Is There a Fuel Cell

In your FUTURE?Larry Blair

DOE Consultantlarry.blair@ee.doe.gov

IFMA

2009 Spring Conference

May 15,2009

OUTLINE

• Fuel Cell Basics

• Benefits & Hurdles

• Potential Markets

• Current & Future Applications

• Opportunities & Incentives

• Summary

Focus on US DOE Hydrogen & Fuel Cell ProgramFocus on US DOE Hydrogen & Fuel Cell Program

3

Fuel Cells DefinedFuel Cells Defined

Fuel (H2) + O2 / Catalyst

Electrical Energy + Heat + Water

Fuel Cells are electrochemical devices that convert the chemical energy of a chemical energy of a reactionreaction directly into electrical energyelectrical energy.

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

• Fuel cells use hydrogen and oxygen to generate electricity through an electrochemical reaction.

• The only by-products are water and heat.

• Single cells are stacked in series to produce the voltage needed to power cars, buses, homes, or portable devices.

• Fuel cells use hydrogen and oxygen to generate electricity through an electrochemical reaction.

• The only by-products are water and heat.

• Single cells are stacked in series to produce the voltage needed to power cars, buses, homes, or portable devices.

5

Why Hydrogen and Fuel Cells?

• HydrogenHydrogen can be produced from can be produced from clean, diverse, domesticclean, diverse, domestic resources. resources.

• Fuel cellsFuel cells are are highly efficient highly efficient and can greatly reduce energy use.and can greatly reduce energy use.(>2x more efficient than internal combustion engines; > 80% efficiency possible with combined heat and power)(>2x more efficient than internal combustion engines; > 80% efficiency possible with combined heat and power)

Stationary & Backup Power

Transportation

Specialty Vehic les

Nuclear

Natural Gas

(for transition period only)

Coal (with carbon

sequestration)

Renewable Sources:

• Wind

• Biomass

• Solar

• Geothermal

• Hydro

• Ocean

Portable Power

6

Fuel Cell BenefitsFuel Cell Benefits Low / Zero Emissions High Efficiency / Low CO2

Wide Range of Applications Fuel Flexible Quiet Simple High Quality Power

7

Achieving GHG and Oil reduction targets will require either battery or fuel cell all-electric vehicles

U.S. CO2 Emissions by Sector (2006)

Electric Power

Generation

40%

Transportation

33%

Industrial

17%

Residential: 6%

Commercial: 4%

U.S. Oil Consumption (2006)

Transportation

67%Industrial

25%

Electric Power: 1%

Residential: 4%

Commercial: 2%

Light Vehicles

66%

Heavy Vehicles

18%

Air: 9%Marine: 5%

Rail: 2%

U.S. Oil Consumption (2006)*U.S. CO2 Emissions by Sector (2006)*

* Source: U.S. Energy Information Administration (EIA) – Annual Energy Review 2007.

CO2 emissions mainly due to transportation and electric power sector

8

H2 & Fuel Cells — Where are we today?

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.Fuel Cells for Stationary Power,

Auxiliary Power, and Specialty Vehicles

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 can be a cost-competitive

option for critical-load facilities, backup

power, and forklifts

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.

9

Hurdles to Fuel Cell Hurdles to Fuel Cell CommercializationCommercialization

Markets and ApplicationsMarkets and Applications

Transportation:Heavy / LightDuty Vehicles

Transportation:Heavy / LightDuty Vehicles

1. Buses / Trucks2. Locomotives / Shipping 3. Passenger Vehicles

1. Buses / Trucks2. Locomotives / Shipping 3. Passenger Vehicles

Portable / BatteryReplacement

Portable / BatteryReplacement

Consumer Electronics Small Motors Note / Sub-notebooks Boating Cellular Phones Lawn Mower Camcorders, etc. Tools, etc.

Consumer Electronics Small Motors Note / Sub-notebooks Boating Cellular Phones Lawn Mower Camcorders, etc. Tools, etc.

