11 November 2005 Brussels

1. Joint Technology Initiative on Hydrogen & Fuel Cells Agustín EscardinoPresident & CEO - NTDA EnergiaMember of the Executive Group – HFP 11 November 2005 Brussels

2. Futuro Mapa Energético

3. OUTLINE Part 1 - Summary of the KEY ISSUES Part 2 - Presentation: • Hydrogen & Fuel Cell Technologies • Strategic Issues and Potential Contribution to EU Objectives, including the EU Competitiveness Agenda • Need for an EU-level Approach • First Step: the Hydrogen and Fuel Cells Technology Platform • The Joint Technology Initiative Commitment from Industry

4. Summary of the KEY ISSUES Importance of R&D&demonstration + deployment of hydrogen and fuel cell technologies in the EU An integrated hydrogen and fuel cell infrastructure will respond to crucial EU challenges • Security of Energy Supply - Oil peak production/geopolitical issues... • Environmental challenges - Climate change • EU Competitiveness - A potential huge market = investment, growth, jobs

5. Summary of the KEY ISSUES Paradigm shift in how energy is produced and used Scale of the effort in terms of R&D&demonstration + deployment • infrastructure planning • value chain development • market creation... requires a concerted effort by all stakeholders (EC, MS, regions, large companies, SMEs, Universities, Technology Centres, financing community...) at EU level Technology Platform (TP)

6. Summary of the KEY ISSUES TP strategic agenda has concluded a PPP joint undertaking (JTI) is required for implementation A Joint Technology Initiative for Hydrogen and Fuel Cells can provide for: • A more durable commitment (critical mass) and a strong political signal • Will facilitate financing from industry & financing community • A substantial increase in public funding (EC, MSs, Regions(?)) • Will complement/guide PPP initiatives at MSs/Regions l • Industry influence (NOT control) over content & objectives • A concerted strategic orientation Commitment already expressed by 44 partners

7. Summary of the KEY ISSUES Small & Medium Enterprises (SMEs) play a crucial role • Hydrogen and fuel cells are disruptive technologies • SMEs play a crucial role in the development of these technologies • Difficulties for SMEs to be involved at EU level (like in the Technology Platform) Necessary to adopt measures to support the participation of Small and Medium Enterprises

8. 1. Hydrogen & Fuel Cell Technologies • Hydrogen is an ENERGY CARRIER, like electricity (not a source) • Provides a most efficient way to STORE ENERGY VERSATILITY: It can be produced from many primary sources of energy, including renewable energies, and it can be used for many applications, including transport, stationary and portable FORMS A COMPLETE CIRCLE WITH ELECTRICITY: (Excess) electricity can be used to produce hydrogen, and hydrogen can be used to generate electricity via a fuel cell The combination of Hydrogen and fuel cell technologies can provide forCLEANER AND HIGHLY EFFICIENT CONVERSION SYSTEMS Generally consideredONE OF THE MAIN COMPONENTS OF THE FUTURE MIX OF ENERGY TECHNOLOGIES

9. 2. Strategic Issues and Potential Contribution to EU Objectives, including the EU Competitive Agenda Strategic Challenges • SECURITY OF SUPPLY Future oil production peak/geopolitical issues • Progressive increase in prices/problems of supply 2.CLIMATE CHANGE, and environmental pollution in general 3.EU COMPETITIVENESS As compared to the US, Japan, China, India, Brazil...) Potential Contribution from H2 & FC 1. H2 is a versatile fuel: can be produced from many primary energy sources, and used for many applications,allowing forDECENTRALIZED supply structures 2. H2 (+FC) can reducegreenhouse gas emissionsof transport vehicles down to zero in the long term - cleaner & more efficient conversion 3.POTENTIALLY HUGE MARKET INVESTMENT & JOB CREATION EU GROWTH & COMPETITIVENESS

10. 3. Need for an EU-level Approach First Step: the Hydrogen and FCells TPlatform • High Level Group (Oct. 2002) Vision Report presented at political level (June 2003): eventual fully integrated hydrogen and fuel cell infrastructure • The Reportcalls for a concerted action at EU level involving all stakeholders public and private (large companies, SMEs, RTDs, Universities, NGOs): Technology Platform (HFP)(Dec.2003) • Mirror Group of Member States (MS) established – HFP has a mobilising effect on MS strategies (+ ERA-NET: European Research Area - Networking & Coordination of National Programmes) • Strategic Research Agenda (SRA) and Deployment Strategy (DS) (“Strategic Overview”) endorsed by the HFP General Assembly (March 2005) –IT CALLS FOR A JTI (PPP) as themost efficient way to implement the Strategic Overview

11. 3. Need for an EU-level Approach - Fully Integrated Hydrogen and Fuel Cell Infrastructure H2 Production Distribution Supply & Distributed Generation

12. 3. JTI - Rational & Advantages as Compared to FP • Enhanced funding both public (EC, MSs, Regions, EIB...) and private (large companies, SMEs...) – capacity to attract additional national support & leverage industry funding, and funding from other sources (e.g. EIB) • Allow for a more durable committment from Private (large companies and SMEs) and Public Partners • Strong political signal • Encourage investments and R&D activities in the EU • Signal to the financing community = increased investment • Global competition demands a strong EU response • Will complement PPPs being developed in this field at National and Regional level • Concerted operational focus

13. 3. JTI - Rational & Advantages as Compared to FP • SMEs: necessary supporting measures to engage SMEsand foster industry development accross the EU. This should include: • The setting up of an EU-specific, sector-specific fund for seed & early stage capital, with participation of the EC or the EIF • The setting up in the Member States of sector-specific seed & early stage finance facilities in the form of capital (not subsidies) • MS direct financial support to the participation of SMEs in the JTI • The possibility for SMEs in this sector to add EU, MS and regional subsidies up to a high level of intensity of aid (75%) • General incentive measures (to generation, purchase of equipment, etc.)

14. 3. JTI - Commitment from Industry List of senders of letters of interest in JTI Member Status Total Number: 107 letters

15. 3. JTI – Commitment from Industry 44 letters of Full JTI Membership

16. The challenge of hydrogen and fuel cells requires the simultaneous development of : A trans-European hydrogen supply infrastructure Durable, functional, affordable and safe vehicles Standardised, inter-connectable stationary fuel cell systems and equipment These all have to be brought together timeously in the context of a strategic roadmap which : Meets the needs of public authorities Avoids stranded investments for both infrastructure providers and Original Equipment Manufacturers This requires strategic planning and intensive, integrated research and demonstration. The JTI can provide the framework to launch this process; Europe cannot afford to lose this highly complex competitive challenge!! Deploying hydrogen and fuel cells : A marathon, not a sprint!