Is There a Fuel Cell In your FUTURE?

1. Is There a Fuel Cell In your FUTURE? Larry Blair DOE Consultant larry.blair@ee.doe.gov IFMA 2009 Spring Conference May 15,2009

2. Fuel Cell Basics Benefits & Hurdles Potential Markets Current & Future Applications Opportunities & Incentives Summary OUTLINE Focus on US DOE Hydrogen & Fuel Cell Program

3. Fuel Cells are electrochemical devices that convert the chemical energy of a reaction directly into electrical energy. Fuel (H2) + O2 / Catalyst Electrical Energy + Heat + Water Fuel Cells Defined

4. Polymer Electrolyte Membrane (PEMFC) Pros: Low temperature operation, quick start, and high power density Cons: Expensive catalysts Applications: Transportation, stationary, portable power Solid Oxide Fuel Cell (SOFC) Pros: Multiple fuel feedstocks, usable waste heat, and cheap catalysts Cons: Slow start-up, poor transient response, and corrosion issues Applications: Auxiliary power units, distributed generation Direct Methanol Fuel Cell (DMFC) Pros: High energy density Cons: Expensive materials Applications: Portable and micro power Phosphoric Acid Fuel Cell (PAFC) Pros: Low temperature operation and high efficiency Cons: Low current and power density Applications: Distributed generation Alkaline Fuel Cell (AFC) Pros: Low temperature operation and high efficiency Cons: Impurity removal Applications: Military and space Molten Carbonate Fuel Cell (MCFC) Pros: Multiple fuel feedstocks and usable waste heat Cons: Slow start-up and corrosion issues Applications: Electric utility Types of Fuel Cells

5. Why Hydrogen and Fuel Cells? • Hydrogen can be produced from clean, diverse, domestic resources. • Fuel cells are highly efficient and can greatly reduce energy use. • (>2x more efficient than internal combustion engines; > 80% efficiency possible with combined heat and power)

6. Low / Zero Emissions High Efficiency / Low CO2 Wide Range of Applications Fuel Flexible Quiet Simple High Quality Power Fuel Cell Benefits

7. U.S. CO2 Emissions by Sector (2006)* U.S. Oil Consumption (2006)* * Source: U.S. Energy Information Administration (EIA) – Annual Energy Review 2007. Achieving GHG and Oil reduction targets will require either battery or fuel cell all-electric vehicles CO2 emissions mainly due to transportation and electric power sector

8. Hydrogen & Fuel Cells for Transportation (in the U.S.): • > 200 fuel cell vehicles • > 20 hydrogen-fueled buses • ~ 60 fueling stations • Several carmakers (including GM, Honda, Daimler) have announced plans for increased deployments in the next few years. H2 & Fuel Cells — Where are we today? Production & Delivery of Hydrogen • In the U.S., there are currently: • ~9 million metric tons of H2 produced annually • > 1200 miles of H2 pipelines Fuel Cells for Stationary Power, Auxiliary Power, and Specialty Vehicles The largest markets for fuel cells today are in stationary power, portable power, auxiliary power units, and forklifts. ~52,000 fuel cells have been shipped worldwide. ~18,000 fuel cells were shipped in 2008. Fuel cells can be a cost-competitive option for critical-load facilities, backup power, and forklifts

9. Hurdles to Fuel Cell Commercialization

10. Markets and Applications Backup Power Remote Power Premium Power Residential / Commercial Power 1. Buses / Trucks2. Locomotives / Shipping 3. Passenger Vehicles Consumer ElectronicsSmall Motors Note / Sub-notebooks Boating Cellular Phones Lawn Mower Camcorders, etc. Tools, etc. Stationary /Distributed Power Transportation:Heavy / LightDuty Vehicles Portable / BatteryReplacement