Stationary /Distributed

Power

Stationary /Distributed

Power

Backup Power Remote PowerPremium PowerResidential / Commercial Power

Backup Power Remote PowerPremium PowerResidential / Commercial Power

Stationary /Distributed

Power

Stationary /Distributed

Power

• Increasing Need for Reliability• Increasing Need for Power Quality• Energy Security (Source Alternative)• Shift to Distributed Alternatives• Modular Need / Flexibility of Design• Industry Deregulation

• Increasing Need for Reliability• Increasing Need for Power Quality• Energy Security (Source Alternative)• Shift to Distributed Alternatives• Modular Need / Flexibility of Design• Industry Deregulation

MarketsMarkets and Market Drivers and Market Drivers

Portable / BatteryReplacement

Portable / BatteryReplacement

• High Energy to Weight Ratio• Longer Operating Time• Performance• Faster Cycling / “Charging”

• High Energy to Weight Ratio• Longer Operating Time• Performance• Faster Cycling / “Charging”

Transportation:Heavy / LightDuty Vehicles

Transportation:Heavy / LightDuty Vehicles

• Environmental Concerns: Pollution• Government Support / Legislation• Fuel Alternatives

• Environmental Concerns: Pollution• Government Support / Legislation• Fuel Alternatives

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Combined heat, hydrogen, and power systems could provide a viable approach to establishing an initial hydrogen fueling infrastructure.

Co-production of electricity and hydrogen can contribute to grid independence Co-production of electricity and hydrogen can contribute to grid independence and produce clean power and fuel for multiple applications. and produce clean power and fuel for multiple applications.

Fuel CellNATURAL GAS or BIOGAS

NATURAL GAS

GRID ELECTRICITY POWER

HEAT

POWER

HEAT

HY DROGEN

Generation & Transmission Losses

Baseline System

CHHPSystem

Fuel CellNATURAL GAS or BIOGAS

NATURAL GAS

GRID ELECTRICITY POWER

HEAT

POWER

HEAT

HY DROGEN

Generation & Transmission Losses

Baseline System

CHHPSystem

Potential Early Market Application—CHHP

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Early Markets—Combined Heat and Power

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%

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

The unique characteristics of fuel cells make them a key enabling The unique characteristics of fuel cells make them a key enabling technology for CHP in many settings.technology for CHP in many settings.

The unique characteristics of fuel cells make them a key enabling The unique characteristics of fuel cells make them a key enabling technology for CHP in many settings.technology for CHP in many settings.

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.

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Photo courtesy of ReliOn

Fuel cells provide several advantages for backup-power applications—Fuel cells provide several advantages for backup-power applications—particularly in the telecommunications sector. particularly in the telecommunications sector.

Low-cost option for backup power

Early Markets—Backup Power

5-kW Outdoor Installations

Battery/

Generator

PEM fuel cell without

incentive

PEM fuel cell with incentive

52-hr run time $61,082 $61,326 $46,326

Fuel Cells...

• Provide longer continuous run-time, greater durability than batteries

• Require less maintenance than batteries or generators

• Can be remotely monitored

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Fuel cells provide several advantages for specialty-vehicle Fuel cells provide several advantages for specialty-vehicle applications (forklifts, baggage-handling tugs, etc.)applications (forklifts, baggage-handling tugs, etc.)

Early Markets—Specialty Vehicles

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

Pallet Trucks – 3kW

Using batteries (2 per truck)

Using fuel cells (w/o incentive)

Using fuel cells (w/incentive)

Capital Costs $17,654 $23,835 $16,684

O&M Costs (includes fuel) $127,539 $52,241 $52,241

Net Present Value

Total System Cost $145,193 $76,075 $68,925

Photo courtesy of Hydrogenics

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The Program is broadening its scope and balancing its efforts to achieve a comprehensive 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.approach to fuel cells for near-, mid-, and longer-term applications.

Stationary Power/CHP

Transportation

Specialty Vehic les

Coal(with carbon

sequestration)

Renewable Resources

(biomass, wind, solar, etc.)

