A slew of interesting letters in today's Times newspaper continuing a debate on biofuels, renewables and hydrogen.  Rob Thring, a Professor of Fuel Cell Engineering, argues that;

" if all the cars in Britain could be converted to run on fuel cells using hydrogen from electrolysers using electricity obtained only from wind turbines, we would need only 20,000 wind turbines to do that. Britain could do that in 20 years, and then we would not need petroleum imported from politically unstable areas to fuel our cars."

On one level, it's not quite right because 90% of the UK's imported petroleum comes from a fellow liberal democracy, Norway - and since the demise of the Vikings in the 10th Century AD, they haven't been an external cause of instability to anyone. Britain's energy security issues are largely to do with gas, being at the wrong end of the European pipeline, the run-down of North Sea reserves, an inbuilt self-defeating prejudice against new energy infrastructure  and a much-strained relationship with Russia.

Leaving that aside, it's a fascinating concept to envision wind turbines as a dedicated resource for the hydrogen production - i.e. via electrolysis - for transport fuel. It's not entirely crazy. The UK's island grid would have a hard time (impossible at the current time) load-balancing 20,000 x 3 MW turbines or 60,000 MW. No wonder more research is going on into wind forecasting as this piece in MIT Technology Review makes clear. Depending on who you believe, the furtherest wind could be integrated today in the UK is between 10 and 15% which would equate to about 16,000 to 20,000 MW of installed capacity, compared to about 2,500 MW now and that's assuming you can get it all through planning.

Hydrogen production however, which would be tied directly to storage, is not time sensitive and if, and it's a big if, all the UK's vehicles were to shift to hydrogen-fuelled fuel cells, there would be a ready market for it. This hydrogen ambition is a throwback to the scientist, J. B. S. Haldane's 1923 speech, in which he proposed the UK should replace it's exhausted coal fields with a network of hydrogen generating windmills - allegedly the first ever proposal for a hydrogen-based renewable energy economy.

For all that the killer fact remains; fuel cells for vehicles are still vastly too expensive for widespread adoption. Show me the showroom where I can go and buy one? Obviously, you can't. The economics of wind-powered hydrogen will start to make sense long before fuel cells do for everyday vehicles.

For more information on this debate, see this article I wrote a few years ago, which still holds up pretty well;

The Hydrogen Economy; what price and when?

Today I'm launching the AEI www.altenergyinvestor.org CEO interview series and I'm delighted to kick it off with Stephen Voller, CEO and Founder of Voller Energy Plc.



Dan Lewis: Stephen,  how did your career develop to becoming Founder and Chief Executive of Voller Energy?

 

Stephen Voller: I worked in the IT business for IBM and then Netscape. As I travelled around the world with my laptop I wondered why a product that got ever more sophisticated never seemed to have enough battery life. I came up with the idea of using a light, renewable fuel cell to charge the batteries.

DL: What is your vision for Voller Energy?

SV: Our vision is to become the leading developer, manufacturer and supplier of fuel cell technology to the mass market.  We are already one of the first companies in the world who have deliverable technology, and portable fuel cells are widely predicted to be the first type of fuel cell to reach a mass market.  Voller is now well placed as an early leader in this sector.

In the future we will use energy differently. Instead of using a national grid to power our homes, I believe that we will generate our own power and use the grid as back-up. We will sell power back to the grid for others to use, or store the energy in batteries to power our cars. Voller is positioning itself for this new world.  I believe that our children and our children’s children will look back on our generation as the one that was decadent with energy and squandered it all. They will also label us the ‘dirty generation’ because of the effect we have had on the planet.

We simply cannot go on using the fossil fuels at the current rate and we cannot go on producing the very high level of emissions that we do.  More and more people are now realising that the technology to address this problem exists in fuel cells. Because fuel cells are much more fuel efficient we can make our natural resources go further, and the emissions from them are much lower.  So we can keep the lights on, but reduce the effects of climate change.

DL: What do you think your latest financial results say about the company?

SV: The results reflect that fact that we are still in the early adopting phase of this technology roll out. All new technologies go through the early adopter, growth, maturity and decline cycles. For example PC’s are now mature technology and it was the internet that pushed them through their growth phase.

We can address niche or specialist markets today such as high end leisure applications for yachts and motor-caravans, and the desperate need for low-emission generators in the construction sector. Our low noise, low vibration products are ideal for these markets.

