2009-06-03 Fortnightly Newsletter

Hello and welcome to another edition of the Fuel Cell Today fortnightly newsletter, bringing you the latest information on the fuel cell industry.

One of the biggest news items of the last two weeks came from Ballard, which announced its intention to dissolve a joint venture (JV) with EBARA Corporation and discontinue operations of EBARA Ballard Corporation. This JV was focused on the development, manufacture, sale, and servicing of stationary power systems for residential combined heat and power (CHP) in Japan. According to Ballard, the firm will continue to sell its 1030v3 model for applications including residential CHP and plan to supply the product to Baxi Innotech for use in the German Callux Project. EBARA Corporation will continue to service EBARA Ballard fuel cell systems that have already been sold and installed in Japan. The news of EBARA Ballard's dissolution comes just after the successful launch of the Ene Farm range of residential CHP products in the Japanese market, in which EBARA Ballard was a partner. Several thousand Ene Farm units are expected to be shipped over the next few years, aided by a 50% government subsidy for householders who adopt the CHP units.

In terms of what the JV's dissolution means for Ballard, the company has been reported as saying the move will not change its projection to sell about 4,000 fuel-cell units in 2009. This is expected to result in revenues of around $68 million this year, a figure at the lower end of its guidance. The company is due to ship 1,000 units as part of the Acme-IdaTech telecoms UPS deal in India in 2009 and a further 9,000 in 2010: the fulfilment of this important deal could be a reason for Ballard's scaling back on other projects. The company disposed of its light duty automotive assets to the Automotive Fuel Cell Collaboration last year, and recently laid off 32 employees, around 7% of its workforce. We expect to see Ballard increasingly focusing on its core markets of fuel cell stacks for UPS and materials handling, and a smaller amount of activity in fuel cell bus demonstrations. Meanwhile, the residential CHP programme in Japan is expected to continue apace with the involvement of Ebara and the other players.

In other recent news, MTI Micro Fuel Cells announced it has received £1.5 million ($2.4 million) in grant money from the United States Department of Energy and also funding from a board member in addition to those funds. The company now claims it has adequate funding to last to the end of the year, and is scheduled to commercialise its Mobion fuel cell in late 2009 or early 2010. Another portable fuel cell firm to receive funding recently was UltraCell, which raised £2.38 million ($3.8 million) from existing investors and plans to invest in expansion at its Ohio manufacturing plant. The company aims to produce hundreds of fuel cells per month by the end of the year, and claims the Ohio plant should have the capacity to produce several thousand units per month once it is expanded.

Further proof that fuel cell companies are increasingly moving away from testing and demonstrations and beginning to build real supply chains with commercial partners came in the news from Proton Motor that it has entered into a five year deal with Deutsche Mechatronics to outsource the production of its PEM fuel cell system. It has been reported that in the near term, the two companies will work on producing short run high quality systems with the medium term aim of Deutsche Mechatronics having the capacity to produce a series production of PEM fuel cell systems. The capacity of the production in the medium term would be up to 5,000 systems per year. Outsourcing of manufacturing is increasingly expected to occur, both of balance of plant and certain stack components.

Finally, Fuel Cell Today and the UK government's Low Carbon and Fuel Cell Knowledge Transfer Network are holding an event in London, UK on July 8th on fuel cell and hydrogen codes and standards. This event aims to give an overview of the current state of fuel cell codes and standards in the UK. Principally focusing on codes and standards for hydrogen, methanol and natural gas in early market applications such as uninterruptible power supplies (UPS) and combined heat and power (CHP) as well as some of the issues surrounding the use of various fuel cell technologies in buildings, it aims to identify and begin to address some of the key issues surrounding codes and standards on stationary fuel cells and their various fuels. To register an interest in this event and for more information, please email moderator@fuelcellktn.com.

Until next time

Dr. Jonathan Butler

Market Analyst, Asia