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Fuel Cells: October 2007 Archives
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.
You can view more details about the FCX from Honda's official site here. What really hit me about this news was; i) The price - there are plenty of people (especially governments) out there who will spend $100,000 on the world's most environmentally friendly car ii) The decision to go into production before the hydrogen infrastructure was in place. Said Mr Takeo Fukui, President and CEO of Honda, " . . .when the car was invented, countries weren’t full of petrol stations” and “ . . . when the demand is there it [the hydrogen economy] will happen.” iii) A new high for platinum. It came at the same time as a record spike in the price of platinum to $1,464 an ounce, a key cost ingredient in fuel cells as the catalyst used to facilitate the reaction of hydrogen and oxygen. A few years ago, I wrote a piece for the now defunct magazine, Power Economics, entitled "The Hydrogen Economy, what Price and When?" and for various reasons, didn't see any big future for hydrogen vehicles until at least 2040. It looks like I may have to eat my words . . . or will I? It occurred to me that Honda may have taken the decision to produce and sell this car at a loss, even a big one, for the forseeable future. I know of no breakthrough in fuel cell technology that has made it possible to bring down the cost of a vehicle to this kind of price. Less than a week ago, the cost of the cheapest fuel cell vehicle was estimated at $1 million. And as for the hydrogen infrastructure, I bet that the first buyers of hydrogen filling station equipment are going to be Honda dealerships. Hydrogen, especially green hydrogen, derived from the carbon free electrolysis of distilled water, is very expensive and they could cut a good margin here. Our interest though is that the FCX is a massive development for those listed companies involved in hydrogen infrastructure; Distributed Energy Systems Hydrogenics Quantum Technologies My guess is that they are poised to win quite a lot of new business. We shouldn't be surprised that Honda is prepared to sell a vehicle at a massive loss. According to Wired magazine, GM apparently took apart a Toyota Prius in their Chop Shop and could not see how they made any money on it. But cash rich, technology friendly, successful japanese car companies have a quite different investment horizon to the likes of Ford, GM or Chrysler - at least one of which may go bust in the next few years. Still, it's a big risk for Honda and just how big will their initial production run be? If the Toyota Prius is anything to go by - I'd guess 40,000 in the first year. Meanwhile the price of oil is still going up . . .
Quite a lot of coverage today in the media about this fuel cell motorbike - a joint development between Suzuki and Intelligent Energy.
I haven't been able to find any technical specifications for the Crosscage, pictured above, but I suspect it is closely related to an earlier model produced by IE, the ENV fuel cell motorbike . To quote this article in the Times about the Crosscage, " . . . It is believed that the cheapest fuel cell car would sell for about $1 million (£500,000). Moreover, until now nobody has managed to build a commercially viable motorbike. The Crosscage, its designers argue, therefore represents a huge breakthrough.By combining Suzuki’s capacity for mass-production and a lightweight, air-cooled fuel cell designed by Intelligent Energy, the Crosscage may offer a fuel cell vehicle that might be affordable to many people. If Toyota succeeds in its recently stated goal of producing a fuel cell car costing $60,000, Phil Caldwell, director of Intelligent Energy, said that a fuel cell-powered bike might cost a fraction of that sum." That all seems quite reasonable to me. Yet the fact that the Crosscage is being displayed as a concept in a trade show is about right. The root problem in my view, as with all hydrogen fuel cells seeking commercial viability, is the hydrogen. In my book, there are 4 types of fuel cell; i) Portable Battery Class ii) Stationary/Distributed Generation Class iii) Industrial Class iv) Vehicle Class The inescapable flaws with hydrogen as a fuel source are it that it costs a lot of money to produce, store and transport, let alone do all of these things in scale. There are however some listed fuel cell companies whose technologies run off natural gas or off the shelf fossil fuels or methanol. Those companies include FuelCell Energy, Ceres Power, Ceramic Fuel Cells, Mechanical Technology Inc, Medis Technologies, Polyfuel and Voller Energy. So as long as natural gas is fairly clean and relatively cheap, why shouldn't it be the bridging technology for fuel cells before the hydrogen era - if it ever happens ?
There's just one altenernative stock story today - according to Reuters, Plug Power's shares have risen 60% on news that its unit received an order from Wal-Mart Stores to provide fuel cells for use in fork trucks at one of the retailer's distribution centers. Plug Power said the GenDrive fuel cell to be provided by its unit,
Cellex Power Products Inc, will power pallet trucks used at Wal-Mart's
food distribution center in Washington Court House, Ohio.
Unless I've missed it, Plug Power's own website doesn't carry any information yet about this, less still about their GenDrive product for the small industrial vehicle market, which is what concerns us here. So here's a picture of a fuel cell driven fork truck from Proton to help you visualize it; I'm anything but an expert of fork trucks, but a fuel cell version doesn't look any different to me. Fuel cells for fork trucks is actually an idea that quite a few companies have been looking at for a few years. Look at this pdf story of Hydrogenics from a couple of years ago. Anyway, I won't bore you by saying again what everyone now knows - fuel cells aren't going to appear any time soon in your family car. But their potential in small niche markets is still untapped. And one of those markets has to be forklift trucks (another actually, is aircraft carriers). The bottom line is that the last thing you want - in our health and safety conscious world - is a build up of exhaust fumes in your indoor working environment. That's why clean-burning fork lift trucks make sense and I wouldn't mind going for a jog around a Walmart depot, perhaps racing a fork truck . . . !
Readers of this blog will know that I don't always have a lot of good things to say about fuel cells. By and large, I think they are long in development and very short on commercial success. That doesn't mean though that they don't make for interesting blog copy for alternative energy investors. Viewed in isolation, fuel cells do offer a combination of unique capabilities; near silent, highly reliable and very clean. No wonder military special forces types hanker after them.
So news that microstock Voller Energy, a firm founded by the Chief Executive, the colourful Stephen Voller, is tying up with Ballard Power Systems is news indeed. Ballard will be selling its Mark1030(TM) fuel cell stacks for integration into Voller's 1kW auxiliary power units (APUs), aimed at the leisure, marine and construction markets. Under the agreement, Ballard will deliver fuel cells to Voller in 2007 and 2008. I have my doubts about them making inroads into the construction or leisure market. But will the marine product in question, the Emerald, sell? It ought to, but not on cost-competitive grounds. Selling fuel cells to the yachting community makes eminently good sense. The old adage that if you ask how much a yacht costs, then you can't afford it has some application to fuel cells too. If the Emerald became something of a fashion statement amongst the yachting community then sales could follow in a big way. The yachting accessories market, I suspect, is a high margin business. Meanwhile, unfortunately, both Voller and Ballard stocks are either at or near 12 month lows and like most fuel cell companies, desperately in need of some serious commercial success. At some point in the next few years, there has got to be an upside to fuel cells . . . otherwise a whole lot of these firms are going to go to the wall. |
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