Notes for the “Workshop on Learning-by-Doing in Energy Technologies” - Fuel
Cells
Prepared by: Mike Rosenberg, Ballard Power Systems, Inc
For: Ferdinand Panik, DaimlerChrysler
1. Describe what is currently known about the cost of this technology.
We have a detailed understanding of the cost of a fuel cell. DaimlerChrysler has
been working with Ballard Power Systems, Inc. since 1994 and we have
completed numerous generations of the technology. Ballard has been working on
all aspects of the fuel cell including the membrane, electrodes, catalysts, bipolar
plates and associated systems and has made significant progress in each area. By
working on each of these areas, Ballard has been able to develop the fundamental
understanding of how a fuel cell works and how changes in each of these
components and systems affect not only the performance of the fuel cell but the
costs as well.
In 1997, Ballard and DaimlerChrysler embarked on a 2-year manufacturing
study to determine how fuel cells will be made and what the cost would be at high
volume. The study concluded that at volumes of 300,000 automotive equivalents
or greater per year, that Ballard would be able to manufacture the automotive
fuel cell at US$20/kW. This is consistent with the DOE targets of US$50/kW for
the entire automotive fuel cell system.
Today we are not manufacturing at high volume, so the costs of the automotive
fuel cell system are significantly higher and not representative of a product at
high volume. As a result, we do not provide the cost or price of these systems
today.
While the automotive fuel cell is still in low volumes and are just starting to
appear in small fleet applications, fuel cells are being sold commercially today by
Ballard in the portable power market. Ballard introduced its NexaTM power
module in September 2001 and is now selling to over 50 customers worldwide.
Ballard’s customers are integrating the NexaTM power module into their product.
Coleman Powermate was the first company to launch a product using Ballard’s
Nexa power module and is selling its AirGenTM fuel cell generator for US$5995 to
industrial customers. This generator is a 1kW fuel cell generator. While Ballard
has never given a price for its Nexa power module, it must be priced well below
the AirGen price. In addition, Ballard has a goal for 2003 to reduce the cost of its
Nexa power module by 50% this year.
2. Describe how cost has fallen over time and as a function of accumulated output.
As described above, fuel cell costs are coming down, however, it is premature to
describe how costs are falling as a function of accumulated output. Today, fuel
cell cost reduction is being done in a stepwise fashion, not an accumulated
manufacturing learning curve. We are moving down a family of learning curves
with each successive generation of technology.
[Please see the first slide in the presentation entitled “Learning Curves” for
details on the above and then use the three remaining slides to talk about how
the costs have fallen over time and to address the next question about factors
that have caused costs to fall.]
3. Identify the factors that have caused cost to fall in the past and what factors may
operate to cause cost to fall in the future. Note where possible how actual declines in
cost compare to forecasts.
As described above, fuel cell costs have been coming down through successive
generation of the technology. We are using different materials of construction,
more efficient means of applying catalysts and developing simpler systems. We do
not provide forecasts of our cost reduction efforts beyond what is stated in our
public annual report goals.
In the future, the increase in volume will be key in driving costs down. In addition
the development of a mature supply chain will aid in lower costs.
4. Identify any obvious barriers to the adoption and diffusion of this technology other
than cost.
There are several barriers to the adoption of fuel cell technology in the
transportation market including lifetime, durability and the widespread
availability of hydrogen. DaimlerChrysler and Ballard are continuing to improve
the fuel cell technology and are on a path to provide non-compromise vehicles for
mass commercialization by around 2010. Many other companies, universities and
research institutions are addressing the issues around hydrogen. This includes
producing, distributing and storing it in a cost effective and safe manner.
5. Describe public policies that would most effectively lower the barriers (if any) and
lower cost in the future.
Programs similar to what President Bush announced during his State of the
Union address are the type of programs the fuel cell industry needs to accelerate
the adoption fuel cells. This includes funding for the development of the hydrogen
infrastructure, incentives for early purchasers of fuel cells and governments being
early fleet customers. In addition, governments can help in the adoption of the
technology by creating legislation that is supportive to fuel cells and other
renewable or clean power generation technology. Finally, another role
government can play is to foster the development of more public-private
partnerships like the California Fuel Cell Partnership that can help in setting
codes and standards, identifying future barriers, providing public outreach and
education, help develop the hydrogen infrastructure and be a participant in
various field trial demonstrations.
6. Describe the likely benefits (either qualitatively or quantitatively) that would be
derived from the policy and the costs of the policy if known
It is difficult to provide the benefits or the costs of these policy initiatives without
knowing the specifics. As an example, if the government would be an early
purchaser of fuel cell vehicles, the benefit would be an increased volume of fuel
cells helping lower costs and increase the manufacturing know-how. This also
helps the industry move closer to the mass commercialization of the technology.
The cost of the program would be the lease costs of the fuel cell vehicles, which
would be significantly higher than traditional vehicles today. Without knowing the
number of vehicles and the timing of the purchase or lease it is difficult for me to
estimate the actual benefits or costs.