  57
US FUEL CELL MISSION



     must provide one year’s power with 90%          • Department of the Navy (DON) Activity
     unit availability, and are monitored for          The Navy and the Marine Corps has a
     performance over that year. In FY 2001, six       significant investment programme in the
     fuel cell companies were awarded                  area of science and technology. Through its
     contracts for 22 PEM units at military            Office of Naval Research (ONR), DON is
     bases. FY 2002 awards are currently being         addressing the challenge of developing non-
     made, while FY 2003 proposals are being           petroleum-based power sources to support
     considered.                                       portable, long life power systems for
     – The Climate Change Rebate Program: a            everything from marine-carried equipment up
     competitive, cost-shared, incentive               to large scale naval war vessels/platforms.
     programme to expedite the introduction of
     fuel cell systems as a climate change-          • Defense Advanced Research Projects
     related initiative. The programme started in      Agency (DARPA)
     1995 and currently provides $1,000/kW of          DARPA sponsors a number of studies
     power plant capacity, provided that this          looking at small and micro fuel cell systems
     does not exceed one-third of the total            to replace batteries in portable equipment.
     programme cost (i.e. capital and
     installation costs). Up to the end of FY          The budget for fuel cell research activities
     2002, this programme had awarded grants           in TACOM, DON and DARPA for FY 2003 is
     totalling $30.2 million ($2.8 million in FY       not known. The combined budgets of all
     2002. All fuel cell technologies are eligible     three for fuel cell activity was $6-10 million
     and non-DoD and even overseas sites               in FY 2002.
     have benefited – including the Woking
     Borough leisure facility in UK. In total, 74    Other Federal Programmes
     projects involving 148 fuel cell units with a   Although the DOE and DoD programmes
     total installed capacity of 14,125MW have       together account for the vast majority of
     been supported at a cost of over $20.5          federal funding for fuel cell and hydrogen
     million to the US Federal Government.           R&D, several other federal agencies are
     – The Research and Development                  involved with these technologies. The most
     Program: currently comprises two                prominent is:
     projects, one addressing logistics fuel
     reformer/processor technology for mobile        • The National Aeronautics and Space
     fuel cell power generation, the other             Administration (NASA): Glenn Research
     looking at the thermoelectric effect.             Center Fuel Cell Technology and Systems
                                                       Activity
     The total budget of ERDC/CERL for these           NASA’s Glenn Research Center
     five areas of activity in FY 2003 was             (Electrochemistry Branch) has been
     approximately $15 million.                        developing improved technologies that
                                                       result in high energy density and long life
• The US Army Tank-Automotive and                      batteries and fuel cells for NASA missions.
  Armaments Command (TACOM)                            Many of these developments have
  TACOM provides support in ground                     potential applications in military and
  combat, automotive, marine and                       commercial arenas.
  armaments technologies and systems to                NASA is currently actively developing fuel
  enable the US Army to be mobile, be                  cells and regenerative fuel cell systems for
  lethal and survive under attack. As such,            application in zero CO2 emissions
  part of its activity addresses fuel cell             technologies, and as part of its ERAST
  systems and applications.                            Helios high altitude, large wing-span,
                                                       unmanned aircraft project.
58
                                                    US FUEL CELL MISSION



  NASA’s budget for this activity for FY 2003
  is approximately $20 million.

Total Federal Support
Table 9.3 is an attempt to amalgamate all the
budget figures presented above to give an
approximate picture of the total Federal
Government expenditure on fuel cells and
hydrogen infrastructure and technologies. Since
a lot of the data can be interpreted in different
ways, the data below can only really be an
indication of the level of expenditure.




                                                                     59
US FUEL CELL MISSION



Federal Govt. Funded Activity (by Agency and Category)                          Budget ($ million)
a) DOE Activities Sorted by Fuel Cells RD&D vs. Hydrogen RD&D     FY 2003 (Appropriated)    FY 2004 (Requested)
DOE Fuel Cells Activity
HFC&IT Program (FC activity only) – inc. PEM stat.                     57.4                      77.5
Stationary Fuel Cells (non-PEM) – inc. SECA                            60.6                      44.5
Fuel Cell Activity Sub-total                                                      118.0                       122.0
DOE Hydrogen Infrastructure Activity
HFC&IT Program (H2 activity only)                                      42.9                      88.0
Office of Nuclear Energy – H2 Production                                –                            4.0
Office of Fossil Energy – Coal-to-H2                                    –                            5.0
Office of Fossil Energy – Gas-to-H2                                     –                            6.5
Funds from Other Agencies                                               –                            0.7
Hydrogen Infrastructure Activity Sub-total                                         42.9                       104.2
DOE FC & H2 Partnerships
FreedomCAR Partnership                                                 74.5                      91.1
21st Century Truck Partnership                                         70.1                      57.5
Other                                                                   8.9                          9.0
FC & H2 Partnerships Sub-total                                                   153.5                        157.6
DOE Grand Total                                                                  314.4                        383.8


b) DOE Activities Sorted by Vehicle-Related RD&D vs. Stationary
DOE Vehicle-Related RD&D
Fuel Cells                                                             49.9                      70.0
Hydrogen                                                               25.0                     104.2
FreedomCAR Partnership                                                 74.5                      91.1
Sub-total                                                                        149.9                        265.3
21st Century Truck Partnership                                         70.1                      57.5
Other Relevant Vehicle Activity                                         8.9                          9.0
Vehicle-Related RD&D Sub-total                                                   228.4                        331.8
DOE Stationary Power-Related RD&D
PEM FCs for Stationary Power (EERE)                                     7.5                          7.5
Stationary FCs (non-PEM) – inc. SECA                                   60.6                      44.5
Hydrogen                                                               17.9                          –
Stationary Power-Related RD&D Sub-total                                            86.0                        52.0
DOE Grand Total                                                                  314.4                        383.8


c) DoD Activities – all Fuel Cell-Related
ERDC/CERL Fuel Cell Program                                            15.0                      15.0*
TACOM                                                                          6.0-10.0                    6.0-10.0*
DON
DARPA
DoD Grand Total                                                               21.0-25.0                    21.0-25.0*


d) Other Federal Activities – all Fuel Cell-Related
NASA                                                                   20.0                      20.0*
Other Federal Grand Total                                                          20.0                        20.0


All Federal – Grand Total                                                   355.4-359.4                  424.8-428.8
*assumes level budget

Table 9.3 – A Summary of US Federal Support for Fuel Cell and Hydrogen Technologies



60
                                                                                 US FUEL CELL MISSION



US State/Local Government Activities               in deploying fuel cells. These schemes come in
Support for product R&D has been, and will         a variety of forms and do not adopt uniform
remain, very important in terms of bringing        laws or definitions, i.e few states explicitly
fuel cell and hydrogen technologies to the         categorise incentive programmes as available
point of commercialisation. Likewise,              for ‘fuel cells’, but rather use terms such as
demonstration projects and field-testing, such     ‘alternative fuel vehicles’, ‘low emission
as that supported by the DoD ERDC/CERL             vehicles’, ‘zero emission vehicles’, ‘clean fuel’,
programmes, plays a major role in addressing       ‘hydrogen fuel’, etc.
technology and economic risk. Clearly,
federally funded RD&D programmes are a             In summary: 19 states provide grants or
key source of such funding and technology          rebates; six provide loan programmes; 17
validation.                                        provide income tax credit incentives; eight
                                                   provide business tax credit incentives; five
Other very important components in bringing        provide a sales or use tax exemption; and
cost effective products to market are              two provide a high technology business
statutory incentives and investment                investment tax incentive. Further details are
funds/partnerships which encourage                 provided in Appendix I.
customers to purchase fuel cell technology
and hydrogen infrastructure. In this area,         This picture is constantly evolving: A significant
state and local government activities are very     number of states have legislation pending.
important. An excellent review of such
incentives and programmes is produced              Investment Funds and Partnerships
quarterly by the law firm Updike, Kelly and        Twelve states have either investment funds
Spellacy PC. This report can be found at           or partnership schemes that support
www.uks.com.                                       customers in purchasing fuel cell technology
                                                   and/or hydrogen infrastructure. These states
While it is not certain how much funding is        and the various schemes that they administer
directed (either directly or indirectly) at fuel   are listed in Appendix I.
cell and hydrogen technology RD&D and
deployment by state and local government           Of all these states that are actively encouraging
activities, it is generally believed by the        fuel cell and hydrogen technologies
industries to be of the same order of              development, commercialisation and
magnitude (i.e. more than $100 million/year)       deployment, the most prominent are generally
and of similar importance to both the              considered to be California, Connecticut,
equipment developers and the early adopters.       Michigan and New York State. Each of these
                                                   states has a cluster of fuel cell companies (see
This scale of state support is confirmed by        Section 4.4 and Appendix D) and university
the Clean Energy Group, a non-profit               departments active in these areas. Each also
organisation that manages the Clean Energy         sees the commercialisation of these
States Alliance (CESA) – a partnership of          technologies providing employment, wealth
several states operating clean energy funds        and prestige in the future. A ‘battle royal' is
(www.cleanenergyfunds.org). The Clean              developing as to which will become the ‘lead
Energy Group claims that the states                state’. This competition is seen by some
participation on CESA invest between $117          industrial companies and industry observers as
million and $206 million annually on fuel cells.   a potential distraction getting in the way of fuel
                                                   cell commercialisation; others disagree.
Statutory Incentives
Of the 50 states, 36 have some type of             While visiting California, Connecticut and
incentive scheme that may support customers        New York State, the Mission team had
                                                                                                  61
US FUEL CELL MISSION



discussions with personnel involved with a              – raising the awareness of fuel cell and
number of state authorities, partnerships and             hydrogen technologies;
investment funds. These are described                   – creating partnerships between industry
below:                                                    and government; and
                                                        – establishing demonstrator projects to
• California Air Resources Board (CARB)                   stimulate adoption of fuel cells in the
  www.arb.ca.gov                                          stationary and automotive markets.
  In the USA, the Environmental Protection
  Agency (EPA) has the federal oversight for            This has principally been achieved through
  air quality legislation and is responsible for        two major partnership programmes – the
  approving State Implementation Plans                  California Stationary Fuel Cell Collaborative
  (SIPs). In California, CARB has the state             and the California Fuel Cell Partnership.
  oversight and is responsible for approving            CARB is an active partner in both these
  the district Air Quality Management Plans             initiatives.
  (AQMPs).
                                                      • California Stationary Fuel Cell Collaborative
     Partly due to historical air quality problems,     (CSFCC) http://stationaryfuelcells.org/
     the State of California is looking to increase     This initiative, started in late 2001, has the
     the share of its electricity generation from       aim of promoting stationary fuel cell
     renewable sources from its current level of        commercialisation as a means of:
     around 10% to 20% by 2010. Additionally,
     the power shortage problems in recent years        – reducing/eliminating air pollutants and
     that resulted in brown-outs and black-outs           greenhouse gas emissions;
     increased the State’s interest in distributed      – improving energy efficiency, reliability
     power generation. In this context, the               and security;
     integration of fuel cell technology into the       – promoting energy diversity and
     power market is seen to be one of the more           independence; and
     effective strategies for resolving some of         – achieving a sustainable energy future.
     California’s energy and environmental
     challenges.                                        Some 20 agencies (federal and state) are
                                                        partners, including a core group
     CARB adopts a ‘technology forcing'                 comprising CARB, the California Energy
     approach, i.e, it imposes conditions to            Commission (CEC), UC Irvine – National
     ensure that the requirements of state laws         Fuel Cell Research Center, the Department
     are met (e.g. the CARB ‘Zero Emission              of General Services and the Los Angeles
     Vehicle – ZEV – Mandate' to demonstrate            Department of Water and Power.
     250 FCVs from six OEMs by 2008 and to
     ensure that 15% of buses – about 750 –             The Collaborative envisages fuel cell
     are zero emission by 2010, under a                 installations being pursued by state, local
     proposed alternative compliance strategy).         and public organisations, as well as private
     CARB assert that this regulatory approach          entities. In aggregate it has established a
     assists existing technologies to improve           minimum goal of 50-250MW of installed
     rapidly and helps alternative technologies         capacity in California by 2006. California is
     become integrated into local learning              seen as a critical market for fuel cells,
     demonstration activities.                          capturing some 5-25% of global sales
                                                        (capacity) over the next several years.
     State authorities, including CARB, have
     focused support on:                                A manufacturers’ survey was undertaken in
                                                        2002 by the Collaborative. This produced
62
                                                                               US FUEL CELL MISSION



  the (very optimistic) global (synonymous            buses under real world operating
  with the USA in this timescale) estimate of         conditions. These will run over a two
  600MW of fuel cells installed for stationary        year period and carry fare-paying
  power generation by 2005 at an average              customers on normal routes at three
  cost of $1,500/kW. Currently, California has        California transit agencies: AC Transit
  an installed capacity of 4MW. UC Berkeley           (San Fransisco Bay Area), SunLine Transit
  is currently examining the state-wide and           Agency (in Palm Springs area) and Santa
  worldwide distribution of installed capacity.       Clara Valley Transportation Authority (in
  The 2003 manufacturers’ survey will be              the South Bay Area). Up to 10 hydrogen-
  conducted soon.                                     fuelled buses will be on the road in
  Specific current initiatives are:                   California by the end of 2003; these
                                                      buses will use fuel cells developed by
  – $1 million co-funding for the SCAQMD              Ballard Power Systems (Canada) and
    projects on small-scale (5kW) fuel cells          UTC Fuel Cells.
    for distributed power generation (due on        – Demonstrating hydrogen fuel
    stream in 2003).                                  infrastructure: three fuelling stations are
  – $1 million co-funding of DoD                      operating, with three different
    ERDC/CERL demonstrations of PEM                   dispensing interfaces (3,600psi gas,
    fuel cells on DoD bases in California             5,000psi gas and liquid hydrogen), and
    under the Residential Demonstration               with over 2,000 vehicle fuellings
    Program (due on stream by late 2003).             achieved. These stations link with others
                                                      in California (seven in total). The aim is to
• California Fuel Cell Partnership (CaFCP)            create a network of stations to allow
  www.fuelcellpartnership.org                         FCVs to move throughout California.
  This partnership, launched in 1999,               – Exploring the path to commercialisation.
  involves ‘co-opetition' between eight             – Increasing public awareness.
  automotive manufacturers (Ford,
  DaimlerChrysler, General Motors, Toyota,          The partnership is funded by each partner
  Honda, Nissan, Volkswagen and Hyundai),           contributing $85,000/year to provide a total
  a number of energy providers (including           budget of $2 million/year. This is
     ,
  BP Shell Hydrogen, ChevronTexaco and              supplemented with in-kind contributions
  ExxonMobil), two key fuel cell companies          (staffing, fuelling station, etc.). Associate
  (Ballard of Canada and UTC Fuel Cells) and        partners can become involved in specific
  state/federal government (CARB, CEC,              projects.
  SCAQMD, DOE, DOT, EPA).
                                                  • South Coast Air Quality Management
  The partnership aims to demonstrate to            District (SCAQMD) www.aqmd.gov
  California, the USA and the rest of the           SCAQMD is a regulatory body responsible
  World that fuel cell vehicles and the             for preparing, submitting (to CARB) and
  associated hydrogen infrastructure are            adopting local Air Quality Management
  safe, practical, clean and efficient. To          Plans for the South Coast Air Basin in
  achieve this, its activities include:             California (16 million people, high
                                                    population density, 8.5 million petrol
  – Demonstrating fuel cell powered cars:           vehicles and 230,000 diesel vehicles, and
    21 FCVs currently being demonstrated –          severe air quality problems e.g. ‘extreme
    with 105,000 vehicle miles to date. It is       non-attainment' of National Ambient Air
    anticipated that 60 FCVs will be on the         Quality Standards for ozone).
    road in California by the end of 2003.
  – Demonstrating three fuel cell electric          SCAQMD is using a mixture of regulatory,
                                                                                                63
US FUEL CELL MISSION



     incentive and RD&D mechanisms to                   kind’($366k SCAQMD), two-year project
     improve transportation emissions (linked           with Fuel Cell Technologies to install ten
     through a Clean Transportation                     natural gas-fired 5kW Siemens
     Implementation Strategy). Regulatory               Westinghouse SOFC units for grid
     approaches rely on using a mix of federal                          .
                                                        connected CHP The first two sites are a
     and state instruments (i.e. Clean Fleet            dormitory at UC Irvine and LADWP    .
     Rules, Low Sulfur Fuel Rule, Pilot               – Truck APU: $1.2 million ($300k
     Emissions Reduction Rule and the                   SCAQMD) 2-3 year project in partnership
     proposed CARB ZEV Mandate) to                      with CARB, UC Davis, DOE, Freightliner,
     encourage the uptake of cleaner vehicles           Carrier and the American Trucking
     in public fleets (initially). Incentive            Association to install
     programmes include tax credits; direct             hydrogen/propane/diesel (ultimately)
     monetary incentive (i.e. $5k/vehicle for           fuelled 5-25kW PEM/SOFC fuel cells as
     electric vehicles); flexible emission credits      APUs for ‘Class 8’ trucks.
     that allow emissions from stationary plant       – Industrial: $9 million ($700k SCAQMD)
     to be offset by transport credits; carpool         project with the California Cast Metal
     lane access; free/preferred parking; etc.          Association and FuelCell Energy (and
                                                        possibly the California Energy
     In addition to this regulatory role,               Commission) to install three 250kW
     SCAQMD also sponsor clean fuels R&D,               MCFC units at three cast metal plants in
     demonstration and deployment through               ‘Environmental Justice Areas’.
     the Clean Fuels Program. This programme,         – Commercial: $2.6 million ($300k
     managed by the Technology Advancement              SCAQMD) project with Disney and UTC
     Office, was established in 1988 and is             Fuel Cells (and possibly the California
     funded by vehicle registration surcharges          Energy Commission) to install three
     ($1 for every vehicle registered) and fines.       150kW PEM fuel cell units at the
     Over 80 cost share projects (i.e. >50%             Disneyland complex.
     funded by proponents) with SCAQMD
     contract values between $100k and $1             Transport fuel cell projects cover light-duty
     million have been contracted, each               and heavy-duty vehicles. Clean Fuels
     providing net emission benefits in the SC        Program funds are used to participate in
     area. Non-US companies are eligible for          the California Fuel Cell Partnership, to
     funding (e.g. BP is currently in receipt). The   demonstrate hydrogen refuelling
     programme covers alternative fuels,              infrastructure growth and to support FCVs
     retrofit technology, hybrid electric vehicles,   placed in fleets in the South Coast Air
     fuel cells (stationary and transport             Basin (including by leveraging other State
     applications) and hydrogen technologies          of California and federal funding). Current
     (production and infrastructure): Fuel cells      and future projects include:
     and hydrogen technologies currently
     account for about 5-10% and 25-30%               – Light-duty vehicles: Partner in the
     respectively of the $8 million/year budget,        California Fuel Cell Partnership and
     but these proportions are rising.                  supporting early fleet placements (i.e.
                                                        City of Los Angeles (Honda) and UC
     Stationary fuel cell projects cover small-         Irvine (Toyota)).
     scale (<5kW) units for residential and truck     – Heavy-duty vehicles: Partner in CaFCP
     APU applications, and industrial- and              (i.e with AC Transit, SunLine Transit and
     commercial-scale fuel cells (>5kW):                Santa Clara Transit – these buses cost
                                                        around $3.2 million and have a two-year
     – Residential: $1.2 million, plus ‘in-             warranty, versus $400k and 12-year
64
                                                                             US FUEL CELL MISSION



  warranty for standard buses).                   – Mobile hydrogen fuelling station
– Thunderpower fuel cell 30-foot bus                supplied by either bulk deliveries or
  project with the California Energy                replacement units at Anaheim City Yard,
  Commission and SMUD to install a                  with UC Irvine (expected on line July
  60kW UTC fuel cell with two Siemens-              2003).
  ELFA hybrid electric drive systems              – Steam methane reformer hydrogen
  (induction motors) using deep-cycle               fuelling station (1kg/hour) in Long Beach,
  battery pack to augment the fuel cell.            with BP   .
– Future demonstration of 30-foot bus(es)         – Photovoltaic assisted Power Park at
  with LA County Mass Transit Authority             SCAQMD HQ with fuel cell power
  (the largest user of CNG buses in the             generation, on-site hydrogen production
  US).                                              and vehicle fuelling.
– Future programme with the Advanced              – Centralised fuelling station in Torrance
  Technology Vehicle Consortium to                  supplied by 17 mile hydrogen pipeline
  develop a 40-foot fuel cell bus.                  (500t/day) managed by Air Products and
                                                    Chemicals Inc.
Hydrogen infrastructure projects supported        – Upgrading of existing emissions testing
by SCAQMD are intended to ensure                    facility in Long Beach to support
adequate fuelling for demonstration FCV             DaimlerChrysler FCV demonstrations in
fleets, provide a dispersed fuelling network        South Coast Air Basin.
throughout the AQMD and determine the             – PEM and PV electrolyser hydrogen
most effective hydrogen production, fuelling        fuelling station at California State
and vehicle designs and technologies.               University Los Angeles (possible
Projects are being developed in three               project).
phases. Six projects were approved for            – Municipal FCV fleets and hydrogen
Phase I in 2001 and 2002; three additional          refuelling demonstration involving a
projects have been approved for Phase II in         utility, university/national laboratory,
2003 (one further project is being                  maintenance facility, etc. (future project).
considered); more projects will be                – Hydrogen production from biomass
considered for Phase III later in 2003 and in       reformation (cyclic ATR technology),
2004. Co-funding from DOE is being                  solar thermal direct production, hospital
actively sought. Phase I and II projects are:       waste (future projects).

