Archive for October, 2008
The industry’s largest expo is only two weeks away! If you are headed to Phoenix, there are several things going on - stop by the joint US Fuel Cell Council and Fuel Cells 2000 booth (#102) for full details.
- On Wednesday the 29th, don’t miss the first ever Women in Fuel Cells luncheon. The mission of Women in Fuel Cells is to foster the professional growth and leadership of women in the fuel cell industry, provide a forum for discussion of issues common to our members, and encourage scientists, engineers and professionals to pursue careers in hydrogen and fuel cells. So if you are a woman in the industry or a man who supports this mission, please join us for the inaugural session on the 29th by registering here.
- There will be a Ride & Drive all day Wednesday and Thursday, with cars from Daimler, GM, Honda, Hyundai, and Toyota. We’ve seen a few already, but can’t wait to try out the others.
- Keep an eye out too for the Council Daily newsletter at the show for more information on the events and news.
- We’ll be posting live from the show as much as possible, and giving you the Inside look you deserve, so stay tuned!
Robert Rose, our frequent guest author, was in Brussels this past week at a series of fuel cell and hydrogen industry workshops, and put together this summary of the week’s events. Enjoy! ~ The Insiders
The European Union and representatives of industry and research institutions have launched a “Joint Undertaking” that commits the EU to invest up to 470 million Euro (€) (about $625 million, as of October 20, 2008) through 2013 for fuel cell and hydrogen research, development and demonstration. The press release claims “nearly one billion,” which reflects the anticipated private sector match.
The formal announcement was made October 14 in Brussels amid high hopes but also substantial uncertainty and some disappointment. The program has been in development for more than six years, and is still unfinished, but an initial call for proposals is available with a budget of €28.1 million with proposals due January 15.
Significant remaining issues include intellectual property, and the process of reviewing and approving proposals (the proposed process raises significant conflict questions). Research institutions complained about the amount of matching funds required of them. The members of the industry association formed to collaborate with the EU on the program overwhelmingly rejected a proposed dues increase, leaving the board to declare an interim budget to be reviewed in the spring. With the exception of the conflict issues, most of these appear to me to be growing pains. Certainly the quantity and quality of private companies and research organizations participating in the collaboration is impressive.
The structure is complicated for an American observer, and requires some patience and the study of a variety of acronyms. Here’s my best shot at an explanation.
Joint Technology Initiative (JTI) on Fuel Cells and Hydrogen (FCH): A public-private partnership among the European Union (EU) and two associations formed for the purpose of the collaboration: the Industry Grouping and the Research Grouping. It is governed by a board comprising five industry members, one research member and six representatives of the EU.
The Industry Grouping is formally called the New Energy World Industry Grouping “Fuel Cell and Hydrogen for Sustainability” or NEW-IG. It is a membership organization with dues in two categories, with established companies paying twice as much as Small and Micro- Enterprises (SME). Membership currently is about 60.
The Research Grouping is formally called the New European Research Grouping on Fuel Cells and Hydrogen, or N.ERGHY. It is also a membership organization. I could not find the dues structure; if someone knows, please post it for us.
The JTI embodies the Joint Undertaking (JU) which is the legal entity set up by the EU government to facilitate the flow of funds. The JTI board will have final vote on project approval.
While a company need not join one of the two associations to apply for funding it cannot be a prime awardee or prime contractor (to use the US term). US based companies cannot join the associations but may participate as a sub.
It should be clear by now that one challenge is presented by the total money set aside for the program and to judge by the first call, it will be spread very thin. Activity areas for the first €28.1 million call include:
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- Transportation & Refueling Infrastructure
- Hydrogen Production, Storage & Distribution
- Stationary Power Generation & CHP
- Early Markets
- Cross-Cutting Issues
Nevertheless, proposers were urged to “think big.”
In the best year, about €100 million is budgeted, and a demonstration bus project or hydrogen infrastructure deployment might take that much all by itself.
Advocates argue that the real value of membership in one of the Groupings is the ability to shape EU policy, and indeed the program allocation of the second through sixth years is still undecided.
