Making Sense of Power Sources

The case for fuel cells is strong if you’re big and can start with a blank sheet of paper. For everyone else it may take a bit more paper and time to figure the payback.

In the U.S. alone, more than a half million propanepowered lift trucks go to work every day. On the leadacid- battery-powered side, picture a few thousand more. This has been the balance of power in the lift truck world for many years. Favorite brands may come and go, but most fleet managers know how these technologies behave under certain conditions and are happy to have a clear-cut either/or choice .

Then a guy like Scott Kliever has to come along and confuse them with talk of fuel cells. Why can’t things stay vanilla or chocolate? Why do we need neopolitan? Kliever is vice president of finance and CFO at Sysco Houston Inc. As a leading foodservice provider, Sysco is a company whose competitive market position is based on offering a wide variety of flavors—in services as well as products. Doing so efficiently requires them to make choices of their own—among material handling technologies that will minimize the cost of service while maximizing their productivity. Where lift trucks are concerned, Sysco Houston decided the time was right to switch from lead acid to fuel-cell-flavored models.

Fresh Start for Fuel Cells

Of course, making such a choice is easier if you start from scratch. Kliever has been located at Sysco’s new Houston location for a year now, and being in this brand-new building gave the material handling managers there opportunities they wouldn’t have had in an existing structure. The freedom to build a new power infrastructure for fuel cell forklifts was one of those.

“This replacement facility gave us the opportunity to redo the infrastructure of what we would normally do in an operating facility like ours,” he says. “It gave us a chance to put in a hydrogen storage system and a dispensing system in our parking lot. Here, because we moved into a new facility and the dimensions were different, we went from double to triple pallet jacks.”

This facility has 72 of those Class 3 trucks and 26 Class 2 narrow-aisle lift trucks. The savings in battery costs alone were enough to make a compelling case for hydrogen fuel cells.

“We save about 1200 hours a quarter based on our fleet size in the time it takes to swap out the batteries compared to refueling the hydrogen fuel cells,” Kliever continues. “If you use a generic $20 an hour our folks are paid, that’s about $24,000 a quarter we’re saving. Our fleet size has 98 fuel cells in it. With the cost of the hydrogen fuel cell, depending on if it was the lower type class 3 cell vs the Class 2, that $24,000 pays for one and a half fuel cells per quarter.” Sysco Houston is a two-shift, 24/7 operation, which is said to be a good justification benchmark for fuel cells. However, Kliever admits that the vendors involved on this project helped with the justification. PlugPower supplied the fuel cells, Air Products the hydrogen, and Raymond the lift trucks. Raymond was particularly helpful in the transitional learning curve, plus Sysco had the luxury of running them 4-6 weeks prior to moving into the facility.

The Learning Curve

A good piece of that time was devoted to giving the workers a new respect for their equipment. They tended to take battery maintenance for granted. Fuel cells wouldn’t allow that kind of laziness. According to Kliever, the material handlers went from a reactive maintenance style to one of preventive maintenance.

“Normally we would have waited until a lead acid battery needed some help or broke down and we’d react,” he says. “Now we schedule the maintenance on the hydrogen cell and find that by doing preventive and routine maintenance we’re not having the issues of the reactive approach we had with the lead acid batteries. We need to make sure on the front end that fuel cells are clean, the filter’s changed and by doing that we have far fewer breakdowns, if any, than we did with the lead acid batteries.” Sysco was a natural for fuel cells because they have an over-the-road fleet of refrigerated trucks that can be converted from diesel to hydrogen.

“Those trailers come back to our facility every night so even though hydrogen isn’t that available throughout Houston it makes sense for our fleet because our fleet can stay contained. We make 100-125 daily routes in the Houston metro area. Plug Power is working with the manufacturers of the refrigerated units.”

