Setting the Record Straight - Part 2
By Bill Moore
For many analysts evaluating the pros and cons of a hydrogen-fueled future, one of the major concerns is finding a way to store sufficient hydrogen gas on board the vehicle to meet the range expectations of consumers, which is typically 300 miles between refills. The issue was even raised recently in testimony before the United States Congress.
Dennis Campell, the president and Chief Executive Officer of Ballard Power Systems, the world's leading PEM fuel cell manufacturer, acknowledged this issue in the second half of our dialog. He explained to me that most hydrogen fuel cell prototype vehicles carry between 2.5 and 3 kilograms of hydrogen stored in compressed cylinders under 5,000 psi, s non-trivial amount of pressure as anyone who has worked with hydrogen can attest.
"We probably need five to seven kilograms to get the kind of range viewed as competitive. So, we need to improve the tank design and on board storage method for hydrogen; and here again is where suppliers will play an important role..."
While it is technically feasible to increase the pressure under which more hydrogen can be stored, at some point, the amount of energy contained in the tank will equal the amount of energy it takes to compress it, leading to zero net energy gain. In addition, there are some very real safety concerns -- not to mention psychological ones -- when you deal with pressures this high in a retail, consumer marketplace setting. Solving the storage problem has to be a major focus of any joint government-academic-industry research efforts over the next decade, otherwise fuel cell vehicles will perform only marginally better than battery electric vehicles and with dramatically less overall efficiency.
So, what are Ballard's plans while the storage issues get resolved? If your immediate conclusion is stationary fuel cell applications, where storage doesn't have to be the "show-stopper," as some refer to it, you'd be right, and that's exactly where Ballard appears headed for the time being. It continues to supply PEM fuel cell stacks to the automotive industry, while it is working hard to carve a niche in the stationary power marketplace.
At present, there are hundreds of stationary fuel cells in operation all over the world, virtually all of which use steam reformation to extract hydrogen from natural gas (methane). There is little if any need to store hydrogen because the well head and pipeline are the storage medium.
But the stationary fuel cell field is a bit more crowded with US, European and Canadian companies who hope to capture their own piece of the pie, which still remains largely dominated by either UPS battery backup systems or gasoline/diesel generators, depending on the application. Both are proven, relatively low-cost technologies, and therein lies the rub, as Campbell would acknowledge.
Still, Ballard is agressively going after the market by introducing three new stationary fuel cell products, two of which were rolled out just last year. These include the Nexa(R) RM (rack mounted) power module, the AirGen portable fuel cell generator and the Ballard EBARA co-generation fuel cell pictured above. The company delivered 250 of the Nexa(R) RM power units in 2003, according to Debby Harris, a company spokeswoman.
The connundrum for any fuel cell maker is the cost of their system versus the cost of conventional "uninterrupted power supply" or UPS products. In order to be competitive, the price has to drop, but the price will only drop with volume production and the UPS market for fuel cells is a very small one at current price points. So, a company like Ballard has to find higher volume markets to help drive down costs and the best one, in Campbell's own words is the automotive marketplace. (As an aside, Geoffrey Ballard is reputed to have once said that automobiles would be the last place you'd want to use fuel cells).
But by now, you're probably starting to see the scope of challenge confronting Ballard and other fuel cell manufacturers.
"The real volume market is clearly automobiles and automobiles first," Campbell told me. "Once automobiles have gone into production and we're getting scaled economies, that's when I think the power generation market, the stationary market will really open up. And that's when you'll start to see significant volumes in power generation, because at this stage there's really niche applications only that make sense, very high value backup systems in places where batteries can't work... that's where our product really will make sense."
"But the massive volume of power generation can be satisfied today with gasoline or diesel combustion engines, and once we get an automotive powertrain in place and we achieve scale volumes, we will be able to be competitive and tackle that market for power generation that is currently being served by those gasoline and diesel engines, and we'll be very competitive.
"So the future is, near term, some limited power gen applications; medium term, it's the automotive market that's really going to take off; and then longer term, once that happens, the power generation market will really gain traction."
In a very real way, it's again the classic "chicken and egg" problem, one which depends on the successful overthrow of the internal combustion engine.
Ballard's Manufacturing Model
Assuming that the demand for fuel cell stacks, be they automotive or stationary, reaches the volumes Campbell would like to see, is Ballard really prepared to manufacture millions of fuel cell components daily, which is what one presenter at the SAE Fuel Cell workshop in Sacramento suggested would be necessary to build one million fuel cell cars a year.
Campbell reminded me that Ballard is the only fuel cell company today using modern, mass manufacturing methodologies to turn out its fuel cell stacks.
"We intend to be the lead player in manufacturing (fuel cells). We're the only fuel cell company today that is using production processes to manufacture our fuel cells. Virtually everybody else is hand-making these. They are laboratory-scale, laboratory quality product; and everyone is different because its lab scale.
"We have production operations. We're using statistical process controls. We've made tremendous progress in the area of repeatability and elimination of process variation. So we are really on the cutting edge of production technology for fuel cells, but we will not be the ones to produce all these fuel cells," Campbell stated. While he fully expects Ballard to set the standards for fuel cell manufacturing, the company's business model is to eventually license their technology to other firms.
One of Campbell's business models envisions a high-volume plant that turns out nothing but individual fuel cell modules in a highly automated process. The modules are then sent to a plant near the automaker where they are assembled into fuel cell stacks.
