National Governor’s Association Center for Best PracticesFuel Cell Economic Development ProgramsAn Overview of the MarketApril 29, 2004
Energy & Power Technology Sector Equity Performance Energy & Power Tech sector has rallied to outperform the Nasdaq over last 12 months Source: FactSet and RBC Capital Markets
Fuel Cell Manufacturing Companies in the US and Canada2004 BRITISH COLUMBIA Ballard Power Palcan Fuel Cell ALBERTA Global Thermoelectric ONTARIO Hydrogenics Astris Energi Fuel Cell Technologies Ltd MASSACHUSETTS Acumentrics Nuvera Ztek Cell Tech Power Protonex WASHINGTON Avista Labs Nu Element Neah Power NEW YORK Plug Power Mechanical Technology IDAHO IdaTech COLORADO Ascent Power Sys. Protonetics CALIFORNIA Metallic Power Direct Methanol Fuel Cell Anuvu ILLINOIS Mosaic Energy OHIO McDermott Tech CONNECTICUT Fuel Cell Energy UTC Fuel Cell Proton Energy GenCell Infinity UTAH Cerametec VersaPower PENNSYLVANIA Siemens Power NEW JERSEY Millenium Cell TEXAS LynnTech - Gary Simon, Sigma Energy Group GEORGIA Fuel Cell Resources Symbols Designate Company Size Large Medium Small FLORIDA Apollo Energy
U.S. Fuel Cell Related Sales 200 150 100 50 2002 2001 Estimated Government and Corporate Spending in R&D, 2001 U.S. Fuel Cell Related Expenditures 400 400 - Corporate 300 300 - Government 200 200 100 100 2002 US Japan EU Canada 2001 Emerging Markets - Fuel Cells • Price Waterhouse-Coopers estimates markets for fuel cells could be as large as $1.7 trillion by 2020. • Focus by Japan and EU on PEMFC • Commercialization of PEMFC is close and considered to be the most promising fuel cell technology today.
DMFC Ballard, 2002 SOFC Cost (US$/kW) MCFC Plug, 2003 Technology AFC Nippon Oil, 2004 PAFC PEMFC 100 Time 100,000 10,000 1,000 Cost (US$/kW) Fuel Cell Cost Curves Source: Fuel Cell Today (March 2004)
4030 20 10 0 Wind COE cents/kWh 1980 1990 2000 2010 2020 100 80 60 40 20 0 Photovoltaic COE cents/kWh 1980 1990 2000 2010 2020 Emerging Markets - Renewable Energy • 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. Declining costs and increasing demand present disruptive factors for the energy sector! 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
Hydrogen and Fuel Cell Companies - Endurance is an Issue Cumulative Announced “Restructurings” Announced M&A Transactions 9 8 3 7 6 5 2 4 3 2 1 1 2003 2000 2001 2002 2003 2000 2001 2002 Signs of a market bottom! More M&A Activity Likely!! Source: RBC Capital Markets
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
Back to Edison – Energy Security and Reliability The Economist, ABB.
Fuel Cells and a Renewable Hydrogen Economy Graphic provided by the National Renewable Energy Laboratory
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