As our production volumes grow we will benefit from the economies of scale and the prices will fall and sales will increase as we begin the growth phase.

DL: Who are your competitors and why do you think you are better than they are?

SV: We provide solutions for our customers using the best of breed systems that are available. The majority of players in the fuel cell industry see us as a customer rather than competitor. Our ‘competition’ is really conventional generators rather than other fuel cell companies.  We have renewable technology and are we are already manufacturing fuel cells to order.

DL: Why do you think the fuel cell industry has generally failed to fulfill the high expectations of the late 90s?

SV: In the 1990s people’s expectations were unrealistic in terms of deliverable products to the mass market.  This is a relatively new industry and, although most fuel cell companies have technology, Voller is one of the few that has actually delivered solutions based on this technology to real customers.

DL: How do you see the fuel cell industry developing over the next 2, 10 and 20 years?

SV: The Stern review highlighted the need for a collaboration of technology instead of searching for one sliver bullet. It is likely that a combination of technologies will allow us to address our future power needs.  It will take time.  In two years hopefully the market will have recovered and people will be more willing to back technologies that address climate change issues.  I would say that that sense of urgency will increase over the next 10 years so that in 20 year time fuel cells will be an integral park of everyday life.

DL: Tell us about your existing products and how you see their market developing in the years to come?

SV: Voller has a 1kW PEM fuel cell system called Emerald that runs from LPG or propane. The system uses the Ballard 1030 PEM fuel cell stack and a steam reforming system. The system provides up to 1kW DC power continuously and up to 5kW AC power via a battery bank and inverter. The Emerald system continuously monitors the user’s batteries and automatically recharges as needed.

In operation, Emerald is quiet and vibration free, has virtually no noxious emissions, requires no liquid lubricants and will require much less maintenance than diesel powered generators. In addition, the Emerald system is highly efficient and will produce up to 2kW of useable heat. Emerald delivers electrical efficiencies of 20-25% when running at full power with overall efficiencies of up to 60% in CHP mode. Conventional generators deliver effective efficiencies of 10% or even much less if poorly managed.

DL: Tell us about the Voller Fuel cell concept yacht.

SV: Fuel cells are a very attractive source of energy in sailing yachts because conventionally they use a noisy generator to charge the batteries on board. Fuel cells charge the batteries without noise, smells or vibration.
We have taken the lead to demonstrate to boat designers what is possible in the future. There is much wasted space on a yacht due to the large heavy engine and batteries. Their layout can be redesigned to better accommodate the fuel cell, providing a much more open design making them potentially much faster for racing.

DL: What is Voller's law and do you think it will stand the test of time?

SV: In a nutshell, ‘people will not pay to be green’. We know if low-emission products are cheaper and better than the conventional alternative people will buy them. No brainer. But consumers will neither pay a ‘green premium’ in most cases, nor accept a performance premium or put themselves out. Yes there are a few exceptions to the rule, but these eco-warriors generally have no money and there are very few of them. Many people advocate Government legislation to make people go green (for example the EU banning conventional light bulbs). But people have to want to be green.

For example, imagine that a new type of gasoline (petrol) was introduced that you could run in your car that produced lower emission out of the tale pipe. But this new fuel cost more per gallon (litre) and when you filled your car with it the acceleration wasn’t nearly as good. How many people would actually queue up at that pump ?

ENDS

Over the weekend, I almost fell out of my chair on learning that at the Tokyo Motor Show, Honda announced that in 2008 the FCX - a  hydrogen fuel cell vehicle was going into production and would cost approx. $100,000 a pop.

The blogosphere is very alive with discussion about hydrogen cars. It follows a National Hydrogen Association Convention meeting where a BMW representative said hydrogen-fuelled cars would not be commonplace until 2025.

I would argue that this is far, far too optimistic. Since writing The Hydrogen Economy - what price and when? a couple of years ago, I've changed my mind very little. Back then I believed that 2040 would be a more likely date for fuel cell vehicles. Although, making any prediction beyond 10 years is very hard to get right. 2 years ago for example, very few people had heard of plug-in hybrids. Now this is almost off-the shelf technology and I would venture it is going to succeed. This study shows that there is more than enough overnight spare electricity capacity to power 168 million plug-in hybrids in America. So why would you bother with hydrogen fuel cells ?

