1. Congressional Briefing: Finding Solutions to the Fuel Cell Dilemma Proposed National Academies Study on Fuel Cells September 2014 Noriko Hikosaka Behling Slide 1 behlingn@msn.combehlingn@msn.com 703-893-1569

2. The Case for Launching a Review of Current Fuel Cell R&D and Future Research Needs Support for Fuel Cell R&D in US is falling behind overseas competitors Department of Energy fuel cell initiatives attempted to address cost and durability, but goals have slipped National Academies evaluations point to need for comprehensive R&D plan Copyright 2013 by Noriko Behling2

3. What are Fuel Cells? Fuel cells are similar to batteries, but they operate as long as fuel is supplied Fuel cells typically run on hydrogen, but can use gasoline, natural gas, ethanol, and methanol Fuel cells are more efficient than other power sources. They convert energy locked up in chemical bonds directly to electrical energy in a single step. At a general level, scientists understand how fuel cells work and why, but knowledge is far more limited when it comes to how mechanical, chemical, and electrical characteristics interact, making it very difficult to build cheap and durable fuel cells Copyright 2013 by Noriko Behling3

4. Summary of Making Fuel Cells Work 1 After decades of support, public and private efforts have yielded almost no products that can compete with conventional power sources, at least without subsidies and tax credits Major impediments to commercialization includes insufficient longevity, reliability, and high cost The challenge to overcoming these obstacles is rooted in the complexities of how fuel cells operate But fuel cell industry operates on assumption that incremental improvements to products will solve problems A new path is needed: basic research must be re- emphasized Copyright 2013 by Noriko Behling4 1 Noriko Behling, published in National Academies Journal, Issues in Science and Technology, Spring 2013

5. US Fuel Cell R&D Planning Lacks Underlying Strategic Commitment Copyright 2013 by Noriko Hikosaka Behling5 Current goals are stated in general terms, such as develop hydrogen and fuel cell technologies for early markets (stationary power, fork lift trucks), mid- term markets (e.g., combined heat and power), and long-term markets (light duty vehicles). Current DOE fuel cell roadmap does not identify specific timelines for reaching combined cost/performance goals. Roadmap milestones often slip or are dropped Example: 2011 roadmap set durability target of 5,000 hours and cost goal of $30/kW by 2017 for vehicle applications Now durability not cited and cost target revised upward to $40/kW by 2020

6. US Fuel Cell Budget is a Moving Target Copyright 2013 by Noriko Hikosaka Behling 6 For FY2010, DOE/EERE cut its fuel cell budget (for Proton Exchange Membrane fuel cells) by 60 percent—to $80 million; $170 million appropriated by Congress. Since then, US budgets have declined below Japanese and European counterparts. In FY2012, DOE/FE zeroed out Solid Oxide Fuel Cell R&D. Congress appropriated a small budget for FY2012 and 2013; future of US SOFC technology uncertain. Total DOE fuel cell/H2 budget DOE/EERE fuel cell budget

7. US Fuel Cell Commercialization Copyright 2014 by Noriko Hikosaka Behling7 FuelCell Energy - Cumulative global total 379.2MW, of which 269.2MW or 70% to South Korea  Bloom Energy installed 522 units, 113.08 MW SOFC systems primarily in California (as of Dec 2013)  Bloom installed a 200kW Bloom box in Japan in Nov 2013  Bloom Energy installed 522 units, 113.08 MW SOFC systems primarily in California (as of Dec 2013)  Bloom installed a 200kW Bloom box in Japan in Nov 2013 Note: UTC Power sold its fuel cell division to ClearEdge Power in 2013. ClearEdge filed Chapter 11 in 2014 and announced sale of its assets to Doosan Ltd of South Korea

8. US Fuel Cell Commercialization (2) Copyright 2014 by Noriko Hikosaka Behling8 Plug powerBallard (Canada) HydrogenicsFuelCell Energy

9. A Comparison: Japan Came from Behind, Worked Out A Plan, and Stuck With It Enacted a laws and initiatives to promote fuel cell technology Implemented them via collaboration across entire government Ensured consistency and strong leadership in policy and program implementation Ensured objective and critical program evaluations Maintained robust and stable R&D budgets and encouraged industry to do the same As a result, it has a robust fuel cell industry and vigorous patenting and market activities Copyright 2013 by Noriko Behling9

