continued from previous post ...
TIM: Before the break here, let's turn back to the cells themselves and do a quick comparison, if a quick comparison could be done, between proton exchange membranes, solid oxide fuel cells. Glenn Rambach, one of our listeners that just sent a question in from Reno, said how about phosphoric fuel cells and alkaline fuel cells? Are you able to give us a quick, simple look at pros and cons of these different types?
PAUL: Sure, I'll do a it as fast as I can and I'm sure every listener.when you said people become a little fanatic about it, I think that's a little bit true. People tend to think that there's a silver bullet among technologies sometime and they forget that this is a very large market and even with combustion engines there are different types of combustion engines that are out there for different market applications. So different fuel cells all have different product attributes that make them better or worse suited to different applications. So just to sort of start from the top, alkaline fuel cells-they use a liquid alkaline electrolyte. They are used in the space shuttle today. That's what provides the power for the space shuttle. They really are not suitable for commercialization on earth-based applications because CO2, even the CO2 in the air around us contaminates the electrolytes. Phosphoric acid, probably the fuel cell that has been most developed for stationary power applications, there's a number of pre-commercial units in the field. They have shown good reliability. Where they have had some trouble is really in bringing the cost down and I think that's partly because of the nature of having a liquid electrolyte in their power plant. Phosphoric acid, again, really is designed for sort of mid-sized under a megawatt but more than 200 kilowatt-type power plant applications. It was mentioned molten carbonate uses a liquid molten salt as the electrolyte, operates very hot but very efficiently, and as a result is really suitable for larger applications, really base load applications or applications where you want process steam in a co-gen-type application where process steam is important. So we're really talking about larger industrial applications. They don't cycle well. In fact, all of the hot fuel cells don't cycle very well. They take a long period of time to heat up and they don't respond rapidly to changes in demand load. Solid oxide-it uses a ceramic coated with an oxide as the electrolyte. Again, runs very hot so it's good in base load applications for stationary power, applications where you need process steam. There's some talk about using them as an APU or an auxiliary power unit on board trucks and that might be an application that might work as long as they're not turned off again because they don't respond well to changes in demand and because they take a long time to heat up. It's the nature of all of the hotter fuel cells. PEM fuel cells are not as efficient as the hotter fuel cells but they more than make up for it in fact through the fact that they respond very rapidly to changes in demand load. They start up virtually instantly even at room temperature, or even subzero temperatures so they have applications in smaller stationary. Ballard (BLDP) focuses at the under one megawatt mark. Certainly transportation applications, portable applications, and there's a variant of PEM fuel cells called the direct methanol fuel cell where you actually inject methanol directly into the fuel cell instead of hydrogen and the methanol breaks down right at the membrane level and that has some interesting applications, especially in smaller applications. The battery replacement type market.
TIM: A hot-button issue here is pollutants coming out of primarily the hot versus the PEM type of fuel cells. Can you talk about that issue a little bit?
PAUL: Really all the fuel cells are very clean and that's because they're electrochemical by nature. They are electrochemical devices so even the hot fuel cells are operating at temperatures far lower than a combustion engine or a gas turbine. So they're all much cleaner. The key thing is that depending on where you get your fuel really determines to a large extent the environmental benefit of fuel cells or frankly any power generation technology. If you generate or use a hydrocarbon fuel you're going to produce CO2. It doesn?t matter what technology you use. But the key thing is that if your technology is more efficient than alternatives you're going to produce less CO2 to the get the same amount of work. And fuel cells generally are two to three times more efficient than conventional ways of generating power. Certainly PEM fuel cells are that when compared to gasoline engine in automobiles that we use today.
TIM: Let's talk about that a little bit too. Let's take cost. How would a fuel cell powered automobile compare to conventionally powered automobiles in terms of cost?
PAUL: Well, for you to buy it, it's not going to cost any more. It's been well recognized that people don't buy new technologies at a significant premium unless they offer significant advantages to them and consumers don't buy vehicles on a life cycle basis so saying they get better economy or they're going to be more reliable or there will be lower maintenance costs isn't a big selling point. Even being a much cleaner vehicle, you know people will feel good about it as long as they don't pay anymore but they won't pay a significant premium. The key thing is, and this is what all of our development programs at Ballard (BLDP) are focused at, is that we have to be able to deliver a fuel-cell powered automobile that costs the same as a combustion engine powered automobile but is a better vehicle. Yes, it's cleaner, yes, it's more efficient, yes, it's more reliable. It's lower maintenance, no more oil changes. It's a vibration-free quieter vehicle so it has better ride comfort. It has better performance because of the high torque characteristics that electric vehicles all have and from a design point of view for an automaker, they have the flexibility of design because they can put the power source wherever they want in the vehicle, even put it underneath the passenger's compartment rather than having to deal with a big block of metal that they have traditionally put in the front of the vehicle. And it gives the auto manufacturers lots of electricity on board the vehicle so that they can use and incorporate new automotive technologies that they want to bring on board the vehicle. Technology such as electric braking, electric steering, drive-by wire vehicle concepts, electric air conditioning, Internet dashboards, video screens for the kids in the back seat, the whole range of things that we want to have in vehicles to make them not just cleaner vehicles but fundamentally superior or better vehicles. And that's really the driver in the auto industry to look at fuel cells as the replacement for combustion engines. Yes, it was originally environmental considerations and regulations that led the auto industry to look at a new power source but today it?s competitive advantage that is driving the various auto manufacturers to look at a new power source, a fuel cell power source for their vehicles because they believe they?ll have a better superior vehicle.
TIM: Speaking of the vehicle, several listeners have made the point that the transmission and the drive train has to change as well. Is this moving along concurrently? Can you talk about that a little bit since you have obviously very close in significant relationships with DaimlerChrysler AG (DAJ) and Ford (F).