– UOP auto thermal reformer (3kg/hour           • Los Angeles Department of Water and
  hydrogen), with SunLine Services in             Power (LADWP) www.ladwp.com
  Thousand Palms (expected on line –              Due to the twin drivers of attaining air
  June 2003).                                     quality standards and ensuring the grid
– ISE/Wintec wind-powered electrolyser            safety and worker safety aspects of
  hydrogen station (2kg/hour), with               distributed power generation, LADWP has
  SunLine Services in Banning Pass                considerable interest in both microturbines
  (expected on line – June 2003).                 and fuel cell technology for distributed
– Grid-powered electrolyser hydrogen              energy resources.
  fuelling station (1kg/hour) near LA
  International Airport, with Praxair Inc.        As a result, it has installed two fuel cell
  (expected on line – November 2003).             power plants into its own premises: a
– Hydrogen fuelling station supplied by           200kW PAFC plant manufactured by UTC
  bulk deliveries for City of Irvine, with UC     Fuel Cells (opened in 2002); and a 250kW
  Irvine (expected on line September              MCFC plant manufactured by FuelCell
  2003).                                          Energy at the John Ferraro Building. These
                                                                                              65
US FUEL CELL MISSION



     installations are regarded as the first phase    from renewable sources and fuel cells,
     of a programme to investigate the role of        thereby helping to accelerate the pace of
     fuel cell technology for distributed             commercialisation of these technologies.
     generation in California.                        Established in 1998 and funded by a small
                                                      surcharge on electricity ($0.001/kWh),
     The next phase of this programme will move       CCEF has been investing over $20
     the focus to customer sites and will include a   million/year (now climbing towards $28-30
     MCFC plant at American Airlines (with            million/year) in total through equity-type
     SCAQMD) and a digestor gas fuelled MCFC          investments, grants and subsidies for
     at Terminal Island sewage treatment plant.       demonstrations and commercial
                          ,
     In addition, LADWP in conjunction with           installations, and education and outreach
     the South California Gas Department are          activities. All such activities must benefit
     managing a three-year, $7 million/year           Connecticut businesses, i.e. create wealth
     customer Rebate Program that offers              for the State of Connecticut.
     generous support for fuel cell deployment.
     This scheme offers a maximum rebate              Investment in fuel cell companies, fuel cell
     equivalent to $3,450/kW (for plants from         technology and education and outreach is
     25kW to 20MW) or up to 50% of the                currently approximately $8-9 million/year,
     installed cost up to $1 million/site, which      examples being:
     ever is less. The scheme allows leveraging
     of other funds (e.g. California Gas Rebate       – Debt/equity investments: Acumentrics
     Program funds), and this can lead to the           Corporation (developers of micro-tubular
     total rebate being 75-80%.                         SOFC systems for on-site power
                                                        generation and premium power);
     The LADWP rebate calculation is complex            GenCell Corporation (manufacturer of
     and aims to encourage energy production            fuel cells and integrated fuel cell power
     at peak times, low NOx emissions, certain          generators applicable to MCFC, PEM
     locations and heat recovery (i.e. $500/kW          and SOFC technology); Pure Power LLC
     for fuel cell; sliding scale $0-200/kW for         (consulting company engaged in
     ‘high congestion’; sliding scale $0-700/kW         implementation of stationary fuel cell
     for NOx reduction – $700/kW for zero               systems for distributed power
     NOx; up to $200/kW for location; sliding           generation); and Sure Power LLC
     scale $0-200/kW for heat recovery).                (developer of fuel cell based UPS
                                                        systems).
     The fuel cell plant must be a permanent          – Subsidies for commercial installations
     installation (five+ years) to qualify and          and demonstration projects: To date,
     must run for at least 800 hours/year (or           over 2MW of fuel cell capacity has been
     rebate reduces accordingly). In addition,          installed in a number of locations
     LADWP require a 50’x60’ footprint for the          including a university campus, a high
     plant to allow access for monitoring,              school/emergency shelter, a hotel/casino
     maintenance, etc. The customer receiving           complex, etc. The 2001 Call for
     a rebate must purchase the unit within 90          Proposals yielded 31 proposals from 19
     days of the rebate award.                          companies and led to eight projects
                                                        receiving a total of $8 million from the
• Connecticut Clean Energy Fund (CCEF)                  fund. The 2002 CFP has yielded 60
  www.ctcleanenergy.com                                 proposals from 41 companies (13 fuel
  The Connecticut Clean Energy Fund                     cell manufacturers) and is likely to lead
  invests in enterprises that promote and               to four projects receiving around $8
  develop sustainable markets for energy                million from CCEF: This could be

66
                                                                               US FUEL CELL MISSION



    supplemented by up to $800k from the         NSERDA is a public benefit corporation
    Energy Conversion and Load                   established in1975. It conducts R&D
    Management Fund (EC&LMF),                    activities in five broad areas: enhancing
    administered by the Connecticut Light        competitive energy markets; ensuring
    and Power Company (CL&P).                    energy supply and reliability; protecting
  – Education and outreach: The University       environmental quality; promoting
    of Connecticut – the Connecticut Global      sustainable business development; and
    Fuel Cell Center (a collaboration of the     serving the State’s residential, small
    University of Connecticut, CCEF and          business and low-income customers’
    industry to create a centre of excellence    needs. In 1995, its mission was broadened
    with a 16,000 square foot facility at the    to include engineering functions, energy
    University of Connecticut’s Storrs           analysis and energy planning, and in 1998,
    Campus); SmartPower Connecticut (a           it assumed responsibility for the New York
    non-profit organisation to create links      Energy $mart Programs (i.e. delivery of
    between CCEF and a number of                 energy efficiency services).
    charitable foundations to encourage
    community action in support of clean air,    NYSERDA’s total budget is around $157
    energy independence, etc.); a travelling     million (FY 2002/03), of which the lion
    Clean Energy Exhibit; a Clean Energy         share is from regulatory instruments e.g.
    Bus learning laboratory; Connecticut         derived from the System Benefits Charge
    Climate Change Summit (2002); etc.           (non-bypassable charge on electricity utility
                                                 transmission and distribution systems) and
  One of the drivers for the CCEF is that        the NY Energy $mart Programs – these
  Connecticut is one of six states liable to     funds can only be used to benefit grid
  the enforcement of a Renewable Portfolio       electricity users e,g. subsidies for energy
  Standard (RPS) – i.e. to produce a             efficiency measures or as ‘buy-down'
  proportion of its electricity from renewable   grants for approved products. This has
  sources, with penalties for non-               been used to support the purchase of
  compliance. This proportion is currently       hybrid electric buses, fuel cells and
  0.5% and will rise to 5% in seven years.       microturbines and attempts to address
  Connecticut has included fuel cell             some of the market disincentives.
  technologies (not necessarily just using       Approximately $50 million/year of the
  hydrogen from renewable energy sources,        overall budget is for R&D activities (some
  as some states have) within the state          $18 million from statutory instruments).
  RPS. Currently, only 8MW of the total of
  600MW capacity is using renewable              Fuel cell technologies have received about
  energy (including fuel cells) – i.e. 0.13%.    30% of the total funds over the last few
                                                 years, with RD&D support being directed
  Another key factor is that long-term power     at basic science, systems integration,
  purchase agreements in the deregulated         ceramic materials, reformers, inverters and
  electricity market in Connecticut offer up     stack manufacturing. Work is cost-shared,
  to 5.5 cents above the standard price for      with stakeholders generally funding more
  electricity from renewable sources             than 50% of project costs; flexibility is
  (including, in Connecticut, fuel cell power    important.
  plants) – a major incentive.
                                                 Fuel cell projects include:
• New York State Energy Research and
  Development Authority (NYSERDA)                – RD&D of a 50kW PEM for passenger
  www.nyserda.org                                  cars (1992-1997);
                                                                                                67
US FUEL CELL MISSION



     – demonstration of a 200kW PAFC in a                capacity – to be sourced from biomass,
       waste water treatment plant in Yonkers;           landfill gas, wind power, fuel cells, etc.
     – development of Plug Power’s PEM fuel
       cells for stationary applications,              • New York State Office of Science,
       culminating in a field trial of 50 5kW            Technology and Academic Research
       PEM units at 10 NY State-owned sites;             (NYSTAR) www.nystar.state.ny.us
     – demonstration of Plug Power’s 5kW fuel            NYSTAR was formed to harness NY
       cell by Verizon Communications to                 State’s university R&D resources for high
       power a remote telecommunications                 technology growth. An overall budget of
       switching equipment hut in                        $678 million was established for FY
       Ronkonkoma; and                                   2002/2003, including: $250 million for
     – RD&D of a Plug Power 5kW grid-parallel            centres of excellence covering
       installation at a home in Lewiston.               nanoelectronics, environmental systems,
                                                         bioinfomatics, IT and photonics; $225
     In June, NSERDA organised a meeting of              million for the Gen*NY*sis (Generating
     fuel cell and hydrogen technology players           Employment through New York Science)
     to discuss NYSERDA’s role. Around 70                Program covering high-tech and
     companies attended, representing fuel cell          biotechnology; and $10 million for Centers
     manufacturers, hydrogen storage                     of Advanced Technology (CATs).
     companies, automakers, transport
     companies, researchers, etc. The results            Activities relevant to fuel cells and
     will help steer future solicitations, e.g. the      hydrogen technologies are being
     scope and eligibility of a future $10 million       undertaken at the Center of Excellence in
     power systems solicitation.                         Nanoelectronics at the University of
                                                         Albany.
     New York State is not fully deregulated,
     with two regulated Power Authorities              University Activities
     (utilities with generating capacity) providing    A large number of universities (in excess of
     20% of the electricity to customers, and a        29) across the USA are directly involved in
     number of deregulated utilities (that can         researching fuel cell and hydrogen
     own grid support devices, e.g. capacitors,        technologies. Much of the activity undertaken
     but not generating capacity) providing            at these centres is associated with federally-
     80%. In considering fuel cells for                funded or state-funded collaborative
     distributed generation, the authorities have      programmes. The most prominent
     considerable interest, whereas the focus          universities are listed in Appendix J.
     for deregulated utilities is, necessarily, lost
     revenue.                                          Advocacy Associations and Road
                                                       Mapping Activities
     The Public Service Commission in New              As well as a large number of lobbying-type
     York State is currently looking at how to         industry associations (an example being the
     structure the State’s Renewable Portfolio         Fuel Cell Power Association), the USA has two
     Standard (RPS), and, amongst other                key advocacy-type industry associations that
     issues, how fuel cells will qualify (i.e. only    work very closely with the Federal Government
     if the hydrogen is from renewable sources,        and many of the state governments.
     or more flexibly). The State currently
     already purchases 15% of its electricity          • The US Fuel Cell Council
     from large scale hydroelectric plants and it        (www.fuelcells.org)
     is anticipated that the RPS will require a          Formed in 1998, the USFCC is organised
     further 10% – i.e. an extra 3,000MW of              as a non-profit industry association aiming
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                                                                                US FUEL CELL MISSION



  to support commercialisation of fuel cells        policies and initiatives, facilitates
  for all applications. The membership              partnerships to develop hydrogen-related
  comprises over 115 companies, including           activity and provides advice to government
  some non-US players. Programmes are               agencies (DOE, DOT, etc.).
  carried out by seven Working Groups
  (codes and standards; education and               In May 2003, NHA produced a policy
  outreach; materials and components;               priorities paper, ‘On the Road to Hydrogen’,
  portable power; power generation;                 aimed at policy makers. This paper
  transportation).                                  endorsed the DOE’s hydrogen roadmap
  During 2002, as an input to the DOE’s             and expressed support for President Bush’s
  hydrogen ‘Vision’ and subsequent                  FreedomCAR and Fuels Initiative, while
  ‘Roadmap' activity, the USFCC played a            arguing the need for economic incentives
  coordinating role in the preparation of an        and tax policies (including a voluntary
  industry strategy for federal investment in       emissions credit trading scheme).
  fuel cell technology and fuel infrastructure:
  ‘Fuel Cells and Hydrogen: The Path              9.4 Key Points of Interest to UK
  Forward’. This strategy, published in
  September 2002, proposed a 10-year, $5.5        • Despite weak capital markets, spending on
  billion commercialisation strategy                fuel cells has continued in the USA, largely
  addressing research, purchases                    driven by public-private partnerships. The
  (demonstrations and pilot fleets), market         unavailability of funds in public markets is
  support/purchase subsidies, infrastructure        not necessarily a barrier particular to the UK.
  and market readiness activities. It covered     • Opportunities still exist in the fuel cell
  all applications and was rooted in public-        sector and, as a consequence, new US
  private partnership. Endorsed by some 40          companies are entering the sector.
  organisations, the strategy was aimed at          However, such companies need to be well
  policy makers and industry to stimulate           funded. The lack of venture capital track
  debate and the development of a fuel cell         record for UK fuel cell companies is,
  policy. The document, which can be found          however, a barrier. A ‘venture network’ for
  at www.fuelcellpath, proved a highly              the UK clean energy technologies sector
  valuable input to the subsequent DOE              (including fuel cells) could be helpful.
  ‘National Hydrogen Energy Roadmap’ (see         • Large UK companies supplying
  Section 4.2).                                     components for US fuel cell developers
                                                    and manufacturers are well-regarded in the
• The National Hydrogen Association                 USA. This may well represent the main
  (www.hydrogenUS.org)                              short term opportunity for UK companies
  The NHA was established in 1989 to foster         in the USA. Focused funds are able to
  the development of hydrogen technologies          catalyse deals in the sector.
  and their use in industrial and commercial      • However, it is still early days for fuel cell
  applications and to promote the transition        technologies, with lots of IPR still to be
  role of hydrogen in the energy field. NHA         developed. The UK fuel cell industry has
  membership stands at 84, and represents           the opportunity to participate in such
  large companies, small businesses,                developments, not just as component
  universities, institutes and national             manufacturers.
  laboratories. Programmes are undertaken         • Pure-play fuel cell companies are all
  through three committees (policy;                 restructuring and revising their business
  education and outreach; codes and                 plans. In the UK too, fuel cell companies
  standards). NHA provides a forum for              need to demonstrate revenues and
  building consensus concerning hydrogen            profitability.
                                                                                                 69
US FUEL CELL MISSION



• There are some early signs of the public        • The US Department of Defense also been
  markets’ interest in this sector picking up,      instrumental in supporting fuel cell and
  particularly following the August 2003            hydrogen related R&D, and in testing and
  black-outs in the USA and Canada. Despite         validating systems in the field. Across the
  this recently increasing interest in fuel         various defence agencies and army, navy
  cells, IPOs are only really possible where        and air force services, $20-25 million
  the company has substantial revenues and          (£12.7-15.9 million) is spent annually on
  is close to cashflow breakeven.                   these technologies. This support,
• The importance of US Department of                particularly for ‘beta’ prototype system
  Energy activities in supporting fuel cell and     testing, has been crucial for a number of
  hydrogen technologies cannot be                   fuel cell developers.
  overstated. DOE has been one of the             • Total financial support from the US Federal
  primary funding sources for fuel cell and         Government in support of fuel cell and
  hydrogen technology R&D, with several             hydrogen technologies in 2003 amounts to
  major programmes and, increasingly,               approximately $355 million (around £226
  coordinated and high profile initiatives.         million/year). This figure looks likely to
  Total expenditure by DOE in FY 2003 was           increase to $425-430 million (£270-274
  over $314 million (£200 million), with            million) in 2004, an increase of around
  funding requested for FY 2004 showing a           20%.
  20%+ increase. The level of funding and         • Federal programmes address almost all
  the cooperative partnerships created              the key areas of interest to the US fuel
  through DOE projects, programmes and              cells and hydrogen industry, creating
  initiatives are some of the most significant      strengths in industry and academia in
  factors positioning the USA in the forefront      hydrogen production, storage, fuelling,
  of developments in these areas.                   safety and codes and standards. They
• The DOE’s support programmes show a               cover the key fuel cell types for mobile,
  balanced distribution of funding for fuel         portable and stationary applications,
  cells and hydrogen technologies and               materials, balance of plant (BOP), test
  infrastructure issues. A balance is also          stations, integration (i.e. fuel cell/hydrogen
  maintained between stationary and mobile          systems) and hybrid systems. Support
  application areas. Generally, these different     programmes are available for all of these
  areas are addressed by separate                   areas, with good interaction between
  programmes to enable focus to be                  universities, companies and other entities.
  achieved.                                       • State organisations are also very active in
• Additional DOE funding is directed at three       supporting the development and
  public-private partnerships focused on            deployment of fuel cell and hydrogen
  automotive and stationary power                   technologies. Some 36 states have an
  applications of fuel cells – i.e. the             incentive programme that may apply to
  FreedomCAR Partnership (with over $91m            fuel cells. 12 states also have dedicated
  requested for 2004), the 21st Century             clean energy funds, typically financed
  Truck Partnership (seeking over $57 million       through levies on electricity production,
  for 2004) and the Solid State Energy              and many of these specifically support fuel
  Conversion Alliance (with a current budget        cells through these funds. Some (notably
  of $34 million and seeking $24 million for        Michigan, Connecticut and New York State)
  2004). Furthermore, the FutureGen                 are aggressively targeting fuel cells as a
  Initiative, aimed at developing zero              future key industry. The total funding
  emission coal power plant configurations          expended through state/local government
  (possibly involving fuel cell hybrid cycles),     schemes in support of fuel cell and
  will further increase funding in this area.       hydrogen technologies is of the same
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                                                   US FUEL CELL MISSION



  order of magnitude (estimated at $117
  million – $206 million/year) as Federal
  Government expenditure, and of equal
  importance.
• A large number of universities are actively
  involved in research activity into fuel cells
  and hydrogen technologies. Much of this
  activity is due to their involvement in
  federal/state-funded partnerships, with
  government, industry and academia
  working together. UK academic institutes
  are well respected by US companies and
  universities.
• Both the fuel cell and hydrogen industries
  have separate strong, long-standing
  advocacy-type associations that effectively
  represent those industries to Federal
  Government: These are the US Fuel Cell
  Council and the National Hydrogen
  Association. The USFCC and NHA have
  been active in fostering the development
  of their respective industries; raising the
  profile of industry activities in these areas;
  acting as central liaison points; and
  developing industry ‘visions’ and
  technology/commercialisation ‘roadmaps’
  (i.e. akin to the aims, objectives and early
  tasks of Fuel Cells UK).




