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Fuel cell technology could change how homes, cars are powered

Fueling the Future

Imagine one day having all of your home's electricity needs provided from a three-foot by four-foot box located in the backyard next to the air conditioning unit. The noiseless box would not only power your house for a fraction of the cost of your current utility bill, it could also charge the family car, which would no longer need to fill up at the gas station.

Proponents of fuel cell technology say this scenario could be a reality in the not-too- distant future. A fuel cell converts hydrogen fuel and oxygen from the atmosphere to electricity cleanly, quietly and efficiently, with few emissions other than carbon dioxide and water. Fuel cells operate without combustion, so they are virtually pollution-free and can operate more efficiently than internal combustion engines.

While industry experts say that it could be anywhere from five to 20 years before fuel cells are feasible for mass production for homes or cars, Texas, along with a handful of other states, is looking to speed up the process. House Bill 2845, passed by the 2001 Legislature, charged the Texas State Energy Conservation Office (SECO), a division of the Texas Comptroller of Public Accounts, to develop a plan to accelerate the commercialization of fuel cell generation in the state. SECO must share its plan, which will include proposed rules, guidelines and operating procedures, with the Senate Business and Commerce Committee and the House Energy Resources Committee in September 2002.

"We're looking at what role the state needs to have here in moving fuel cells along and what opportunities that would present for the state in terms of economic development and environmental issues," says Dub Taylor, SECO's director.

The next Silicon Valley?
H.B. 2845 also required SECO to form an advisory committee to assist in developing the plan. Formed in September 2001, the Fuel Cell Initiative Advisory Committee (FCIAC) includes members of the fuel cell industry, energy services providers, retail providers of electric energy, electric cooperatives and municipally owned electric utilities. The committee held its first meeting in November 2001 at the Houston Advanced Research Center where members discussed H.B. 2845 and possible components of the proposed plan.

Fuel cell technology already is used in limited commercial applications at more than 200 military bases, hospitals and office buildings around the country. Proponents say the market for fuel cell technology is huge for stationary applications, including residential and commercial structures, and mobile applications, including vehicles. With states like Connecticut and California already exploring fuel cells and offering incentives to companies to develop and use them, Texas is joining a nationwide effort to kick-start a fledgling industry that some say could rival that of the cellular phone or personal computer industries.

"I would liken it to the opportunity to be the Silicon Valley of the computer industry. That's really the breadth of the opportunity here," says Malcolm Jacobson, president of Fuel Cells Texas, a trade association focused on accelerating the commercialization and deployment of fuel cells in the state. A member of the FCIAC, Jacobson is also vice president of market development for Danbury, Conn.-based FuelCell Energy Inc., which manufactures fuel cell power plants.

Taylor agrees that the expectations for fuel cells are high.

"I think the industry's hope for the technology is that it really transforms the way energy is made and used, similar to the way people carry cell phones now," he says. "It certainly has that promise."

Texas' focus on fuel cells reflects the federal government's interest in the technology. In January 2002, the Bush administration nixed a $1.5 billion, eight-year government-subsidized program to develop high-mileage, gasoline-fueled vehicles in favor of a fuel cell plan. Developed by the Department of Energy and the auto industry, the program, called Freedom Car, aims to eventually replace the internal combustion engine with fuel cells but does not require automakers to produce fuel cell-powered vehicles.

From the space shuttle to the backyard
Fuel cell technology isn't new; it has been around for more than 150 years. British scientist Sir William Grove built the first experimental fuel cell in 1839, but interest in fuel cells as power generators did not occur until the 1960s, when NASA used the first commercial fuel cell to provide an alternative source of power for the U.S. space program.

Refining fuel cell technology from powering a space shuttle to powering people's homes will take more time, experts say. Cost is a major factor. Now made one at a time by engineers, fuel cells still carry a NASA-size price tag. Fuel cells capable of powering large, commercial buildings sell for anywhere from half a million dollars to more than $1 million. A fuel cell suitable for powering a house would be far too expensive and is still a few years away from being commercially viable.

"It exists, but you can't go to Sears and buy one," says Katie Schmitz de Fernandez, vice president of strategic planning and alliances for Valencia, Calif.-based DCH Technology Inc., which makes hydrogen-based fuel cells for stationary and portable applications for the automotive and defense industries. "They are out of reach of the average consumer."

