Hydrogen and Fuel Cells

1. Hydrogen and Fuel Cells Shannon Baxter-Clemmons, PhD Institute of Management Accountants January 19, 2011

2. SCHFCA Mission The South Carolina Hydrogen and Fuel Cell Alliance is a public-private collaboration for cooperative and coordinated utilization of resources in the state used to advance the commercialization of hydrogen and fuel cell technologies. 

3. Partners I/U Cooperative Research Center for Fuel Cells

4. Current U.S. Economy is Unsustainable • U.S. is 5% of world population but consume 25% of energy produced in the world. • Over $700 billion are leaving this country to foreign nations every year. That's four times the cost of the Iraqi war, and it's killing our economy. It'll be the largest transfer of wealth in the history of mankind. T. Boone Pickens, 2008 • Up to 30% of plant and animal species could face extinction by mid-century if global warming is left unchecked. The U.N. Intergovernmental Panel on Climate Change

5. The Opportunity • Current U.S. economy is unsustainable • Hydrogen and fuel cells allow people to increase their standard of living in a sustainable manner • SC is well positioned to be home to the hydrogen and fuel cell industry • Fuel cell vehicle technology has advanced significantly in recent years • Key issues currently being addressed include hydrogen storage, FC system costs & durability, and hydrogen infrastructure • Pilot testing of vehicles is occurring in Japan, Europe, and the U.S. (esp. California, Michigan, and Washington, D.C.) under a U.S. DOE program

6. Genesis for Economic Cluster SC Research Institutions Savannah River National Laboratory Applied Research Center: Hydrogen University of South Carolina NSF Industry/University Cooperative Research Center Solid Oxide Fuel Cell Center of Excellence South Carolina State University James E. Clyburn Transportation Center Clemson University International Center for Automotive Research

7. State of the States: Fuel Cells in America April 2010 South Carolina is one of the Top 5 Fuel Cell States in the U.S.A. • Top 5 (alphabetical) California, Connecticut, New York, Ohio, and South Carolina.

8. Policy Development SC Hydrogen and Fuel Cell Permitting Law • Places the authority and responsibility of permitting hydrogen and fuel cells in SC in the jurisdiction of the Office of the State Fire Marshal. • Benefits: • Increases public safety by creating a state expert at the Office of the State Fire Marshal • Creates a better business environment for the placement of hydrogen and fuel cell facilities • Raises South Carolina’s profile as a progressive place for hydrogen and fuel cells.

9. Industry Builds hybrid and all-electric city buses Building a $68 million plant in Greenville • Breaking ground in July 2010 • Expected to generate over 1,000 jobs

10. Industry Build Hydrogen Fuel Cell generators and hydrogen fuel canisters for commercial uses Moved its manufacturing and administration to Columbia, creating over 1,000 jobs Partner with Midlands Tech—hired first 5 fuel cell technology graduates in 2010 An SCLaunch! partner company

11. Hydrogen and Fuel Cells are part of a Portfolio of Transportation Energy Solutions • Conservation • Gasoline-electric hybrids • Flex fuel • Plug-in hybrids • Neighborhood electric vehicles • Hydrogen internal combustion engine • Hydrogen fuel cell

12. What is a fuel cell? What is hydrogen? • An electrochemical device that combines hydrogen and oxygen to produce electricity, with water and heat as its by-product  • It is clean, quiet and highly efficient – two to three times more efficient than fuel burning • The most abundant element in the universe • A universal fuel that can be used to power anything from cars to cell phones • Non-toxic, lighter than air, colorless, odorless, tasteless

13. Benefits of a Hydrogen Economy • Environmental and human health protection • No harmful or climate change emissions from the use of hydrogen • Energy security • Hydrogen can be produced from local resources • Ability to couple stationary and transportation power • Distributed network possible versus a centralized network • Complements the intermittent nature of renewables • Economic prosperity • Technology innovations • Sustainable fuel supply—predictable price structure

14. Greenhouse Gas Emissions Lifecycles & Lifestyle Sources(Jones, Horvath & Kammen)

15. U.S. Refrigerator Use vs. Time Change is Good! (as long as it doesn’t affect my lifestyle) 2000 25 1800 1600 20 1978 Cal Standard 1400 Refrigerator Size Average Energy Use per Unit Sold (kWh per year) 1980 Cal Standard (cubic feet) 1200 15 1987 Cal Standard Refrigerator volume (cubic feet) 1000 800 10 1990 Federal Standard 600 Energy Use per Unit 1993 Federal 400 5 Standard 2001 Federal 200 Standard 0 0 1947 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001