Although Sysco Houston relies on two diesel generators for backup power, if hydrogen becomes the fuel of choice at this facility, Kliever says it might make sense to convert the site to hydrogen. The lessons learned here will be shared with a new Sysco Central Texas facility outside San Antonio. It is scheduled to open by December with more than 100 fuel cell lift trucks. Sysco is counting on not being alone in this effort, and as far as Kliever is concerned, the more the merrier—even if that means competitors joining the hydrogen club. “With FedEx and UPS using them and more wholesalers and distributors starting to use them in their fleets, we’ll all gain by the cost of the technology going down,” Kliever adds. “We have a competitor opening a DC in the next year and if they catch onto the fuel cell, great for them and it would probably help us both down the road by giving us a more viable, less expensive option.”

He’s also hoping General Motors will find in Houston a big market for hydrogen fuel cell cars which he feels will spur a mass retail outlet for hydrogen. “Our operation could support a retail pump on our property so someone who had a hydrogen fuel cell car could come by and slip a credit card in, fill up with hydrogen, and take off,” he says.

As an early adopter of fuel cells, it was DOE grant money that first drew Sysco to consider the technology. There was also the Section 1603 renewable energy tax credit, which gives purchasers a cash credit on their fuel cell purchase. That helped Sysco defray the cost and increase its ROI. If those kinds of programs continue, Kliever says, it will make it easier for his company to broaden fuel cell usage across more operations.

Improving Existing Technology

In the meantime, David Furman, vice president of marketing for Raymond, still sees plenty of opportunity to make better use of existing battery technology. He cites today’s AC technology, which not only causes batteries to be changed less frequently, but with fewer moving parts, less maintenance is required—further increasing lift truck uptime and lowering operating costs.

“According to a U.S. Auto Club study, our ACR technology results in up to a 20% increase in energy efficiency, meaning 20% fewer charges needed, so you can extend the life of the battery as well as improve performance,” he says. “But battery management still seems to be the redheaded stepchild of technology. There still seems to be a lot of low hanging fruit left for customers to wring cost out of an operation with effective battery and energy management practices.”

Raymond’s manager of narrow aisle products, Susan Comfort, adds that fast charging can also contribute to an ROI by reducing the downtime associated with fueling a battery.

“That works great in a greenfield application where you can instill the discipline needed to make sure the batteries do get charged,” she says.

David Spears, manager of business development for NACCO Material Handling Group (parent company of Yale and Hyster) sees an opportunity for fast charging and fuel cells to cover a wide variety of power needs in the market. For one- and two-shift operations, fast charging allows users to avoid changing batteries. In three-shift operations fuel cells do the same thing.

“Fast charging is much better than changing batteries,” Spears says. “The problem is you can’t really do it for a three shift operation. Most fast and opportunity charging operations you’re only putting a portion of the power back in at breaks and lunch time. The fewer of those downtime opportunities you have in your operation, the harder to use fast charging. Fast charging is very economical compared to fuel cells. The flip side, is for fuel cells, you can fuel up a vehicle in a couple minutes and be up and running for another shift of work. But the cost can only be borne by the highest volume operations. If you can have a fast charge battery that can be recharged in five minutes or a fuel cell that could compete on cost with a fast charge battery, you’d have something that could cover most of the market.”

One option that has yet to gain traction in the U.S. is 80 volt lift trucks. While going from 48 to 80 volts doubles voltage it also cuts current in half. That’s a sound direction from a technical standpoint, but in the U.S. it faces a well-established infrastructure for 48 volt technology. Fleet managers want the same voltage on all their trucks. Converting to 80 volt would require new chargers, so it might only be feasible for a company starting a new operation from scratch.

Then there’s the promise of lithium-ion batteries, which, in the U.S., are now only being considered for the automotive and consumer electronics markets. Although some manufacturers of this technology claim lithium-ion batteries can reduce charging times by as much as 32 times, improve productivity by 10%, and reduce environmental impact by 45%, right now lithium-ion battery technology is similar to or higher in cost than a fuel cell power pack. According to Eric Jensen, manager of new technology research and development for Crown Equipment Corp., lithium-ion runs at $1 a watt hour, and a big lift truck will require 36,000 watt hours of battery capacity— that’s a $36,000 lithium ion battery.

