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    The Department of EnergyHydrogen and Fuel CellsP rogram P lan

    An Integrated Strategic Plan for the Research,Development, and Demonstration of Hydrogenand Fuel Cell Technologies

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    The need for clean, sustainable, and domestically produced

    energy has never been greater. The call for green jobs and U.S. leadership in clean energy, combined with the growingneed to reduce emissions and our growing dependence onimported oil, have come together to form a powerfulimperativeone that demands new technologies and newapproaches for the way we produce and use energy.

    Congress has led the call for the development of clean,domestic sources of energy with the Energy Policy Act of 2005(EPACT), the Energy Independence and Security Act of 2007 (EISA 2007), and the American Recovery and Reinvestment

    Act (Recovery Act). The Department of Energy (DOE) isresponding to this challenge, collaborating with industry,academia, and other stakeholders to develop, advance, and enable the widespread use of key energy technologies. Asoutlined in this document, hydrogen and fuel cells are part of

    DOEs portfolio of R&D activities for emerging energytechnologies.

    For more information, contact:

    EERE Information Center877-EERE-INF (877-337-3463)www.eere.energy.gov/informationcenter

    Fuel Cell Technologies ProgramOffice of Energy Efficiency and Renewable EnergyU.S. Department of Energy1000 Independence Avenue, SWWashington, DC 20585

    www.hydrogenandfuelcells.energy.gov www.hydrogen.energy.gov

    http://www.eere.energy.gov/informationcenterhttp:///reader/full/www.hydrogenandfuelcells.energy.govhttp:///reader/full/www.hydrogen.energy.govhttp://www.eere.energy.gov/informationcenterhttp:///reader/full/www.hydrogenandfuelcells.energy.govhttp:///reader/full/www.hydrogen.energy.gov
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    THE H YDROGEN AN D FUEL CELLS P ROGRAM A V ALUABLE P ART OF THE N ATI ONAL E NERGY P ORTFOLI O

    In 2010, the National Academies of Science (NAS) published their review of the Department of Energys(DOEs) hydrogen, fuel cell, and advanced vehicle technologies activities and reiterated DOEs portfolioapproach:

    In the collective opinion of the committee, there are essentially three primary alternative pathways: Improved ICE [internal combustion engine] vehicles coupled with greater use of biofuels A shifting of significant portions of transportation energy from petroleum to the grid through the

    expanded use of PHEVs [plug-in hybrid electric vehicles] and BEVs [battery-electric vehicles],and

    The transition to hydrogen as a major transportation fuel utilized in fuel cell vehicles.

    The fuel cell/hydrogen R&D is viewed by the committee as long-term, high-risk, high-payoff R&D that

    the committee considers not only to be appropriate, but also to be of the type that much of it probablywould not get done without government support.

    The National Academies Review of the Research Program of theFreedomCAR and Fuel Partnership, Third Report, 2010

    In April 2009, the Secretary of Energy emphasized the importance of fuel cells within a portfolio of technologies:

    "The investments we're making today will help us build a robust fuel cell manufacturing industry in the

    United States Developing and deploying the next generation of fuel cells will not only create jobs - it will help our businesses become more energy efficient and productive. We are laying the foundation for agreen energy economy."

    Secretary of Energy Steven Chu

    In 2008 the U.S. Government Accountability Office presented its report to Congress on DOEs hydrogenand fuel cell activities:

    ... [the Department has] made important progress in developing hydrogen technologies in allof its technical areas in both fundamental and applied science. DOE and industry officials

    attribute this progress to DOEs (1) planning process that involved industry and universityexperts from the earliest stages; (2) use of annual merit reviews, technical teams, centers of excellence, and other coordination mechanisms to continually involve industry and universityexperts to review the progress and direction of the program; (3) emphasis on both fundamentaland applied science, as recommended by independent experts; and (4) continued focus on suchhigh priority areas as hydrogen storage and fuel cell cost and durability.

    U.S. Government Accountability Office reporton DOEs hydrogen and fuel cell activities

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    In 2008, the National Academies completed a report on the resources needed for fuel cell vehicles tobecome competitive in the marketplace:

    Industry- and government-sponsored research programs have made very impressive technical progress the introduction of fuel cell vehicles into the light-duty vehicle fleet is much closer to reality than when the National Research Council last examined the technology in 2004.

    The National AcademiesTransitions to Alternative Transportation TechnologiesA Focus on Hydrogen

    In 2007 the Hydrogen and Fuel Cell Technical Advisory Committee (HTAC), which was establishedunder Section 807 of the Energy Policy Act of 2005 (EPACT), submitted its first biennial report:

    The Committee believes that hydrogen has the significant potential to play an important role inmeeting the long term energy needs of the United States because it has the capability to carryenergy from any source fossil, renewable, nuclear to the points of use with very lowenvironmental footprint. Hydrogen can be produced in a distributed fashion and by using off

    peak power or intermittently available renewable energy resources such as sunlight. Hydrogenalso has the ability to store this energy during off-peak power periods so that the energy can bemade available when and where it is needed.