It appears to me that the Groupings will begin to function less like single purpose entities and more like trade associations as time goes on, though the dues, which were proposed at €35,000 (approaching $50,000) will challenge even some larger companies, given that there is no guarantee members of the Groupings will receive funds.
The 2008 Annual Implementation Plan contains a valuable list of abbreviations for those not steeped in the complexities of European industrial policy. See the last two pages of this document.
~ Robert Rose, US Fuel Cell Council
This week, both the House and Senate voted on and passed sweeping legislation to shore up troubled financial markets. Included in the comprehensive bill, was an incentive package that would extend and revise, among other things, the existing Investment Tax Credits for fuel cells.
On Monday the House failed to pass the financial bailout bill, prompting the Senate to come up with a revised version. On Wednesday, Senators voted on and passed by a vote of 74-25 a financial bailout bill that included alternative energy tax credits to the controversial legislation.
Today the House took up the Senate-passed legislation and cleared the bill by a vote of 263 -171.
The action represents a significant win for the industry. Without it, the Investment Tax Credits were scheduled to expire on December 31st of 2008. The President immediately signed the bill into law, making the Investment Tax Credits valid until 2016. The revised statue will allow purchasers to write off 30% up to $3,000 per kW off the cost of a qualified fuel cell unit from their tax liability.
On Tuesday, the US Fuel Cell Council joined other alternative energy concerns to urge Congress to act before adjourning for the November election. The public release came on the heels of a report commissioned by the Department of Energy on employment scenarios for fuel cell commercialization. It concluded that commercializing fuel cells could generate 675,000 new jobs over the next 25 years.
Commercializing fuel cells and shifting to hydrogen for motor fuel could generate 675,000 new jobs over the next 25 years, according to a study DOE sent to Congress yesterday. Jobs will be created or preserved in manufacturing and assembly, fuel production, repair, recycling, and construction, with the majority created at auto shops and dealerships.
This is encouraging news and particularly valuable in the context of our current economic anxiety. From the analysis, it’s clear that fuel cells offer substantial job creating potential. It’s also clear that the faster the transition takes place, the faster the jobs are created.
The authors analyzed two scenarios, one in which 89% of new vehicle sales are fuel cell vehicles and 5% of US power is fuel cell generated by 2035, and a second in which fuel cells account for 20% of vehicle sales and 2% of power generation. More than three times as many jobs are created in the more aggressive scenario. The study evaluated transportation, stationary and portable power sectors.
The fuel cell industry has been supporting an extension of the fuel cell installation tax credit in collaboration with the solar and wind industries, whose credits are also scheduled to expire December 31. Certainly the study supports the conclusion that credits like these have tangible value as an economic stimulus.
It’s interesting that a study done in Europe a couple of years ago reached a comparable conclusion, projecting 500,000 jobs by 2030. The Europeans, however, recognized that those countries that commercialize first will win many of these jobs early on, and they are investing accordingly via an ambitious new Fuel Cell and Hydrogen Joint Technology Initiative. It’s still an open question whether U.S. policy will keep pace.
According to the DOE report, “If U.S. companies are able to forge a lead in hydrogen technologies, U.S. global competitiveness will be fostered. The movement to hydrogen in particular could well be an opportunity for U.S. automotive firms to recapture market share lost to foreign multinationals in recent years.”
The study evaluated regional effects, and found that a fuel cell transition could produce more than 100,000 new jobs in 41 industries in the five Upper Midwest States, the traditional center of auto manufacturing.
The study, Effects of a Transition to a Hydrogen Economy on Employment in the United States (pdf available here), was ordered by Congress in Section 1820 of the Energy Policy Act of 2005, and conducted by RCF Economic and Financial Consulting, under a competitive contract. While noting the usual uncertainties, RCF called the estimate “a reasonable measure of the potential opportunities that hydrogen presents to U.S. employment. ”
One wishes that release of the report had come earlier - the data could have been useful during the months it took for final approval from OMB and DOE.