10. Prime Minister’s Office Plays A Major Role We need technology breakthroughs and hydrogen infrastructure to succeed in full-scale fuel cell vehicle commercialization (diffusion) To break through the big wall of fuel cell development, it is indispensable that we deploy the entire national strength of the government, academia, and industry and tackle R&D to attain ground- breaking basic technology The next generation vehicles must cut cost of fuel cells to 1/100th of today’s cost and achieve sufficient durability and hydrogen storage technology by 2030 In addition to technology development, Japan needs to define clear hydrogen energy policy to moving to hydrogen energy Copyright 2013 by Noriko Hikosaka Behling10 A 2012 statement from Prime Minister’s Office identifies need for breakthroughs to achieve full scale fuel cell vehicle commercialization (red font is original text)

11. Japan Ensured Robust and Growing R&D Budget Copyright 2013 by Noriko Hikosaka Behling11 Fuel cell budget for FY2013 was plused-up in December 2012. Currently it is $397.7 million--double the previous year and largest in the world. Activities FY2013 Budget Line Item PEMFC R&D 固体高分子形燃料電池実用化推進技術開発 (FY2010-2014) $31.9 million SOFC R&D 固体酸化物形燃料電池等実用化推進技術開発 (FY2013-2017) $12.4 million Hydrogen Utilization Technology Development 水素利用技術研究開発事業 $20 million Fuel Cell Vehicle and Hydrogen Station Demonstration Project 地域水素供給インフラ技 術・社会実証事業 $7.5 million Construction of Center of Excellence Hydrogen Research Test Center 水素エネルギー製 品研究試験センター (HyTrec) $29.4 million Subsidy Installation of Hydrogen Fueling Station 水素供給設備整備事業費補助金 $46 million Installation of Ene-Farm 民生用燃料電池導入緊急対策費補助金 (A supplement added in Dec 2012) $250.5 million Total$397.7 million

12. Japanese Fuel Cell Commercialization (1) Copyright 2014 by Noriko Hikosaka Behling Japanese residential Combined Heat and Power deployment, Total = 82,974 units Possible Overseas Opportunities 12 CompanyOverseas Activities PanasonicJoint Venture with Viessmann (Germany) perhaps in April 2014 ToshibaJoint venture with Baxi Innotech (Germany) in March 2014; Preparatory joint efforts underway with Korean heating appliance manufacturers JX Nippon Oil and Energy Joint efforts with a Korean gas company and a fuel cell development center in North Rhine-Westphalia in Germany Aisin SeikiSupplied power module to Bosch (Germany) for exhibit; Demonstration operation in Ene-Field Project (Europe) in 2014 Data from Advanced Cogeneration and Energy Utilization Center Japan A.C.E.J, コジェネ財団, as of April 2013

13. Japanese Fuel Cell Commercialization (2) Copyright 2014 by Noriko Hikosaka Behling13 November 18, 2010. Toyota Vice President Takeshi Uchiyamada  November 18, 2010. Toyota announced its Future Plans for Fuel Cell Hybrid Vehicle Commercialization  January 13, 2011. 13 Companies made A Joint Declaration on Domestic Market of FCVs in 2015 and Establishment of Hydrogen Supply Infrastructure (3 automakers and 10 energy companie s)

14. Global Patent Overview Copyright 2014 by Noriko Hikosaka Behling14  Top 10 Fuel Cell Patent Assignees by Country 2008-2013 CEPGI data

15. 15  US needs to chart a new course for R&D, laying out actions with roadmaps  First step: unravel issues, identify solutions, and identify potential R&D paths forward Why Another Study on Fuel Cells? Nation needs a diverse set of low-cost energy sources. Fuel cells have potential to meet that need, but after decades of public and private sector support, major obstacles to fuel cell applications remain, including insufficient durability, reliability, and high cost Scaling up existing technology has not overcome obstacles New approaches are needed based on gaining understanding of complexities of fuel cell operations at the atomic level, developing solutions, and applying these to real world needs As yet, there are no plans to do this