Natural Gas &Biogas

Propane

Methanol

Nuclear

Fuel Cells

Portable Power

H2

U.S. efforts to overcome obstaclesRebalancing the Program

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Market Transformation Projects

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.

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.

The Program is facilitating the early market adoption of hydrogen and fuel cell The Program is facilitating the early market adoption of hydrogen and fuel cell technologies across the federal sector. technologies across the federal sector.

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.

All market transformation projects involve extensive data collection and analysis to provide information on performance and reliability in real-world operation.

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DOE Vehicle/Infrastructure Demonstration (four teams in 50/50 cost-shared projects)

Verified performance in 140 fuel cell vehicles and 20 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)

Technology Validation

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

Technologies must be validated in integrated systems, under real-world conditions.Technologies must be validated in integrated systems, under real-world conditions.

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Deploying Fuel Cells at DOE Facilities

DOE intends to “walk the talk” by deploying fuel cells at its facilities; DOE intends to “walk the talk” by deploying fuel cells at its facilities; the Program has begun to identify opportunities. the Program has begun to identify opportunities.

There are 19 DOE lab sites, with a potential for about 50 – 80 MW of CHP.

Ideal sites:Ideal sites:• Require constant, consistent, Require constant, consistent,

reliable, quiet powerreliable, quiet power

• Can effectively use waste Can effectively use waste heat for heating and coolingheat for heating and cooling

• Would combine fuel cell Would combine fuel cell installations with budgeted installations with budgeted projects. projects.

2020

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

Backup Power Fuel Cell Deployments

# of Units

Total kW

DOD/USMC - 29 Palms, CA 4 20

DHS El Centro Sector 4 20

DOD/USAF Cheyenne Mountain 4 20

DHS NY Canadian Border Location 4 20

DOC/NOAA (Maryland site) 4 20

NASA (2 sites) 15 100

Fort Sumter (includes H2 generation via solar electrolysis)

4 20

Specialty Vehicle Fuel Cell Deployments

# of Units

Total kW

USPS - California sites (15 forklifts,7kW per forklift)

15 105

Proposed Market Transformation Projects

Fuel Cell Bus Deployment Locations

# of Units

Total kW

FC Bus - Camp Pendleton - 40ft 24 120

FC Bus - West Point - 35ft 7 35

FC Bus - Fort Leonard Wood - 35ft 7 35

FC Bus - Fort Jackson, SC / Shaw Air Force Base, SC - 35 ft

24 120

FC Bus - Warner Robins, GA - 35 ft 7 35

FC Bus - Kilauea Military Camp, HI - 35ft 7 35

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

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This recent act provides incentives and opportunities for hydrogen and fuel cell technologies.

American Recovery & Reinvestment ActAmerican Recovery & Reinvestment Act • Passed by House and Senate Feb 13, 2009• Signed by President Obama Feb 17, 2009• $787 B total, including

– $16.8 B for Energy Efficiency and Renewable Energy

– $2 B for DOE Office of Science (including $400 M for the Advanced Research Projects Agency)

– $3.4 B for Fossil Energy R&D

– $4.5 B for Electricity Delivery & Energy Reliability (Smart Grid)

– $6 B for Loan Guarantee Program

– $5.6 B for GSA (includes high performance green federal buildings and fleets)

– $300 M for DoD Energy research, including fuel cells

Policies and Initiatives in the U.S.The American Recovery & Reinvestment Act (H.R.1)

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• 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.

• 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.

or…

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Some tax credits affecting fuel cells were expanded.

Tax Credits in the Conference BillTax Credits in the Conference Bill

Hydrogen Fueling Facility Credit

Increases the hydrogen fueling credit from 30% or $30,000 to 30% or $200,000.

Grants for Energy Property in Lieu of Tax Credits

Allows facilities with insufficient tax liability to apply for a grant instead of claiming the Investment Tax credit (ITC) or Production Tax credit (PTC). Only entities that pay taxes are eligible.