The Hydrogen Infrastructure

So, that brings us back to fuel cells. And we still haven’t discussed the hydrogen infrastructure. Although Sysco has found a way to justify a hydrogen dispensing station at its Houston site, is that a logical scenario for everyone?

Nick Mittica, commercial manager for hydrogen energy systems at Air Products, providers of hydrogen fueling systems, advises that right now the business case looks best for two and three-shift operations that run six or seven days a week. That will scale down as we see more of the large scale users like Sysco developing their own fueling infrastructures.

“We recently installed a hydrogen infrastructure that will serve three customers,” Mittica says. “That’s the way, over the long run, we can build scale. If I can connect multiple customers to one hydrogen tank in a park then I’m offsetting the capital costs over multiple customers, not just one. That may be how we bring it down in terms of the number of shifts and run time hours, making it more affordable.”

Air Products currently has 500 customers in the U.S., and it will be deploying fueling systems in Southern California for the automotive market in the next year. Mittica believes that same technology will be used for material handling accounts in the same region, and eventually across the country. There are many power options available for today’s large-scale lift truck fleets. But for most material handlers, the readily available and affordable ones are still either lead-acid-battery or propane powered. While developments continue among purveyors of tomorrow’s alternatives, the leading lift truck OEMs will continue to improve the performance and efficiency of today’s.

Propane IS an alternative fuel

When you think “alternative fuel,” liquid propane might not come to mind right away. After all, LP powers more than 40 percent of the lift trucks used in the U.S. today. However, according to Brian Feehan, V.P. at the Propane Education & Research Council (PERC), the Environmental Protection Agency recognized propane as an alternative fuel when it passed the Clean Air Act in 1990, and it continues to be recognized as an alternative fuel by the EPA and by the state of California. That recognition was reinforced by the tax credit extension that was just passed at the end of 2010 under the Tax Relief Unemployment Insurance Reauthorization Job Creation Act which extended the 50 cent per gallon tax credit for propane used in lift trucks. And Feehan wants to remind LP users that they can take that tax credit not only for 2011, but for 2010 as well.

“You have until August of 2011 to claim one-time your fuel use for 2010,” he says. “We can’t state that enough. Congress realizes that such tax credits decrease our dependence on foreign oil and that propane is good for the environment. Those two things have been carrying the day for propane.” Back in 2005 when the California Air Resources Board (CARB) was trying to clean up emissions from large spark ignited (LSI) engines, it was also trying to convert as many lift truck fleets as possible to electric power—at least all lift trucks of 8000 pounds capacity and less. The propane industry worked with California to develop new LSI regulations so that LP lift truck fleets could meet certain fleet average emissions goals.

But to emphasize propane’s image as an alternative fuel, Feehan notes that propane is also a good fuel source for hybrid and fuel cell technologies. “We’re seeing propane and electric hybrid technology and direct injection technology used in Europe in on-road vehicle applications,” he says. “We expect to see those come to the States. We’ve done a lot of work with fuel cell manufacturers and have proven that propane is an excellent fuel source for fuel cells. The challenge isn’t the fuel source but the cost associated with fuel cells. The fuel cell industry needs to look at how it will introduce its technology to the marketplace to build volume and reduce the overall cost of that equipment. When they’re ready we’re ready to help them.”

In the meantime, propane shares the stage with lead-acid-battery powered electric lift trucks as the most reliable choices on the market. And although Toyota Material Handling USA has been researching and developing alternative power sources, its president, Brett Wood, still feels the old reliables are hard to beat.

“Hybrids sound sexy and exciting and everyone can relate to it now,” he says, “but in the lift truck world if you want to be green and efficient you can go electric as easy as anything. As for IC, as housing and manufacturing come back, there will still be a strong need for ICs to climb ramps and handle heavy loads.”

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