11. Increasing Need for Reliability • Increasing Need for Power Quality • Energy Security (Source Alternative) • Shift to Distributed Alternatives • Modular Need / Flexibility of Design • Industry Deregulation • Environmental Concerns: Pollution • Government Support / Legislation • Fuel Alternatives • High Energy to Weight Ratio • Longer Operating Time • Performance • Faster Cycling / “Charging” Markets and Market Drivers Stationary /Distributed Power Transportation:Heavy / LightDuty Vehicles Portable / BatteryReplacement

12. Potential Early Market Application—CHHP Co-production of electricity and hydrogen can contribute to grid independence and produce clean power and fuel for multiple applications. Combined heat, hydrogen, and power systems could provide a viable approach to establishing an initial hydrogen fueling infrastructure.

13. Early Markets—Combined Heat and Power The unique characteristics of fuel cells make them a key enabling technology for CHP in many settings. • BENEFITS OF DISTRIBUTED CHP • Waste heat is used for space heating & hot water • Potential for significant reductions in GHG emissions • Potential long-term cost savings • Independence from the grid • BENEFITS of FUEL CELLS for CHP • Low O&M requirements, less down-time • Less fluctuation in efficiency across variable loads • Zero emissions • Low noise and vibration • CHP fuel cell systems for critical load facilities... • Provide high-quality, reliable, grid-independent power • Improve the effectiveness of data center power use by 40% • Preliminary analysis of fuel cells for CHP shows: • Fuel Cell CHP applications could realize 20 – 50% reductions in CO2 emissions. • CHP fuel cells could be cost-competitive when the ratio of electricity price to fuel price (“spark spread”) is > 3.

14. Early Markets—Backup Power Fuel cells provide several advantages for backup-power applications—particularly in the telecommunications sector. • Fuel Cells... • Provide longer continuous run-time, greater durability than batteries • Require less maintenance than batteries or generators • Can be remotely monitored Photo courtesy of ReliOn Low-cost option for backup power

15. Early Markets—Specialty Vehicles Fuel cells provide several advantages for specialty-vehicle applications (forklifts, baggage-handling tugs, etc.) • FUEL CELLS ... • Allow for rapid refueling — much faster than changing-out or recharging batteries • Provide constant power without voltage drop • Eliminate space requirements of batteries & chargers • May provide substantial cost-savings over battery-powered forklifts Photo courtesy of Hydrogenics Low-cost option for pallet trucks Photo courtesy of Hydrogenics

16. U.S. efforts to overcome obstacles Rebalancing the Program The Program is broadening its scope and balancing its efforts to achieve a comprehensive approach to fuel cells for near-, mid-, and longer-term applications.

17. Market Transformation Projects The Program is facilitating the early market adoption of hydrogen and fuel cell technologies across the federal sector. • Ongoing Projects include deployment of 39 forklifts and 43 backup power systems. • Projects involve the FAA, Postal Service, the Defense Logistics Agency, and other Department of Defense installations. • Some projects include on-site renewable H2-generation. • Planned Activities:In FY 2009, the Program is planning to team with DoD and FAA to administer a multi-agency deployment program. • Deployment of more than 60 backup-power units planned. • Will incorporate additional renewable H2-generation systems. Photo courtesy of Hydrogenics All market transformation projects involve extensive data collection and analysis to provide information on performance and reliability in real-world operation.

18. Technology Validation Technologies must be validated in integrated systems, under real-world conditions. DOE Vehicle/Infrastructure Demonstration (four teams in 50/50 cost-shared projects) Verified performance in 140 fuel cell vehiclesand20 hydrogen stations: • EFFICIENCY: 53 – 58% (>2x higher than gasoline internal combustion engines) • RANGE: ~196 – 254 miles • FUEL CELL SYSTEM DURABILITY: • 1977 hours, projected to 10% degradation (~59,500 miles) • 1987 hours, observed, with more than 10% degradation (~59,500 miles) • Additional projects include: • Demonstrating integration of renewable power and hydrogen production • Data collection and analysis with other agencies • DOT’s Fuel Cell Bus Program • DOD’s fuel cell forklifts 18

19. Deploying Fuel Cells at DOE Facilities DOE intends to “walk the talk” by deploying fuel cells at its facilities; the Program has begun to identify opportunities. • Ideal sites: • Require constant, consistent, reliable, quiet power • Can effectively use waste heat for heating and cooling • Would combine fuel cell installations with budgeted projects. There are 19 DOE lab sites, with a potential for about 50 – 80 MW of CHP.

