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Public-Private Partnership Launched in Europe

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:

    1. Transportation & Refueling Infrastructure
    2. Hydrogen Production, Storage & Distribution
    3. Stationary Power Generation & CHP
    4. Early Markets
    5. 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

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  1. November 5, 2008 @ 12:50 am
    Glenda Schiemann says...

    I see from this report that most of the interest is in Europe.  Where does the United States fit in.  Also, I don’t see any progress in hydrogen fuel cell for residential use.  Why not?

  2. November 6, 2008 @ 1:27 pm
    Jim Horwitz says...

    The JTI is an EU program, and under the current administration, the US is very far from being a clean energy partner of the EU.  But as Bob noted, US firms are allowed to receive matching funds if they are subcontractors to an EU grantee.In regard to residential cogeneration, or microCHP as it is called in Europe, it is alive and well in Europe, Japan, and Korea.  Its penetration is somewhat slower than hoped, but is progressing and is comparatively close to thousands of near-commercial installations.  I presented on the global state and near future of mCHP at last week’s Fuel Cell Seminar and would be happy to pass along a pdf of my presentation to you (Glenda) or other interested parties.In my presentation I talked about the extreme lack of support for mCHP in this country, even compared to regions where there is a similar lack of government support.  There is no logical explanation.  It is a win-win situation for the natural gas utilities, particularly those (like many in the US since deragulation) who are also power providers.  Our own (Boston area) local SOFC upstart Acumentrics has a real foothold in the EU marketplace, and has a major partner in Nippon Steel in Japan, but can only hope for social and political change to create a market in this country.

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