                                                                    71
US FUEL CELL MISSION



10 MAJOR OUTCOMES OF THE MISSION                   (if it hasn’t done so already) overtake
   Philip Sharman, DTI – International             Canada as the world leader in the
   Technology Promoters                            development and commercialisation of
   Celia Greaves, Synnogy/Fuel Cells UK            these technologies.
   David Hart, Imperial College London           • US manufacturers are seeking international
                                                   partners to progress their technologies
10.1 Introduction                                  globally. Opportunities exist in: chemicals
                                                   and MEAs; component supply; stack and
This fact-finding Mission had the primary aim      generator manufacturing; licensing and
of fostering the development of the UK fuel        partnering; systems integration; codes and
cell industry by:                                  standards; and field deployment and
• improving UK awareness of fuel cell              servicing.
   developments in the USA;                      • A large number of universities are actively
• developing opportunities for collaboration       involved in research into these
   and technology transfer for stationary          technologies. Much of this activity is due
   power, transportation and portable power        to their involvement in public-private
   applications;                                   partnerships. UK academic institutes are
• highlighting opportunities; and                  well respected by US companies and
• enhancing awareness of new markets and           universities.
   applications.                                 • These industries have separate, strong,
                                                   long-standing, advocacy-type associations
The purpose of this Section is to pull the         that represent them to Federal
various lessons fot the UK (included in the        Government – the US Fuel Cell Council and
preceding sections) together and draw out a        the National Hydrogen Association. Both
number of opportunities and                        have been active in fostering the
recommendations for the UK fuel cell and           development of their respective industries;
hydrogen industries, UK Government and its         raising the profile of industry activities in
agencies and for UK academic institutions.         these areas; acting as central liaison points;
                                                   and developing industry ‘visions’ and
10.2 Conclusions – Key Lessons for the UK          technology/commercialisation ‘roadmaps’
                                                   (i.e. akin to the roles of Fuel Cells UK).
General
• The pace of development of fuel cell and       Fuel Production and Storage
  hydrogen production, delivery and storage      • There is a clear move away from on-board
  technologies is accelerating rapidly,            reforming in the USA. This follows the
  particularly in the USA. As a result, the US     DOE statement that it will examine on-
  fuel cell industry is maturing quickly,          board reforming with a view to dropping
  although it is not yet profitable.               the concept from its programme if its
• Consolidation is beginning to occur in the       targets are not attained.
  industry as companies look to                  • In common with other geographical areas,
  demonstrate revenues and profitability.          many fuel cell companies in the USA are
  Companies with the longest pedigrees             looking to start their businesses in niche
  seem least anxious to rush to market and         hydrogen-fuelled applications. There is,
  will only do so profitably.                      therefore, a demand for improved
• The USA’s strong historical legacy in the        hydrogen storage technology.
  fuel cell and hydrogen technology field,       • With private funding less available now
  coupled with the current high resources          than in recent years, government funding
  being deployed provide a massive                 is essential to progress technology from
  competitive advantage. The USA will soon         proof of concept to product. The
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                                                                               US FUEL CELL MISSION



  development of fuel production and                 USA is targeted to be around 2010 and
  storage technology in the USA benefits             market uptake is currently led by
  greatly from DOE and DoD funding at a              government-funded agency schemes.
  level far in excess of that available in the       Large-scale stationary applications are
  UK.                                                expected to emerge with the development
• US systems integrators are generally               of MW-scale hybrid systems around 2015.
  willing to source components from non-US       •   The USA is currently the front-runner in
  sources. For example, a significant                developing and commercialising SOFC
  Canadian presence in the area of fuel              technology. However, significant cost
  production and storage was observed.               reductions are necessary for SOFC
• The USA holds a lead in hydrogen                   systems to compete with alternative
  production and storage technology. Unless          technologies such as diesel gen-sets and
  UK public sector funding increases, it will        gas turbines. Costs need to be reduced
  be very difficult for the UK to compete in a       from current levels of at least $4,500/kW
  head-to-head manner in future markets for          down to less than $400/kW. While much
  this technology. This places a premium on          of this reduction can be achieved through
  the UK focussing resources on its                  volume manufacturing, major technology
  strengths and looking to partner the USA           challenges also need to be addressed.
  in a complementary way.                        •   The size of the market for SOFCs in the
                                                     short-, medium- and long-term is the
Fuel Cell and Systems Commercialisation              subject of much debate. The SECA
• The organisations visited as part of this          Program estimates of 25MW and up to
  Mission represent some of the world’s              40GW of installed SOFC capacity by 2012
  leading players in fuel cell system                and 2025 respectively were regarded by
  commercialisation for their specific               the Mission team as realistic.
  applications (automotive, stationary and       •   Significant and continuing investment in
  aerospace/defence), with established               building proton exchange membrane
  development, prototyping, production and           (PEM) fuel cell technology capabilities over
  roll-out/demonstration processes. Almost           many years has created and sustained a
  all have significant corporate resource            supply base of related materials,
  commitment to long term technology                 components and sub-assembly items
  development and accept that fully                  around stacks, balance of plant, electronics
  commercial applications are still some way         and power conditioning, fuel processing
  into the future.                                   and hydrogen storage technologies.
• Product development, prototyping and           •   The focus of PEM development is on fully
  product enhancement have been driven               integrated, often modular, systems that are
  through predominantly internal funding,            lighter, achieve better performance and have
  but with additional support derived from:          higher power densities and better durability
  Government buy-down grants and tax                 than in the past. Other requirements are
  incentives (Federal and State); defence            the ability to achieve cold start and operate
  related and military programmes; national          in ‘extreme’ conditions while being
  R&D funds/programmes; and strategic                remotely monitored and controlled.
  partnering, alliances, joint venturing-based   •   PEM systems are near to being
  development and supply agreements.                 commercially competitive in the USA for
• SOFC systems are being developed for               applications such as remote power supply,
  early application in the vehicle auxiliary         standby power and UPS. The price
  power unit (APU), CHP and uninterruptible          differential for defence and aerospace
  power supply (UPS) system areas.                   applications makes these a continuing
  Commercialisation in these markets in the          focus for development and supply of
                                                                                                73
US FUEL CELL MISSION



     specialist products.                              cost countries over time.
•    Demonstration programmes are essential          • The US SECA Program offers an
     instruments for achieving product                 outstanding example of how to
     validation and next stage product                 communicate politico-technical goals to
     enhancement. They also promote                    scientists, combining political commitment
     customer and public awareness and help            and financial support, with operational
     to develop supporting infrastructure and          transparency and flexibility. Similarly
     appropriate codes and standards.                  structured research programmes are
     Significantly, fewer and larger                   widely used in the USA, in other areas of
     demonstration projects with ‘serious’             science. The process tries to promote
     funding support may be more effective in          cooperation and competition (‘co-
     achieving these objectives than multiple          opetition’) between researchers in
     small projects with limited funding levels.       academia, national research laboratories
•    Support programmes to create market               and industry.
     demand and move fuel cell products into         • Codes and standards have not so far been
     wider use are also critical – buy-down            a significant barrier but could delay
     grants and tax credits can be a significant       commercialisation if national and
     determinant in users deciding to install fuel     international institutions are not aligned or
     cell systems, and use of government               aware of the extent to which barriers may
     purchasing of such systems to emphasise           be created or reinforced.
     acceptance of the technology could be a         • Electrical utility companies are in a position
     further stimulus as part of support               to prevent or at least hinder the creation of
     initiatives.                                      fuel cell based (and other) distributed
•    Publicly supported R&D, materials                 generation. Uniform interconnection and
     development and testing facilities (and/or        net metering standards are essential.
     university centres) that provide low cost
     space and support services (such as             Financial Support
     hydrogen and other fuel supply, computer        • Despite weak capital markets, spending on
     simulation, non-destructive testing, etc.)         fuel cells has continued in the USA, largely
     have supported the overall pace of fuel cell       driven by public-private partnerships. The
     and related technology development – there         unavailability of funds in public markets is
     are no similar facilities in the UK. However,      not necessarily a barrier particular to the UK.
     the activities of a large number of states in   • Opportunities still exist in the fuel cell
     promoting and attracting fuel cell                 sector and, as a consequence, new US
     development has been viewed by some as             companies are entering the sector.
     diluting attention and effort in moving the        However, such companies need to be well
     technology forward: not all can be the             funded. The lack of venture capital track
     national centre of excellence in fuel cells.       record for UK fuel cell companies is,
•    Several of these demonstration, market             however, a barrier. A ‘venture network’ for
     stimulation and R&D schemes are open to            the UK clean energy technologies sector
     UK companies and scientific institutions,          (including fuel cells) could be helpful.
     and the UK supply chain appears to be           • Large UK companies supplying
     able to benefit initially. However, longer-        components for US fuel cell developers
     term security in the supply chain is               and manufacturers are well-regarded in the
     unknown with the threat of subordination           USA. This may well represent the main
     to the customer through strict licensing           short term opportunity for UK companies
     agreements. Based on the example of                in the USA. Focused funds are able to
     vehicle manufacture, non-specialist                catalyse deals in the sector.
     suppliers are likely to be sourced in lower     • However, it is still early days for fuel cell
74
                                                                                   US FUEL CELL MISSION



    technologies, with lots of IPR still to be          requested for 2004), the 21st Century
    developed. The UK fuel cell industry has            Truck Partnership (seeking over $57 million
    the opportunity to participate in such              for 2004) and the Solid State Energy
    developments, not just as componenet                Conversion Alliance (with a current budget
    manufacturers.                                      of $34 million and seeking $24 million for
•   Pure-play fuel cell companies are all               2004). Furthermore, the FutureGen
    restructuring and revising their business           Initiative, aimed at developing zero
    plans. In the UK too, fuel cell companies           emission coal power plant configurations
    need to demonstrate revenues and                    (possibly involving fuel cell hybrid cycles),
    profitability.                                      will further increase funding in this area.
•   There are some early signs of the public        •   The US Department of Defense also been
    markets’ interest in this sector picking up,        instrumental in supporting fuel cell and
    particularly following the August 2003              hydrogen related R&D, and in testing and
    black-outs in the USA and Canada. Despite           validating systems in the field. Across the
    this recently increasing interest in fuel           various defence agencies and army, navy
    cells, IPOs are only really possible where          and air force services, $20-25 million
    the company has substantial revenues and            (£12.7-15.9 million) is spent annually on
    is close to cashflow breakeven.                     these technologies. This support,
•   The importance of US Department of                  particularly for ‘beta’ prototype system
    Energy activities in supporting fuel cell and       testing, has been crucial for a number of
    hydrogen technologies cannot be                     fuel cell developers.
    overstated. DOE has been one of the             •   Total financial support from the US Federal
    primary funding sources for fuel cell and           Government in support of fuel cell and
    hydrogen technology R&D, with several               hydrogen technologies in 2003 amounts to
    major programmes and, increasingly,                 approximately $355 million (around £226
    coordinated and high profile initiatives.           million/year). This figure looks likely to
    Total expenditure by DOE in FY 2003 was             increase to $425-430 million (£270-274
    over $314 million (£200 million), with              million) in 2004, an increase of around
    funding requested for FY 2004 showing a             20%.
    20%+ increase. The level of funding and         •   Federal programmes address almost all
    the cooperative partnerships created                the key areas of interest to the US fuel
    through DOE projects, programmes and                cells and hydrogen industry, creating
    initiatives are some of the most significant        strengths in industry and academia in
    factors positioning the USA in the forefront        hydrogen production, storage, fuelling,
    of developments in these areas.                     safety and codes and standards. They
•   The DOE’s support programmes show a                 cover the key fuel cell types for mobile,
    balanced distribution of funding for fuel           portable and stationary applications,
    cells and hydrogen technologies and                 materials, balance of plant (BOP), test
    infrastructure issues. A balance is also            stations, integration (i.e. fuel cell/hydrogen
    maintained between stationary and mobile            systems) and hybrid systems. Support
    application areas. Generally, these different       programmes are available for all of these
    areas are addressed by separate                     areas, with good interaction between
    programmes to enable focus to be                    universities, companies and other entities.
    achieved.                                       •   State organisations are also very active in
•   Additional DOE funding is directed at three         supporting the development and
    public-private partnerships focused on              deployment of fuel cell and hydrogen
    automotive and stationary power                     technologies. Some 36 states have an
    applications of fuel cells – i.e. the               incentive programme that may apply to fuel
    FreedomCAR Partnership (with over $91m              cells. 12 states also have dedicated clean
                                                                                                    75
US FUEL CELL MISSION



     energy funds, typically financed through       • Generator Manufacture: Many fuel cell
     levies on electricity production, and many       companies are offering stacks to UK
     of these specifically support fuel cells         companies. The UK has a presence in
     through these funds. Some (notably               Intelligent Energy and Voller, but there is
     Michigan, Connecticut and New York State)        space for many more players.
     are aggressively targeting fuel cells as a     • Licensing/Partnering: Stack, generator or
     future key industry. The total funding           system manufacture under license or
     expended through state/local government          simple contract builders opportunities are
     schemes in support of fuel cell and              available. This could increase the
     hydrogen technologies is of the same order       throughput and utilisation of existing
     of magnitude (estimated at $117 million –        fabrication capacity in UK manufacturers.
     $206 million/year) as Federal Government         The manufacturing skills of UK fabricators
     expenditure, and of equal importance.            can be applied effectively to fuel cell
                                                      systems design, driving out production
10.3 Opportunities for the UK                         costs.
                                                    • System Integration: This is a weakness for
Many opportunities exist throughout the value         small- and medium-sized organisations.
chain for UK manufacturers. However, to realise       The UK has a very good opportunity to fill
these, UK companies must proactively seek             this space through companies like siGEN.
them out from the USA; the USA will not seek        • Codes and standards: These are extremely
out the UK companies. It is the responsibility of     important and there is ample opportunity
UK companies to establish relationships,              for the UK to play its part in their
promote skills and capitalise on opportunities        establishment and implementation.
themselves. If UK companies do not act quickly      • Field deployment and service: As products
the opportunity will pass them by.                    are deployed in the field there will be
                                                      increasing opportunities for training and
Key areas of opportunity are:                         field service support.

• Chemicals and MEAs: The UK already has            The UK science base is enormously respected
  a relatively strong position with                 in the USA. This means that UK scientists will
  established players such as Johnson               continue to have opportunities in the USA and
  Matthey and Morgan Fuel Cell. UK semi-            there is huge potential for a continued and
  conductor industry may find new                   even an accelerated ‘brain-drain’ in the coming
  opportunities emerging from the work at           years to fulfil the US fuel cell industry
  Albany Nanotechnology on thin film                employment demand. Alternatively, there is an
  fabrication of MEAs.                              opportunity to promote and capitalise on the
• Component Supply: A wide range of                 British science base abroad while providing
  components required in generator and              security to UK companies, technologists and
  system manufacture could be provided by           IP through targeted funding.
  UK companies. Microponents, for
  example, has customers worldwide.                 10.4 Recommendations
• Stack Manufacture: Although opportunities         • It is recommended that, in order for the
  remain in this area, the space is becoming           UK fuel cell and hydrogen technologies
  crowded, and the US knowledge legacy is              industries to compete with the USA,
  a major barrier to entry. Intelligent Energy         routes for cooperation and partnership
  is well placed here. However,                        should be sought and encouraged to
  opportunities remain for larger companies            enable UK companies to participate fully in
  of substance with IPR and know how                   the emerging global opportunities.
  readily available.                                   Identifying UK strengths and
76
                                                                                 US FUEL CELL MISSION



    complementary technologies is critical. The        Fuel Cells UK and other organisations look
    role of Fuel Cells UK is central to such           to engage UK utilities in the development,
    coordination.                                      demonstration and deployment of fuel cell
•   It is recommended that further                     and hydrogen technologies.
    consideration be given to hydrogen             •   It is recommended that regional activities
    production, delivery and storage                   relating to the demonstration and
    technologies. A study should be                    deployment of fuel cells and hydrogen
    undertaken to gain a better understanding          technologies in the UK be encouraged and
    of the UK hydrogen industry and to                 supported by Government. These
    evaluate the strengths and weaknesses of           activities, and the development of centres
    the industry and the opportunities and             of excellence, should form part of a
    threats facing it.                                 regional strategy covering these
•   It is recommended that Government                  technologies, aiming to build on regional
    support for fuel cells be increased                drivers, resources and technology
    significantly. This support should address:        strengths and link and coordinate
    R&D activities (e.g. materials                     complementary activities in order to
    development, testing facilities, etc.);            maximise the value of these initiatives to
    demonstration programmes (i.e. for                 the UK.
    product validation, customer and public        •   It is recommended that, given the highly
    awareness, etc.); and market stimulation           significant role of the US Department of
    mechanisms (e.g. through public                    Defense, consideration be given to the
    purchasing, tax credits, etc.). Such               potential role of the Ministry of Defence in
    increased support should be within the             beta prototype testing and evaluation.
    framework of an integrated strategy across     •   It is recommended that a prototype UK
    the various relevant government                    hydrogen industry association be
    departments (i.e. DTI, DfT, DEFRA, etc.).          established using Government seedcorn
•   It is recommended that consideration be            funding, along the lines of Fuel Cells UK.
    given to establishing a new                        Such an organisation would need to have
    Government/industry/academe partnership            strong and complementary linkages with
    programme supporting the development,              Fuel Cells UK and, after an initial period of
    demonstration and deployment of                    Government funding, would be likely to
    hydrogen production, delivery and storage          evolve into an industry association funded
    technologies and addressing infrastructure         by a membership base.
    issues relating to the emergence of a          •   It is recommended that support be given
    hydrogen economy.                                  by the Government to the establishing of a
•   It is recommended that the participation of        clean energy ‘venture network’ in the UK
    UK companies and research organisations            to overcome, at least in part, the lack of
    in US R&D, demonstration and market                venture capital track record for UK fuel cell
    stimulation programmes and schemes be              (and other clean energy) companies.
    actively encouraged using mechanisms           •   It is recommended that the UK science
    such as the 10-year US/UK Memorandum               base relating to fuel cell and hydrogen
    of Understanding on energy R&D.                    technologies be actively promoted. A
•   It is recommended that greater participation       review of research activities and
    of UK companies and other organisations in         competencies should be produced and
    activities being undertaken in North               maintained to complement the capability
    America relating to the development of             directory for UK companies currently being
    codes and standards for fuel cell and              prepared by Fuel Cells UK.
    hydrogen technologies be encouraged.
•   It is recommended that the Government,
                                                                                                  77
US FUEL CELL MISSION




Appendix A


MISSION PARTICIPANTS


Name                   Organisation              Telephone/Email           Address
Michaela Kendall       Adelan UK Ltd             +44 (0)121 414 8118       ICT Center, Birmingham
                                                 michaela@adelan.co.uk     University Research Park
                                                                           97 Vincent Drive, Birmingham,
                                                 B15 2SQ, UK
Kevin Pointon          Defence Science and       +44 (0)1980 614954        Room A5, MWC Building, DSTL
                       Technology Laboratory     kdpointon@dstl.gov.uk     Portsdown
                       (DSTL)                                              PO Box 325, Hampshire,
                                                 PO6 3SX, UK
Ray Eaton              Department of Trade and   +44 (0)20 7215 2650       Department of Trade and Industry
                       Industry (DTI)            Ray.Eaton@dti.gov.uk      1 Victoria Street, London,
                                                 SW1H OET, UK
Bruce Jenkyn-Jones IMPAX Asset                   +44 (0)20 7432 2618        Broughton House,
                   Management Ltd                b.jenkyn-jones@impax.co.uk 6-8 SackvilleStreet
                                                                            London, W1S 1DG, UK
David Hart             Imperial College London   +44 (0)20 7594 6781       RSM Building,
                                                 david.hart@ic.ac.uk       Prince Consort Road
                                                                                            ,
                                                                           London, SW7 2BP UK
Dennis Hayter          Intelligent Energy Ltd    +44 (0)20 7958 9828       42 Brook Street, London,
                                                 dennis.hayter@            W1K 5DB, UK
                                                 intelligent-energy.com
Philip Sharman         DTI-International         +44 (0)1235 510395        Pera, Pera Innovation Park
                       Technology Promoters      philip.sharman@pera.com   Melton Mowbray,
                                                                           Leicestershire, LE13 OPB, UK
Anthony Marrett        Microponents Ltd          +44 (0)121 3800100        PO Box 162,
                                                 anthony.marrett@          30 Curzon Street
                                                 microponents.com          Birmingham, B4 7XD, UK
Jonathan C Lewis       Rolls-Royce plc           +1 703 621 2825           14850 Conference Center Drive,
                                                 jonathan.c.lewis@         Chantilly,
                                                 rolls-royce.com           Virginia, 20151, USA
David McGrath          siGEN Ltd                 +44 (0)1224 715568        Mill of Craibstone,
                                                 djm@sigen.co.uk           Craibstone Estate
                                                                           Bucksburn, Aberdeen,
                                                                           Aberdeenshire, AB21 9TB,
                                                                           Scotland
Celia Greaves          Synnogy Ltd/Fuel Cells UK +44 (0)1832 720007        1 Aldwincle Road,
                                                 c.greaves@synnogy.co.uk   Thorpe Waterville
                                                                           Northants, NN14 3ED, UK
Bozkurt Aydinoglu      Voller Energy Ltd         +44 (0)781 3718128        Grove House, Grovely Way
                                                 bozkurt_aydinoglu@        SO51 9AX, UK
                                                 yahoo.co.uk




78
                                                                                      US FUEL CELL MISSION




Appendix B


MISSION COORDINATOR –                                 to collaboration between the UK and the USA.
SYNNOGY/FUEL CELLS UK                                 In September 2002, Synnogy coordinated a
                                                      DTI Global Watch Technology Mission to
About Synnogy                                         Canada to examine, first hand, the Canadian
                                                      experience of developing and
Synnogy is dedicated to helping all types of          commercialising fuel cells and hydrogen
organisations respond effectively to the              production, delivery and storage
opportunities and challenges around new               technologies. This Mission, which comprised
technology. Synnogy’s current technology              11 organisations, was regarded as highly
interests lie in the areas of energy                  successful. The results were disseminated at
generation, transmission and distribution,            a seminar in London that attracted over 70
storage and end-use.                                  attendees. Recommendations arising from
                                                      the Mission were important and timely inputs
The Synnogy Team has been active in the area          into the UK Government’s Energy White
of fuel cells for several years, during which it      Paper, published in February 2003, which led
has supported a wide variety of both public           to the creation of Fuel Cells UK and the
and private sector bodies in identifying new          instigation of a number of other important
business opportunities and optimising their           initiatives in support of the UK fuel cells
commercial strategies. In 2000 and 2001,              industry.
Synnogy organised two highly successful
Missions on aspects of fuel cell technology to        Synnogy has extensive contacts with a range
the USA. These Missions have provided                 of organisations with an interest in fuel cell
valuable insights into developments around            commercialisation. Over the past five years, it
commercialisation in the USA, and have lead           has worked with organisations as diverse as:




Advantica                      Irish Electricity Supply Board    Shell Hydrogen
Air Products                   Johnson Matthey                   Siemens
AMEC                           Katalyst Ventures                 Sulzer Hexis
Babcock Borsig                 Landi Renzo                       UBS Warburg
Birmingham City Council        Morgan Materials                  UK Department of Trade and Industry
Black & Decker                 National Grid                     UK Environment Agency
BNFL                           Porvair                           UK Health and Safety Executive
BP                             siGEN                             UK Ministry of Defence
DERA/DSTL                      Rolls-Royce                       W.S. Atkins (Viridian Power)
Innogy                         RWE                               Welsh Development Agency
Intelligent Energy             Scottish Power




                                                                                                       79
US FUEL CELL MISSION



About Fuel Cells UK

Fuel Cells UK provides a focus for the UK fuel
cell industry and works to foster its growth.
Activities include:

• raising the profile of the industry both in
  the UK and overseas;
• acting as a central liaison point for national
  and international contact;
• catalysing partnering opportunities
  between UK and overseas organisations;
• improving the positioning of the UK fuel
  cell industry in the international arena; and
• developing a pan-industry perspective on
  key issues.

At the time of writing, Fuel Cells UK was
preparing two key documents for the UK fuel
cell industry:

• The UK Fuel Cell Industry: A Capabilities
  Guide.
• A Fuel Cell Vision for the UK.

Fuel Cells UK is managed by Synnogy Ltd.
Following initial seedcorn funding from the
DTI, it is expected to evolve into a self-
funded industry organisation in early 2005.




