Europe Tries to Boost Energy With More Fuel Cell Research
By SCOTT MILLER and BHUSHAN BAHREE
Staff Reporters of THE WALL STREET JOURNAL
BRUSSELS -- The European Commission is planning to significantly boost spending on hydrogen fuel cells, highlighting increasing interest in the new form of energy.
The commission said it plans to spend €2.12 billion ($2.1 billion) during the next three years on research into fuel cells, which convert hydrogen to electricity. That compares with €120 million during the past three years. At the same time, Europe is setting up an advisory group of business executives to guide the commission where to concentrate research and provide financial incentives.
If all goes as hoped, 20% of European cars will be running on hydrogen power by 2020, up from a handful of pilot projects now.
It marks an important step for Europe, which despite the strength of "green" political parties has lagged far behind Japan and the U.S. in promoting fuel-cell power. Total European public funding for fuel cells has been only about a quarter of Japan's €2.4 billion, 28-year budget and about one-third of what the U.S. spends.
During the past few years, hydrogen power has emerged as the darling of industry and political leaders looking for an alternative to fossil fuels. Converted to electricity through a fuel cell, hydrogen can power everything from factories to cars with no pollution and in almost-complete silence. However, production of hydrogen itself will create pollution unless major technological advances are made.
"Today fuel cells are too expensive -- that's why we need a consistent approach at a European level," said Philippe Busquin, the European Union's research commissioner.
There is little infrastructure to support hydrogen-powered vehicles, which would replace the fossil-fuel-powered vehicles that are the main cause of air pollution. Car companies like DaimlerChrysler AG and General Motors Corp. have been putting considerable effort into developing fuel-cell cars, and even oil companies, such as Shell, have been working on the technology. But hydrogen is a technology in its infancy.
For example, although around 100 European cities are running small fleets of fuel-cell-powered buses, the vehicles break down twice as often as ordinary buses, according to Wolfgang Meyer, president of the public transport association UITP. They also weigh considerably more and thus take longer to stop.
"We can't use our passengers as guinea pigs," Mr. Meyer said. "We need to get better products before this can take off."
But governments are anxious to promote fuel cells, seeing in them a way to reduce dependence on Middle East oil, reduce pollution and fill what have become embarrassing gaps in energy supply, such as the power shortages that struck California.
The city of Los Angeles, one of America's smog capitals, became the first retail customer for fuel-cell cars this month when it signed a contact with Honda Motor Co. to lease five Honda FCX fuel-cell cars. The car was certified by the California Air Resources Board and the U.S. government's Environmental Protection Agency as a zero-emission vehicle.
A broad move to hydrogen would have far-reaching economic and political implications, notably by shifting power to those with the new energy technology. Resource-rich countries and companies with oil and gas reserves would be the losers.
But governments in energy-consuming countries wouldn't be immune from the impact. Even as they move to support hydrogen through subsidies -- if only for research now -- governments need to consider how they would replace the huge revenue generated by taxes on oil and gas that in some European countries is as high as 75%.
A big move to hydrogen is only a possibility so far. Royal Dutch/Shell Group's most optimistic scenario shows fuel-cell vehicles accounting for 25% of new auto sales in industrial countries by 2020. Not until 2040 would hydrocarbons such as oil and gas lose their dominance in the energy industry, according to the scenario.
Other scenarios painted by Shell envision advances in current technologies used in internal combustion engines, much greater use of natural gas and a major role for renewables by 2015.
There are many reasons for hydrogen's uncertain future. The technology is still in a developmental stage; costs are high; there is no infrastructure to produce, store and distribute hydrogen; and reliability of hydrogen power and consumer acceptance are still unknown.
"A huge amount of progress has been made, but there is still a fair-sized barrier" to the adoption of fuel cells in autos, says Bernard Bulkin, chief scientist at BP PLC.
There also is the unresolved issue of how to produce hydrogen without carbon-dioxide emissions. If hydrogen is produced from natural gas at central locations for distribution, emissions from the process could theoretically be captured and stored in sealed acquifers. Hydrogen could also be produced by splitting water. But all these are expensive processes that have yet to leave the labs. The fuel-cell optimists are betting that given time and money, scientists will be able to find economic solutions.
BP's Mr. Bulkin says his company's view is that "if auto makers can solve their problems, we can deal with the infrastructure." Oil companies like BP have long produced hydrogen for use in their refineries. Given demand, they can also invest in a storage and distribution network to rival the one that now moves oil.
Government interest in hydrogen is being driven by climate-change issues, local air pollution and concerns about the security of energy supply after the Sept. 11, 2001 terrorist attacks on the U.S., according to Jeroen van der Veer, president of Royal Dutch Petroleum NV, part of Royal/Dutch Shell. Of course, there is no impending shortage of oil and gas.
But sources of power that are carbon-free and economical are limited -- nuclear, hydro and wind. Both power generation and transportation produce vast amounts of carbon. Carmen Difiglio, head of energy technology policy, says it is unlikely enough carbon-free electricity and hydrogen can be produced without substantial technological advances and investment in infrastructure.
In a speech to the world hydrogen energy conference in Montreal in June, the Royal Dutch chief said governments should fund research and development, but keep at arms' length and let companies take the technologies to market. "Shell believes in hydrogen and is putting its money on the table," he said.
Donald Huberts, chief executive of Shell Hydrogen, says current fuel-cell vehicles already "feel good to drive and accelerate well." But their drivetrains alone cost three to five times as much as those for internal-combustion vehicles. "My sense is that they have to come down to twice the cost to start becoming viable," Mr. Huberts said.
But the cost of hydrogen is not the issue it seems to be, he contends. Fuel-cell-equipped vehicles are more efficient than gasoline-powered vehicles, generally providing twice the mileage for the equivalent amount of fuel. "The cost per mile is the same," he said.
-- Brian Grow contributed to this article. |