Manufacturing Credit Creates 30% credit for investment in property used for manufacturing fuel cells and other technologies

Residential Energy Efficiency Credit

Raises ITC dollar cap for residential fuel cells in joint occupancy dwellings to $3,334/kW.

The American Recovery & Reinvestment Act (H.R.1)(H.R.1)

Tax Credits

25

Many provisions offer funding opportunities for fuel cells, even if not specifically mentioned.

ApplicationApplication Funded OpportunityFunded Opportunity AmountAmountStationary fuel cells for CHP (hot water and power)

Energy efficiency improvements in federal buildings and HUD housing

$4.5 B (federal)

$250 M (HUD)

Vehicles and fueling infrastructure

Alternative fueled vehicles for Clean Cities and GSA federal fleets

$300 M (Clean Cities)

$300 M (GSA)

Development of hydrogen and fuel cell industry

State Energy Program $3.1 B

Hydrogen for grid storage Smart Grid programs $4.5 B

Forklifts Efficiency improvements at DoD facilities, and electrification infrastructure at ports

$3.7 B (DoD)

$400 M (electrification)

All Loan guarantees for projects to reduce pollution and GHGs including fuel cells for residential, industrial or transportation applications.

$6 B

Opportunities for Fuel Cells

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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.

• 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.

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Special Thanks to -

• DOE Office of Hydrogen, Fuel Cells and Infrastructure Technologies http://www1.eere.energy.gov/hydrogenandfuelcells/

• Logan Energywww.loganenergy.com

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Benefits of Hydrogen & Fuel Cells

Studies have shown that hydrogen and fuel cells can significantly Studies have shown that hydrogen and fuel cells can significantly reduce oil use and greenhouse gas emissions.reduce oil use and greenhouse gas emissions.

Greenhouse Gas Emissions — by Light-Duty Vehicles

Billion

s o

f Ton

s C

O2–

Equ

ivale

nt

Per

Year

Base Case (gasoline hybrids)

Gasoline PHEV Scenario

Ethanol PHEV Scenario

Fuel Cell Vehicle Scenario

0

0.5

1

1.5

2

2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

80% below 1990 emissions

60% below 1990 emissions

1990 emissions level

Greenhouse Gas Emissions — by Light-Duty Vehicles

Billion

s o

f Ton

s C

O2–

Equ

ivale

nt

Per

Year

Base Case (gasoline hybrids)

Gasoline PHEV Scenario

Ethanol PHEV Scenario

Fuel Cell Vehicle Scenario

0

0.5

1

1.5

2

2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

80% below 1990 emissions

60% below 1990 emissions

1990 emissions level

0

2

4

6

8

10

12

14

2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Domestic Oil Consumption — by Light-Duty Vehicles

Million

s o

f B

arr

els

Per

Day Base Case (gasoline hybrids)

Gasoline PHEV Scenario

Ethanol PHEV Scenario

Fuel Cell Vehicle Scenario0

2

4

6

8

10

12

14

2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Domestic Oil Consumption — by Light-Duty Vehicles

Million

s o

f B

arr

els

Per

Day Base Case (gasoline hybrids)

Gasoline PHEV Scenario

Ethanol PHEV Scenario

Fuel Cell Vehicle Scenario

Source: Dr. Sandy Thomas, “NHA Transportation Study,” November 2008—conducted using data and models developed by his group, EIA and Argonne National Laboratory.

Each technology scenario assumes sales of vehicles using that technology will achieve 75% of total sales by 2100.

2929

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

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 The Program is working to reduce the non-technical barriers facing the commercialization of hydrogen and fuel cell technologies, commercialization of hydrogen and fuel cell technologies,

and to enable the federal government to lead by example and to enable the federal government to lead by example

Recent increase in fuel cell investment tax credit Recent increase in fuel cell investment tax credit (to $3,000/kW) will help accelerate progress. (to $3,000/kW) will help accelerate progress.

Recent increase in fuel cell investment tax credit Recent increase in fuel cell investment tax credit (to $3,000/kW) will help accelerate progress. (to $3,000/kW) will help accelerate progress.