Palcan fuel cell electric bike
Palcan's remarkable fuel cell-powered electric bike is to be followed by a similarly-powered motorscooter.

Canada's Palcan Fuel Cell Bike

Vancouver, BC firm may be favorite to win fuel cell race.

By Alec Tsang

Western Canada's Palcan Fuel Cells Ltd is poised to be first to market with a commercially viable fuel cell product to consumers. While fuel cells in homes and cars may still be up to a decade down the road, an electric bicycle, powered by a Palcan fuel cell, could motor down your street within one or two years.

However, you may stand a better chance of seeing one if you lived in Beijing or another large Chinese city, because China has banned vehicles powered by two-cycle engines in many of its urban centers.

I met Jim McBeth, President and CEO of Palcan, at his office on the outskirts of Vancouver, BC. Palcan is one of several fuel cell related companies clustered around Ballard Power Systems Inc. in the region. Ballard is one of the leaders of the global fuel cell movement. McBeth and I sat down in their meeting room to discuss how Palcan appears ready to go to market ahead of more prominent industry leaders.

The Founder
The fuel cell bicycle application is the brainchild of founder and chairman, Dr. John Shen. He derived the idea based on the need for non-polluting personal transport, created by China's ban on two-cycle engines.

Rapid economic growth in China and other Asian countries has led to the proliferation of fossil-fuel burning vehicles and the subsequent air pollution problems: The two-cycle bike and scooter are the worse offenders. Dr. Shen had visions of providing a ZEV (Zero Emission Vehicle) alternative to the two wheeled, two cycle respiratory offenders even before the "Asian Brown Cloud" came to prominence.

After two years of market research, Dr. Shen founded Palcan in 1998. His expertise in catalysis and fuel cell technology formed the technological base for Palcan's business model.

Editor's Note: Sales of new electric bicycles were recently banned in Beijing. The city government plans to have all electric bicycles phased out within four years. However, experts in Beijing believe this ruling eventually will be overturned as the city tries to find ways to cope with air pollution and traffic congestion.

Palcan Strategy
Adhering common business strategy for introducing new technologies and products, Palcan has elected to tackle a niche market. They are targeting the small power, fuel cell market (transportable and portable power) rather than the medium and large power market (cars and power plants) or the micro and mini power market (electronics). Palcan's product is an integrated fuel cell power module that targets key power points in the 100 W to 5 kW range. The PalPacTM power module is intended to be a substitute for the battery in small EV (electric vehicle) applications such as electric bikes, electric scooters and electric forklifts.

[Note: A fuel cell bike and an electric bike are both essentially electric bikes. They both operate by providing electric power to an electric motor. The difference is in the storage system for the electric power. The common term, "electric bike" refers to a bike that stores electric power with a battery, where as a fuel cell bike stores its electric power in the form of hydrogen fuel which must be converted to electric power via a fuel cell. When the term hybrid is thrown into the mixture, a combination of two systems is inferred: For example, a fuel cell and battery system or a combustion engine and battery system.]

Establishing a Fuel Cell Ebike Market
Palcan has forged joint ventures and partnerships to provide the additional expertise, technology, manufacturing infrastructure and capital for commercialization. For example, Palcan has established relationships with the Taiwan Bicycle Industry Research and Development Center and China based, Suzhou Small Antelope Electric Bicycle Co. Ltd for the electric bicycle application of their fuel cell power module.

McBeth describes their strategy to develop its PalpacTM power module as market based: "It's not a push, it's a pull. The whole thing is based on pull." In this case, China is the initial market to do the "pulling". McBeth explained how China has banned two-cycle scooters in 60-70 cities.

"There's a huge market now," says McBeth. "[The ban] doesn't mean you can't operate an existing scooter. It means you can't manufacture and sell two-cycle gas scooters."

Palcan anticipates the rest of Asia and Europe to be potential markets. They also considered the North American market but see the fuel cell bike received there as more of a novelty item than a "work horse" -- a term McBeth uses to describe the function of scooters and similar two-wheeled vehicles (excluding motorcycles) outside of North America.

