31 Oct 2002 @ 22:01, by Jenese James
Eco-Economy Update 2002-15 Please share with a friend or colleague.
For Immediate Release
Copyright Earth Policy Institute 2002
October 31, 2002
FUEL CELL-POWERED CARS HITTING THE ROAD AHEAD OF SCHEDULE
[link]
Bernie Fischlowitz-Roberts
On April 2, 2001, Ballard Power Systems, the world leader in fuel cell
production, announced a sale of $16 million of fuel cell modules and
support
services to the Honda Motor Company. In September and December, 2001,
Ballard concluded two agreements with Ford Motor Company to provide $66
million of the same fuel cells and services.
The fuel cell economy is developing much faster than expected, as the
competition among companies intensifies. This momentum in developing
clean
sources of electricity for vehicles, as well as homes and businesses,
holds
the promise of a cleaner energy future, bringing us one step closer to
an
eco-economy.
Fuel cells use hydrogen to produce electricity and emit only water and
heat.
If used to power a vehicle, the fuel cells generate electricity to run
the
motor. Buildings powered by fuel cells use both the electricity and the
heat
they generate, increasing the fuel cells' efficiency.
If the hydrogen fuel is derived from the electrolysis of water, using
electricity obtained from wind turbines, solar cells, hydropower
turbines,
or geothermal generators, it is completely emission-free. Some fuel
cells
rely on hydrogen extracted from natural gas or gasoline; while not
emission-free, this is still much cleaner than fossil fuel combustion.
Fuel
cell vehicles that derive hydrogen from fossil fuels are typically
twice as
fuel-efficient as vehicles with internal combustion engines.
Major automakers are on the verge of introducing fuel cell vehicles
(FCVs)-in some cases much sooner than anyone anticipated.
DaimlerChrysler
announced that early next year, 60 Mercedes-Benz A-Class FCVs will be
unveiled as part of limited customer fleets in Japan, Singapore, the
United
States, and Europe. Honda will sell the first of its FCX model to the
city
of Los Angeles by the end of 2002, and they plan to distribute 30 cars
in
California and Japan over the next two to three years. The Honda seats
four
and has a range of 220 miles (354 kilometers).
Toyota also plans to introduce 20 fuel cell hybrid SUVs by the end of
the
year, which will be offered to customers with access to hydrogen-supply
infrastructure and after-sales service. Ford is sending five Focus FCVs
to
California for evaluation this year, and plans a small number of fleet
vehicles in 2004. Even though it may take a decade for widespread
commercialization of FCVs, the availability of small fleets of these
vehicles ahead of schedule is a promising development.
Fuel cell-powered buses will soon be used in a number of cities. Since
buses
are often refueled at a central location, just like other fleet
vehicles,
they can be introduced before hydrogen stations become widely
available.
Following successful fuel cell bus trials in Chicago and Vancouver
during
1999-2001, DaimlerChrysler has been working with Ballard Power Systems,
a
leading fuel cell producer, to provide 10 European cities with 30 fuel
cell
buses in the next few years. This European Fuel Cell Bus Project
represents
the next step in the transition away from internal combustion-powered
transportation.
Hydrogen stations are opening to serve the needs of hydrogen vehicles,
primarily at research facilities. Honda opened a hydrogen station in
Torrance, California, that produces hydrogen using solar-powered water
electrolysis. SunLine Transit operates a station in Thousand Palms,
California, that offers hydrogen along with numerous other fuels.
Munich has
a hydrogen station on the grounds of its airport that is used to fuel a
fleet of 15 BMW sedans with internal combustion engines that run on
hydrogen. Tokyo has three hydrogen stations built with government
funding,
and a natural gas company in Japan is currently building a fourth.
Iceland plans to be the first hydrogen-powered economy. Next year,
DaimlerChrysler will begin to convert Reykjavik's 80 buses to fuel cell
engines. Shell is constructing a hydrogen station that uses inexpensive
hydropower to electrolyze water to supply the buses. After the buses
are
converted, Iceland's passenger cars will be next, and then the nation's
fishing fleet.
One obstacle to commercialization of fuel cell vehicles is the lack of
a
fueling infrastructure. In a classic chicken-and-egg situation, car
companies are wary of producing too many fuel cell vehicles without a
network of hydrogen stations, while companies involved in hydrogen fuel
are
wary of building the requisite infrastructure in the absence of a
sizable
fuel cell vehicle market. Some automakers estimate that 30 percent of
filling stations in the United States would need to offer hydrogen fuel
in
order for a viable hydrogen-based transport sector to emerge.
To overcome high costs, which is a second obstacle to mass production
and
commercialization of FCVs, the stationary fuel cell market may play a
key
role. Experts at the Rocky Mountain Institute suggest that buildings
may be
the initial market to increase fuel cell production and cut costs,
eventually making fuel cells cost-competitive for vehicles. They make
clear,
however, that buildings and vehicles are both such large markets that
when
fuel cell production in either sector starts to take off, the other
will
follow. Once buildings get much of their power from fuel cells, spare
off-peak hydrogen can be used to run vehicles; this eliminates the need
for
a fully developed network of hydrogen stations to precede FCV
commercialization.
Businesses that need a reliable electricity supply are turning to fuel
cells
to power their buildings. Verizon announced in April 2002 that it would
use
fuel cells to provide electrical power at a telephone call routing
center on
Long Island, New York. The U.S. Postal Service's mail processing center
in
Anchorage, Alaska, also uses fuel cells to get power unaffected by
outages
on the grid. The First National Bank of Omaha, a credit card processing
company, turned to fuel cells to provide the consistent power supply it
requires. It then uses the heat from the fuel cells for space heating.
To encourage private investment in building a hydrogen infrastructure
conducive to FCVs, tax credits for hydrogen production and fuel cell
production-modeled after the wind production tax credit in the United
States-could play a constructive role. Tax credits for fuel cell
production
could stimulate economies of scale to drive down costs. Additional
incentives for so-called early adopters could motivate further
investment,
as could government purchases of FCV fleets. As the single largest user
of
energy in the world, the U.S. government can play a significant role in
stimulating market demand for fuel cells.
The movement to bring hydrogen fuel cells to the forefront of the
global
energy market will require collaboration across industries. One example
of
such an effort is the California Fuel Cell Partnership. Formed in 1999,
this
consists of auto manufacturers, energy providers, fuel cell companies,
hydrogen suppliers, developers of hydrogen fueling stations, transit
companies, government agencies, and the environmental community. Its
goal is
to increase public awareness of fuel cells and prepare the market for
commercialization of FCV technology.
The European Commission recently launched a high-level group of car and
energy companies to ensure that European companies with interests in
hydrogen and fuel cell development do not fall behind their Japanese
and
U.S. counterparts. The group, which includes Royal Dutch/Shell,
DaimlerChrysler, and Renault along with 15 other companies, clearly
recognizes the competitive advantage of early entrance into the
fast-emerging hydrogen economy.
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