80
                                                                                               US FUEL CELL MISSION




Appendix C


CONTACT DETAILS FOR US
ORGANISATIONS
Acumentrics Corporation                Brown University                         Electrochem Inc
Warren Ziegler, Vice President of      Dr William Risen, Professor of           Dr Radha Jalan, President/CEO, 400
Technology, 20 Southwest Park,         Chemistry, Department of Chemistry,      West Cummings Park, Woburn, MA
Westwood, MA 02090-1548                PO Box H, Providence, RI 02912-H         01801-6519
Phone: 781-461-8251                    Phone: +1 401 863 2611                   Phone: +1 781 938 5300
Fax: 781-461-1261                      Fax: +1 401 863 2594                     Fax: +1 781 935 6966
Email: wziegler@acumentrics.com        Email: wrisen@brown.edu                  Email: fuelcell@fuelcell.com
Web: www.acumentrics.com               Web: www.brown.edu                       Web: www.fuelcell.com

Allegro Ventures                       California Air Resources Board           Energy Conversion Devices Inc.
Peter Rothstein, 31 Greenridge Lane,   (CARB)                                   Alastair K Livesey, Director, Hydrogen
Lincoln, MA 01773                      Ron Friesen, Executive Director, CA      Energy Systems,
Tel: +1 781 259 0171                   Stationary Fuel Cell Collaborative,      2956 Waterview Drive,
Email: peter@allegroventures.com                         .O.
                                       1001 "I" Street, P Box 2815,             Rochester Hills, MI 48309
Web: www.allegroventures.com           Sacramento, CA 95812                     Phone: +1 248 293 0440
                                       Phone: + 1 916 323 1508                  Fax: +1 248 844 1214
Anuvu Fuel Cell Products               Fax: +1 916 322 4357                     Email: alivesey@ovonic.com
Rex Hodge, President/CEO,              Email: rfriesen@arb.ca.gov               Web: www.ovonic.com
3980 Research Drive, Sacramento,       Web: www.arb.ca.gov
CA 95838                                                                        Ford Motor Company
Phone: +1 916 921 7040 ext 201         California Fuel Cell Partnership         Phil Chizek, Manager, Marketing and
Fax: + 1 916 921 7044                  (CFCP)                                   Sales,
Email: rexhodge@anuvu.com              Catherine Dunwoody,                      Sustainable Mobility Technologies
Web: www.anuvu.com                     Executive Director,                      Lab-I, Room 1043,
                                       3300 Industrial Blvd. Suite 1000         15050 Commerce Drive North,
Boston University                      West Sacramento, CA 95691                Dearborn MI 48120
Dr Srikanth Gopalan, Assistant         Phone: +1 916 371 2870                   Phone: +1 313 390 5030
Professor, Dept. of Manufacturing      Fax: +1 916 375 2008                     Fax: +1 313 594 4901
Engineering,                           Email: cdunwoody@cafcp.org               Web: www.ford.com
15 Mary’s Street, Boston, MA 02215     Web: www.fuelcellpartnership.org
Phone: +1 617 358 2297                                                          GE Power Systems
Faxl: +1 617 353 5548                  Concurrent Technologies Corporation      Dr Nguyen Q Minh, Manager, Fuel
Email: sgopalan@bu.edu                 Robert J Unger, 100 CTC Drive,           Cells,
Web: www.bu.edu                        Johnstown, PA 15904-1835                 Hybrid Power Generation Systems,
                                       Tel: +1 814 269 2721                     General Electric Company, 19310
Breakthrough Technologies              Fax: +1 814 269 2402                     Pacific Gateway Drive, Torrance, CA
Institute/Fuel Cells 2000              Email: ungerb@ctcgsc.org                 90502-1031
Jennifer Gangi, Program Director,      Web: www.ctc.com                         Phone/Fax: +1 310 538 7250
Fuel Cells 2000, 1625 K Street, NW,                                             Email: nguyenminh@ps.ge.com
Suite 725, Washington DC, 20006        Connecticut Clean Energy Fund            Web: www.gepower.com
Phone: +1 202 785 4222 x17             Dr Subhash Chandra, Managing
Fax: +1 202 785 4313                   Director and Chief Technology Officer,   GenCell Corporation
Email: jennifer@fuelcells.org          999 West Street, Rocky Hill,             Daniel R Connors, Vice President,
Web: www.fuelcells.org                 CT 06067                                 Business and Marketing, 1432 Old
                                       Phone: +1 860 563 0015 x283              Waterbury Road, Southbury, CT
                                       Fax: +1 860 563 6978                     06488
                                       Email:                                   Phone: +1 203 264 2515
                                       subhash.chandra@ctinnovations.com        Fax: +1 203 264 0466
                                       Web: www.ctcleanenergy.com               Email: drc@gencellcorp.com
                                                                                Web: www.gencellcorp.com

                                                                                                                  81
US FUEL CELL MISSION



General Motors Corporation            Mechanology LLC
Stan Horky, Manager,                  Don Wright, 453 South Main street,       Proton Energy Systems
Business Development,                 Attleboro, MA 02703                      Trent M. Molter, Senior Vice
GM Fuel Cell Activities,              Phone: +1 508 223 1920                   President, Technology and New
General Motors Corporation,           Fax: +1 508 226 3697                     Business
Research and Development Centre       Email: don@mechanology.com               10 Technology Drive, Wallingford,
Mail Code 480-102-000,                Web: www.mechanology.com                 CT 06492
30500 Mound Road,                                                              Phone: +1 203 678 2185
Warren, MI 48090-9055                 National Hydrogen Association            Fax: +1 203 949 8078
Phone: +1 586 986 5149                Lara Neer, Vice President,               Email:
Fax: +1 586 986 2244                  Management Operations, 1800 M            trent.molter@protonenergy.com
Email: stan.horky@gm.com              Street, NW, Suite 300, Washington        Web: www.protonenergy.com
Web: www.gm.com                       DC 20036-5802
                                      Phone: +1 202 223 5547                   Quantum Technologies Inc.
Hydrogen Source                       Fax: +1 202 223 5537                     Andris 'Andy' R Abele, Director,
Greg Sandelli, Marketing Manager,     Email: lneer@ttcorp.com                  Business Development,
Government Programmes,                Web: www.HydrogenUS.org                  17872 Cartwright Road, Irvine,
60 Bidwell Rd, South Windsor,                                                  CA 92614
CT 06074                              Nissan Technical Center North            Phone: +1 949 399 4527
Phone: +1 860 987 5008                America Inc.                             Fax: +1 949 399 4601
Fax: +1 860 987 5025                  Brian D. Johnston, Engineering           Email: aabele@qtww.com
Email: sandelg@hydrogensource.com     Researcher, Electric Fuel Cell           Web: www.qtww.com
Web: www.hydrogensource.com           Vehicles, 3300 Industrial Blvd., Ste.,
                                      400, W. Sacramento, CA 95691             South Coast Air Quality Management
Los Angeles Department of Water       Phone: +1 916 375 3704                   District (SCAQMD)
and Power                             Fax: +1 916 375 3709                     Dr Matt Miyasato, Technology
Robert Castro, Dept. of Distributed   Email: johnstb@ntcna.nissan-usa.com      Demonstration Manager, Science &
Generation,                           Web: www.nissanusa.com                   Technology Advancement,
John Ferraro Building,                                                         21865 Copley Dr.,
111 Hope Street,                      NYSERDA - New York State Energy          Diamond Bar, CA 91765-4178
Los Angeles, CA 90012                 Research and Development Authority       Phone: +1 909 396 3249
Phone: +1 213 367 0410                Valerie S. Milonovich, Manager for       Fax: +1 909 396 3252
Fax: +1 213 367 0777                  Special Projects, 17 Columbia Circle,    Email: mmiyasato@aqmd.gov
Email: Robert.Castro@ladwp.com        Albany, NY 12203-6399                    Web: www.aqmd.gov
Web: www.ladwp.com                    Phone: +1 518 862 1090 x3326
                                      Fax: +1 518 862 2398                     Suffolk University
Massachusetts Institute of            Email: vsm@nyserda.org                   Dr Tom 'Soroosh' Naderi,
Technology                            Web: www.nyserda.org                     Environmental Engineering Program
Leslie Bromberg, Principal Research                                            Director, Beacon Hill, 41 Temple
Engineer & Group Leader,              NYSTAR – New York State Office of        Street, Boston, MA 02114-4280
Department of Plasma Science &        Science, Technology and Academic         Phone: +1 617 994 4297
Fusion, NW16-108                      Research                                 Fax: +1 617 367 5063
Phone: +1 617 253 6919                Kathleen J. Wise, Director of            Email: naderi@ee.suffolk.edu
Email: brom@PSFC.MIT.EDU              Programs,                                Web: www.suffolk.edu
Web: www.media.mit.edu                30 South Pearl Street, 11th Floor,
                                      Albany, NY 12207                         Teledyne Energy Systems Inc.
Massachusetts Technology              Phone: +1 518 292 5700                   Mr Rhett Ross, President,
Collaborative                         Fax: +1 518 292 5799                     10707 Gilroy Road,
Barry Newstead, 75 North Drive,       Email: kwise@nystar.state.ny.us          Hunt Valley, MD. 21031-1311
Westborough, MA 01581                 Web: www.nystar.state.ny.us              Phone: +1 410 891 2287  .
Phone: +1 508 870 0312 x223                                                    Fax: +1 410 771 8619
Fax: +1 508 898 9226                  Plug Power Inc.                          Email: rhett.ross@teledynees.com
Email: newstead@masstech.org          Gerard L. Conway, Director of            Web: www.teledynees.com
Web: www.masstech.org                 Government Relations,
                                      968 Albany-Shaker Road,
                                      Latham, NY 12110
                                      Phone: +1 518 782 7700 x1970
                                      Fax: +1 518 782 7884
                                      Email:
                                      gerard_conway@plugpower.com
                                      Web: www.plugpower.com

82
                                                                                                US FUEL CELL MISSION



United Technologies Research Center      US Department of Defense - Fuel         UTC Fuel Cells
Ella Kisitis, Manager, Strategic         Cell Test & Evaluation Center (FCTec)   Jim Bolch, Vice President,
Business Development, UTC Fuel           Dr. Michael J. Binder, US Army          Operations,
Cell Program                             ERDC/CERL Fuel Cell Program             195 Governor’s Highway, 90/100
411 Silver Lane, MS 129-21, East         Manager,                                Bidwell Rd, South Windsor, CT 06074
Hartford, CT 06108                       100 CTC Drive, Johnstown, PA            Phone: +1 860 727 2200
Phone: +1 860 610 7816                   15904-1935                              Fax: +1 860 727 2319
Fax: +1 860 610 7253                     Phone: +1 217 373 7214                  Email: General@UTCFuelCells.com
Email: kisilied@utrc.utc.com             Email:                                  Web: www.utcfuelcells.com
Web: www.utrc.utc.com                    michael.j.binder@erdc.usace.army.mil
                                                                                 UTC Power
University of Albany, Albany             US Department of Energy                 Michael Cassidy, Director, Strategic &
Nanotechnology                           Valri Lightner, Technolgy               Business Development,
Harry Efstathiadis, Staff Scientist,     Development Manager, Hydrogen,          195 Governor’s Highway, 90/100
University at Albany                     Fuel Cells and Infrastructure           Bidwell Rd, South Windsor, CT 06074
251 Fuller Road, Albany, NY 12203        Technologies                            Phone: +1 860 727 7916
Phone: +1 518 437 605                    EE-2H                                   Fax: +1 860 998 9988
Fax: +1 518 437 8687                     1000 Independence Ave., SW              Email:
Email:                                   Washington, DC 20585                    michael.cassidy@UTCPower.com
hefstathiadis@uamail.albany.edu          Phone: +1 202 586 0937                  Web: www.utcpower.com
Web: www.albanynanotech.org              Fax: +1 202 586 9811
                                         Email: valri.lightner@ee.doe.gov        Worcester Polytechnic Institute, Fuel
University of California, Davis,         Web: www.eere.energy.gov/               Cell Center
Institute of Transportation Studies                                              Dr Ravindra Datta, Professor and
Marshall Miller,                         US Department of Energy - National      Department Head and Director of
University of California, Institute of   Energy Technology Laboratory (NETL)     Fuel Cell Center, Department of
Transportation Studies,                              .
                                         Dr Joseph P Strakey, Director,          Chemical Engineering,
Davis, California, USA 95616             Strategic Center for Natural Gas,       100 Institute Road,
Phone: +1 530 752 6548                   Solid Electrolyte Conversion Alliance   Worcester, MA 01609-2280
Fax: +1 530 752 6572                     (SECA),                                 Phone: +1 508 831 6036
Email: mmiller@ucdavis.edu               3610 Collins Ferry Road, PO Box         Fax: +1 508 831 5853
Web: www.fcvcenter.ucdavis.edu           880, Morgantown, WV 26507-0880          Email: rdatta@wpi.edu
                                         Phone: +1 304 285 4619                  Web: www.wpi.edu
University of California, Irvine,        Fax: +1 304 285 4216
National Fuel Cell Research Center       Email: joseph.strakey@netl.doe.gov      ZTEK Corporation
Prof. Scott Samuelsen, Director,         Web: www.netl.doe.gov/scng              Dr Michael S. Hsu, President, 300
NFCRC, Henry Samueli School of                                                   West Cummings Park, Woburn,
Engineering, University of California,   US Department of Transport - Volpe      MA 01801
Irvine, CA 92697-3550                    National Transportation Systems         Phone: +1 781 933 8339
Phone: +1 949 824 5468                   Center                                  Fax: +1 781 933 8396
Fax: +1 949 824 7423                              .
                                         William P Chernicoff, General           Email: mhsu@ztekcorporation.com
Email: gss@nfcrc.uci.edu                 Engineer, Advanced Vehicle              Web: www.ztekcorp.com
Web: ww.nfcrc.uci.edu                    Technologies Division,
                                         55 Broadway, Kendall Square,
University of Connecticut,               Cambridge, MA 02142 1093
Connecticut Global Fuel Cell Center      Phone: +1 617 494 2756
(CGFCC)                                  Fax: +1 617 494 2961
Prof. Nigel Sammes, United               Email: chernicoff@volpe.dot.gov
Technologies Chair Professor in Fuel     Web: www.volpe.dot.gov
Cell Technology and Director of
Operations, CGFCC,                       US Fuel Cell Council
44 Weaver Road, Unit 5233,               Robert Rose, Executive Director,
Storrs, CT 06269-5233                    1625 K Street, NW, Suite 725,
Phone: +1 860 486 8379                   Washington DC, 20006
Fax: +1 860 486 8378                     Phone: +1 202 293 5500
E-mail: sammes@engr.uconn.edu            Fax: +1 202 785 4313
Web: www.ctfuelcell.uconn.edu            Email: brose@usfcc.com
                                         Web: www.usfcc.com




                                                                                                                   83
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Appendix D


FUEL CELL CLUSTERS AND                             Teledyne Energy Systems Inc
ORGANISATIONS IN THE USA                           (www.teledynees.com)
                                                   Teledyne is a leading supplier of hydrogen
The North-Eastern Cluster                          generators for a range of applications and in
                                                   2002, the company unveiled its H2Oasis
a) Washington, DC and Baltimore (MD) Area          Hydrogen Gas Station for high purity
                                                   hydrogen production and delivery for vehicles
Breakthrough Technologies Institute                and industrial applications. Teledyne also
(www.fuelcells.org)                                supplies PEM fuel cells and fuel cell testing
BTI is a non-profit organisation formed to         stations.
promote the development and
commercialisation of fuel cells. One of BTI’s      b) New York/Albany Area
activities is to maintain the FuelCells2000
website. BTI is also a world-leading source of     NYSERDA - New York State Energy
fuel cell information. Publications include Fuel   Research and Development Authority
Cell Quarterly – and The Fuel Cell Directory -     (www.nyserda.org)
a comprehensive listing of organisations           Established in 1975, the New York State
involved in fuel cell technology.                  Energy Research and Development Authority
                                                   (NYSERDA) administers funds for research
National Hydrogen Association                      projects to help the State's businesses and
(www.hydrogenus.org)                               municipalities with their energy and
The National Hydrogen Association is a             environmental problems. NYSERDA began
membership organisation for hydrogen               partnering in PEM fuel cell technology in
producers and users. The NHA acts as a             1992 and are currently co-funding a number
primary source of information on hydrogen          of projects to help develop fuel cell
commercialisation, serves as a forum for           technology and demonstrate its viability for
information exchange and cooperative               the residential market. These include a $6
projects. It provides a national focal point for   million project, started in 1999, to build, test,
hydrogen interest that can assist in               evaluate and demonstrate 80 Plug Power
developing hydrogen initiatives in emerging        7kW fuel cells. NYSERDA is also supporting
technologies.                                      the development of 50KW PEM fuel cell for
                                                   passenger cars.
US Fuel Cell Council (www.usfcc.com)
USFCC is an industry association dedicated         NYSTAR – New York State Office of
to the commercialisation of fuel cells in the      Science, Technology and Academic
USA. Members include the world's leading           Research (www.nystar.state.ny.us)
fuel cell developers, manufacturers, suppliers     NYSTAR was created as part of the landmark
and customers. USFCC provides technical            Jobs 2000 Act (J2K) to harness the economic
advice, issues reports and provides                power within New York State's public and
networking opportunities to establishes links      private research universities and institutions
between comparable activities in the USA           by investing in job-creating technologies. As
and worldwide.                                     of March 2003, NYSTAR has invested more

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than $125 million in new funds in research        In the field of energy technologies, Allegro’s
universities across the State. NYSTAR             particular interests include technology
incorporates the Center for Advanced              breakthroughs in fuel cells and components
Technology (CAT) Development Program,             and in hydrogen technologies.
which was established in 1983 to support
university-industry collaboration in research,    Boston University – Department of
education and technology transfer, with a         Manufacturing Engineering (www.bu.edu)
strong focus on helping New York businesses       The Department of Manufacturing
gain a competitive technological edge.            Engineering focuses on engineering design,
                                                  manufacturing processes and materials,
Plug Power Inc. (www.plugpower.com)               together with the management and control of
Plug Power is a leading supplier of PEM fuel      man-made systems. The R&D programme
cells for homes, small commercial and             encompasses a range of high-technology
automotive applications. Formed in 1997 as a      applications including nanoelectronics and
spin-off from MTI Micro Fuel Cells, Plug          fuel cells. Fuel Cell activities include SOFC
Power is a major player in the US fuel cells      materials research into development of
industry for stationary applications. Recent      intermediate operating temperature (600-
projects include the supply of 75 fuel cells to   750°C) SOFCs. Specific projects include
Long Island Power Authority (LIPA) the supply     research into cathode, anode and cell process
of nine 5kW CHP units for evaluation by the       development.
US Navy in California - the first sale of Plug
Power fuel cells in California. In 2002 Plug      Brown University Research Foundation
Power acquired H Power.                           (www.brown.edu)
                                                  The Brown University Research Foundation is
c) New England Area                               an independent not-for-profit corporation
                                                  serving the technology licensing needs of
Acumentrics (www.acumentrics.com)                 Brown University. Work at the university has
Acumentrics technologies include tubular          lead to the development of a procedure for
Solid Oxide Fuel Cells (SOFCs) generating         increasing the surface of polymer electrolyte
power from octane or natural gas. In 2001         membranes such as Nafion used in fuel cells.
Acumentrics supplied SOFC systems for use         A catalyst such as platinum can be deposited
in auxiliary power units and generators for       on the larger surface in greater amounts than
military applications. Their technology was       previously to improve functionality. It is
based on original patents developed by K          thought that the process may aid in making
Kendall in UK. The company has just been          fuel cells more scalable.
selected by DOE/NETL for their SECA
Program.                                          Connecticut Clean Energy Fund
                                                  (www.ctcleanenergy.com)
Allegro Ventures (www.allegroventures.com)        The Connecticut Clean Energy Fund (CCEF)
Allegro Ventures is a venture capital firm        invests in enterprises that promote and
founded to make seed-stage and follow-on          develop sustainable markets for energy from
investments in companies with fundamental         renewables and fuel cells. CCEF also
breakthroughs. Allegro prefers a hands-on         supports a wide range of initiatives involving
approach with its portfolio companies, in         research, education, outreach and other
some cases dispatching a partner to work          activities, focusing primarily on breakthrough
with them on-site. The fund invests primarily     developments in clean energy technologies
in business emerging from university              and soliciting suitable projects through its
research in the areas of nanotechnology,          Fuel Cell and Solar Requests for Proposals.
energy technologies, and advanced software.
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Electrochem Inc (www.fuelcellcom)                   break down the barriers facing the use of fuel
ElectroChem has worked on several aspects           cells in Massachusetts by assisting with
of fuel cell technology and its products            some of the capital costs associated with the
include PEM electrodes and MEAs, fuel cell          installation of fuel cells and providing funding
testing equipment and PEM fuel cell power           support for services related to fuel cell
plants from 20W to 10kW.                            feasibility studies.

