This is part of an eight-week series on clean energy.
It was about a dozen years ago when Ballard Power Systems Inc. generated excitement around fuel-cell technology with its dream to put one in every car.
When the reality soon set in that it would take too much time and money to go to mass market – given that fuel-cell technology was and remains years away from being mainstream – Ballard scrambled to find other immediate uses for its product, considered a clean-energy alternative.
The Vancouver-area company hasn’t entirely given up on the automotive sector, but its focus today is on developing and marketing fuel cells for industrial uses such as backup power for telecoms and forklifts.
“What we tried to do is distinguish where the opportunities are going to be commercial and when,” Ballard chief executive John Sheridan said in a recent interview.
“It was us starting to think about where there was a value proposition, where we could solve customers’ problems and provide competitive-cost solutions in real world applications.”
Ballard’s focus is largely on markets outside Canada, such as the United States, the Caribbean, Europe, Asia and Africa, where there is more demand – and in many cases government subsidies – to support the technology.
For example, in the Bahamas, Ballard fuel cells provided backup power when the electricity grid was shut down by Hurricane Sandy in October last year. The 17 systems used ran for more than 700 hours and, according to Ballard, helped to prevent the potential loss of half the cellphone coverage across the country’s most populated island, New Providence.
Ballard also installed more than 300 fuel-cell backup power systems in Japan in the first half of this year, tapping into a market looking for more reliable solutions in the aftermath of the Fukushima disaster in March of 2011. The crisis caused a shutdown of Japan’s nuclear plants, creating widespread power outages and rising electricity bills.
Fuel cells produce electricity through a chemical process that combines hydrogen and oxygen. Hydrogen can be supplied directly or can come from natural gas, methanol or petroleum using a fuel processor. Unlike batteries that can run down, fuel cells can produce continuous heat or electricity, as long as hydrogen and oxygen are provided. The only byproducts are heat and water, which is why they are considered a cleaner alternative to fossil fuels.
Another Ballard customer is Plug Power, which uses its fuel cells in forklifts as a replacement for lead-acid batteries. The forklifts are used in warehouses by such companies as Sysco Corp., FedEx Corp., Coca-Cola Ltd. and Kroger Co. Ballard has also partnered with mining company Anglo American Platinum Ltd. to develop fuel-cell-powered generators to provide electricity in remote rural communities in South Africa.
Other companies are also finding new global markets for fuel cells.
California-based Bloom Energy Corp. recently signed a joint venture with a Japanese firm to provide fuel-cell-generated electricity to large power customers such as factories and office towers. Outside of Japan, Bloom also provides fuel-cell systems to companies such as Verizon Communications Inc. in the United States and Google Inc.’s headquarters in California, to name a few.
Mississauga-based Hydrogenics Corp. has manufacturing facilities in Europe that make hydrogen generators, fuel cells and storage systems, while Connecticut-based FuelCell Energy Inc. is providing components for fuel-cell kits and power plants in places such as Germany and South Korea.
In the meantime, car makers such as Hyundai, Toyota and Mercedes-Benz have stepped up the development of fuel-cell technology for cars and are getting closer to commercial production in Europe and the United States. Ballard returned to the automotive space earlier this year after signing a $100-million contract with Volkswagen for use of its fuel cells to power demonstration vehicles.
While Canada is home to a lot of fuel-cell research and development, it is not very far along in developing its own fuel-cell economy. The Canadian Hydrogen and Fuel Cell Association says the sector generated $211-million in revenues and employed about 2,000 people in 2011, mostly in British Columbia. Still, most of the product is exported.
“We haven’t been nearly as fast on the uptake as other countries,” association CEO Eric Denhoff said.
Lack of infrastructure such as hydrogen powering stations is one problem, but Canada also already has an abundance of relatively cheap power, especially when compared with places in Europe and Asia.
Canada also doesn’t offer any meaningful subsidies for fuel-cell technology as other countries do, Mr. Denhoff said. The United States adopted the Hydrogen Fuel Initiative (HFI) in 2004 and has spent more than a billion dollars on research and development to date. Government subsidies are also offered in Japan, South Korea, Norway and other parts of Europe.
Still, many investors are reluctant to jump into the space just yet. Cost, durability and the ability to match performance of existing technology are the main hurdles to investment for this clean technology, according to Purnesh Seegopaul, general manager of Pangaea Ventures. The technology-focused venture capital firm has yet to make a direct investment in fuel-cell technology.
“We think there are opportunities in fuel cells, we just haven’t found it yet,” said Dr. Seegopaul. However, he added, “We haven’t given up.”
How do fuel cells work?
Fuel cells were first invented in the 19th century, but the first commercial use was in the National Aeronautics and Space Administration (NASA) space program in the 1960s to generate power for satellites and space capsules.
A fuel cell uses hydrogen and oxygen to create electricity through an electrochemical process. Hydrogen can be supplied to a fuel cell directly or it can come from natural gas, methanol or petroleum using a fuel processor, also known as a fuel reformer. It converts the hydrogen and oxygen into water, producing electricity and heat.
There main types of fuel cells are; alkaline, proton exchange membrane, direct methanol, molten carbonate fuel cell, phosphoric acid fuel cell, and solid oxide fuel cell.
Pros: Fuel cells are considered a cleaner alternative to fossil fuels because they produce fewer greenhouse gases. If pure hydrogen is used, fuels only release heat and water as a byproduct. They are also reliable, which makes them attractive as a form of backup power.
Cons: Costs are high which makes them difficult to implement on a large scale. While they are promoted as being a reliable backup source of power, their durability is still considered a risk.
Sources: Ballard Power, International Partnership for the Hydrogen Economy, NASA.