20. Proposed Market Transformation Projects Other projects would include deployments of backup power, specialty vehicles, and fuel cell buses—by several agencies. 20

21. New food market in Denham, MA – 60,000 sq.ft.On- site power with 400 kW ultra-clean fuel cell from UTC Power~90% Electrical power – grid independent operation~100% Hot water CO2 Mitigation benefits = planting 175 acres of trees NO2 Benefits = more than 90 cars off the road per year $400,000 Grant from the state of MA

22. Policies and Initiatives in the U.S.The American Recovery & Reinvestment Act (H.R.1) This recent act provides incentives and opportunities for hydrogen and fuel cell technologies.

23. Business Tax Credit Applies to commercial, industrial and utility sectors. 30% of expenditures or $3,000/kW (whichever is smaller). Min capacity of 0.5 kW. Electricity only efficiency of 30% or greater. Policies & Initiatives in the U.S. Federal Tax Credits Federal tax credits currently in place to support the deployment of fuel cells in the commercial, industrial and utility sectors. or… • Combined Heat and Power (CHP) Tax Credit • Applies to commercial, industrial, and utility sectors. • Applies to systems up to 50 MW that exceed 60% energy efficiency. • Efficiency requirement waived for systems that use biomass for at least 90% of the system energy source (but credit may be reduced). • Credit equal to 10% of expenditures.

24. The American Recovery & Reinvestment Act (H.R.1)Tax Credits Some tax credits affecting fuel cells were expanded.

25. Opportunities for Fuel Cells Many provisions offer funding opportunities for fuel cells, even if not specifically mentioned.

26. SUMMARY • Hydrogen and fuel cells offer significant environmental, energy security and employment benefits - U.S. DOE Hydrogen Program working towards advancing technology to realize these benefits. • The development path of hydrogen/fuel cells technology is a continuous one – immediate markets already exist today to start taking advantage of technology’s benefits. • Scenario analyses conducted indicate that supportive policies could increase the technology’s market share at costs that are in line with other policies that support national goals. • Analysis has shown that government acquisition efforts allow federal government to play important role in reducing technology costs, supporting a domestic supplier base, and supporting development of infrastructure required for the transition to hydrogen. • ORNL and NAS studies concluded incentives and policies are required to initiate the transition to hydrogen for transportation. • Incentives in place or recently established offer many opportunities to further enhance R&D and stimulate market development and transition to hydrogen for transportation.

27. DOE Office of Hydrogen, Fuel Cells and Infrastructure Technologies http://www1.eere.energy.gov/hydrogenandfuelcells/ Logan Energy www.loganenergy.com Special Thanks to -

28. Benefits of Hydrogen & Fuel Cells Studies have shown that hydrogen and fuel cells can significantly reduce oil use and greenhouse gas emissions. Each technology scenario assumes sales of vehicles using that technology will achieve 75% of total sales by 2100. Source: Dr. Sandy Thomas, “NHA Transportation Study,” November 2008—conducted using data and models developed by his group, EIA and Argonne National Laboratory.

29. Market Transformation OBJECTIVES Enable federal agencies to implement fuel cell technologies Increase sales & manufacturing volumes of fuel cells to achieve economies of scale Support development of national infrastructure and domestic supplier base Improve user confidence in fuel cell reliability The Program is working to reduce the non-technical barriers facing the commercialization of hydrogen and fuel cell technologies, and to enable the federal government to lead by example Recent increase in fuel cell investment tax credit (to $3,000/kW) will help accelerate progress. 29