16. Energy demand and GDP per capita (1980-2002) US Australia France Russia S. Korea UK Japan Ireland Greece Malaysia Mexico China Brazil India Economic Growth Takes Energy PPP = Purchasing Power Parity - A rate of exchange that accounts for price differences across countries allowing international comparisons of real output and incomes. Source: UN and DOE EIA, Slide courtesy of Steven E. Koonin, Chief Scientist, BP, plc

17. Peak Oil is Within Sight Long-Term World Oil Supply Scenarios: The Future Is Neither as Bleak or Rosy as Some Assert, John H. Wood, Gary R. Long, David F. Morehouse http://www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2004/worldoilsupply/oilsupply04.html

18. Hydrogen makes Energy Security a Local Issue • Couples transportation and stationary energy • “Firms up” renewable resources • Allows for the use of indigenous fuel sources • Renewables, nuclear, fossil fuels • Breaks traditional energy paradigms • Monopolies • Fueling infrastructure • Vehicle capabilities

19. Economic Impacts Effects of a Transition to a Hydrogen Economy on Employment in the US, National Academy of Science, July 2008 • Assuming the Hydrogen Fuel Initiative is successful • 1st HFCV sales in 2018 • 100% of new car sales in 2050 • Net increase in employment of 361,000 jobs • Scientific and Technical Service sectors will increase • South, new automotive manufacturing center, will do well

20. South Carolina & Hydrogen: A Natural Fit • SC has a 50+ year history of hydrogen research • A Harvard study identified hydrogen and fuel cells as a major economic focus for SC • In 2006, the South Carolina Hydrogen and Fuel Cell Alliance was formed to coordinate and collaborate SC’s hydrogen initiatives with economic development goals in mind

21. SC has many existing hydrogen strengths • Multi-level governmental support of hydrogen • Long-existing strength in research • Emerging strengths in a variety of hydrogen markets • Long-existing manufacturing expertise encourages economic development and private investment • Coordination and collaboration through SCHFCA activities

22. SC’s Unique Hydrogen Markets • Focused on feasible near-term applications • Portable applications – Such as ETV fuel cell cameras and emergency responder packs • Off-road applications – Such as USC/Hydrogen Hybrid Mobility fuel cell Segway and Bridgestone hydrogen forklift projects • Automotive – Federal Transit Administration’s National Fuel Cell Bus Program, Fall 2008

23. Columbia, SC • In 2007, the City of Columbia unanimously passed a resolution to become a leader in fuel cell innovation • The Greater Columbia Fuel Challenge funds projects of various scales, including: • Portable fuel cell battery packs for ETV cameras • First responder extended fuel cell power packs • University of South Carolina professors unveiled two hydrogen fuel cell Segways in 2007 • NSF Research Center for Fuel Cells • 2 Endowed Chairs in fuel cell research • Site of the 2009 National Hydrogen Association Conference

24. Aiken, SC • $10 million Center for Hydrogen Research opened 2005 • Currently under expansion, 2009 • SC’s first hydrogen vehicle, 2007 Chevrolet Silverado truck, delivered February 2008 • Bridgestone plant deployed 23 hydrogen forklifts in 2008 with plans to create an all hydrogen forklift fleet by 2009 • GENCO facility in process of adding hydrogen forklifts • Hydrogen station part of SC Hydrogen Freeway

25. Upstate of SC • Home to CU-ICAR and a growing Southeast Automotive Cluster • Tetramer • Kusters-Zima working with Nuvera • Hyperion • BMW—gasoline/liquid hydrogen • KEMET

26. Transportation Industry Challenges • Hydrogen storage • Fuel cell cost and durability • Infrastructure

27. Challenge:H2 Storage • Should achieve high energy density (by wt. and vol.), low cost, quick refueling and good safety • Candidates: compressed gas (5k – 10k psi), liquid, metal hydride, carbon nanotubes, chemical storage • No perfect solution yet but there are workable options Consumers demand 300+ mile range per fill.

28. Challenge: Fuel Cell Cost and Durability • GM, Toyota, Honda Motor Co. and Daimler AG say durability improvements and cost reductions may enable them to sell the zero-emission vehicles by 2015. Costs to make the fuel-cell cars have fallen from $1 million each a few years ago, and automakers are working to meet a proposed goal of slashing the premium for the cars to $3,600 more than a midsized gasoline model. GM, Toyota Fuel-Cell Plans Clash With U.S. Battery Car Push, October 9, 2009. • Fuel cell manufacturers have achieved DOE cost and durability targets

29. GM: Example of Progress • The fuel cell stack itself has been shrunk in terms of both size and cost and now fits in roughly the same space as GM's EcoTec four-cylinder engine. • The second generation hydrogen fuel cell system in development is half the size, 220 pounds lighter and uses less than half the precious metal of the current generation in the Chevrolet Fuel Cell electric vehicle • GM’s fifth-generation fuel cell stack, could be commercialized in the 2015 time frame

