Ontario: Hydrogen Hotbed
By Bill Moore
Ever wondered why so much hydrogen fuel cell technology development takes place in Canada?
Some of the leading R&D companies in the field call either British Columbia (Ballard, Palcan) or Ontario home, including Hydrogenics, which just bought Stewart Energy, also in Ontario; Astris Energi and Fuel Cell Technologies.
To find out why, I talked to George Mandrapilias, whose business card reads something like this: Team Leader, Office of Materials Industries, Sector Competitiveness Branch, Ontario Ministry of Economic Development and Trade. Phew! He assured me that it all fits, but it's in very small type.
We began by talking about the roll of the Ministry and Mandrapilias' team in the hydrogen fuel cell sector, which is just one of a number of areas of business development focus. He told me that with respect to the fuel cell sector, the Ministry concentrates its efforts in three key areas: Research and Commercialization, Trade and Investment, and Business Cluster Development, which is his area of responsibility.
The Ontario government began to devote resources to the hydrogen fuel cell industry some four to five years ago, although the money allocated and the pace of involvement only began to accelerate within the last year. He explained to me that it was a combination of strong engineering colleges in the province's university system and the financial clout of Ontario Hydro, at the time the world's largest electric utility, that helped kick start the industry within the province.
In the last year or so, three clusters of "excellence" have begun to develop across the province. Fuel Cell Technologies, developers of solid oxide fuel cell systems for stationary applications is located in Kingston, east of Toronto, across the St. Lawrence River from New York State. DuPont Canada is also located there and is doing research into polymer electrode membrane materials, as well as is the Royal Military College and Queens University.
The second cluster is located in the Greater Toronto Area and includes Hydrogenics in Mississauga and Stewart Hydrogen, which the former has just acquired. Mandrapilias noted that the combined companies will be one of the largest hydrogen and fuel cell corporations in the world. Also located there is Astris Energi, which is focusing on alkaline fuel cells. McMasters University is also within this cluster.
A third, newly developing cluster is over in Sarnia -- the center of Ontario's petrochemical industry -- just across the border from Port Huron, Michigan, north of Detroit.
"As you're probably aware, petrochemical companies produce a lot of hydrogen," Mandrapilias told me. "So they are looking at growing a fuel cell cluster in that area".
The catalyst for all this fuel cell ferment, Mandrapilias believes, dates back to the 1980's when the province's universities began turning out electrical and chemical engineering graduates who were not only turned on by the concept of fuel cells but who were also able to line up sufficient venture capital to develop their ideas into real products. Although he didn't know the precise economic impact on the province of this developing sector, he did tell me that according to Fuel Cell Canada, the nation's industry trade group, all hydrogen fuel cell technology firms enjoyed sales totaling $188 million (Canadian dollars) in 2003. This did not include monies invested in ongoing research and development.
Role of Government as Incubator
I asked Mandrapilias what he thought was the proper role for government in promoting new technology. He began by pointing out that Ontario is fortunate to have such a large manufacturing base with the province accounting for nearly half of Canada's total gross domestic product or GDP. This creates what he feels is a very favorable business climate. Next he explained that the province has 20 universities and 25 colleges -- all publicly funded -- that graduate some 29,000 students annually with degrees in either math, the sciences or engineering. The population of the province is 12 million.
"There's a study being done out of New York... and when they look at quality of engineers coming out, we're in the top ten," Mandrapilias noted with some understandable pride. "So, our universities here are, in terms of quality of engineers, they're up there with the best."
Mandrapilias went on to explain to me that his initial role was to listen to these firms, to hear what they were needing in order to grow. It turned out that what they needed was funds to do demonstration programs, funds which he eventually was able to convince the Provincial government to allocate.
"For example, last month, our Minister, Joseph Cordiano announced a program of $9.7 million dollars over three years to commercialize fuel cell technology."
In addition to funding some demonstration projects, the Ministry has been networking with its counterparts across the border in Michigan and Ohio, "on how we can work together to grow the fuel cell clusters in this part of the world". Incidentally, both states, as well as Illinois, California, New York, Texas and Florida, have all announced they want to be world leaders in hydrogen fuel cell technology as well.
So, what inducements does Ontario offer to attract hydrogen fuel cell companies there rather than California or Texas? Mandrapilias reminded me of that the province already has world leaders in three of the key fuel cell technologies: PEM, alkaline and sold oxide. In addition to the $9.7 million in provincial funds, the Canadian federal government is going to have significant funds available as part of its Kyoto Treaty commitment to help reduce its greenhouse gas emissions, and hydrogen fuel cells qualify for those funds.
Mandrapilias stressed to me, however, that Ontario is not in the "incentives game", which he views as a no-win situation. Instead, he believes the province's educational assets, world leadership in the technology and healthy business environment is sufficient inducement for companies to relocate to or launch a new enterprise in the province. The province also offers state-funded Medicare for all its citizens, reducing this cost to business.
Investing in a Technology Too Far?
I asked Mandrapilias if he agreed with a growing number of analysts that the successful commercialization of fuel cell technology is at least 20-30 years out, and isn't that too far into the future for the government to be devoting its financial and manpower resources?
He agreed that the use of fuel cells in automotive applications could be that far out, if not further.
"It'll take some time before we have mass-produced fuel cell cars. The fuel cell stack, which is the heart of the fuel cell, has to drop significantly in price. The other issue that has to be addressed is hydrogen infrastructure. We have to fuel these automobiles and that's going to take time. So, automobiles, that's definitely going to take some time," he agreed.
"But let's not forget that there are other applications; portable fuel cells, fuel cells [that] power your telecomm or computers, they're here right now, you can buy them right now. They're mass produced"
He also pointed out that stationary fuel cell manufacturers are right on the verge of mass commercialization of units that generate both electricity and heat. There are even niches for fuel cells in mobile applications such as fork lifts or on military vehicles, he added.
"So, yes, cars are out in the future, but there are applications that are here, and part of our strategy in Ontario is to focus on these applications", he said.
To contact the Ministry's fuel cell cluster group, you can call 800-819-8701 or send email to firstname.lastname@example.org. Their web site is www.2ontario.com.