While the average home demands anywhere from two to five kilowatts of electricity, the commercially available fuel cell today produces 200 kilowatts of electricity and is better suited to larger commercial buildings, banks or hotels. Size is another factor. Some of the existing fuel cells are larger than a refrigerator--a bit large to place in people's backyards or cars.

Fuel cells' reliability, or lack thereof, is another challenge, says Bruce Rauhe, technical director of the Fuel Cell Research and Applications Center at HARC and a member of the FCIAC.

"The one fuel cell that I would call commercial with a real track record is not at the reliability that we all want and expect from something that we might put in our backyard," Rauhe says.

Fuel cell proponents say the fledgling industry faces a classic chicken and egg situation.

"If you had a mass market, you could have mass manufacturing. If you had mass manufacturing, you could have a mass market," says Bob King, president of Good Company Associates, an Austin-based business-development consulting firm that provides contract association management for Fuel Cells Texas.

"That is really the challenge of the state plan," King says. "Is there a way through a private-public partnership--in order to have the public benefit of fuel cells--is there a way we can leapfrog the normal development process in order to make these things more effective?"

The house or the car
The FCIAC faces another challenge in developing its plan. Which fuel cell applications should the state pursue first--commercial or residential applications or transportation applications? Some fuel cell experts say that stationary fuel cell applications may be easier to tackle before transportation applications.

"HARC sees that fuel cells will find a commercial value in stationary before transportation," says Rauhe. "Transportation is so much more difficult an application--it [the fuel cell] has to be small, it has to handle vibration, it has to cost a lot less."

Across the board, cost is the over-riding barrier to fuel cells' mass-market acceptance, experts say.

"We all have different sets of challenges, but at the top of the list for all of us is cost," Jacobson says. "The challenge is really to achieve some volume that will let us reach economies of scale so we can mass produce these power plants."

Yet public acceptance, which can come only if fuel cell price tags come down, is crucial, Taylor says.

"If you talk to the fuel cell industry, they'll tell you, "If you pay me enough money, you can have one tomorrow,'" Taylor says. "Right now nobody is paying that much money. The reality is, from a mass acceptance level we're probably five to 10 years out."

Cleaner and cheaper
Proponents say fuel cells provide three major benefits--cheaper power costs, reduced emissions and, eventually, reliability. Because fuel cells can be at or near the location the power is consumed, they offer a decentralized power system, which is inherently more reliable, Jacobson says.

The FCIAC has identified "fuel flexibility" as another benefit, Rauhe says. Fuel cells would potentially lower the country's dependence on crude oil and provide an alternate, more secure energy source.

Texas joins several other states that have already taken steps to encourage and support development of fuel cell technology. Connecticut is on the leading edge of fuel cell technology, perhaps because it's home to several of the country's largest fuel cell manufacturers--United Technologies Corp., Proton Energy Systems Inc. and FuelCell Energy Inc., Jacobson says. Connecticut considers fuel cells a top-tier renewable energy source and has initiatives for economic developers constructing and maintaining facilities in the state.

In California, two organizations promote fuel cells for stationary and transportation applications. Formed in 1999 by the California Area Resource Board, the California Fuel Cell Partnership includes several state agencies and major automakers like Ford Motor Co., General Motors and Toyota. The partnership focuses on the development of fuel cell-operated vehicles and their components. The California Fuel Cell Collaborative promotes using fuel cell technology to power stationary sources, including homes and commercial buildings.

A plan of action
The FCIAC will study other states' fuel cell initiatives and explore all options in drafting a plan for Texas, says Charlie Bredwell, who handles SECO's special projects and program development. The committee will examine possible government incentives and rebates, infrastructure needs, public benefits and economic impact when developing the plan. Funding fuel cell technology will prove to be the bottom line, Bredwell says.

"It will take money to do anything--it's just where is it going to come from?" Bredwell says. "It's a catch-22. It's something that can really help us save money, but we have to spend the money to save it."

Fuel cell manufacturers say they are encouraged that the state is studying the technology.

"The future is bright," says Schmitz de Fernandez. "We're just trying to find a way to get there faster by helping the SECO panel come up with a plan to help Texas."

Karen Hudgins