While preparing Material Handling Management's November "Innovation Awards" issue, MHM interviewed one of the winners in its "Pioneering Innovators" category, Dr. Geoffrey Ballard, the internationally recognized "father of the fuel cell." In addition to receiving his award the night of March 30, 2004, during our awards banquet held in Cleveland, Dr. Ballard will also be the keynote speaker for the event. Ballard, Chair of General Hydrogen Corporation and Chairman Emeritus of the Canadian Hydrogen Association, founded Ballard Power Systems and, in 1979, brought together and funded a technical team to explore the development of high energy density power systems.
In 1983, Ballard began the development of Proton Exchange Membrane (PEM) fuel cells. By 1987, the company had achieved significant power improvements that showed the promise of fuel cells. In 1990, the company began the drive towards commercialization. This culminated in 1993 with the highly successful introduction of the world's first hydrogen fuel cell powered zero emission transit bus at Science World in Vancouver. As a result of this event, effectively all the major automobile companies in the world are now in a race to bring fuel cell vehicles to full commercialization. The results will be a major reduction to inner city air pollution and significantly improved health of citizens in those areas.
Dr Ballard served as Chair of Ballard Power Systems until his retirement in 1997. Prior to the development of Ballard Power Systems, Dr. Ballard spent ten years with the U.S. Department of Defense. In 1974, he was appointed to the Federal Energy Office in Washington, D.C. as the Director of Research for the Office of Energy Conservation.
Here's our Q/A with Dr. Ballard and with Michael Routtenberg, president & CEO of General Hydrogen. -- Tom Andel, chief editor, Material Handling Management.
MHM: You've said that fuel cells in the future will be a significant source of power for material handling. Why is material handling so special?
Ballard: Material handling comes in because it can tolerate a much higher cost for initial fuel cell operations than can the automotive industry. The automotive industry is at the very bottom of price vesting. The IC engine has leapt forward quickly in the last 10 years. It's an extremely competent application of mobile power. It will be last in line for fuel cells. Its economic demands are very rigid. We're talking about $50 per kilowatt even before you begin to scratch the surface of the automotive market with a 5,000 hour duration fuel cell. Material Handling kicks in an order of magnitude above that. With the cost of the lift truck, fuel cells still give you very good profit margins in competing with battery operated equipment.
MHM: Is material handling the proving grounds for fuel cells?
Ballard: I think it is. You develop a great deal of expertise as you slide down that cost curve. As you move from material handling you go into back-up power, then uninterrupted power systems, then the beginnings of the automotive world with truck auxiliary power units.
MHM: How soon will we see fuel cells in lift trucks?
Ballard: We are looking at introducing them out of development and design in 2005, then we'll have a year and a half of commercial testing before that product hits the open market. If we look at material handling as being the first entrée into the commercial world for fuel cells, cars will be another ten years out there.
Routtenberg: We're putting together a substantial order book with some of the biggest users of this technology. They're telling us once this proves out, it will spread very quickly through organizations because there will be an economic imperative.
MHM: Does the physical nature of fuel cells provide a kind of design freedom for lift truck OEMs compared to industrial batteries?
Routtenberg: Once we've shown that the hydrogen fuel cell works, being squeezed into a box, then of course it will work being distributed over a vehicle. Although we're selling a box today, we envision selling a box of components tomorrow that the lift truck companies can distribute throughout the vehicle, changing the ergonomics. That design process will begin in earnest when the lift truck companies are ready to devote the financial resources to it, and that will begin once they see this stuff working and proving itself.
MHM: Once fuel cells take hold in the industrial truck industry, how can they expand to the industrial enterprise?
Ballard: With a lift truck fleet, you create a very large market for fuel cells which will bring the price down. As you slide down that curve there are a series of market niches that open up as the price drops. That includes backup power for the computer systems in your warehouses.
But you have to expand the use of hydrogen before expanding the use of fuel cells. As you learn to fuel your lift trucks and you have them at every distribution point, you automatically create a hydrogen infrastructure. All of the major lift truck users also have parking lots associated with them. If you can reach with the right hand toward the lift truck and fill it with hydrogen, there's no reason you can't reach with the left hand and fill a car with hydrogen when it comes in. You move into a whole new world of application that didn't exist before for the retail store.
Take a Wal-Mart, for example. They have DCs and 4,500 retail outlets and they're putting up new ones every day. The DCs would now have hydrogen on site to fuel the lift trucks that operate in those centers. They also have corresponding lift trucks in each of the stores, so the DC, through existing trucking arrangements, would deliver hydrogen to the retail outlets to run the three or four lift trucks in each of those locations. The hydrogen could also run the UPS system that's in each retail outlet. Now you have, very quickly, at an industrial level, a pathway for hydrogen to go right to the consumer shopping mall. It's in very small quantities for internal use, but it begins to develop that pathway. Then the retail shopping mall becomes a point of delivery for hydrogen. You'll have a gasoline island and a hydrogen island, as well as a distribution pathway built in via the central distribution system mechanism.
MHM: How will we generate the hydrogen?
Ballard: Hydrogen is not a primary energy source, it's a currency. Any primary energy source such as wind, solar, or nuclear can be used to generate hydrogen. Hydrogen can then be moved to locations to engage the energy. In that sense you have a natural support mechanism for all kinds of alternative energy supplies. Countries will differ on their sources. They'll all use a hydrogen economy. Iceland will be focused geothermal, Argentina will probably go with wind, France has already chosen nuclear, Canada will go with hydro and nuclear, and the U.S. will have a huge struggle with its coal industry. But the biggest roadblock to widespread, automotive applications will be price. The internal combustion engine is a marvelous piece of equipment and it's getting better every year with respect to pollution. Its price breakpoint is about $50 per kilowatt with a 5,000 hour duration, or one U.S. cent per kilowatt hour for the engine itself. That's the whole drivetrain. That means, ignoring the drivetrain, the fuel cell price point has got to be .6 cents per kilowatt hour. Those are very difficult targets to meet. It will only be met after the fuel cell is accepted and fully understood in a number of applications that are profitable years before the automotive market. That will be the last market conquest for fuel cells, not an early one.
