For Fuel Cell Today, the first day of the 2006 FC Expo began with the opportunity to talk on the development of the fuel cell market in Europe and North America. But starting this session, trying to give the audience an understanding of the analyst's view on life, was Tomohide Kazama of Nomura Research Institute.
Forecasting, he gave us two views of the future: a market worth 224 billion Yen per year in 2010. This forecast means a split of 60 billion Yen for mobile and portable electronics, 140 billion for residential systems and a relatively light 24 billion Yen for vehicle-based fuel cells. Like the Fuel Cell Today forecasts, the portable market was heavily dependent (on this timescale at least) on business users where the fuel cell will be better maintained and where a price premium is possible. Mr. Kazama also dispelled the myth of being able to predict a "killer application": he did not say that it might not happen but had a reasonable view that no-one would truly be able to predict which application this was.
He also showed the importance of Japan in the fuel cell world, with his forecast that Japan and the rest of the world would contribute roughly equal amounts of demand to the residential sector, recognising that there is less excitement outside Japan for this sector.
Nomura's view was that 2005 was, though, a pivotal year for fuel cells. With a few product launches planned, some of which were achieved and some of which were clearly missed. As a result, it has downgraded its forecast to a more realistic level, where the market in 2010 is a less impressive 100 billion Yen. Fuel cells have to move faster and the market has to see improvements being made, particularly as relatively few clear user requirements exist for fuel cells themselves: they will only be attractive if developed and marketed well.
Looking more closely at the fuel cell vehicle sector, Kazama looked at the balance of user needs, rival technologies and business's plans on developing and introducing the technology. On the one hand here, customers are not willing to pay more for a fuel cell vehicle than its conventional competitors. But on the other hand, there is legislation, such as ZEV in California, which will, at the very least, encourage the development of fuel cells for this use. On the business side, recent announcements from the likes of DaimlerChrysler and Ford, both cutting costs due to financial pressures, can only be expected to cut back on their longer term commitment to research and development, perhaps impacting negatively on fuel cells.
Like Fuel Cell Today, Nomura also compared the adoption of fuel cells to the way that hybrid electric vehicles have penetrated the market. It has taken eight years for hybrids to move from a standing start to selling 300,000 vehicles annually, even with a cost differential. This is not a particularly large segment of the market but it is significant and we have seen new companies joining recently (for example ford in 2005) and it is quite possible, if costs can be reduced, that fuel cells will follow a similar adoption curve.
In the residential sector, the presentation focused on the external issues of the market: in Japan, this takes the form of the competition between gas companies and electricity companies for extra consumers in the still-regulated domestic market. Looking internally, he examined the competition between the technologies: SOFC and PEMFC. In each of 2004 and 2005, something like 9,000-10,000 residential cogeneration systems were sold in Japan and this represents a reasonable market size for fuel cells if they can meet these costs (somewhere between 800,000 and one million Yen). By comparison, the PEMFC systems are in the region of one million Yen for a ten year lease. The real comparison though should be the unsubsidised price, which is closer to seven or eight million Yen today. And, according to Kazama, SOFC still has a role to play despite the head start that PEMFC has in Japan, with its characteristics very well-suited to commercial rather than residential use.
Finally, Mr. Kazama spoke on the portable market, something we will not touch on here (except to note that the commercialisation date now appears to be 2007) as there will be plenty more on this elsewhere at FC Expo.
I was able to follow this up not by looking at market forecasts but by comparing Japan and the European and North American experiences. Of course, the curse of speaking second is that, often, your best points have already been made. In this case, I was able to focus on the differences and on the way forward rather than on the details and on the market size, hopefully adding to the earlier presentation and giving a rounder view.