16. Solid Oxide Fuel Cell Workshop Held Last Fall Endorsed Proposed Study Concept Sponsored by National Science Foundation; participants included 50 researchers and fuel cell experts participated Findings included – Characterize impact of inorganic impurities in JP-8 fuel on activation of molecular structures within fuel cell – Understand use of reversible SOFCs for energy storage – Creation of National Fuel Cell Development Project akin to National Nanotechnology Initiative Recommended government agencies jointly sponsor a National Academies study on how to structure U.S. fuel cell policy and identify best technologies for clean use of hydrocarbon fuels SOFCs provide energy densities equivalent to 1MW gas turbines— but at any operating level 16

17. Studies identify challenges and gaps and call for solutions and further research Leads to action to overcome challenges by scaling up or incrementally improving existing technology …with results that same challenges persist New studies are commissioned, leading to similar recommendations, and cycle repeats National Academies study to identify roadmap and plan for breakthroughs in performance and durability will end this cycle Many Studies Called for Fuel Cell Improvements, But None Identified Paths to Lower Cost and Higher Durability 17

18. DoD has funded work on fuel cells for many years. Spending levels on the order of $44 to $60 million (FY 2010). 2 Collaboration with DOE (22 July 2010 MOU) led to at least 3 workshops We asked Acting Assistant Secretary of Defense for Research and Engineering to co-sponsor study (300K), with support from DOE (200K) and National Science Foundation (100K) DDR&E stated such a study “ not sufficiently compelling “ 18 Status of DoD Interest in Fuel Cell Study 2 Excerpted from Beyond Demonstration: the Role of Fuel Cdells in DoD’s Energy Strategy, prepared by LMI Corporation for the Defense Logistics Agency Research and Development

19. 1.Assess research advances and technological opportunities for fuel cells that would greatly improve capability to support commercial and defense needs 2.Define a roadmap to discover and characterize fuel cell electrochemical processes and operations, including: – A theoretical understanding and empirical validation of underlying causes that drive performance shortfalls; – Transformational technologies that enable creation of revolutionary fuel cell types – Simulators and models to be developed to depict fuel cell operations – Potential game-changing applications 3. Outline a feasible plan for how these goals would be achieved: – Developing fuel cell systems with high power density and high efficiency reformers – Systems or technologies that readily scale to high power applications – Fuel cell systems that can operate with fuel impurities (e.g., Sulfur, CO). – Order of magnitude reductions in catalyst costs and improvements in durability – Required authorities, milestones, and funding levels 19 National Academies Study Statement of Task Study funding requirement: $600K

20. Examples of Previous Fuel Cell Studies 20

21. Finding: The majority of the currently funded (DOE) efforts are on performance and durability aspects of carbon free supported catalysts, non-precious metal catalysts, the quantity of catalysts required per cell, as well as on lower-cost, durable membranes. If success is achieved in any one of the above areas, the attractiveness of the fuel cell from a cost and durability perspective would be greatly enhanced. 21 Key National Academies Evaluations: National Research Council Review of DOE’s U.S. Drive Partnership (Fourth Report - 2013) Recommendation (S-4) The DOE should increase efforts for the cost reduction initiatives for fuel cells taking into account the entire system including balance of plant. Emerging modeling capabilities should be used … for guiding resource allocation to the areas that will have the greatest impact on performance, endurance, and cost at the system level. (emphasis added)

22. 22 Key National Academies Evaluations: Transitions to Alternative Vehicles and Fuels (2013) Finding: Fuel cells, batteries, biofuels, low-GHG production of hydrogen, carbon capture and storage, and vehicle efficiency should all be part of the current R&D strategy... hydrogen/fuel cells are at least as promising as battery electric vehicles in the long term and should be funded accordingly. Both pathways show promise and should continue to receive federal R&D support. Policy Recommendation The committee supports consistent R&D to advance technology development and to reduce the costs of alternative fuels and vehicles. The best approach is to promote a portfolio of vehicle and fuel R&D, supported by both government and industry, designed to solve the critical technical challenges in each major candidate pathway. (emphasis added)

