Green Candidate ~ Published in "Business in Vancouver" May 3 - 9, 2005

Business in Vancouver ~ May 3 - 9, 2005

Damian Kettlewell: Podium

B.C. firms weigh in at Hannover fuel cell exhibit
Hydrogen and fuel cell commercialization from a B.C. perspective
I just returned from the Hydrogen and Fuel Cells Trade Exhibit in Hannover, Germany, where from April 11 to 15 I was a forum moderator interviewing European, North American and Asian business leaders from the hydrogen sector.
The Hydrogen and Fuel Cell Trade Exhibit was in its 11th year, and had more than 100 exhibitors from 20 countries presenting the entire value-added chain from hydrogen production to components and services all the way to complete fuel-cell systems.
The exhibition encompassed fuel-cell applications ranging from powering portables such as camcorders and laptops, to mobiles (vehicles, forklifts), to stationary power plants.
This year, commercialization moved more to the forefront, said exhibit producer Arno Evers: "We will see that the expressed desire to now also make money with this technology will play an ever increasing role."
Investors have reason to be optimistic, considering the costs of setting up a hydrogen infrastructure in Europe have been over-estimated in the past. Linde AG released a study that showed a complete European hydrogen infrastructure will cost $5.6 billion, significantly lower than previously estimated. "The results of the study are a clear signal to us," noted Linde CEO Wolfgang Reitzle. "Entry into the hydrogen economy is feasible."
A sumary of Linde AG's study can be found at www.fuelcells works.com/Supppage2138.html. The study points to the centralized production of hydrogen and distribution in highly populated areas. To propel the implementation of a hydrogen economy infrastructure, European companies are calling for the elimination of taxes on hydrogen until 2020.
This European scenario is similar to B.C.'s Hydrogen Highway and its seven refuelling stations, which are expected be operational in southwestern B.C. by 2010.
Among B.C.-based companies at the exhibit were Greenlight Technologies and FuelCon Systems, which are capitalizing on the plethora of fuel-cell companies that require equipment to test fuel cell components. Quest Air Technologies of Burnaby exhibited its hydrogen purification technology and representatives spoke about opportunities in Japan.
Hydrogenics of Ontario was the most prominent Canadian exhibitor as it demonstrated its stationary and mobile fuel cells in the same booth as Greenlight Technologies, one of their subsidiaries. Hydrogenics is evolving into Canada's largest and most stable hydrogen and fuel-cell company after acquiring Stewart Energy and its hydrogen manufacturing and refuelling technology.
Noticeably absent from the exhibitor list this year was Ballard Power. Ballard did send a number of representatives to the exhibit, but there was speculation that it is trying to contain cash burn levels until it has new technology benchmarks to demonstrate.
Two market opportunities that exist for B.C.'s hydrogen economy companies include fuel cells as auxiliary power units for long-haul trucks and technologies that capture waste hydrogen and re-integrate it into a separate manufacturing process.
The high cost of fuel and anti-idling regulations are making fuel cells attractive as a means to power the "hotel" units of long-haul trucks.
Currently, these long-haul trucks idle their diesel engines through the night to power their heating and internal appliances. A 5-kilowatt fuel cell would meet all the power requirements for long-haul trucks while they are parked.
Netherlands-based Nedstack is developing a niche application for hydrogen fuel cells in the production of chlorine that captures waste hydrogen and feeds it to a fuel cell. North Vancouver's planned hydrogen refuelling station in the Hydrogen Highway would operate from a similar waste-hydrogen model.
In an interview that covered the global state of the hydrogen economy, David Jollie, editor of Fuel Cells Today, called for "cautious optimism." The Japanese are setting the most aggressive goals, and now plan to have 50,000 fuel-cell cars on the road by 2010.
North American hydrogen economy companies are known for over-promising their technology achievements, as Ballard Power and Plug Power have consistently failed to meet technology performance benchmarks. European fuel-cell companies have been more cautious in their goals, and, as a result, the valuation of their publicly traded companies has been relatively consistent.
Earlier expectations about fuel-cell cars are still limited by technology challenges. Fuel cells must have an operational life of at least 5,000 hours (it is currently around 1,500 hours). And costs must be contained: platinum, one of the critical raw materials for fuel cells, costs between $1,600 and $3,200 per vehicle.
The hydrogen economy's classic "chicken and egg" challenge persists: to ensure long-term viability, a hydrogen production and distribution system needs to be built, even while the search for an economically sustainable fuel-cell vehicle goes on.
Research and development dollars continue to rise every year, and it is not a matter of "if," but simply "when" fuel cells will be integrated into our daily lives. Niche opportunities in the hydrogen value chain are present for those entrepreneurs who understand the relationship between the regulatory, taxation and energy drivers in North America, Asia and Europe.
Damian Kettlewell (hydrogenmedia@telus.net) is a Vancouver-based consultant specializing in renewable energy.