1Confidential. Not for distribution. Page and Slide #
National Governor’s Association Center for Best Practices
Fuel Cell Economic Development ProgramsAn Overview of the Market
April 29, 2004
2Confidential. Not for distribution. Page and Slide #
Technology - Fuel Cells
3Confidential. Not for distribution. Page and Slide #
Energy & Power Technology Sector Equity Performance
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
3/10/03 6/09/03 9/08/03 12/05/03 3/09/04
Nasdaq RBCCM EPT Index
Energy & Power Tech sector has rallied to
outperform the Nasdaq over last 12 months
Source: FactSet and RBC Capital Markets
4Confidential. Not for distribution. Page and Slide #
Fuel Cell Manufacturing Companies in the US and Canada2004
FLORIDAApollo Energy
GEORGIAFuel Cell Resources
TEXASLynnTech
CALIFORNIAMetallic Power
Direct Methanol Fuel Cell
Anuvu
BRITISH COLUMBIABallard Power
Palcan Fuel Cell
WASHINGTONAvista LabsNu ElementNeah Power
IDAHOIdaTech
UTAHCerametec
VersaPower
COLORADOAscent Power Sys.
Protonetics
ALBERTAGlobal Thermoelectric
ILLINOISMosaic Energy
OHIOMcDermott
Tech
PENNSYLVANIASiemens Power
ONTARIOHydrogenicsAstris Energi
Fuel Cell Technologies Ltd
NEW YORKPlug Power
Mechanical Technology
CONNECTICUTFuel Cell Energy
UTC Fuel CellProton Energy
GenCellInfinity
MASSACHUSETTS
AcumentricsNuvera
ZtekCell Tech Power
Protonex
NEW JERSEYMillenium Cell
Symbols Designate Company SizeLarge
MediumSmall
- Gary Simon, Sigma Energy Group
5Confidential. Not for distribution. Page and Slide #
Emerging Markets - Fuel Cells
U.S. Fuel Cell Related Sales
20022001
50
150
200
100
Price Waterhouse-Coopers estimates markets for fuel cells could be as large as $1.7 trillion by 2020.
Focus by Japan and EU on PEMFC
Commercialization of PEMFC is close and considered to be the most promising fuel cell technology today.
U.S. Fuel Cell Related Expenditures
20022001
100
300
400
200
Estimated Government and Corporate Spending in R&D, 2001
JapanUS
100
300
400
200
EU Canada
- Corporate
- Government
6Confidential. Not for distribution. Page and Slide #
Fuel Cell Cost Curves
Time
Cost
(US
$/k
W)
Ballard, 2002
Plug, 2003
Nippon Oil, 2004
100
Tech
nolo
gy
Cost (US$/kW)
AFC
1,000
PEMFC
DMFC
MCFC
SOFC
PAFC
10,000100,000
Source: Fuel Cell Today (March 2004)
7Confidential. Not for distribution. Page and Slide #
Emerging Markets - Renewable Energy
Wind
1980 1990 2000 2010 2020
CO
E c
en
ts/k
Wh
40
30
20
10
0
1These graphs are reflections of historical cost trends NOT precise annual historical data (levelized cents/kWh in constant $2000). Source: NREL Energy Analysis Office (www.nrel.gov/analysis/docs/cost_curves_2002.ppt) Updated: October 2002* Vestas and NEG-Micon merged their operations to create the largest wind turbine manufacturing group
Declining costs and increasing demand present disruptive factors for the energy sector!
Photovoltaic
1980 1990 2000 2010 2020
100
80
60
40
20
0
CO
E c
en
ts/k
Wh
demand growth 26% for 2003
global annual sales of $9 billion
top manufacturers * - Vestas, NEG-Micon, GE
key markets - Germany, US, Spain
demand growth 20-25% per year
global annual sales of $3-4 billion
top manufacturers - Sharp, BP, Kyocera, and Shell (AstroPower among top 10)
key markets - Japan, Germany, U.S.
8Confidential. Not for distribution. Page and Slide #
Hydrogen and Fuel Cell Companies - Endurance is an Issue
Source: RBC Capital Markets
Signs of a market bottom! More M&A Activity Likely!!
Announced M&A TransactionsCumulative Announced
“Restructurings”
2003200220012000
1
2
3
2003200220012000
1
2
3
45
6
789
9Confidential. Not for distribution. Page and Slide #
Recent M&A Activity in Hydrogen and Fuel Cells
Ballard Power acquires XCELLIS and Ecostar (October 2001)- $348 M - all stock- PEM fuel cells, vehicular fuel cell engines and electronic drive systems technology - combine all three pieces into one entity to lower overall costs and accelerate product development.
Plug Power merges with H Power (November 2002)- $50.7 M - all stock- Stationary PEM fuel cell technology developers
Stuart Energy acquires Vandenborre Technologies (December 2002)
- $18 M - $11.6 M stock and $6.4 M cash- Developers of alkaline electrolysis based hydrogen generation systems
Hydrogenics acquires Greenlight Power (January 2003)- $19 M - $16.75 M stock and $2.25 M cash- Fuel cell test station developers
Distributed Energy Systems acquires Northern Power Systems (May 2003)
- $27.5 M - $8.5 M stock and $19 M cash- Combining hydrogen generation technology with renewable and fossil-fuel power systems
Fuel Cell Energy acquires Global Thermoelectric (August 2003)- $80 M - all stock (~$115-120 M at close given stock appreciation)- Developers of MCFC and SOFC technologies
Source: RBC Capital Markets
10Confidential. Not for distribution. Page and Slide #
Back to Edison – Energy Security and Reliability
The Economist, ABB.
11Confidential. Not for distribution. Page and Slide #
Fuel Cells and a Renewable Hydrogen Economy
Graphic provided by the National Renewable Energy Laboratory
12Confidential. Not for distribution. Page and Slide #
Connecticut Clean Energy Fund – Fuel Cell Initiative
Fuel Cell Installations– Commercialization
– UTC PC25 St. Francis Hospital – power security to operating room– UTC PC25 South Windsor High School – baseload power emergency shelter– DFC300 Yale University – CHP application with high quality power needs
– Demonstration– 10 kW SOFC using syngas from biomass gasification process– 5 kW SOFC using ethanol fuel
– Performance Monitoring – working with EPRI (Electric Power Research Institute) to identify system performance and risks associated with commercialization
Investments– Proton Energy Systems – regenerative fuel cell systems– Acumentrics – manufacturer of SOFC– Ztek – business developing SOFC technology– GenCell – integrated fuel cell power generators– Sure Power – high reliable back-up power systems using fuel cells
Outreach and Education– Annual Fuel Cell Investment Summit – RK Pachauri, IPCC Chairman– Public Fuel Cell Alliance– Connecticut Global Fuel Cell Center at the University of Connecticut