GenCell (www.gencellcorporation.com)                Mechanology LLC (www.mechanology.com)
GenCell Corporation is a developer of fuel          Mechanology produces compressors and
cells and fuel cell power systems. The              pumps using technology based on its
company has developed a stationary fuel cell        patented Toroidal Intersecting Vane Machine
power generator featuring bipolar separator         (TIVM). Mechanology's air management
plate and internal reforming technologies to        system reduces the size and cost of the fuel
reduce costs and improve the performance of         cell stack and was chosen to receive a $2.7
fuel cells. GenCell technology is applicable to     million contract from the DOE because it has
PEM, SOFC and MCFC fuel cells.                      the only technology that may solve every
                                                    stringent requirement of "under-the-hood" air
Hydrogen Source                                     management systems.
(www.hydrogensource.com)
HydrogenSource is focused the manufacture           Proton Energy Systems
of fuel processing systems to produce               (www.protonenergy.com)
hydrogen. In 2002, the company launched it's        Proton Energy Systems produces hydrogen
VEGA 5, the world's first stand-alone 5kW           fuel for vehicle and portable fuel cell
fuel processing system. Hydrogen Source is          applications, based on its HOGEN® PEM
a joint partnership of UTC and Shell.               hydrogen generators and UNIGEN®
                                                    regenerative PEM fuel cell systems. The
Massachusetts Institute of Technology               hydrogen generator produces hydrogen from
(www.media.mit.edu)                                 electricity and water and the UNIGEN
The Fuel Cell Laboratory at MIT focuses on          regenerative fuel cell systems combine this
optimising transport processes in fuel cells in     hydrogen generation technology with a fuel
order to achieve the highest possible current       cell power generator.
density. One current project is investigating
the design of electrodes for aqueous                Suffolk University (www.suffolk.edu)
electrolyte fuel cells. Other research topics       Suffolk University’s Department of Physics is
include mobile applications for fuel cells and      the home of the Sagan Energy Research
integrating fuel cells to the national grid.        Laboratory. The laboratory provides research
                                                    opportunities for faculty and students in solar
Massachusetts Technology Collaborative              engineering, telecommunications, hydrogen
(www.masstech.org)                                  fuel cells, thin films and ellipsometry, and
The Massachusetts Technology Collaborative          atomic spectroscopy.
has developed a Green Power Program that
helps to put newly developed renewable              United Technologies Research Center
energy into the marketplace. As part of this        (UTRC) (www.utrc.utc.com)
programme, the organisation’s Fuel Cell             UTRC is the R&D branch of United
Initiative aims to promote the use of               Technologies Corporation. The centre has a
commercially available fuel cells in                number of departments and ‘program
applications that require high reliability and/or   offices’. Each program office partners with
power quality. The initiative is working to         one of UTC's companies, including UTC Fuel


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Cells. Current product innovations include the     undertaken a review the fuel cell power plant
development is gasoline-powered vehicles           (FCPP) technology to identify potential
driven by fuel cells.                              impacts and issues related a proposed FCPP
                                                   installation.
University of Albany, Albany
Nanotechnology (www.albanynanotech.org)            UTC Fuel Cells (www.utcfuelcell.com)
Albany Nanotech is a research, development,        UTC is a major US fuel cells company which
technology deployment and education                has sold worldwide over 200 stationary
organisation that supports commercialisation       phosphoric acid fuel cells (PAFCs). The
of advanced technologies through leveraged         company supplies to NASA and every US
partnerships between business, government          manned space flight has used UTC fuel cells
and academia. In fuel cell development,            for electricity and water. UTC is currently
Albany Nanotech has entered into a five-year       shifting its focus to the development of PEM
research and development agreement with            fuel cells for large commercial, residential and
Plug Power to investigate the use                  transportation markets. UTC is also one of
nanotechnology to manipulate the basic             the two dominant providers of fuel cells to
atomic structure of fuel cell membranes. It is     the California market and is closely involved
thought that the use of nanomaterial               in both the California Fuel Cell Partnership
components provides considerable promise           and the Stationary Fuel Cell Collaborative.
for efficient, light-weight, stable, more
compact fuel cell systems.                         UTC Power (www.utcpower.com)
                                                   A subsidiary of United Technologies Corp.,
University of Connecticut – The                    UTC Power leads the company’s activities in
Connecticut Global Fuel Cell Centre                distributed generation. As such, UTC Power
(CGFCC) (www.ctfuelcell.uconn.edu)                 incorporates UTC Fuel Cells, a leader in the
Founded in 2001, the Connecticut Global Fuel       production of fuel cells for commercial, space
Cell Centre aims to be a world leader in fuel      and transportation applications.
cell research, education and product
development. Current research includes             Worcester Polytechnic Institute, Fuel Cell
catalysis; inomers for PEM fuel cells; and         Center (www.wpi.edu)
PEM fuel cell R&D.                                 The WPI Fuel Cell Center is an industry-
                                                   university alliance for furthering fuel cell
US Department of Transport - Volpe                 technology through education and through
National Transportation Systems Center             research and development of fuel cells. The
(www.volpe.dot.gov)                                centre currently performs research in
The Volpe National Transportation Systems          modelling, development of higher
Center is a federal, fee-for-service               temperature and carbon monoxide (CO)
organisation within the US Department of           tolerant PEM fuel cells, catalytic reformer
Transportation (DOT) and is an internationally     design, non-pyrophoric reforming and water-
recognised centre of transportation expertise.     gas shift catalysts, preferential CO oxidation
Through research and development,                  catalysts, low temperature shift catalysts,
engineering, and analysis, the Volpe Center        palladium and other inorganic membranes,
serves as a catalyst for innovation and a          and molten carbonate fuel cells.
source of critical insight into future transport
options. Volpe’s fuel cell and alternative fuels   ZTEK Corporation (www.zteccorp.com)
interests lie within its Advanced Vehicles         ZTEK develops and manufactures solid oxide
Technologies Division and staff there have         fuel cell systems. The company has
presented a number of papers on these              successfully demonstrated a 1kW fuel cell
technologies. The Volpe Center has also            stack, with over 15,000 hours of operation,
                                                                                                 87
US FUEL CELL MISSION



and currently has a 25kW system using               GE Power Systems (www.gepower.com)
natural gas as the fuel.                            Since early 1999, GE Distributed Power has
                                                    been evaluating low temperature fuel cell
d) California Area                                  products for residential and small commercial
                                                    applications. The technology is designed to
Anuvu (www.anuvu.com)                               generate electricity at homes, or small
Anuvu is a small company that started up            businesses, efficiently and with emissions
about eight years ago. They claim to have           levels lower then the most modern large
produced the smallest, lightest PEM fuel            scale power plants.
cells per kW power in the world. Their target
markets are: uninterruptible power supplies         Los Angeles Department of Water and
(UPS); commercial lawn mowers; electric             Power (www.ladwp.com)
outboard motors for boats; fork lift trucks; golf   LADWP has also been proactive in introducing
carts; auxiliary power in trucks; and the longer    fuel cell technologies and recently unveiled the
term market for auto-engine replacement.                 ’s
                                                    USA ‘largest, most efficient commercial
Anuvu is currently working on new designs           design fuel cell power plant’. The John Ferraro
that could further reduce (by 33%) the size         Building (JFB) Fuel Cell Power Plant,
and weight of their fuel cell.                      manufactured by FuelCell Energy, provides
                                                    250kW of electricity and is the latest in a series
California Air Resources Board (CARB)               of LADWP programs designed to address air
(www.arb.ca.gov)                                    quality in Los Angeles. The Department also
CARB is a part of the California                    operates a commercial 200kW fuel cell plant,
Environmental Protection Agency. A major            manufactured by UTC Fuel Cells, which began
goal is to promote demonstration and                operation in January 2002.
commercialisation of fuel cells. CARB is an
active member of the California Fuel Cell           Nissan Technical Center North America Inc.
Partnership for auto applications and the           (www.nissanusa.com)
Stationary Fuel Cell Collaborative, which will      Nissan Technical Center North America
support pilot projects and promote stationary       (NTCNA) is responsible for blending
fuel cell applications in California.               technology and engineering to create cars
                                                    that deliver total customer satisfaction.
California Fuel Cell Partnership (CFCP)             NTCNA employs over 575 people and has
(www.fuelcellpartnership.org)                       operations at a number of locations in the
CFCP is a collaboration of auto                     USA. NTCNA’s fuel cell research is carried out
manufacturers, fuel cell developers, fuel           in Sacramento, CA.
providers, and other government agencies.
Its aim is to demonstrate the viability of fuel     Quantum Technologies (www.qtww.com)
cell vehicles and explore how to best               Quantum Technologies develops fuel storage,
commercialise fuel cell technology. The             fuel metering, electronic control systems, and
Partnership has constructed a fuel cell facility    fuel system integration for automotive
in West Sacramento, which houses fuel cell          applications. These have included the Hyundai
vehicles, a hydrogen refuelling station and a       Santa Fe and the Thor (ElDorado National) Fuel
methanol fuelling station. Automotive               Cell Bus. Over recent years Quantum has
partners including DaimlerChrysler, Ford and        made considerable investment in new
GM also occupy indoor garage "bays"                 technologies and products and has established
designed to house vehicles for routine              what the company claims to be the largest
servicing, repairs, and diagnostic purposes.        development centre in the world focused on
                                                    advancing gaseous fuel system technology.


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                                                                                US FUEL CELL MISSION



South Coast Air Quality Management                 batteries and PV cells. The company works
District (SCAQMD) (www.aqmd.gov)                   through joint ventures and licensing
SCAQMD is the air pollution control agency         arrangements. Through its joint venture,
for the Southlands region of California which      Texaco Ovonic Battery Systems, ECD is
includes the Los Angeles area. SQAMD is            focusing on battery markets for fuel cell
proactive in promoting fuel cell technologies      electric vehicles (FCEVs) and hybrids.
and has supported a number of projects.
These include a demonstration of solid oxide       Ford Motor Company (www.ford.com)
fuel cells to power 10 homes in southern           The main technology Ford is examining is
California and a fuel cell project to reduce       PEM fuel cells for automotive use, in
pollution during diesel truck idling. SCAQMD       conjunction with Xcellsis (now owned by
is also a sponsor of the LADWP project             Ballard Power Systems of Canada). Ford is
described above.                                   active in fuel cell vehicle development and
                                                   has produced a number of prototypes. The
UC Irvine – The National Fuel Cell Research        Focus FCV is a Ford Focus modified slightly
Center (www.nfcrc.uci.edu)                         for packaging the hydrogen fuel cell
Located at the University of California, Irvine,   components. The Focus FCV is powered by
NFCRC is the main academic centre                  PEM fuel cell technology using Ballard Mark
academic fuel cell research in California.         900 Series stacks. The Ford Focus Hybrid
Research is focused on stationary power and        Fuel Cell Vehicle combines a Ni-MH high
its role as a distributed generation technology.   voltage battery with the hydrogen-powered
While some work in done on fuel cell               fuel cell. The FCV-Hybrid is Ford's third
components, most of the research is looking        generation fuel cell vehicle and fleet sales are
at integration and infrastructure issues, e.g.     scheduled to begin in 2004. The Ford Focus
deployment and connectivity. Research is in        FC5 also based on a modified Ford Focus, is
five areas: systems, operations; cycle             powered by a methanol reformer fuel cell
analyses, components and markets.                  system and electric motor. The Ford P2000
                                                   prototype system is built on a lightweight
UC Davis – Institute of Transportation             research platform and uses Ballard Mark 700
Studies (www.fcvcenter.ucdavis.edu)                Series PEM stacks.
The FCV Center was created in 1998. Its
primary research activity is the Fuel Cell         General Motors Corporation
Vehicle Modelling Program which is funded by       (www.gm.com)
a consortium of automotive and energy              GM is a large investor in fuel cell R&D. The
companies as well as three government              company boasts the world's first gasoline
agencies. Other research at the centre             processor for extracting hydrogen and its fuel
includes catalysts, nanomaterials, energy cycle    cell stacks are arguably among the world's
analyses and the use of fuel cells for auxiliary   most efficient. GM’s HydroGen1 fuel cell
power on trucks. In a project supported by         vehicle, now part of the demonstration fleet
SCAQMD, CARB and the DOE, the FCV                  at the California Fuel Cell Partnership, has
Center will develop the fuel cells for use in      accumulated more than 20,000 miles during
diesel trucks to reduce pollution during idling.   field testing, operating in the hottest
                                                   temperatures on record for a fuel cell vehicle.
e) Detroit Area                                    In early 2002, GM introduced its AUTOnomy
                                                   concept. AUTOnomy is the first vehicle
Energy Conversion Devices                          designed from the ground up around a fuel
(www.ovonic.com)                                   cell propulsion system. To further its fuel cell
ECD is a materials developer. In particular, the   development, GM has established
company develops Ovonic materials for eg           partnerships with many leading companies in
                                                                                                 89
US FUEL CELL MISSION



the field, including Quantum Technologies,
Hydrogenics Corp. and Giner Electrochemical
Systems. The company has also just signed
an agreement with Dow Chemicals for a fuel
cell project, looking at all aspects of hydrogen
production, storage and distribution. GM has
now added a stationary power unit capable of
powering a house to its list of research and
development inventions.

f) Western Pennsylvania Area

Concurrent Technologies Corporation
(www.ctc.com)
Concurrent Technologies Corporation (CTC) is an
independent, applied R&D organisation that
provides management and technology-based
solutions to clients from government and the
private sector. CTC operates a Fuel Cell Test and
Evaluation Center (FCTec) under sponsorship
from the US Department of Defense. FCTec's
primary focus is to accelerate the development
of fuel cell technologies for military and
commercial applications. However, under the
agreement, CTC will also evaluate commercially
viable technologies such as PEM, PAFC, MCFC,
and SOFC.

US Department of Defence (DoD) - Fuel
Cell Test and Evaluation Center
(www.fctec.com)
Located at Concurrent Technology Corp’s
Environmental Test facility, this is a national
resource for the independent, unbiased
testing and validation of fuel cell power plants
for military and commercial applications.

US Department of Energy (DOE) - National
Energy Technology Laboratory (NETL)
(www.netl.doe.gov)
NETL sponsors and manages a number of
fuel cell programmes –including the Solid
Electrolyte Conversion Alliance (SECA) – and
undertakes some in-house R&D on gas
dynamics for fuel cells. NETL is also working
towards the production of ultra-clean fuels
and seems to provide the technical
coordination for the wider ultra clean fuels
programme.
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                                                                               US FUEL CELL MISSION




Appendix E


MISSION DISCUSSION TOPICS AND                     Technology
QUESTIONS                                         • What alternative materials might improve
                                                    performance/reduce costs?
The key questions to be addressed by the          • Is materials research a large focus of the
Mission fell into three groups:                     USA's funding? Are there opportunities for
                                                    collaboration?
Markets                                           • What is the status of reformer technology
• What are the timescales for                       and how is this likely to evolve in the short
  commercialisation?                                term?
• Where will the early niche markets be?          • What is the status of legislation around the
• Where will the medium/long term markets           storage of hydrogen?
  be?                                             • How are issues around safety and
• Are there opportunities for technology            perceived risk being addressed?
  transfer to accelerate commercialisation?       • Can skills needs to be met? If not, what
• What are the key barriers to                      action is required?
  commercialisation?                              • How can power density, manufacturability,
• What enablers will facilitate                     integration, standardisation, catalyst
  commercialisation of fuel cells?                  poisoning, power quality and system
• Are there barriers that are specific to the       configuration (e.g. size reduction) be
  USA?                                              optimised?
• What are the opportunities and challenges
  around the evolution from an R&D                Economics
  situation to a mass production                  • What economic instruments might be
  environment?                                      appropriate to stimulate commercialisation
• How can these be overcome?                        and what might be their impact?
• How will non-US markets be supplied?            • Will they differ significantly across
• How will supply chains for different              technologies, or other countries?
  markets evolve, and where are there             • Where will fuel cells fit into the hydrogen
  gaps?                                             economy? How can they be optimised for
• What is the role for Government?                  use in hybrid and combined situations?
• How is the hydrogen economy likely to           • How much impact will economies of scale
  evolve and its implications?                      have on cost?
• How has funding for fuel cell related           • How can the costs of e.g. plate
  technology been managed and is there              manufacture, platinum loading, balance of
  now sufficient funding available in the US        plant be minimised?
  market for all levels of organisation? If not   • Is there still an opportunity for innovation
  how might this be resolved?                       in fuel cell design and structure or is the
• Do you see specific areas in which                US system becoming dominated by
  international cooperation is required or          existing players?
  would greatly benefit all parties?
• How will fuel cells differentiate themselves
  from competition?

                                                                                                91
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Appendix F


Technology       Electrolyte      Power Range     Description, Operating Temperature               Technology Status
                                                  and Applications
First Generation Fuel Cells – Mature
Alkaline fuel    Aqueous          A few watts to Characterised by a liquid potassium               Mature technology.
cell (AFC)       alkaline,        tens of        hydroxide (KOH) electrolyte. Main issues          Expensive but used
                 usually KOH’     kilowatts      with these are the possible contamination         in niche applications.
                 soaked in a                     of the electrolyte by CO2.                        Few manufacturers
                 matrix                          Operating Temperature: 90-100ºC                   currently active.
                                                 Applications: Military, space                     Technology may still
                                                                                                   find applications.
Phosphoric       Liquid           200kW-11MW      Moderate operating temperature                   200kW systems
acid fuel cell   phosphoric                       precludes internal reforming of hydrocarbon      offered but not
(PAFC)           acid soaked in                   fuels, and so a separate reformer is             commercially
                 a matrix                         required. (True of any low temp fuel cell.)      competitive with
                                                  Operating Temperature: 175-200ºC.                other forms of
                                                  Applications: Stationary/distributed power.      generation without
                                                                                                   specialised
                                                                                                   circumstances.
Second Generation Fuel Cells – Currently Under Development
(i.e. concept – prototype – pre-production – early adoption – production)
Proton           Solid perfluoro- A few watts to Traditional PEM direct hydrogen solid             ‘Commercial’
exchange         sulphonic acid many hundreds polymer fuel cell. Whilst Ballard, Siemens           products now
membrane         polymer          of kilowatts   and Babcock have delivered 200kW systems,         available although
(PEM)                                            generally they operate at around the few           power output limited
fuel cell                                        watts to 25kW (except for vehicle engines at      to 1-2kW. A large
                                                 75kW and bus engines at 250kW)                    number of
                                                 Operating Temperature: 60-85ºC                    companies are
                                                 Applications: Transportation, stationary/         close to bringing
                                                 distributed                                       stacks to market but
                                                                                                   few are offering
                                                                                                   generator or system
                                                                                                   products.
Micro direct Solid polymer        < 50W           Low power PEM devices that will compete          Advanced product
methanol fuel                                      directly with traditional batteries. Methanol   trials, early
cell                                              fuel delivered to the PEM device as a liquid.    commercialisation
(µDMFC)                                           Operating Temperature: 60-100ºC                  expected.
                                                  Applications: Mobile electronic equipment
                                                  from phones to computers
Direct        Solid polymer;      50-150W         Operating Temperature: 60-100ºC                  Early product proof
methanol fuel can be alkaline                     Applications: Larger portable equipment          of concept.
cell (DMFC)
DMFC             Solid polymer    500W-2kW        These have significant issues to overcome        Early R&D effort
                                                  with regard to efficiency and precious metals    seems to confirm
                                                  content. Operating Temperature: 60-100ºC         viability.
                                                  Applications: Large mobile equipment



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                                                                                                  US FUEL CELL MISSION




Molten        Molten lithium   25kW-2MW        Hydrocarbon fuels, including coal-derived          Development
carbonate     and sodium/                      fuel-gas, may be reformed directly at the          programmes in
fuel cell     potassium                        anode and an external reformer is not              Japan, the USA and
(MCFC)        carbonates                       necessarily required. However, sulphur             Europe have
              in a matrix                      tolerance remains a problem. Possible              produced many
                                               application areas include power generation,        small prototype units
                                                   ,
                                               CHP ship propulsion and trains. Very small         in the 5-20kW range,
                                               MCFC systems are complex due to                    and a 2MW plant has
                                               requirement to recirculate CO2 in the              been demonstrated
                                               system.                                            in the USA and 1MW
                                                                                                  Japan. 250kW
                                                                                                  systems are also
                                                                                                  being demonstrated
                                                                                                  but further R&D
                                                                                                  required.
Solid oxide   Solid zirconium 100W-10MW        Tubular and planar SOFCs employ similar            SOFC systems of
fuel cell     oxide with                       materials, but differ in terms of fabrication      250kW have been
(SOFC)        trace of yttria                  techniques. Applications include. Natural gas      delivered for
Tubular                                        is generally the fuel of choice.                   demonstrations.
design                                         Operating Temperature: 600-1,000ºC                 Costs remain high
                                               Applications: stationary centralised/distributed
                                                                        ,
                                               power generation, CHP APUs, ship
                                               propulsion, trains

SOFC –        Solid oxide      100W-10MW
Planar design material
Third generation technologies – R&D Concepts Only
Direct H2S    Solid oxide      Hundreds of     Taking H2S as the fuel, the heat of the anode      Conceptually proven,
SOFC          material         kilowatts and   dissociates the hydrogen and sulphur.              embarking on fund
                               above                                                              raising to
                                                                                                  commercialise
                                                                                                  (2-5 years to market).
Liquid acid   Liquid acid      1kW –5kW        Claims better technical performance over           Early R&D work,
                                               PEM DMFC devices but DMFC has draw                 theoretical
                                               back of a liquid electrolyte. Given it is a        characterisation
                                               Kordesh technology its currency is                 leading to
                                               coincidentwith AFC (1st generation) but has        prototyping during
                                               notenjoyed widespread exposure and deals           2003, 2-3 years
                                               with inherent problems with DMFC.                  away from pre-
                                                                                                  production stage.
Micro SOFC    Solid oxide      <10W            • Integrated mSOFC and micro-reformer on
(µSOFC)       material                         a silicon chip using some                          Early R&D work,
                                               MicroElectroMechanicalSystems (MEMS)               theoretical
                                               technology from the integrated circuit             characterisation
                                               industry                                           leading to
                                               • Extremely high energy densities                  prototyping during
                                               theoretically possible                             2003, 2-3 years away
                                               • Targeting battery replacement market for         from pre-production
                                               next generation of portable electronics            stage.
Micro PEM     Solid polymer    <100W at        Uses micro-fabrication techniques to build up Early R&D work
(µPEM)                         present         very small PEM systems, hence high energy
                                               densities possible




                                                                                                                       93
US FUEL CELL MISSION




High-         Solid polymer   Same as PEM   Easier heat management, more useful heat R&D stage
temperature                                 output, more tolerant of contaminants in fuel
PEM                                         stream.
                                            Operating Temperature: 120-160°C




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                                                                                 US FUEL CELL MISSION




Appendix G


FUEL CELL SYSTEM COMPONENTS AND                   The Membrane Electrode Assembly
INTEGRATION
                                                  The base materials above are fabricated into the
Introduction                                      MEA product. MEAs are the individual cells
                                                  which will produce electrical voltage and
In order to make sense of the balance of plant    current, typically 0.5 to 1V at current densities
(BOP) requirements and opportunities, the fuel    of 100mA to 2A/cm2. They may be fabricated
cell product is considered at each stage of the   by the suppliers of the chemicals or by separate
value chain and the BOP needs considered for      companies who purchase the materials.
each stage. The section identifies the key
areas of BOP opportunities surrounding the        Sub-assemblies comprise:
actual product system, as sold.                   • Raw materials formed into membranes
                                                  • Catalysts.
For each technology to be of value to any
end-user, it must be manifested in an actual      The Fuel Cell Stack
end-user product. Whilst the end-user
product is a function of the product              MEAs are assembled into an array comprising a
manufacturer’s chosen position in the supply      stack. Connected in a parallel series combination
chain, it is what the final customer will         depending on the technology, the configuration
purchase and use that defines what will be        of the stack defines the voltage and current
sold throughout the supply chain.                 capabilities of the stack. Stacks are configured to
                                                  produced milli watts to mega watts depending
Generally, the end-user product contains the      on technology and application needs.
sub materials/components described below.
For illustrative purposes, a PEM system is        Sub-assemblies comprise:
used. A similar pattern exists for other fuel     • MEAs
cell technologies although the components         • Seals and end-plates
will differ as they will for differing            • Connectors and manifolds
technologies power ranges.                        • Assembly metal work.