Electric bicycles currently fill the void created by the ban on two-cycle, two-wheeled vehicles in China. However, "consumers are not enthralled with [electric bikes]", according to McBeth. He added that electric bikes have performance issues similar to those of electric cars: diminishing power as the battery drains; a lack of range; and long charging times.

Palcan is intent on providing a fuel cell product that addresses the performance deficiencies of the electric bike. McBeth explained that a fuel cell powered bike will output full-rated power as long as there is hydrogen in the hydride storage canisters. And its dual hydrogen canister system would allow the operator to replace one empty canister while still running on the other.

McBeth gives an analogy of the original VWs (Volkswagen), which did not have a fuel gauge: When the VW's main fuel tank was empty, the operator switched to the reserve tank and headed for the next gas station.

Barriers to Entry
Having determined an initial market in China, there remains the question of what are the barriers to entry? The demand for non-polluting motor vehicles was created by government legislation. Hence, the foreseeable barriers for Palcan are competition, economic viability, and availability of support services and infrastructure. Since Palcan has already demonstrated a working fuel cell bike with performance benchmarks that exceed that of its battery powered counterpart, competition should hinge on economics and availability of support systems.

Price Point Advantage
The current cost of producing PEM (Proton Exchange Membrane) fuel cell stacks is still too high for automotive standards. However, the electric bicycle market can accept a higher price point because of the lower power requirements of electric bikes. McBeth explains the price point difference between a bicycle and a car: "The auto industry is on record as stating they need to get [fuel cell] system costs below $100 per kW. A small EV can absorb costs in the $1000 per kW level... The advantage that Palcan has is that achieving the target costs is within the range of existing materials and volume production, so what is required is joint ventures that are willing to fund the tooling, scale up and initial product launch."

McBeth explains further that the introduction of fuel cell bikes will still require some sort of financial boost until "volume manufacturing" is attained: either in the form of a government, price subsidy program or by the manufacturers selling the product at an initial loss.

Circumventing Infrastructure
The other barrier faced by fuel cell powered cars is the need for hydrogen refueling infrastructure. Palcan has circumvented the need for a hydrogen refueling infrastructure that parallels the existing petrol infrastructure with their dual canister hydrogen storage system. The company proposes a canister exchange system that mimics that of the LPG tanks used for bar-b-queues. LPG vendors could sell these canisters as they are already certified to handle flammable materials.

The technology
Consumers may soon identify Palcan as proprietors of the fuel cell bike, but their core technology is a fuel cell system for small transportable power applications under 5 kW. The system comprises the fuel cell stack, metal hydride storage for hydrogen and the electronics that pull the fuel cell system together for application.

As proprietors of the components for the bicycle's power plant, Palcan is able to optimize the fuel cell stack, the hydride storage canisters and the electronic controls for the particular application. McBeth believes this internal control over the core fuel cell components gives Palcan an advantage over integrators in industry that must rely on fuel cell OEMs (Original Equipment Manufacturer) to design on specs or arrange the application parameters to fit the fuel cell products available on the market.

Palcan's PEM fuel cell stack is designed for simplicity, which suits the bicycle application. It operates at ambient temperature and pressure and is air-cooled. The rare-earth metal hydride storage system operates at ambient conditions. Although less extreme operating conditions result in a lower power density for the fuel cell and a lower hydrogen storage density for the hydride storage system, the performance versus simplicity balance is very suitable for the intended transportable application of a fuel cell bicycle.

Palcan's Plans
Palcan is following up their fuel cell bike application with a scooter application. Where the electric bicycle is a viable substitute for the two-cycle, two-wheeler bike because the rider has the option of pedaling when the batteries die, the electric scooter lacks this option. It also falls short on range and power. Palcan's fuel cell system will permit the electric scooter to overcome the deficiencies of being powered by batteries alone.

Fuel cell powered bicycles are scheduled for production and release to market via joint venture partners around this time next year. As for the fuel cell scooter, Palcan is currently optimizing and integrating their fuel cell system for this application.

Times Article Viewed: 6661
Published: 22-Sep-2002


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