PAUL: Yes, you're right. The drive train does change in that it's an electric drive train so electric drive trains need electric motors and different-either a transmission or perhaps even a lack of a transmission-our buses don?t have a transmission for instance that were in Chicago or Vancouver. A number of the other vehicles have very simple transmissions or no transmissions at all. So you're right that it does results in a change and yes, those areas are advancing. In fact this is one of the little known benefits of other technologies coming into the market place. As you know, we?re starting to see some hybrid vehicles start to come into the market place. These are gasoline or diesel, small diesel engines on board a vehicle tied to an electric motor along with batteries. And those vehicles use electric motors. And in fact they are helping to drive the development of electric motor technology which will ultimately move into fuel cell vehicles.
TIM: Switching our attention to Ballard (BLDP) versus Plug Power (PLUG) if we could do that. Plug obviously focuses on the stationary market. Is Ballard directing any attention in that area and who wins in the race to bring the power plant to the home?
PAUL: Well, we are looking and developing a stationary product but for the Japanese market. It's a one kilowatt product that works with a grid. It's a co-generation product so it will provide the first kilowatt of electricity to the home. The grid will supply the remaining electrical needs that the home has but one kilowatt is important because that is sized to match the domestic heating and hot water needs of a typical Japanese household. Now Japan is unique because it has the highest energy costs in the world both for electricity but also for gas used for heating. So in that market you can deliver a product that actually can relatively easily deliver true cost savings to the consumer. As well there?s a certain amount of government initiative in Japan related to higher efficiency use of fuels because of their concern about global warming, the Kyoto Accord, and Japan's commitment to reduce overall CO2 emissions. So it?s a market that is very ripe for new product.
TIM: We?ve got to take a break here, too, Paul. Do you have 2-3 more minutes perchance?
PAUL: Sure.
TIM: Good. Well, hold on through this break. We'll take a quick break. Stay right here. We're talking with Paul Lancaster from Ballard Power Systems (BLDP). We?ll do so for a couple more minutes right after this break.
(Commercial break)
TIM: Welcome back. Tim Quast here on Tech Check. We?re looking at energy technology and chatting with Paul Lancaster, VP of Finance at Ballard Power Systems (BLDP). Paul, did we get to finish that thought regarding your stationary program and what you?re developing in Japan?
PAUL: I think so. The one thing I would like to add is that obviously this is a very large market and there is certainly going to be a number of companies that will be successful in this space. And from my perspective, there's certainly room for Ballard (BLDP) and for Plug Power (PLUG) and the other companies to all be very successful companies because what we're seeing is the development of a new industry. Just as five years ago you wouldn?t have been broadcasting over the Internet. In fact most of us wouldn't have thought of knowing what the Internet was. And here we are talking over it. The same thing is going to happen in the fuel cell business or the whole new power generation technology area. We?re seeing a new industry develop and we're going to hear a lot of about it over the next few years.
TIM: Yes. Partnerships in the stationary market. Do you have them like Plug Power (PLUG) does with a couple of the hybrid utilities I guess you?d say?
PAUL: Yes we do. We have-you mentioned we have a subsidiary company that does our stationary power business and developing the products for it. It's called Ballard Generation Systems and yes, we have partners in that business as well. Alstom (ALS) which happens to be the second largest electrical equipment manufacturer in the world after GE is one of our partners in that company. Ibara Corporation, which is a very large Japanese environmental engineering and manufacturing company, is a partner in that business. And GPUI which is the unregulated arm of GPU (GPU) which is a utility on the US east coast is also a partner in that business with us.
TIM: I know I'm jumping around here. Let's go back to one emissions question. I know you and Shell (RD) have developed a device or are testing one that converts gasoline to hydrogen at the pump. Does this address the carbon dioxide emissions issue which is a hot button?
PAUL: Well, you get carbon dioxide because you have a carbon-containing fuel. And so what the device that was developed between Shell (RD) and one of our associated companies-is actually one that is a joint venture between Ballard (BLDP), DaimlerChrysler AG (DAJ), and Ford (F)-it?s called ECELLSIS-and what they did is they were developing a multi-fuel fuel processor to actually go on board the vehicle so you would take your car and fill it up at the pump with a gasoline or a petroleum product and it would then do the separation of the hydrogen from the fuel on board the vehicle. That's what they were working on. And yes, you're still going to have CO2 emissions because you started with a hydrocarbon fuel.
TIM: Right. We've got just a few minutes or so left here so here's a couple of short things. Cash. Are you positioned well enough to see things all the way through as you've planned?
PAUL: Yes, we are. As you're probably aware, we closed a financing in the end of February for-and I'll do it in Canadian dollar terms because I am in Canada-we raised a half billion Canadian dollars so we have in rough numbers 820 million Canadian dollars in our bank account right now and that's sufficient to see us through the commercialization and market introduction of our first commercial products and all of our first markets. That's both a portable product, a stationary power product, and to see fuel cells powering commercial automobiles in showrooms.
TIM: To conclude, that's a perfect concluding note. When do we see commercialized products in each of those areas if you can rattle those off in short order?
PAUL: Real short. Portable power products next year, that's in 2001. In 2002 fuel cell engines for transit buses and our first sales of stationary power products and somewhere between 2003 and 2005-and it really depends on the auto manufacturers-that's when fuel cells from Ballard (BLDP) are going to be powering vehicles in showrooms.
TIM: Excellent. Paul, thanks very much. Just a delight to have you on.
PAUL: You're very welcome.
TIM: Paul Lancaster, VP of Finance at Ballard Power Systems (BLDP), and we?ll wrap up. We?ll have a lot more on the tech sector next week, same time, same place. Join us then. Tim Quast saying see you then. |