The Base Chemicals/Materials                      The Fuel Cell Generator

The lowest level of component are the raw         At the generator level the stack is the central
materials used in the chemical composition of     component. The BOP is required to control the
the membrane electrode assemblies (MEAs)          flow of gases to the stack, manage the
as membrane materials and catalysts, current      environment inside and surrounding the stack
carriers and frames, metals/plastics for flow-    and manage the water production. This typically
plate manufacture. Suppliers include Dupont,      will take gasses to defined specification,
Johnson Matthey and Morgan Crucible Group.        hydrogen and usually air. Hydrogen and air to
                                                  the fuel cell stack are required to have specific
Sub-assemblies comprise a vast array of           quality and humidity characteristics and
chemicals used in differing compositions and      presented to the stack ports at defined
differing parts of the MEA.                       pressures. Hydrogen is normally delivered at
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US FUEL CELL MISSION



pressure requiring an electronically controlled       Sub-assemblies comprise:
pressure regulator and the air needs to be            • Gas and water pumps
pressurised requiring a compressor and filter.        • Valves and regulators
The stack temperature needs to be maintained          • Sensors (flow, temperature, pressure, H2 )
within defined limits requiring combinations of       • Electronics and control (data acquisition
heat exchangers, fans and humidifiers. To               and output controls, processors, software)
control these conditions and manage start-up,         • Mechanical assembly (chassis, mechanical
shut-down, fault detection and correction               components)
requires a range of sensors, data acquisition         • Electrical assembly (connectors, wiring,
and process control hardware to measure the             fusing etc.).
system and actuator devices to execute control
and actions. Power to run the control system,         Systems
sensors and actuators will be DC requiring
DC/DC converter and some form of start-up             The system is the unit that will deliver power
battery with trickle charger. A fuel cell generator   to the end-user and is the minimum required
concept is illustrated below (GM-DOE 10kW             for any useful work. The final end-user
conceptual power source):                             product employs the fuel cell generator at its
                                                                             .
                                                      heart with further BOP A system is
                                                      configured for an end-user application.

                                                      A   system will comprise:
                                                      •   Fuel source, (including storage)
                                                      •   Fuel cell generator
                                                      •   Power conditioning (DC/AC or DC/DC)
                                                      •   Interface between fuel cell and power
                                                          conditioner (likely to include a battery
                                                          depending upon overall system duty.

                                                      It may also include heat recovery when used
                                                      as part of a CHP system.

                                                      The fuel source may be direct hydrogen, in
For an uninterruptible power supply (UPS) the         which case the application requires
first second’s response is still by battery and,      hydrgogen storage tanks, manifolding and
for an engine, spike and peak loads are               pressure regulators taking pressure down to
spread by batteries. Although batteries still         the defined input pressure for the generator.
figure in most systems, the market for                It will also likely require and isolating valve.
battery replacement is one of reducing                For the installation in needs to be mounted
battery dependency. The Mission saw some              and contained or if in a mobile application
small batteries in the power conditioning             shock and vibration mounted. Alternatively
modules that allowed for spikes of a factor of        the system may require a hydrocarbon being
five on the usual maximum. (The Mission               natural gas, LPG, methanol or others. These
didn’t see flywheels or super capacitors used,        have to be contained delivering the fuel at
but they are possibilities for the same               defined conditions to the fuel cell input port
reason). Good quality rechargeable batteries          and are contained as required. All must have
will be needed. New Ni-Zn rechargeable                some form of refuelling capacity.
batteries are competitors to Pb-acid batteries.
Replacement times for batteries will become           The fuel cell system can be considered as a
an issue when PEM membrane life is longer.            defined purchased item as described above.
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                                                                                 US FUEL CELL MISSION



This system delivers unregulated DC, which          external data inputs and outputs for O&M
will require power conditioning. All loads have     support and customer needs in Japan, North
defined characteristics and tolerance               America and Europe.
requirements. This will impose limits on
voltage regulation, frequency regulation,           Specialist applications of fuel cells may or
transient response, fault tolerance etc. This       may not have common BOP issues. For
will either a DC/DC unit or DC/AC unit.             example, the reversible fuel cells planned for
However there is also likely to be a start-up       the sunlight powered weather/phone relay
buffer power requirement, possible a ride           planes focus on very low weight, whilst the
through power need or a power surge                 fuel cell approach to using hydrogen sulphide
requirement that must be met by an auxiliary        (H2S) from gas wells has some unique plant
power buffer either battery, capacitors or          needs.
other devices. For both PEM fuel cells and
SOFCs in the 0.5kw to 50kW range there              Sub-assemblies comprise:
was consistent concern about power                  • Fuel storage system and controls
conditioning. It is taken as read that there is a   • Fuel cell sub-system
good solid-state approach to the issue of DC        • Power electronics and fuel cell interface
to AC conversion, but the problem seems to          • Overall control systems and user interface
be that specialist inverter suppliers have not      • System packaging.
seriously addressed the particular cost, size
and performance range needed by fuel cells.         The Need for System Characterisation
This is an area of potential market focus.
                                                    There is considerable opportunity in the area
All of this must be monitored and controlled,       of demand characteristics for three reasons:
packaged, supplied with a control panel and         • assurance and certification;
supplied with control systems, batteries,           • customers in specifying their needs; and
electrical bus, isolators and fault protection      • fuel cell suppliers in optimising their
devices to protect the load, customers and             product range and commercial offer.
internal sub system. Interface to the outside
world will be through standard industry             Reasons for this include the wide range of
electrical connectors. Depending upon the           characteristics that fuel cells will have to
installation additional safety devices may be       match as they address the numerous niche
required including gas sensors which may            markets that will be the first users of fuel
also need to be either intrinsically safe on in     cells. Fuel cells are also still very expensive,
an explosion proof container.                       and minimising their size, and maximising the
                                                    efficiency of the system they are serving, are
At this stage in the industry there is a lot of     important ways of reducing costs. If you
bespoke control coding, and a large amount          know a lot about the load variances (and
of monitoring equipment. Remote monitoring          ambient temperatures), designs can be
and control of units in the field is common.        better. Examples of standard loads are used
Rationalisation may happen, but it was not          in ‘well to wheel’ tests.
clear that any norms had been established to
help bring down costs for component
suppliers. Any study of the direction in which
codes and standards are going may benefit
from inclusion in the scope of a summary of
data interfaces inside fuel cells, and seek to
define what are the minimum long term


                                                                                                  97
US FUEL CELL MISSION




Appendix H


FURTHER INFORMATION ON US                          No further information is available. The
FEDERAL PROGRAMMES FOR FUEL                        programme was incorporated into the
CELLS AND HYDROGEN                                 Hydrogen, Fuel Cells and Infrastructure
                                                   Technologies (HFC&IT) Program in 2001 (see
This Appendix provides further details (and,       below).
where appropriate, web site addresses) for
various key US Federal Government                  • DOE Hydrogen Program [status: closed]
programmes in support of fuel cell and
hydrogen technologies that are summarised          The DOE’s Hydrogen Program was launched
in Section 9.3.                                    in 1992, building on activities undertaken in
                                                   the DOE from 1978 (when hydrogen activity
US Department of Energy (DOE)                      was transferred to DOE from the National
                                                   Science Foundation). Programme activities
• Fuel Cells for Transportation Program            were carried out by national laboratories,
  [status: closed]                                 universities and private sector partners.
                                                   Federal funding grew from around $2.5
This programme, also referred to as the            million in 1992 to around $31 million in FY
Transportation Fuel Cell Power Systems             2002.
Program and operated by the Office of
Transportation Technologies (OTT) of the           All hydrogen activity has now been
Office of Energy Efficiency and Renewable          incorporated into the Hydrogen, Fuel Cells
Energy (EERE), ran from 1987 (with an              and Infrastructure Technologies (HFC&IT)
original annual budget of just $0.9 million). It   Program (see below).
was incorporated into the Hydrogen, Fuel
Cells and Infrastructure Technologies              • Partnership for New Generation of Vehicles
(HFC&IT) Program in 2001 (see below).                [status: closed]

The programme focused on the development           The Partnership for New Generation of
of highly efficient, low- or zero-emission         Vehicles (PNGV), a cooperative R&D
automotive fuel cell propulsion systems. The       partnership between the Federal Government
DOE selected the PEM fuel cell as its leading      and the US Council for Automotive Research
technology candidate because of its high           (USCAR), which comprises Ford, General
power density, quick start-up capability and       Motors and DaimlerChrysler, began in 1993
simplicity of construction.                        and was the direct predecessor of the
                                                   FreedomCAR Partnership (see below).
The programme covered fuel cell system
development, fuel processing sub-systems,          One of the main objectives of PNGV was to
fuel cell stack sub-systems, PEM stack             develop a mid-size passenger vehicle capable
component cost reduction, air management           of achieving a petrol-equivalent fuel economy
sub-systems and hydrogen storage.                  of 80mpg while adhering to anticipated future
                                                   emission standards and maintaining such
• Fuel Cells in Buildings Program [status:         attributes as performance, comfort and
  closed]                                          affordability.
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The Partnership was supported by research          –   Fuel cell power systems
conducted through the Fuel Cells for               –   Storage systems for hydrogen
Transportation Program.                            –   Hydrogen infrastructure
                                                   –   Codes and standards for the hydrogen
In 2001, the PNGV goals were re-evaluated to           infrastructure
identify changes that would maximise the           –   Electric propulsion systems
potential national petroleum savings benefit       –   Lightweight structural materials
of the emerging advanced technologies. It          –   Electrical energy storage systems (e.g.
was this process that led to the launch of the         batteries, power capacitors, etc.)
FreedomCAR Partnership in 2002.                    –   Advanced combustion and emission
                                                       control systems for internal combustion
• FreedomCAR Partnership [status: ongoing]             engines that will contribute to reduced
  (www.ott.doe.gov/freedom_car)                        petroleum consumption in the near
                                                       term.
Building on a number of previous EERE
Office of Transportation Technologies’           Technical challenges that affect affordability
programmes (including the Fuel Cells for         and manufacturability will also be addressed,
Transportation Program, the Partnership for a    and R&D activities are being funded at national
New Generation of Vehicles, the Alternative      laboratories, universities and other research
Fuels R&D Program and the Cooperative            institutes, as well as at traditional and non-
Automotive Research for Advanced                 traditional automotive industry suppliers.
Technology – CARAT – Program), US Energy
Secretary Spencer Abraham and senior             The programme has established technology
executives from Ford, General Motors and         goals for 2010 in order to promote rapid
DaimlerChrysler announced the FreedomCAR         innovation. FreedomCAR is not designed to
(Cooperative Automotive Research)                produce any particular vehicle, but rather to
Partnership in January 2002.                     accelerate the adoption of advanced
                                                 automotive technologies targeted towards a
The partners in FreedomCAR are the same as       broad range of vehicles.
those for PNGV, i.e. the DOE and USCAR, a
joint venture formed by the three auto           DOE funding for the FreedomCAR
manufacturers above. Activities focus on         Partnership is $74.5 million in FY 2003, with a
collaborative, pre-competitive, high-risk        request made for $91.1 million in FY 2004
research to develop affordable passenger cars    (indications are that this request will be met
and light trucks that will ‘free the nation’s    or exceeded).
personal transportation system from
petroleum dependence and from harmful            • The 21st Century Truck Partnership [status:
vehicle emissions, without sacrificing freedom     ongoing]
of mobility and freedom of vehicle choice’.        (www.eere.energy.gov/vehiclesandfuels/
                                                   program_areas/21centurytruck/)
One of the main foci of the Partnership is R&D
around enabling technologies to further the      Initiated in 2000, the 21st Century Truck
commercialisation of hybrid electric vehicles    Partnership has very similar aims to the
(HEVs). This would help efforts to               FreedomCAR Partnership, but is focused on
commercialise FCVs, since many of the            improving technologies for heavy vehicles to
drivetrain components are common with HEVs.      improve safety, efficiency and environmental
                                                 performance. The Partnership is a cooperative
FreedomCAR aims to address:                      effort among 16 industrial partners (key
                                                                                               99
US FUEL CELL MISSION



members of the heavy vehicle industry, truck       • Hydrogen, Fuel Cells and Infrastructure
manufacturers, hybrid propulsion developers          Technologies Program [status: ongoing]
and engine manufacturers), four Federal              (www.eere.energy.gov/
Government departments/agencies and 12               hydrogenandfuelcells/)
national laboratories. Ultimately, the
Partnership seeks to develop trucks and            The Hydrogen, Fuel Cells and Infrastructure
buses that use sustainable and self-sufficient     Technologies (HFC&IT) Program, replaced the
energy sources, thereby enhancing the              former Fuel Cells for Transportation Program
industry’s competitiveness.                        the Fuel Cells in Buildings Program and the
                                                   DOE Hydrogen Program. It directs R&D and
DOE funding for the 21st Century Truck             validation of fuel cell and hydrogen
Partnership is $70.1 million in FY 2003, with a    production, delivery and storage technologies
                       .5
request made for $57 million in FY 2004            for transportation and stationary applications.
(indications are that this request will be met
or exceeded).                                      The programme supports basic R&D aimed at
                                                   overcoming the technical, economic and
• FreedomCAR and Vehicle Technologies              institutional barriers to hydrogen and fuel cell
  Program [status: ongoing]                        commercialisation. The programme works
  (www.eere.energy.gov/vehicle)                    with the national laboratories and industry
                                                   partners through public-private partnerships
The FreedomCAR and Vehicle Technologies            and demonstrations to research core
(FCVT) Program is, essentially, a bringing         technologies and address both technical and
together of the FreedomCAR Partnership, the        non-technical challenges to commercialisation.
21st Century Truck Partnership and various
other activities in other EERE OTT                 Fuel cell R&D activities are aimed at reducing
programmes of relevance to fuel cells and          fuel cell system cost and size and improving
hydrogen technologies.                             the performance and durability of fuel cell
                                                   systems. Most of the research focuses on
The FCVT Program aims to expand its                PEM fuel cell systems, with emphasis in
emphasis on energy storage and materials           areas such as fuel processing (i.e. reforming)
technologies critical for fuel cell and internal   technologies, improved catalyst and
combustion engine/hybrid vehicles to include:      membrane designs and improved air, thermal
new propulsion and light weight materials for      and water management systems. Fuel cell
fuel cell and hybrid vehicles; and an increased    R&D is supported in three primary areas:
emphasis on long-term energy storage
concepts.                                            – Transportation fuel cell systems
                                                     – Stationary/distributed generation fuel cell
The ‘other‘ elements from OTT programmes               systems
that are included in the FCVT Program are            – Fuel cell sub-systems and components.
receiving $8.9 million of federal support in FY
2003, with a request for $9.0 million in FY        In the area of transportation, the HFC&IT
2004.                                              Program is working closely with the FCVT
                                                   Program to further the state of the art fuel
This means that the FCVT Program has a             cell systems for highway vehicles and
total federal budget of $153.5 million in FY       address key challenges including:
                             .6
2003 and is requesting $157 million in FY
2004 (indications are that this request will be      – Reducing component and system costs
met or exceeded).                                      (including reducing precious metal
                                                       requirements)
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                                                                               US FUEL CELL MISSION



  – Developing high volume manufacturing           remain significant issues. On-board
    capability                                     reforming, while allowing vehicles to run on
  – Demonstrating component and system             fuels compatible with existing refuelling
    durability                                     infrastructure (and hence a more gradual
  – Reducing system start-up times,                transition to direct hydrogen fuel cell
    especially for petrol-powered fuel cell        technology), presents serious technical and
    systems                                        economic challenges that may not be
  – Developing high efficiency air                 overcome in a timescale relevant to such a
    management sub-systems.                        transition. As a consequence, DOE will
                                                   consider whether or not to continue R&D into
While industry has expertise in integrating fuel   on-board fuel processing beyond the end of
cell technology into vehicles, DOE has focused     FY 2004. The decision point is June 2004.
its efforts on supporting research into core
technologies to improve fuel cell systems and      The programme is also supporting the
the various sub-systems and components that        development of auxiliary power units (APUs)
comprise them. These technologies include:         for use on commercial trucks to provide the
                                                   necessary ‘hotel’ power. Since these APUs
  – Direct hydrogen and reformate PEM fuel         would most likely run on diesel, R&D activity
    cell systems                                   is focused on diesel reformers capable of
  – Direct methanol fuel cell (DMFC)               producing hydrogen with minimal amounts of
    systems and components                         sulphur in the reformate.
  – Analysis tools for evaluating and
    projecting the costs and performance of        The buildings sector accounts for around
    fuel cell systems and FCV designs              36% of US primary energy consumption. As
  – Large-scale component manufacturing            a result, DOE is supporting R&D in the area
    processes, especially for stack                of stationary/distributed power generation,
    components                                     with high efficiency PEM fuel cell systems
  – Fuel processing sub-systems and                being proposed as an alternative to grid-
    components, e.g. quick-start petrol            based electricity for buildings.
    reformers and water-gas shift catalysts
  – Fuel cell stack sub-systems and                A number of technical and economic
    components, e.g. low-platinum catalysts,       challenges face stationary fuel cell systems
    bipolar plates and carbon monoxide             using natural gas:
    sensors
  – Air management sub-systems and                   – Improving energy efficiency
    components, e.g. turbocompressors,               – Improving durability of integrated
    blowers and hybrid                                 systems
    compressor/expander modules.                     – Reducing component and system cost
                                                     – Resolving grid interconnectivity issues
The DOE is pursuing a ‘dual pathway’                   and developing codes and standards
approach to systems for FCVs. This involves          – Developing systems to cost effectively
developing both systems fuelled directly by            meet some/all of a building’s
hydrogen, and systems fuelled by hydrogen              heating/cooling requirements.
reformed on-board from petrol, methanol,
ethanol or natural gas. While the former are       To address these challenges, DOE is
more technically mature and face fewer             supporting cross-cutting R&D projects in:
challenges than the latter, the lack of               – Stationary fuel cell systems
hydrogen infrastructure, on-board hydrogen            – Fuel cells for back-up power
storage, cost, durability, size and weight            – High temperature membrane materials
                                                                                              101
US FUEL CELL MISSION



   – Fuel cell component durability                 such as wind and PV)
   – Water and thermal management                 – Reversible fuel cells/electrolysers (e.g.
   – Fuel processing for stationary                 thermal management, humidification,
     applications                                   catalyst type/loading).
   – Platinum recycling                         Photolytic production technologies:
   – Non-precious metal catalysts.                – Photobiological (e.g. oxygen tolerant
                                                    microbes, metabolic ‘switch’
DOE is currently working to establish               photosynthetic bacteria)
baseline performance and future targets for       – Photoelectrolysis (e.g multi-junction
stationary PEM fuel cell cells for various          amorphous silicon photoelectrochemical
market segments.                                    light harvesting electrolysers).