Following this, Wal van Lierop of Chrysalix Energy spoke, giving a venture capitalist's view of the fuel cell world. One interesting point was his focus on the enabling technologies, services and infrastructure and the challenges and opportunities that they bring. He was also able to point to the recent growth in IPOs (initial public offerings) outside the UK, showing the appetite of the market for fuel cell-related companies, particularly when they have a short term market that they can make money from. However, the industry still has a requirement to move from its technology focus to a market focus where it tries to understand its customers and what they really need. "Technology achievement is not a sufficient basis for market acceptance." So, even though the technology is rapidly improving, costs do not yet meet market or customer requirements. However, this is not always the case: companies like Sprint and Verizon are buying fuel cells for telecoms backup from Relion and Plug Power, simply because the fuel cell product is better than the incumbent battery product. So, there is a way forward.
Sadly, presenting in the morning prevented me from seeing and commenting on the presentation from Subhash Singhal of Battelle, who was invited to speak on SOFC. He was, though, pleased to see almost six hundred people in the audience, showing an insatiable appetite for information.
Outside the conference, the exhibition was also going on. It was perhaps less busy than 2005's exhibition, as it did not share the dates with Internepcon, the manufacturing exhibition but there was still a fair amount of footfall. The number of companies was high as well, with most from Japan but significant representation from Korea, Europe and North America. Expect to read more about the exhibition tomorrow as well as about the plenary lectures but the highlight so far? It is a tie between a fuel cell-powered butterfly and the return of last year's pterodactyl.
Day 2:
The keynote session took place on the morning of the second day, Thursday, with a speech from Masatami Takimoto, Executive Vice President of Toyota Motor. I was personally interested to see the scale of Toyota's research and development, ranging from the high profile work on hybrids to the full range of fuel cell work, covering cars at Daihatsu and Toyota, forklift development at Toyota Industrial and even a residential CHP system.
He spoke further on the challenges facing the car companies in scaling up to large volumes of FCVs. Cost was one, where a hundred-fold reduction from today is required. The key customer requirement, though, is range, where 500km is apparently the minimum a consumer would accept. Work last year on moving to a high pressure tank gave their latest vehicle a range extension of 10 per cent, but still only a total of 350km. Work on metal hydride and high pressure storage in combination has shown some promise but suffers from a high weight and the search is on (as reported elsewhere) for new materials: one of the key challenges in the fuel cell world. However, there are, of course, other things that a car designer can do: the vehicle configuration, or where you place the driver and the fuel tanks, can allow more fuel storage and greater driving ranges. This, though, is not possible for every car design, so the work on new materials and storage methods goes on.
Moving to buses, its first use in Tokyo covered 170,000km, running from Tokyo Station to Odaiba (where this conference is) from 2003-2004. The bus work then moved to Aichi, near Toyota¡¯s base where another hybrid fuel cell bus covered 130,000km in taking passengers to the Aichi Exposition in 2005. Again, though, range is an issue and there are still some questions on reliability and durability over the long term.
On a wider theme, he also touched on the question of well-to-wheels or lifecycle emissions of greenhouse gases. How clean is the hydrogen being used? While the vehicle itself emits no carbon dioxide, the hydrogen production process might do so. This is not relevant for a few vehicles being tested but would become so if fuel cell cars enter the market in large numbers.
Following this, the focus switched to the residential work being carried out by Tokyo Gas (which also operates some vehicles as part of the JHFC project). Shigeru Muraki, Chief Executive of R&D at Tokyo Gas noted that the Kyoto carbon dioxide reduction targets and Japan's almost complete lack of energy reserves (plenty of tidal opportunities notwithstanding) combine with a desire for economic growth to provide challenges, and opportunities for fuel cells. The promotion of distributed generation also fits in well with this, leading to the prospect of a network of small fuel cell CHP systems.
Lifuel is the name of the domestic fc system at Tokyo Gas, combining Lifestyle, Fuel and Electricity in the name. For a company like Tokyo Gas, whose markets are geographically limited, the ability to supply electricity as well as gas is a welcome opportunity for expansion. As a result, it started residential R&D in 1998, in collaboration with developers and manufacturers. 2005 saw the first gentle introduction of the product into the markets. The government will continue providing some subsidy until 2008 for these residential systems, with the intention of feeding information back into the development process, leading to better fuel cells at that point.