How Soon is Open to Debate
I asked Campbell what his view was regarding when fuel cell vehicles would be commercially competitive, noting that I have had automotive fuel cell engineers tell me that they are at least twenty years off. He replied that there is a wide divergence of opinion on the matter, with companies like GM "constantly pounding the table" that it will have commercial product ready by 2010.
Obviously, from Ballard's perspective, the sooner the better. Campbell said that he hoped that when GM was ready to launch those cars and trucks, that it would be with Ballard fuel cells. "We've not ruled out anyone as a customer," he said.
"Our role at Ballard is to do everything we can to support companies like GM and others who think that earlier is better. So, we're driving to advance the technology; to extend our leadership position, and to have it in place, so that when our customers are ready to scale up, we can go to it."
A Good Hard Push From Geopolitics
Campbell isn't discounting the power of contemporary geopolitics to provide a distinct sense of urgency to the drive towards a hydrogen economy centered around fuel cell technology.
"You can read different points of view of around when oil production will peak, in other words, when we've found half of all available oil, and now we're chewing into the second half. Some people say that can happen in the next ten years. When it happens, the next thing we know for sure is that oil prices are going to start moving up quickly, and inexorably higher," he said.
Campbell believes we need to be ready for when that event happens, saying that geopolitical events could "move this time table to the left." Adding emphasis to this urgency are power blackouts like those that darkened a significant portion of the American northeast and parts of Canada last August. Other parts of the world, including Italy and England, also experienced power outages; in Italy's case, Campbell said it impacted sixty million people.
"Other solutions are going to have to be found," adding that the recent Pentagon study on sudden climate change could have a profound impact on not only the climate in North America and northern Europe, but global politics, as well. "There are all kinds of reasons why people need to get on the bandwagon for fuel cells and start moving this technology ahead at a faster rate."
Campbell commented that there are people who are calling for an Apollo-like program to accelerate the drive to a hydrogen economy, including Senator Hilary Clinton. For Ballard's part, Campbell said that the company is working as rapidly as possible to be ready with the technology when the time comes.
Hybrid Are For Real
As Ballard readies its technology, the success of the Toyota Prius, in particular, has sent a very clear message to the auto industry that gasoline-electric hybrids are no longer mere curiosities, but are becoming serious consumer products. (A colleague of mine just ordered a new Prius, but will have to wait at least nine months to get it, and then it will probably be the 2005 model).
A recent newspaper account reported that Campbell was re-evaluating Ballard's view of fuel cells, so I asked him what he thinks about technology that could be viewed as his direct competitor.
"I think it has now become a must-have technology for the automakers as a competitive defense measure. They've got to be in that game," he replied. "So, our alliance partners, Ford and DaimlerChrysler are taking a look at their hybrid programs. We see hybrids, not as an impediment to fuel cell adoption, but, in fact, a facilitating force. We think hybrids will help us implement fuel cells across the board, because a lot of the architecture is exactly the same. What it does is it enables automakers to begin thinking about cars in a different way."
That different way includes drive-by-wire technology GM is experimenting with in its HyWire fuel cell concept vehicle, and electrical accessories instead of mechanical ones. "It redefines how you design and build a car, and hybrids are that first step. Fuel cells then become a very logical extension of that architecture, as opposed to having to plow all new ground... So, we see the hybrid movement as a very positive force in favor of fuel cells."
"Fuel cells are the end-game," Campbell asserted, adding that where they were once viewed as interesting experiments, they are now viewed by the automotive industry as inevitable. "Hybrids don't get you where you want to go. They still use piston engines. They still burn fossil fuels. They still produce CO2. There is nothing you can do to solve that problem, except replace them with fuel cells."
So, what skills can Ballard bring to its industry partners as they look to ramp up their hybrid efforts? Campbell told me that the company and its partners are right now re-evaluating who does what best in advancing the technology. "That's a discussion that's underway with our alliance partners and I can't get into a lot of detail because it's a work in progress."
The Real Magilla!
Dennis Campbell wanted EV World readers to understand that fuel cells are for real; in his words, "the real Magilla."
"This isn't a fantasy. There is real momentum. It is continuing to build. It's the future of the automotive powertrain. We can argue whether its five years, ten years, twenty years. That's an interesting discussion, but the fact is we have commercial fuel cell products on the market today, and while the timing of massive volumes of automobiles driven by fuel cells is a topic of discussion, the fact that that's where we're going is really not a topic anymore. People are basically in agreement, this is where we have to get to.
"So for my money, it's better to get there faster. I'd like to see more support, more government support, more regulatory support, more customer pull and customer demand."
He sees some of that pull happening as a direct consequence of current and future fuel cell vehicle demonstration programs like the European fuel cell bus program and the small fleet of Ford Focus fuel cell cars that will begin operating in and around Vancouver later this year.
"We think that Ballard has taken the high ground on technology development. We're gaining more experience faster than anybody else in the world. We're leading in the laboratory. We're leading on the road. We're leading in the factory. We think those are all positive things for our company. We're excited about the future."
And speaking of that future, Campbell agreed to periodically -- once or twice a year -- sit down with EV World and bring our readers and listeners up-to-date on developments at his company and in the fuel cell industry. That's a promise we're looking forward to Campbell keeping.