R&D on key fuel cell sub-systems and            R&D into hydrogen storage is focused on
components is focused on fuel processing        meeting a series of challenging targets for
(i.e size reduction and start-up time for on-   energy storage density (on weight and
board reformers – a target of 30 seconds has    volume basis) and cost by 2005, 2010 and
been set), fuel cell stack components (i.e.     2015, both for on- and off-board hydrogen
improve performance and durability, reduce      storage. Key technical barriers are cost,
cost) and air management (i.e.                  weight and volume, efficiency, durability,
turbocompressor and blower designs, hybrid      refuelling time, codes and standards and lack
systems, cost reduction). The challenges and    of life cycle and efficiency analyses.
research areas are as identified previously.
                                                R&D is being supported across a range of
Hydrogen R&D within the programme is            possible approaches, including:
targeted at ensuring that hydrogen will be
produced cost-effectively from a variety of     Pressurised storage tanks:
energy sources and made readily available for      – Compressed hydrogen tanks (e.g.
widespread use as a clean energy carrier and         12wt% hydrogen storage at 10,000psi in
fuel. The programme therefore focuses on             lightweight tanks)
conducting R&D into advanced technologies          – Liquid hydrogen tanks (e.g. hybrid high
to produce, deliver, store and detect                pressure gaseous and cryogenic liquid
hydrogen for its safe handling and use.              storage concepts).

In the area of hydrogen production and          Storage in materials:
delivery, DOE is supporting R&D in three          – Absorption into simple metal hydrides
broad areas:                                         (e.g. 3-5wt% low temperature systems,
                                                     multi component alloys)
Thermochemical production technologies:           – Chemical reaction with complex metal (
   – Natural gas steam reforming (e.g. cost          ‘chemical’) hydrides (e.g. sodium
     reduction using CO2 absorbents to               borohydride)
     increase hydrogen production)                – Adsorption onto carbon materials (e.g.
   – Partial oxidation/ceramic membrane              single wall carbon nanotubes).
     reactor
   – Biomass gasification and pyrolysis         In addition, the programme is supporting
   – Coal gasification                          activities associated with:
   – Separation and puification.
Electrolytic production technologies:
   – Water electrolysis (e.g. integration of
     intermittent renewable energy sources
102
                                                                                    US FUEL CELL MISSION



  – technology validation (e.g.                      Hydrogen:
    vehicle/infrastructure ‘learning’                  – Production/delivery      $23.0 m (13.9%)
    demonstrations, tanks, power parks                 – Storage                  $30.0 m (18.1%)
    (cogeneration), renewable energy                   – Infrastructure validation $13.2 m (8.0%)
    systems (biomass, electrolysis, etc.);             – Safety, codes and standards and
  – codes and standards (i.e.                            utilisation               $16.0 m (9.7%)
    stationary/vehicle fuel cell standards,            – Education and cross-cutting analysis
    refuelling station standards, hydrogen                                          $5.8 m (3.5%)
    transportation standards, model codes
    (fire, building, electrical, plumbing, etc.));   In addition to this $165.5 million requested
  – safety (e.g. hydrogen physical/chemical          for FY 2004 (to be disbursed by EERE), the
    properties, risk assessments, Hydrogen           DOE’s Office of Fossil Energy has requested
    Safety Review Panel); and                        $11.5 million for hydrogen-related activities in
  – education and outreach (e.g.                     it’s work programmes (i.e. ‘FutureGen’ – see
    evaluate/update website, school                  below). This sum is split into $5.0 million for
    curriculum, university programmes,               coal-to-hydrogen activity, and $6.5 million gas-
    safety coordinators, public campaign).           to-hydrogen activity. Similarly, the DOE’s
                                                     Office of Nuclear Energy has requested $4.0
The draft Multi-year RD&D Plan for the               million for the hydrogen production aspects
HFC&IT Program covering 2002-2010 has                of it’s ‘GEN4’ Program (see below). This
been available for stakeholder review and            effectively increases the total budget request
comment and can be found on the EERE                 under the HFC&IT Program for FY 2004 to
website                                              almost $182.0 million. This, if approved,
(www.eere.energy.gov/hydrogenandfuelcells/           represents an 87% increase in the
mypp/).                                              programme’s budget compared to FY 2003.

The DOE’s budget for the HFC&IT Program for          • The President’s FreedomCAR and Fuel
                  .4
FY 2003 totals $97 million, with a request             Initiative (also known as the Hydrogen Fuel
made for FY 2004 amounting to $165.5 million,          Initiative) [status: ongoing]
broken down by key activities as follows:              (www.eere.energy.gov/hydrogenfuel/)

Fuel cell technology:                                In his January 2003 State of the Union
  – Fuel cell – fuel processor R&D                   Address, President Bush called for an initiative
                              $19.0 m (11.5%)        to reverse the USA’s growing dependence on
  – Fuel cell – stack component R&D                  imported oil by developing technologies and
                             $28.0 m (16.9%)         infrastructure needed to produce, store and
  – Technology validation                            distribute hydrogen for use in FCVs and
                               $15.0 m (9.1%)        electricity generation. The Initiative’s goal is to
  – Distributed energy systems                       ‘enable automotive manufacturers and the
                                  .5
                                $7 m (4.5%)          energy industry to make a commercialisation
  – Transportation systems                           decision in 2015 regarding fuel cell vehicles
                                  .6
                                $7 m (4.6%)          and hydrogen infrastructure.’ By so doing, it is
  – Technical/programme management                   intended to ensure that FCVs are
     support                    $0.4 m (0.2%)        commercially available in car showrooms and,
                                                     equally importantly, hydrogen is available at
                                                     fuelling stations by 2020.




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President Bush proposed an overall $1.7              hydrogen and electricity, ‘FutureGen’, has
billion for FCV and hydrogen fuel R&D over           been proposed (see below), with a
the next five years.                                 Solicitation of a further $1 billion over 10
                                                     years. The budgets requested for these
This proposed budget of $1.7 billion                 activities for FY 2004 are presented under
comprises:                                           the description of the HFC&IT Program
                                                     budget above.
   – $1.2 billion for fuel cells and hydrogen
     (includes the FreedomCAR and Vehicle            The total proposed budget for the
     Technologies Program and the                    FreedomCAR and Fuel Initiative (as it is more
     Hydrogen, Fuel Cells and Infrastructure         accurately described) for FY 2004 is $273
     Technologies Program budgets plus               million. This sum is made up of the $182
     $0.72 billion of new funding)                   million budget requested for the HFC&IT
   – $0.5 billion for hybrid vehicle                 Program ($77   .5m fuel cells component and
     technologies R&D (existing activity,            $104.2m hydrogen component – including
     includes bio-derived liquid fuels,              the NE and FE additions), plus the $91.1
     lightweight vehicles, etc.).                    million requested FreedomCAR Partnership.

The Initiative, managed by a team in EERE            For some reason, the 21st Century Truck
headed by Steve Chalk, consists of                   Partnership and the other elements of activity
accelerated, parallel track activities for           from other automotive programmes that
hydrogen production (led by Peter Devlin),           were included in the budget lines of the
hydrogen storage (JoAnn Milliken) and fuel           FreedomCAR and Vehicle Technologies
cells (Patrick Davies). In addition, cross-          Program described earlier, do not appear to
cutting activity will be supported, including        have been included within this Initiative. If
analysis, development of codes and                   they were, then the total budget requested
standards, validation of fuel cells and                            .3
                                                     would be $337 million for FY 2004.
hydrogen infrastructure, vehicle and hydrogen
fuelling ‘learning’ demonstrations (the subject      The reconfiguring and augmentation of existing
of a current DOE Solicitation with a budget of       activity related to fuel cell and hydrogen
$150-240 million over five years), linkages to       technologies, embodied in the announcement
stationary fuel cell R&D, etc.                       of the FreedomCAR and Fuel Initiative, was
                                                     largely in response to the publication of the
The overall Initiative (i.e. with the overall $1.7   National Hydrogen Energy Roadmap,
billion budget) is a ‘pulling together’ and a        published by DOE in November 2002 – see
significant expansion of the FreedomCAR              Section 4.2. The Roadmap identified a number
Partnership, the Hydrogen, Fuel Cells and            of key technology, economic and institutional
Infrastructure Technologies (HFC&IT) Program         barriers needing to be addressed if a hydrogen
and other hybrid vehicle technology                  economy is to be realised.
programmes relevant to fuel cells and
hydrogen. It also includes relevant activities       To address these barriers, the DOE will initiate
being undertaken through programmes of               research, develop and validate fuel cell and
DOE’s Office of Nuclear Energy (NE) and              hydrogen production, delivery and storage
Office of Fossil Energy (FE). In NE, a               technologies for transportation and stationary
hydrogen production from nuclear power with          applications. This involves supporting activity
cogeneration programme, ‘GEN4’, has been             in hydrogen production from renewable
proposed, with a Solicitation of $1 billion over     energy sources (i.e. biomass, hydro power,
ten years. In FE, a programme to develop a           wind and solar energy – all likely to be beyond
zero-emissions coal plant to generate                2040), nuclear power and fossil fuel (with
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carbon sequestration). Such high efficiency,       Alternative strategies are also run in parallel
reliable and zero-emission concepts will target    (based on developing hybrid vehicles and/or
transportation, distributed energy and (in the     policies related to fuel economy, incentives
case of GEN4 and FutureGen), centralised           for emerging technologies, etc.).
power generation applications. These different
hydrogen sourcing ‘routes’, are needed to          This approach has enabled a four phase
address the range of regional considerations       ‘timeline’ to be developed for the establishing
faced in the USA.                                  of a hydrogen energy economy: Phase I –
                                                   Technology Development (2000-2015); Phase
The FreedomCAR and Fuel Initiative has an          III – Initial Market Penetration (2010-2025);
overall approach based on establishing time-       Phase III – Infrastructure Investment (2015-
phased technical targets that measure              2035); and Phase IV – Fully Developed
progress against barriers. Targets from RD&D       Market and Infrastructure (2025-2040+).
plans are used to establish performance-
based milestones and deliverables (e.g. in         The implementation plans for the Initiative
Laboratory Annual Operating Plans,                 emphasise collaborative partnerships.
Cooperative Agreements, etc.) established          Industrial partners will continue to be
with national laboratories, contractors and        engaged through the various component
universities. The DOE’s role (and expenditure)     programmes that make up the Initiative.
is anticipated to decrease as these targets        Coordination with other federal agencies is
are met in ‘system contexts’ under real            important due to the cross-cutting nature of
operating conditions.                              an initiative on this scale and this will be
                                                   achieved through the formation of a Task
Success criteria have been defined                 Force led by the White House Office of
(embodying consumer, industry and                  Science, Technology and Policy (OSTP). In
public/societal benefits), requiring validation,   addition, state and local governments will be
by 2015, of technology for:                        involved in developing codes and standards,
                                                   public education and field validation trials.
  – Hydrogen storage systems enabling
    minimum 300 mile vehicle range, while          • Office of Fossil Energy (FE) Stationary Fuel
    meeting identified packaging, cost and           Cell Program (status: ongoing)
    performance requirements.                        (www.fe.doe.gov/coal_power/fuelcells/)
  – Hydrogen production to safely and
    efficiently deliver hydrogen to                The DOE’s FE has, since the mid-1970s,
    consumers at prices competitive with           partnered with several high temperature fuel
    petroleum, without adverse                     cell developers to progress technologies
    environmental impacts.                         aimed at the stationary power generation
  – Fuel cells to enable engine costs of less      sector. The aim is to develop power units for
    than $50/kW (in high volume production),       centralised and distributed generation
    while meeting performance and                  applications, and for auxiliary power
    durability requirements. Note that this        applications. For centralised applications, the
    cost target is for the engine, requiring       units would be modular with a power of say
    the fuel cell to be about $30/kW by 2015       100-250kW and capable of operating on their
    ($45/kW by 2010). Manufacturers                own or integrated into other power cycles as
    currently project that the cost of a 50kW      combined cycle units. For distributed
    PEM transportation fuel cell, when             generation and auxiliary power applications
    produced in volumes of more than               (e.g. for back-up power or in trucks), the units
    500,000/year, would be around $300/kW          would be smaller modular units of 3-10kW,
    (c.f. around $3,500/kW at present).            located at or near the end user, to
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US FUEL CELL MISSION



complement electricity supply from central          technologies, namely molten carbonate fuel
generation systems or provide auxiliary             cell (MCFC) and solid oxide fuel cell (SOFC)
power. These systems may be owned and/or            technology. The goal is to bring these
operated by utilities, utility customers or third   technologies to commercial readiness from
parties.                                            2003 onwards.

The goals of this programme, which is               The activity on MCFC technology, in
complementary to the activities on                  partnership with FuelCell Energy (FCE), has
distributed generation systems based on             led to a demonstration of a 250kW system
PEM fuel cell technology within the                 with internal reforming, operating at an
President’s FreedomCAR and Fuel Initiative          efficiency of 47%. Units of this type, which
described above, are to ensure the                  cost $2,500-$5,000/kW, are manufactured at
widespread deployment of clean fuel cell            a state-of-the-art facility in Torrington, CT,
technology by developing technologies that          which has a manufacturing capacity of
are low cost and widely applicable.                 50MW/year. It is expected that FCE’s MCFC
                                                    systems will find near-term (2003-2008)
A high level of industry participation is           applications in the distributed generation
achieved in the programme, with over 40%            market as modular units in the 250kW-3MW
of the total value of the work funded by the        range, with efficiencies of around 54%. Costs
private sector.                                     are expected to reduce to $1,000-1,500/kW
                                                    by 2008. DOE support for MCFC
The Stationary Fuel Cell Program is divided,        development will cease from the end of FY
for administrative and budget purposes, into        2003 as FCE’s systems are entering the
four parts:                                         commercialisation phase.

   – Systems Development                            Tubular SOFC activity in the programme is
   – Vision 21 Hydrids                              undertaken in partnership with Siemens
   – Innovative Concepts (the Solid State           Westinghouse. Currently, work is being
     Energy Conversion Alliance)                    undertaken at the 100-220kW scale with
   – Advanced Research.                             20,000 operating hours experience at the
                                                    100kW scale. Efficiencies of 47% are being
In terms of the Systems Development sub-            achieved, but the cost is currently over
programme, activity initially (late 1970s to        $10,000/kW. This cost is set to reduce to
early 1980s) concentrated on phosphoric acid        around $4,500/kW with the bringing on line
fuel cell (PAFC) systems, which, along with         of a 15MW/year capacity manufacturing
alkaline fuel cell (AFC) systems, are considered    facility in 2003, pointing the way to near-term
to be the ‘first generation’ technologies. The      application of 250-550kW modular units in
result of this initial focus was that UTC Fuel      the distributed power generation market.
Cells is currently manufacturing and selling        Expected efficiencies are in the range 47-
PAFC systems around the world (260 units            63%, and costs are expected to fall to
currently in the field – including the unit with    $1,000-1,500/kW by 2008.
Woking Borough, with over six million
operating hours experience in total). Despite       In the mid-1990s, the programme also
this, it is understood that UTC are exiting from    started supporting R&D into Vision 21
PAFC technology to focus on PEM product             Hybrids – fuel cell/turbine hybrid systems. A
development.                                        hybrid system, in this context, can be
                                                    regarded as any combined cycle power
In the late 1980s, the programme changed            generation system combining a high
it’s emphasis to ‘second generation’                temperature fuel cell with either a gas
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                                                                                  US FUEL CELL MISSION



turbine, a reciprocating engine, or another         the most widely marketed systems cost
type of fuel cell. The focus of this activity       approximately $4,500/kW, which compares
has been directed at supporting a major             with $800-1,500/kW and $500/kW for diesel
DOE initiative – the ‘21st Century Energy           generators and gas turbines respectively.
Plant (Vision 21)’. Vision 21 is essentially a      However, recent advances, such as lower cost
set of long-term strategic goals – an               conducting materials (enabling higher
assemblage of technologies, the outcome of          temperature operation and higher power
which is a ‘carbon sequestration ready’ next        density), and internal fuel reforming, mean that
generation power plant with an efficiency           advanced fuel cells currently being tested are
greater than 60% for coal systems, 75% for          likely to cost around $1,200/kW. However, this
gas-fired plant and thermal efficiency of 85-       is still too expensive for most distributed power
90% for cogeneration. While the Vision 21           applications. It is this requirement to
initiative (started under the Clinton               dramatically reduce costs that led to the
Administration) has been largely superseded         launch, under the Innovative Concepts sub-
by the Bush Administration’s FutureGen              programme, of the Solid State Energy
Initiative (see below), the activity within the     Conversion Alliance (SECA). As this is
Stationary Fuel Cell Program on hybrid              effectively a separate DOE-industry
system designs is still referred to as ‘Vision      partnership, SECA is covered separately below.
21 Hybrids’.
                                                    The final part of the Stationary Power Fuel
This programme activity (run by the                 Cell Program – Advanced Research –
Strategic Center for Natural Gas – part of          supports the programme objectives by
the National Energy Technology Laboratory)          conducting research to identify new,
is, so far, focusing on hybrid systems of           innovative electrochemical technology
200kW-1MW that will support businesses              concepts and by addressing cross-cutting
and light industry by enabling on-site              high temperature electrochemical issues. It
cogeneration. Fuel efficiencies of up to 60%        also supports SECA core technology
are anticipated from systems comprising             materials work (see below) and research into
combinations of existing components. In             direct carbon fuel cells (DCFC).
the medium term, larger units of up to
20MW and with efficiencies of 70%-80%               The budget for the Stationary Fuel Cell
will be developed, the goal being to                Program in FY 2003 is $60.6 million – $9.9
demonstrate systems capable of producing            million being directed at Systems
electricity in centralised systems at costs         Development, $13.4 million at Vision 21
10-20% below that of current best available         Hybrids, $33.8 million at Innovative
technology.                                         Concepts/SECA and $3.5 million at Advanced
                                                    Research. Original budget requests for FY
Initial activity has included the selection of      2004 amounted to $44.5 million – $6.0
two teams to design and demonstrate hybrid          million for Systems Development, $5.0
systems: FuelCell Energy-Capstone Turbine           million for Vision 21 Hybrids, $23.5 million at
and Rolls-Royce will demonstrate a 280kW            Innovative Concepts/SECA and $10.0 million
hybrid and conduct a systems study for a            at Advanced Research. However, indications
40MW hybrid system; Seimens                         are that the overall programme will receive at
Westinghouse will demonstrate a 200kW               least $60 million and possibly up to $68
hybrid and two 1MW systems.                         million, with all sub-programme areas
                                                    continuing to be funded at around the 2003
The principal barrier to the deployment of high     levels or higher.
temperature fuel cell technologies for
stationary power applications is cost. Currently,
                                                                                                 107
US FUEL CELL MISSION



• The Solid State Energy Conversion Alliance        available for use in combined cycle mode in
  (SECA) (status: ongoing)                          coal-fired central power plant (i.e. Vision
  (www.seca.doe.gov/main)                           21/FutureGen concepts).

SECA was formed in 1999 as an alliance              The programme is structured into an ‘Industry
between government, industry and                    Group’(six projects currently accounting for
academics to promote the development of             around 60% of the SECA budget, i.e around
SOFC technology for virtually all markets           $20 million/year) and a ‘Core Technology
requiring clean, affordable and reliable electric   Program’(currently 45 projects):
power. SECA forms part of the Stationary
Fuel Cell Program (see above) and the DOE           The Industry Group comprises six teams,
funding for SECA comes from that                    each with a structured programme covering
programme’s budget. Responsibility for              10 years in three phases. A detailed set of
developing the SECA Program lies with the           minimum technical requirements have been
National Energy Technology Laboratory (NETL         set to match these three phases. Broadly,
– Morgantown, VA, and Pittsburgh, PA) and           these can be summarised as:
the Pacific Northwest National Laboratory
(PNNL – Richland, WA).                                – Cost:                           <$400/kW
                                                      – Efficiency
As stated earlier, SECA was established                 (AC or DC, LHV):        30-50% for APUs;
specifically to produce a core solid-state fuel                             40-60% for stationary
cell module (3-10kW) that can be mass                 – Fuels (current and infrastructure):
produced at a cost of no more than $400/kW                            natural gas; gasoline; diesel
to enable it to compete with gas turbines and         – Design lifetime:
diesel generators from 2010. As the market                       5,000hrs for 1,000 cycles (APU)
grows, unit costs will be reduced as high                   40,000hrs for 100 cycles (stationary)
volume manufacturing technologies are used            – Maintenance interval:
(>50,000 units/year). SECA has established a                                1,000hrs (e.g. filters).
target of 25MW of installed power by 2012,
and a ‘saturation’ level of 40GW by 2025.           The six teams and their respective
                                                    technologies, concepts and low cost
In addition to cost reductions through volume       manufacturing technologies are:
manufacturing, SECA is seeking significant
materials cost reductions. These will come            – Cummins Power Generation and SOFCo
mainly from reducing the operating                      (McDermott International). Electrolyte-
temperature of the SOFC technology from                 supported, 850ºC planar SOFC
800-900ºC down to 700-750ºC and the                     technology. Developing a five-cell cross-
impact this will have on catalyst costs (i.e.           flow stack, catalytic partial oxidation, two
platinum has a relatively short life if run at          60-cell stacks. Low cost manufacturing
800ºC+ due to its volatility).                          techniques being used include tape
                                                        casting, screen printing, co-sintering.
SECA aims to have a ‘first generation’product         – Delphi Automotive Systems and Battelle
available in 2005 to address the transport              Memorial Institute. Anode-supported
(truck) APU, remote vehicle and military                750ºC planar SOFC. Developing two 44
markets. By 2010, a $400/kW ‘commercial                 litre low cost systems for transport
product’will be available addressing the                APUs. Tape casting, screen printing,
residential, commercial, industrial CHP and             two-stage sintering.
transport APU markets. By 2015, a $400/kW             – GE Hybrid Power Generation Systems.
hybrid system offering 60-70% will be                   Anode-supported 750ºC planar SOFC.
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    Developing a unitised cell design, 1kW         –   Materials
    POX conceptual design. Tape                    –   Modelling and simulation
    calendaring, two-stage sintering.              –   Fuel processing
  – Seimens Westinghouse Power                     –   Power electronics
    Corporation. Cathode-supported 800ºC           –   Control and diagnostics
    tubular SOFC. Developing 5kW                   –   Manufacturing.
    prototype unit, redesigned ‘flattened
    tube’. Stack extrusion, plasma spray.        Current priorities for the Core Technology
  – FuelCell Energy, Materials and Systems       Program are:
    Research, Gas Technology Institute,
    EPRI. Conceptual stage only 10kW               – Top priority: Gas seals (glass and
    planar SOFC. Planning natural gas units                        compression seals)
    for stationary and propane/diesel units                        Interconnects (modifying
    for remote locations/transport APUs.                           components, alloy
  – Acumentrics Corporation. Anode-                                materials, coatings).
    supported 750ºC tubular SOFC.
    Developing 10kW natural                        – 2nd priority: Modelling (with
    gas/propane/diesel units for stationary,                       electrochemistry, structured
    trains, military with rapid (10mins start-                     characterisation)
    up). Extrusion, dip process, spray.                            Cathode performance
                                                                   (micro-structure
The teams are independent and compete                              optimisation, mixed
with each other. They provide necessary input                      conduction, interface
to shape the Core Technology Program. As                           modification)
design changes are being incorporated by the                       Anode/fuel processing
industry teams, any R&D gaps are filled by                         (metal oxides with interface
the Core Technology Program by allowing the                        modifications, catalyst
industry teams to continue their development                       surface modifications,
activities as key breakthrough technologies                        characterise
are researched in parallel.                                        thermodynamics/kinetics).