Tokyo Gas has chosen Matsushita Electric and Ebara Ballard as its suppliers and both systems look remarkably similar. The best performance was 37 per cent electrical (87 per cent total) efficiency, working from 300Wto 1kW. That equates to (or, more accurately, could in the future equate to) a saving of 44 per cent of the energy cost compared to more conventional technology. And, impressively, performance appears to be pretty good across the whole performance range. Running times average 4,000 hours per year, or 11 or so hours per day. Total durability of 13,000 hours has been seen. In total, the Japan residential fuel cell programme has now introduced 480 systems, ahead of the original targets (Tokyo Gas will install 150 of these: 80 from Ebara Ballard and 70 from Matsushita). Tokyo Gas is also developing SOFC in conjunction with Kyocera, looking to sell for commercial use, although the status is several years behind this PEMFC work.
But of course, no fuel cell presentation would be complete without mentioning the challenges: by 2008, Tokyo Gas wants a shipping price from the manufacturer of 1.2 million Yen and durability of 40,000 hours or ten years. To achieve this, better components like the MEA (membrane electrode assembly) and catalyst have to be developed and accelerated testing has to be validated: after all, 2008 is only three years away. If everything comes together, 2010 could see 10,000 systems sold and, by 2015, 1.5 million units will be installed.
Hitomi Murakami, General Manager of the IT development division of KDDI gave his view of the future for another leg of the fuel cell market: portable microelectronics. Currently there are 90 million cell phones used in Japan: what price a fuel cell in each of them? Again, the challenges: as cell phones are able to do more and more (digital broadcasting is next) power requirements are important: there is little use watching a football match and missing the end. His focus was very much on the customer¡¯s requirements: to a UK audience, many of these are ludicrous when we simply want long battery lifetime. In Japan, though, consumer interest focuses on digital broadcasting and even recording TV programmes. Li ion is unlikely to meet these power requirements but "fuel cells are one option".
Regulation and standardisation appear to be key for fuel cells: where can you use the phone? We know that it will be possible to take methanol on a plane soon (and I personally hope that on-one will be allowed to use a mobile phone on a place, for my peace and quiet). Technical performance is not the biggest sticking point: "fuel cell batteries are really ready for cell phones". Toshiba and Hitachi already have products which could feasibly be introduced. The cell provides 300mW and the phone only weighs 150g.
Back in the exhibition, there was a fair amount going on with a similar number of visitors to day one. The exhibition itself was split into a number of zones to help everyone find what they were looking for with a focus on hydrogen storage, fuel cell systems and products and, interestingly one for small and medium Japanese companies, many of whom are relatively unknown, to me at least.
Probably the most popular stand was bizarrely one of the duller ones. Taking a guest around, I found swarms of people on the JHFC (Japan Hydrogen and Fuel Cell) stand. JHFC is trialling a number of cars and fuelling stations around the Tokyo and Yokohama area. So, on this stand were cars from most of the major Japanese manufacturers. Of course, unlike in years past, they are not all that exciting to see. Most have FCV or something similar written somewhere but when you open the bonnet, you can only see a box (if indeed the fuel cell is positioned there). There was though a cutout of a DaimlerChrysler car which showed the fuel storage and fuel cell beneath the cabin floor.
Around the corner were two contrasting stands: Fuji Electric where a 100kW phosphoric acid fuel cell was on display, emphasising that this technology is by no means dead yet. The stack and reformer are fairly tightly fitted into a box to limit the size. Overall, though, it looks like what it is, a practical piece of chemical engineering. For more design, Intelligent Energy showed off one of its ENV bikes which had so much publicity back in 2004. The design still looks good and passers-by were impressed by the concept of being able to remove the fuel cell from the bike and use it elsewhere, the sort of concept more normally seen at the Tokyo Motor Show.
At the frivolous end of the show I was able to not only take a few photos of Toagosei's pterodactyl but also to find a metal hydride-powered robot, dragon and Godzilla. Alongside though, I was able to spot some interesting components and services on offer.