23. Energy Efficient Technologies for the Dismounted Soldier (1997) – Called on Army to accelerate development of advanced fueled systems Meeting the Energy Needs of Future Warriors (2004) – Called on Army to complete development of JP-reforming fuel technology, both for battery and fuel cell applications. Review of the 21 st Century Truck (First and Second Reports) 2007/2012 – Evaluated applicability of Solid Oxide Fuel Cell for auxiliary power Making the Soldier Decisive on Future Battlefields (2013) – Emphasized Army Capabilities Integration Center's 2010 goal for fuel cell development (which highlighted need to make fuel cells compatible with JP fuels). – Recommended that the Army develop and maintain a robust program in advanced energy sources based on full analysis of DOTMLPF elements with the goal of eliminating power and energy as limiting factors in tactical small unit operations. 23 National Academies Periodically Reviewed DoD Fuel Cell Initiatives (selected examples)

24. Examples of Previous Fuel Cell Studies: JASON Studies for DoD Portable Energy for the Dismounted Soldiers, June 2003 – The 2003 JASON study for Office of Defense Research and Engineering (ODDR&D) looked into all the fuel cells (SOFC, MCFC, PAFC, AFC and DMFC). The study suggests that DoD address technology options to mitigate the fuel cell limitations, that DoD look into the question as to whether or not it should dramatically invest in fuel cells, and that if so, what ancillary technology is needed to operate in a non-detectable manner. Reducing DoD Fossil-Fuel Dependence, September 2006 – The study sees no significant DoD use for fuel-cell vehicles on any reasonable time horizon. These vehicles are very costly and the technology is not mature. It also does not see a good mechanism by which the fuel to power them could be supplied to theater. As such, JASON does not anticipate that they will play a role in DoD tactical or combat vehicles in the foreseeable future. – Five technology challenges (power density, scalability, susceptibility to fuel impurities, reformer efficiency, catalyst cost) are likely to persist for decades. 24

25. 2011 LMI Study, “Beyond Demonstration: The Role of Fuel cells in DoD's Energy Strategy” 25 1.Monitor and evaluate government and private-sector fuel cell projects. 2.Continue support for research, development, and demonstration of fuel cells and the fuels required for their operation. 3.Continue defining and pursuing fuel cell partnership initiatives with the Department of Energy. 4.Develop and implement procurement models that enable increased visibility for fuel cell options 5.Require that fuel cell systems be considered for meeting electric power, heating, and cooling demands 6.Require that fuel cell systems be considered during planning backup power capability for DoD sites 7.Plan and implement an initiative to address the limitations of current power purchase models with respect to acquiring emerging technologies, including fuel cells. 8.Invite, but not require, bidders for material handling equipment to consider fuel cell power. 9.Increase awareness of unmanned vehicle providers, and operators about fuel cell systems The study confirms that fuel cell technologies are relevant for all applications of interest to DoD, which can benefit by tracking fuel cell progress so that it can promptly use it to contribute to its goals and missions. Recommendations:

26. Other DoD Reports and Briefings A May 2011 report on the DoD-DOE Workshop on Fuel cells in Aviation and focused on fuel cell auxiliary power in ground support equipment and onboard DoD aircraft. Three demonstration projects have been proposed: a two-year multisite mobile fuel cell plasma lighting demonstration, an SOFC battery range extender APU demonstration, and a PEMFC battery range extender demonstration. An October 2011 report focused on waste-to-energy using fuel cells. The report is inconclusive, calling for further studies, workshops, etc. Also, R&D and demonstration projects include Power supplies for UAVs, fuel cell powered forklifts, back up and auxiliary power units, light duty vehicles, maritime applications, soldier wearable power supplies. An 2010 AFRL (Air Force Research Laboratory) report on the possible use of SOFC (that was being developed at DOE at that time) as military APU replacements. The report is not a actual study but is a brief review of such suggestion by DOE. The conclusion is that AFRL has interest in this area but key challenges exist which must be overcome. Ultra Electronics (a defense contractor) briefing to DoD (office unidentified) on integration challenges adapting long endurance power sources for tactical unmanned aerial systems. No conclusions. This briefing shows that DOD has interest in fuel cell- powered unmanned aerial systems. 26