Hydrogen rising: US corporates drawn to fuel cells

While most of what we are hearing out of the United States at the moment is the Presidential clamour of Clinton vs Trump, a huge variety of organisations are getting on with the job of transforming the way the nation uses and thinks about energy.

As a wind power engineer I am naturally drawn to the latest and greatest developments in wind farms, but on a recent trip to Washington DC I found it was hydrogen fuel cells that were firing my imagination about the future of energy.

Hydrogen fuel cells are being picked up by surprising companies for surprising applications, one example of which is for powering forklifts at Walmart’s warehouses. While converting the forklifts to fuel cells comes at a cost, there are no longer piles of big batteries taking up warehouse space while they charge, and forklift drivers no longer have to deal with them slowing down towards the end of a charging cycle.

Instead, a fuel cell forklift goes at full tilt until the fuel cell is empty. Recharging takes moments and the saved space means more real estate for storing goods. Currently fuel cells are being used at 11 warehouses, out of an initial target of 20. The huge efficiencies that are being delivered through the technology means this is just the beginning.

Fuel cells generate electricity through a chemical process which converts hydrogen-rich fuel into energy. They don’t burn fuel like a traditional combustion engine and they don’t need recharging like a battery either. The process of generating electricity is silent and clean, with heat and water the only by-products. A hydrogen fuel cell can be quickly topped up from a source of liquid hydrogen, like a traditional petrol pump. And the units can power anything from a vehicle all the way up to large stationary power systems.

Lots of auto manufacturers are working on fuel cell vehicles. While the Fuel Cell & Hydrogen Energy Association is careful to point out that fuel cells are unlikely to compete directly with electric vehicles in the small urban market, the technology is well suited to trucks travelling longer distances.

And when big brands like Google, Coca-Cola, Apple, Paypal and Walmart are adopting the new technology, this makes other companies pay attention.

In the last few years Paypal has installed a 6 MW solar and fuel cell plant to power its data centre in Utah, and Apple’s North Carolina data centre installed a 10 MW solar and fuel cell operation, which uses the grid only as backup.

Apple’s ‘Campus 2’ building, currently under construction in Silicon Valley is planning to generate 75 per cent of its energy needs on site using a combination of solar and fuel cells.

These companies see fuel cell technology not only as a hedge against rising electricity prices, but as a resilient option for a clean and uninterrupted power supply – and of course a branding opportunity.

But new technologies don’t roll out to market by accident. The United States is the global leader in fuel cell development, and a lot of that comes down to funding research and development, either directly or by way of tax discounts.

The US Government has a 30 per cent tax credit for stationary and portable fuel cells that allows for a better return on investment. While the tax credit only applies to the actual fuel cells and not to the rest of a vehicle, this still allows companies to make a fairly expensive conversion easier, so they can get back to work delivering those improved efficiencies.

The American Recovery and Reinvestment Act (ARRA) provided further support to the fuel cell industry, investing $41.9 million alongside private investment of around $51 million for deployment of around 1300 fuel cells for forklifts and telecommunications backup power.

Fuel Cell and Hydrogen Energy Association President Morry B. Markowitz told me that consequently the United States is home to the world’s leading fuel cell manufacturers, as well as hydrogen generation and component companies.

“Everyone benefits when the public and private sectors connect to move an industry forward while utilizing domestic resources and innovations. Fuel cell and hydrogen technologies are dynamic and have nowhere near reached their full potential. The possibilities are limitless.”

But one of the big challenges to the future of the technology is – and this should be familiar to all in the Australian industry – policy certainty. Big companies need to plan technology transitions, they need certainty and they need to find the budget for the updated equipment. The tax credit for fuel cells expires at the end of the year and it is expected to be reinstated. But long-term certainty would be a huge boost to the industry.

Either way, it’s an exciting technology with a big opportunity to help transition the world and Australia to a cleaner future.

The Clean Energy Council’s Policy Manager Alicia Webb visited North America on a three week study tour, sponsored by the United States Government and focusing on climate change and renewable energy policy.