2 years ago, I did anticipate in the article that mass production of portable fuel cells for electronic devices would have started by now and we would be able to buy them - well it hasn't and I'm not sure if it ever will. But CHP fuel cells produced by the likes of Ceres Power and Ceramic Fuel Cells look very close to commercialisation and possible success.

London listed ITM Power , a fuel cell company developing materials and patented production methods to produce low cost fuel cells and electrolysers rallied yesterday on the back of a new research update.

What makes ITM different to other fuel cell companies is that it is trying to develop liquid fuel cells - direct methanol fuel cells, which could avoid the inherent priciness of plantinum.

It has filed patent applications both on the invention of a composite membrane of enhanced properties including specifically an acid/alkaline laminate, and on the use of control grids to act directly on and control the electrical activity within a fuel cell.

It closed today at a new high of 139.5.

Millennium Cell has just posted improved Q3 results, although still making a loss.

The company calls itself the "Hydrogen Battery Technology Company" and sees its future markets as military, medical, industrial and consumer.

Of particular recent interest here though is the military market, for which they have developed a 30 watt battery pack together with Protonex Technology Corporation.

The U.S. Army is funding the development of a portable 30 watt soldier power product (the "P2").

MC CEO H. David Ramm said "We expect the Air Force to begin field testing early next year and Protonex to begin low volume shipments to support this effort in early 2006".  Mr. Ramm continued, "While the military has clearly emerged as our lead market in the near term, we view the P2 as an attractive replacement for batteries in selected applications in the medical and industrial markets".

This won't be the first time that military investment has made possible a product on consumer markets.

Ahead of the AGM yesterday, London AIM listed Voller Energy Plc issued a very upbeat statement. The group, "believes it is on course to be one of the first fuel cell companies in the world to reach profitability."

Voller also announced the resignation of Chief Technical Officer Mark Turpin after joining the group's technical team in February 2005. 

Hard-headed investors must like Voller's law :

"Consumers will not pay a premium to be environmentally friendly nor will they accept a performance degradation to be environmentally friendly".

I'm not sure it's true though.

Take a look at the Toyota Prius - not only are consumers paying a premium, it's pretty ugly too !

Millennium Cell closed up over 21% on the day to $2.22. As this article shows, MC is one of the leading companies trying to crack the problem of hydrogen storage.

"The most critical barrier to the hydrogen economy" says Steve Chalk of the Department of Energy, is creating a viable hydrogen storage platform. More specifically, weight, volume, cost and refuelling times are the limits right now. The DoE is now sponsoring research to meet these goals.

President Bush gave a speech 2 years ago claiming that any child born now should be learning to drive on a hydrogen vehicle. Right now, that's looking unlikely.

Nasdaq-listed Medis Technologies has just become the first micro fuel cell company to receive a major order - $50 million - for their disposable portable power packs for consumer electronics. Consumer Electronics are widely considered the holy grail for micro fuel cells with 1.5 billion portable devices in use around the world, forecast to become 2 billion by 2007.

In this very interesting interview in Red Herring, CEO Robert K. Lifton talks about the prospects for his company.

The technology is unusual because instead of using methanol, Medis prefers sodium borohydride as the lower cost fuel of choice. What's more, all those futuristic programmes and pictures you see of laptops and mobile phones running on internal fuel cells just might never happen.

As Lifton points out, that would require getting 1000s of Original End Manufacturers to change their design around a given fuel cell. "Integration doesn't make sense as a business proposition". So the Medis Power Pack only plugs in externally, requiring no input from the OEMs which could have lost years in redeveloping, retooling and retesting.

Very practical.

Probably one of the reasons why Medis will be the first to market, ahead of NEC, Sanyo, Sony, Toshiba et al.

The Canadia Fim and Nasdaq listed, Ballard Power Systems, has just posted a slightly reduced Q2 loss, of $29.5 million.

BPS is the world's leading supplier of fuel cells, fuel cell engines, fuel cell components and electric drive systems to the car industry. Its stock flew high in the late 1990s when fuel cell cars were widely perceived to be just around the corner . . . but they weren't.

6 years later, BPS is still trying to get out of the laboratory and into the market. Still, it has big clients, including Ford and Mercedes Benz who's own investment in fuel cells is tied up with companies like BPS.

In transport though, because of the prohibitive cost, it looks more likely that fuel cells will break only into rich world government funded public transport buses and the deep pockets of the US military.

Fuel cells in regular passenger cars are some way off . . .