The Core Technology Program involves six           – 3rd priority: Power electronics – the
national laboratories (NETL, PNNL, Oak                             main cost factor in low
Ridge, Argonne, Los Alamos and Lawrence                            volume manufacturing
Berkeley), 11 universities, several research                       (direct DC/AC conversion,
institutes and some companies. The                                 DC to DC designs).
programme provides the focused applied
R&D component of SECA, with IP being               – 4th priority: Materials costs (lower cost
offered to all the industry teams as a non-                        precursor processing, cost
exclusive license (an ‘exceptional                                 model methodology).
circumstance’to the Bayh-Dole Act). The
programme, which covers cross-cutting            SECA is a key part of the larger fossil fuel
technology development needs of                  energy programmes. SECA’s 2005, 2010 and
one/some/all six of the industry teams, is       2015 aims are designed to coordinate with
peer reviewed by the industry teams and          fossil fuel systems dynamic control,
independent organisations. It covers the         component integration and turbine adaptation
following technology areas/research topics:      activity (2000-2006), with the hybrid
                                                 developments under SECA (2006-2015)


                                                                                              109
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feeding into work on integrated gasification        programme) and the DOE’s Carbon
combined cycle (IGCC) and SECA-based                Sequestration Program – which will also be
hybrids (2010-2015), culminating in a hybrid-       the principle source of technology for the
based plant design under FutureGen (see             prototype.
below) by 2015. Such a plant will also involve
drawing on programmes addressing                    The work being undertaken by the DOE
gasification, clean-up and separation,              Office of Fossil Energy’s Stationary Fuel Cell
optimised turbine design, systems integration       Program (including SECA) on fuel cell/turbine
and carbon sequestration.                           hybrids may well be appropriate for
                                                    application within the ‘power island’ of a
• The Integrated Sequestration and                  FutureGen prototype.
  Hydrogen Research Initiative (also known
  as FutureGen) (status: starting/ongoing)          The project will require 10 years to complete
  (www.fe.doe.gov/)                                 and will be led by an industrial consortium
                                                    representing the coal and power industries.
The Integrated Sequestration and Hydrogen           Other countries will be invited to participate
Research Initiative, or ‘FutureGen’ as it is        in the FutureGen demonstration project
commonly referred to, is a Federal                  through a recently (July 2003) inaugurated
Government sponsored project to develop a           Carbon Sequestration Leadership Forum.
coal-fired, zero emission, electricity and
hydrogen producing prototype power plant            It is early days for this initiative and,
that will be the cleanest coal-fired power          consequently, the way that the initiative will
plant in the world.                                 link with other fuel cell/hydrogen
                                                    programmes and initiatives is not clear. A
As such, this $1 billion initiative (expected to    ‘prospectus’ for the initiative, indicating how
be 80% funded by the US Government)                 organisations (US and international) can
supports other hydrogen RD&D in addressing          become involved is expected to be published
President Bush’s call to create a hydrogen          on the Fossil Energy web site in the near
economy for zero emission vehicles and              future.
stationary power plants. The sourcing of the
hydrogen from indigenous coal will help the         • Supporting Activities in DOE National
USA in terms of energy security.                      Laboratories

The initiative will employ integrated               Research and development activity in support
gasification combined cycle (IGCC)                  of various DOE programmes is undertaken at
technology for electricity generation, allowing     a number of the DOE’s national laboratories,
pre-combustion decarbonisation and carbon           as follows (the principle relevant areas of
dioxide capture, with sequestration (probably       competence are shown in brackets):
into geological structures). The prototype will
establish the technical and economic                  – Argonne National Laboratory (ANL),
feasibility of flexibly producing electricity and       Illinois (low temperature fuel cell
hydrogen from coal while capturing and                  systems):
sequestering the carbon dioxide generated in          – Catalyst development
the process.                                          – System and vehicle modelling
                                                      – Advanced materials development for fuel
The project will be supported by activities             cell components
under the DOE-managed President’s Coal                – Onboard fuel processing technologies
Research Initiative – particularly the Clean          – SOFC development.
Coal Power Initiative (a $2 billion, 10-year
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                                                                         US FUEL CELL MISSION



– Lawrence Berkeley National                  – Pacific Northwest National Laboratory
  Laboratory (LBNL), California (high           (PNNL), Washington State (high
  temperature fuel cell systems):               temperature fuel cell systems):
– Electrochemistry                            – SOFC development
– SOFC development.                           – High temperature interconnect materials.

– Lawrence Livermore National               US Department of Defense (DoD)
  Laboratory (LLNL), California
  (hydrogen infrastructure):                • The US Army Engineer Research an
– Hydrogen production                         Development Center’s Construction
– Hydrogen storage.                           Engineering Research Laboratory
                                              (ERDC/CERL) Fuel Cell Program [status:
– Los Alamos National Laboratory              ongoing]
  (LANL), New Mexico (low temperature         (www.dodfuelcell.com/)
  fuel cell systems):
– Polymer electrolyte membranes             ERDC/CERL, the US Army Corps of
– Reformate fuel cells                      Engineers’ R&D organisation based at
– DMFC development                          Champaign, Illinois, has a number of activities
– Air-breathing fuel cell stacks            under its Fuel Cell Program. These can be
– Adiabatic fuel cell stacks.               summarised under five headings:

– National Energy Technology                The DoD Fuel Cell Test and Evaluation
  Laboratory (NETL), Pennsylvania/West      Center (FCTec) was established in 1999 as a
  Virginia (high temperature fuel cell      collaboration between ERDC/CERL, the
  systems):                                 National Defense Center for Environmental
– SOFC and MCFC development                 Excellence (NDCEE) and Concurrent
– Fuel cell/turbine hybrid systems          Technologies Corporation (CTC). It was
– Advanced materials                        located at CTC’s Environmental Technology
– Advanced electrochemistry.                Facility at Johnstown, PA. FCTec is a ‘national
                                            resource’ facility for the independent,
– National Renewable Energy                 unbiased testing and validation of complete
  Laboratory (NREL), Colorado               fuel cell systems up to a 300kW rating for
  (hydrogen infrastructure):                both military and commercial applications.
– Hydrogen production and delivery
– Hydrogen storage                          FCTec’s primary goal is to significantly
– Fuel processing                           accelerate the development and
– Transportation fuel cell components.      commercialisation of fuel cell systems. To
                                            support this goal, FCTec:
– Oak Ridge National Laboratory
  (ORNL), Tennessee (high temperature         – Validates prototype, pre-
  fuel cell systems):                           commercial/commercial systems and
– Advanced materials for transportation         components
  fuel cells                                  – Evaluates design and off-design
– SOFC systems for residential use              operating characteristics of fuel cell
– Power electronics and electric machines       systems
– Hydrogen infrastructure                     – Enhances the performance of fuel cell
– Fuels, engines and emissions.                 technologies
                                              – Reduces life-cycle costs for fuel cell
                                                systems
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US FUEL CELL MISSION



   – Supports the development of codes and         The Residential Demonstration Program –
     standards for military and commercial         a demonstration of US-produced PEM fuel
     fuel cell applications                        cells at US military facilities – commenced in
   – Educates stakeholders regarding fuel          FY 2001. The units must provide one year’s
     cell technologies and applications            power with 90% unit availability, and are
   – Serves as a demonstration site for fuel       monitored for performance over that year.
     cell technologies.                            Although targeted at residential applications,
                                                   commercial and remote building applications
Equipment and instrumentation within               are also included. The PEM units can be
FCTec’s 20,000ft2, eight-bay facility provide      operated on natural gas, propane, hydrogen
CTC with the capability of conducting test         or any other fuel; can be used in single fuel,
and evaluation in grid-connected or grid-          fuel switching or fuel blend mode; can be
independent configuration for:                     grid-connected, grid-independent or both,
                                                   cogeneration or non-cogeneration mode; and
   – Variable power load ranges                    be individual or multiple units.
   – Transient power loads (i.e. motor starts)
   – Full characterisation of fuel cell thermal    In FY 2001, six fuel cell companies were
     heat recovery systems                         awarded contracts for 22 PEM units at
   – Variable operating modes (e.g. dual-fuel,     military bases. FY 2002 awards are currently
     fuel blends, environmental conditions,        being made, while FY 2003 proposals are
     shock and vibration)                          being considered.
   – Gas emissions and wastewater
     discharge.                                    In 1995, Congress appropriated funds for the
                                                   DoD to establish a competitive, cost-shared,
When the Mission team visited FCTec, some          Climate Change Rebate Program to expedite
13 different fuel cell systems were                the introduction of fuel cell systems as a
undergoing tests, including units from UTC         climate change-related initiative. This incentive
Fuel Cells, PlugPower, Avista, Idatech/Ballard     programme currently provides $1,000/kW of
and H Power/PlugPower.                             power plant capacity, provided that this does
                                                   not exceed one-third of the total programme
The PAFC Demonstration Program is the              cost (i.e. capital and installation costs). Up to
largest demonstration of phosphoric acid fuel      the end of FY 2002, this programme had
cell plants in the USA. Thirty 200kW plants        awarded grants totalling $30.2 million ($2.8
were installed at DoD facilities (all the Armed    million in FY 2002). Nearly all these projects
Services were represented) between 1994            would not have been feasible without support
and 1997 in order to demonstrate PAFC              from the Rebate Program.
capabilities in real world situations, stimulate
growth of scale in the fuel cell industry and      The scheme enables early adopters (NOT fuel
determine the role for fuel cells in DoD’s long    cell manufacturers) to participate in
term energy strategy.                              demonstrations and facilitates manufacturer
                                                   cost reductions through increased volume of
All the installations operate in cogeneration      production. It also encourages financial
(CHP) mode, with seven of the units                project support from other sources and
configured to provide back-up electricity in       increases the technology options for
the event of a grid power outage.                  distributed generation technologies to meet
                                                   the worldwide growth in electricity demand.
Up to the beginning of 2003, over 847,000
hours of operation had been achieved, with         All fuel cell technologies are eligible, provided
over 66% power plant availability.                 the plants have a rated capacity of at least
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                                                                                   US FUEL CELL MISSION



3kW. PAFC systems dominated the awards                  – Fuel cell auxiliary power unit (APU) to
for the first three years of its operation, but           provide power to vehicle systems when
MCFC, SOFC and PEM have been more                         stationary
evident in recent awards. While priority is             – Fuel cell bus powered by a 100kW PEM
given to installations on MoD sites, the                  fuel cell system (partnership with
scheme is flexible and overseas sites have                industry).
benefited – including the Woking Borough
leisure facility in UK.                               • Department of the Navy (DON) Activity
                                                        [status: ongoing]
In total, 74 projects involving 148 fuel cell units
with a total installed capacity of 14,125MW           The Navy and the Marine Corps have a
have been supported at a cost of over $20.5           significant investment programme in the area
million to the US Federal Government.                 of science and technology. Through its Office
                                                      of Naval Research (ONR)
As part of the DoD’s commitment to fuel cell          (www.onr.navy.mil), the DON is addressing
technology, ERDC/CERL also manages a                  the challenge of developing non-petroleum-
Research and Development Program. This                based power sources to support portable,
currently comprises two projects, one                 long life power systems for everything from
addressing the development of 100kW                   marine-carried equipment up to large scale
logistics fuel reformer/processor technology          naval war vessels/platforms.
for mobile fuel cell power generation (a joint
project with the US Air Force Research                This range of applications means that ONR is
Laboratory – AFRL – at Tyndall AFB), the              investigating systems with power capacities
other looking at the thermoelectric effect (i.e.      from 1W to 1MW. At the smaller scales,
the ability of some materials to generate             ‘energy harvesting’ systems based on
electric current due to a temperature                 renewable energy sources (e.g. PV systems)
differential).                                        and linked to batteries/fuel cells/other storage
                                                      devices are under consideration. For mid-size
The total budget of ERDC/CERL for these five          power applications, fuel cells, stirling engines
areas of activity in FY 2003 is approximately         and small turbines are of interest. At large
$15.0 million.                                        scale (i.e. MW+), multi-fuel cell systems,
                                                      turbines and nuclear power are foci. Systems
• The US Army Tank-Automotive and                     integration is a key issue at all scales of
  Armaments Command (TACOM) [status:                  operation.
  ongoing]
  (www.tacom.army.mil)                                Major challenges that need to be addressed
                                                      include:
TACOM provides support in ground combat,                 – the current need for a large range of
automotive, marine and armaments                           logistics fuels;
technologies and systems to enable the US                – the role for emerging fuels/energy
Army to be mobile, be lethal and survive                   sources (e.g. synthetic diesels, sodium
under attack. As such, part of its activity                borohydride, methane hydrates, etc.);
addresses fuel cell systems and applications.            – systems’ operability in all marine
                                                           environments (e.g. undersea vehicles
The Army’s National Automotive Center, a                   require oxidiser source); and
division of TACOM, is engaged with US                    – the need for compact, lightweight and
industry in projects to develop advanced                   rugged equipment.
diesels, electric drives and new fuels. Two
such projects are:                                    Some current initiatives include:
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US FUEL CELL MISSION



   – R&D activity at ONR and the Naval              NASA’s Glenn Research Center
     Research Laboratory                            (Electrochemistry Branch) has been developing
   – Naval Sea Systems Command’s strategy           improved technologies that result in high
   – NAVSEA – DON’s 21st Century all-               energy density and long life batteries and fuel
     electric ship – fuel cell for ship’s service   cells for NASA missions. Many of these
     power (2005)                                   developments have potential applications in
   – Naval Surface Warfare Center at Crane,         military and commercial arenas.
     IL – beta prototype testing of Ballard
     Power Systems’ fuel cell system                In particular, GRC develops and tests
     achieved 85% efficiency (cogeneration          components for fuel cell and regenerative
     mode)                                          fuel cell systems, including advanced anodes
   – NRL Anacostia – methane hydrate                and cathodes, polymers and other
     research for undersea power                    electrolytes and membranes. System-level
   – Naval Air Weapons Station at China             development for PEM fuel cells and
     Lake, CA – nine grid-linked residential        electrolysis systems, as well as system
     fuel cells                                     design/modelling/analysis for advanced
   – Navy and Marine Corps Transportation –         electrochemical systems and extensive
     fuel cells for transportation – FCV and        component/ system life testing is undertaken.
     hydrogen infrastructure at bases in San
     Diego County (meeting Environmental            Building on this electrochemistry and
     Protection Act, Executive Orders,              systems capability, NASA has been and is
     SECNAV Directions, etc.)                       currently actively pursuing the development
   – Naval Petroleum Office and Defense             of fuel cells and regenerative fuel cell
     Energy Support Center strategies.              systems for application in a number of
                                                    environments. This is illustrated by
• Defense Advanced Research Projects                programmes undertaken, including:
  Agency (DARPA)
  (www.darpa.mil)                                     – Terrestrial Energy Programs: programme
                                                        management for approximately MW-
DARPA sponsors a number of studies looking              scale systems (1980-1990)
at producing small and micro fuel cell                – Unmanned Underwater Vehicle (UUV)
systems to replace batteries in portable                Program: 20kW PEM fuel cell (1991-
systems. These studies include:                         1995)
   – Portable power systems based on SOFC             – Regenerative fuel cell (RFC) testbed:
     technology                                         operational (1995)
   – A 50W PEM fuel cell system.                      – High Altitude Balloon Program: 500W
                                                        fuel cell demonstration (1997-1998)
                                                      – Shuttle Upgrade Program (1997-1998)
Other Federal Activities                              – Reusable Launch Vehicle Program: 5kW
                                                        fuel cell [status: ongoing]
• The National Aeronautics and Space                  – Zero CO2 Emissions Technologies
  Administration (NASA): Glenn Research                 [status: ongoing]
  Center Fuel Cell Technology and Systems             – ERAST Helios Energy Storage System
  Activity [status: ongoing]                            [status: ongoing]: high altitude, large
  (www.grc.nasa.gov/www/erast/fcw1)                     wing-span, unmanned aircraft powered
                                                        by RFCs.
Since the success of the fuel cell development
programme associated with the Gemini,               The budget for FY 2002 for this activity was
Apollo and Shuttle missions (1963-1981),            around $20 million.
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                                                                              US FUEL CELL MISSION




Appendix I


FURTHER INFORMATION ON US STATE                     Investment Funds and Partnerships
ACTIVITIES FOR FUEL CELLS AND
HYDROGEN                                            • California:
                                                      – California Stationary Fuel Cell
This Appendix provides further details of key           Collaborative
US states’ activities in support of fuel cell and     – California Fuel Cell Partnership
hydrogen technologies that are summarised             – California’s Clean Fuel Infrastructure
in Section 9.3.                                         Program
                                                    • Connecticut:
                                                      – Connecticut Clean Energy Fund
Statutory Incentives                                • Florida:
                                                      – Florida Solar Energy Center
• 19 states provide grants or rebates:              • Kansas:
  Arkansas, California, Delaware, District of         – State Energy Program Grants
  Columbia, Illinois, Indiana, Kentucky,            • Massachusetts:
  Maryland, Massachusetts, Michigan, New              – Massachusetts Renewable Energy Trust
  Jersey, New Mexico, New York, Oklahoma,               Fund
  Pennsylvania, Rhode Island, Washington,           • Michigan:
  West Virginia and Wisconsin.                        – NextEnergy Fund
• 6 states provide loan programmes: Iowa,           • Montana:
  Kansas, Missouri, Nebraska, Oklahoma                – Alternative Energy Revolving Loan
  and Utah.                                             Program
• 17 states provide income tax credit               • New Jersey:
  incentives: Arizona, Arkansas, Colorado,            – New Jersey Clean Energy Program
  Georgia, Hawaii, Kansas, Louisiana, Maine,        • New York State:
  Maryland, Montana, New York, Oklahoma,              – New York State Energy Research and
  Oregon, Rhode Island, Utah, Virginia and              Development Authority (NYSERDA)
  West Virginia.                                      – New York State Office of Science,
• 8 states provide business tax credit                  Technology and Academic Research
  incentives: Arizona, Connecticut, Montana,            (NYSTAR)
  Oregon, Rhode Island, Utah, Virginia and          • Ohio:
  West Virginia.                                      – Ohio Fuel Cell Coalition
• 5 states provide a sales or use tax                 – Energy Efficiency Revolving Loan Fund
  exemption: Colorado, Connecticut, Maine,          • Pennsylvania:
  New York and Washington.                            – Alternative Fuels Incentive Grant Fund
• 2 states provide a high technology                • Texas:
  business investment tax incentive: Hawaii           – Fuel Cell Texas.
  and Vermont.

This picture is constantly evolving: A
significant number of states have legislation
pending.

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    US FUEL CELL MISSION




Appendix J


US UNIVERSITIES WITH ACTIVE
RESEARCH PROGRAMMES ON FUEL
CELLS AND HYDROGEN

•   Boston University*
•   Brown University, Boston*
•   Georgia Tech
•   Humbol State University
•   Kettering University
•   Miami University
•   MIT*
•   Montana State University
•   Northwestern University
•   Pennsylvania State University
•   Princeton University
•   Stanford University
•   Suffolk University*
•   Texas A&M University
•   UC Berkeley
•   UC Davis – Institute of Transportation
    Studies*
•   UC Irvine – National Fuel Cell Research
    Center*
•   University of Albany*
•   University of Connecticut – Connecticut
    Global Fuel Cell Center*
•   University of Florida
•   University of Hawaii
•   University of Illinois
•   University of Michigan
•   University of Missouri
•   University of Pittsburgh
•   University of Utah
•   University of Washington
•   Virginia Tech
•   Worcester Polytechnic Institute – Fuel Cell
    Center*

Note:* denotes visit/discussion during the
Mission.




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