30. Challenge: Fuel Cell Cost and Durability • Investment Tax Credit (ITC) • Example – If a US Telecom company purchases a 10kW fuel cell based backup power system at a price of $35,000 the value of the ITC will be the smaller of: • ITC Computation Based on Capital Cost: • 30% of purchase price = 0.30 x $35,000 = $10,500 • ITC Cap Computation: • $3,000 per kW = $3,000/kW x 10kW = $30,000 • Value of the ITC to the US Telecom company in this example = $10,500

31. Challenge: Fuel Cell Cost and Durability • Grant-In-Lieu of Tax Credit • Example – If a US Telecom company purchases a 5kW fuel cell based backup power system at a price of $15,000 the value of the grant will be the smaller of: • Grant Computation Based on Capital Cost: • 30% of purchase price = 0.30 x $15,000 = $4,500 • Grant Cap Computation: • $3,000 per kW = $3,000/kW x 5kW = $15,000 • Value of the grant to the US Telecom company in this example = $4,500

32. Challenge: Fuel Cell Cost and Durability South Carolina Hydrogen and Fuel Cell Tax Exemption • Any device, equipment, or machinery operated by hydrogen or fuel cells; • Any device, equipment, or machinery used to generate, produce, or distribute hydrogen and designated specifically for hydrogen or fuel cell applications; and • Any device, equipment, or machinery used predominantly for manufacturing, or research and development involving hydrogen or fuel cell technologies. (Reference South Carolina Code of Laws 12-36-2120)

33. Infrastructure • Germany: Daimler (DAI), the German government, and several industrial companies announced a plan to build 1,000 hydrogen-fueling stations across Germany. • Japan: Announcement on 1/18/11 for 100 more fueling stations • US: approximately 76 hydrogen fueling stations with more to coming online • Stations in Australia, Belgium, Brazil, Canada, China, Denmark, France, Germany, Greece, Iceland, Italy, Netherlands, Singapore, South Korea, Spain, UK • A study commissioned by the National Academy of Science concluded that the U.S. would need to spend $3 billion to $4 billion a year for 15 years to subsidize the cost of the cars and get a national infrastructure in place to make the transition to hydrogen. About the same amount in annual subsidies that corn-based ethanol receives.

34. Deployment S.C. Hydrogen Freeway • Sage Mill Hydrogen Station • Capacity: 80 kg/day • Columbia Hydrogen Station • Capacity: 120 kg/day First H2 vehicle to drive SC H2 Freeway

35. Near Term Opportunities • Energy Stations • Hydrogen fueling stations where the primary function is to supply power to a nearby location • Niche Markets • Telecommunications • Forklifts • APU and Scooters • Applications with a high need for reliability • Opportunity Fuels • Waste hydrogen from chemical processes • Methane from landfills • Anaerobic digester gas from wastewater treatment facilities

36. Early Niche Markets • Telecommunications • Cell tower back-up • Fuel cells can meet battery price point with incentives • Fuel cells offer longer, continuous runtime and are more durable in harsh environments • Forklifts • Fuel cells are superior performing in high-productivity markets • Rapid refueling, eliminate down-time for battery recharging • Fuel cells provide a unique value to market segment not met by competing technologies

37. Growing Markets Currently putting together Case Studies that examine the CurrentMarket Value Proposition for hydrogen and fuel cells in: Cell Phone Towers Combined Heat and Power (CHP) Forklifts

38. Market Value Proposition Hydrogen Fork-Lifts Bridgestone-Firestone Plant & GENCO warehouse in Aiken, SC Creates jobs for operation, maintenance, and distribution of technology • Key Strategy to increasing hydrogen through put of local hydrogen station

39. Market Value Proposition Example of fuel cell application for telecommunications

40. Fuel Cell/Battery Side by Side INITIAL COSTS

41. Fuel Cell/Battery Side by Side TEN YEAR COSTS

42. Deployment Fort Jackson Fuel Cell Applications 10-5 KW units in 3 locations Ft. Jackson Emergency Services Center Ft. Jackson Telecommunications Center

43. Hydrogen still needs your support • Let your state and local representatives know you support hydrogen and the work of the SCHFCA • Educate yourself on hydrogen and fuel cells • Visit schydrogen.org for information on SC’s activities • Plug into national activities at hydrogenassociation.org and h2andyou.org • Learn more about favorable state incentives for adopting alternative energy technologies at www.energy.sc.gov

44. Questions? Shannon Baxter-Clemmons baxterclemmons@schydrogen.org