    Hydrogen and Fuel Cell Technical Advisory Committee Biennial Report to the Secretary of Energy

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    PrefaceThe U. S. Department of Energys (DOEs or the Departments) hydrogen and fuel cell efforts are part of a broad portfolio of activities to build a competitive and sustainable clean energy economy to secure thenations energy future. Reducing greenhouse gas emissions 80 percent by 2050 and eliminating

    dependence on imported fuel will require the use of diverse domestic energy sources and advanced fuelsand technologies in all sectors of the economy. This calls for a robust, comprehensive research anddevelopment (R&D) portfolio that balances short-term objectives with long-term needs and sustainability.Fuel cells, which convert diverse fuels directly into electricity without combustion, and hydrogen, a zero-carbon fuel that can be produced from renewable resources, comprise key elements of the DOE portfolio.The use of hydrogen and fuel cells can address critical challenges in all energy sectorscommercial,residential, industrial, and transportationand a wide variety of applications, including vehicles,auxiliary power, stationary power, and portable power.

    In the last several years, DOE has greatly advanced the state of the art of hydrogen and fuel celltechnologies, making significant progress toward overcoming many of the key challenges tocommercialization, including reducing the cost and improving the durability of fuel cells, reducing thecost of producing and delivering hydrogen, and developing technologies to improve the performance of hydrogen storage systems.

    DOEs efforts to enable the widespread commercialization of hydrogen and fuel cell technologies form anintegrated programthe DOE Hydrogen and Fuel Cells Program (the Program). The Program iscoordinated across the Department and includes activities in the offices of Energy Efficiency andRenewable Energy (EERE), Science, Nuclear Energy, and Fossil Energy.

    The Hydrogen and Fuel Cell Program Plan (the Plan ) outlines the Programs activities, progress, andplans. Chapter 1 of the Plan presents the broad benefits that hydrogen and fuel cells can provide to thenation, as well as the advantages that they offer to the end-user in a variety of applications. Chapter 2discusses strategic activities, future plans, milestones, and progress in all areas of the Programincludingefforts in applied research, development, and demonstration (RD&D) to further reduce costs and improvedurability and performance, as well as activities that address the economic and institutional challenges tobroader commercialization. Chapter 3 outlines the DOEs direction of the Program, including itsorganizational structure, partnerships, collaboration, and mechanisms for internal and external review.

    Advances made by the Hydrogen and Fuel Cells Program can be seen in the marketplace today.Commercial customers are choosing fuel cells for the benefits they offer, including increased efficiencyand reliability; clean, quiet, low-maintenance operation; and reduced lifecycle costs. Growing sales andmanufacturing volumes of fuel cells and hydrogen technologies for applications such as forklifts andbackup power are beginning to lower costs, increase consumer confidence, and grow the domesticsupplier base. Hydrogen and fuel cells are also being demonstrated in growing fleets of automobiles,transit buses, and supporting refueling infrastructure. These demonstrations show strong and steadyimprovements in performance and durability, confirming progress toward commercial viability in theseimportant markets. DOE and its partners in industry are also exploring the potential role that hydrogencan play in storing energy from renewable sources, a key area that could have tremendous impact on thegrowth of clean power generation.

    DOEs efforts have been integral to the important progress that has been made. By pursuing innovativeconcepts and promising pathways for R&D, DOE has made significant technological advances; and byworking to ease the transition of technologies into the marketplace, DOE has moved hydrogen and fuelcells substantially closer to the crucial role they can play in our energy economy.

    i

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    Table of ContentsPreface ............................................................................................................................................. i

    Introduction

    Why Hydrogen and Fuel Cells? ............................................................................................ 1The DOE Hydrogen and Fuel Cells Program ....................................................................... 4

    1. Hydrogen and Fuel Cell Applications: Benefits and Challenges1.1 Advantages of Fuel Cells and Hydrogen ......................................................................91.2 Potential Impacts of the Widespread Use of Hydrogen and Fuel Cells ......................181.3 Key Challenges............................................................................................................ 261.4 The Way Forward........................................................................................................ 30

    2. The Program: Plans and Key Milestones2.1 Guiding the Program:

    Systems Analysis............................................................................................... 34

    Systems Integration ........................................................................................... 352.2 Advancing the TechnologiesFuel Cell Systems R&D .................................................................................... 35Hydrogen Fuel R&D .........................................................................................38

    2.3 Driving Technical Progress through Crosscutting EffortsManufacturing R&D..........................................................................................44Technology Validation ...................................................................................... 45Basic Science..................................................................................................... 47

    2.4 Overcoming Institutional & Economic BarriersSafety, Codes & Standards................................................................................48Education & Outreach ....................................................................................... 49Market Transformation......................................................................................49

    Infrastructure.....................................................................................................502.5 Key Milestones............................................................................................................ 51

    3. The Programs Strategic Direction3.1 Organization & Partnerships ...................................................................................... 523.2 Program Implementation............................................................................................. 553.3 Federal, State, and International Collaboration & Coordination................................. 60

    AppendicesAppendix A: About this Document .................................................................................. A1Appendix B: Program Budgets: FY 2000 2011 ............................................................ A2Appendix C: Sample Scenario for Domestic Hydrogen Production Options

    and Resource Needs ................................................................................... A3Appendix D: Hydrogen Production and Delivery Pathways ............................................ A6Appendix E: Glossary of Acronyms .............................................................................. A30Appendix F: Contacts, Resources, and Web Links ........................................................ A31

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    Introduction

    Why Hydr ogen and Fuel Cel ls? Hydrogen and fuel cells can be used in all sectors of the economy, offering a broad range of benefits for the environment, for our energy security, and for our domestic economy.These benefits include:

    Reducing Greenhouse Gas Emissions Due to their high efficiency and zero- or near zero-emissions, fuel cells have the potential to reducegreenhouse gas emissions in many applications. DOE-funded analyses have shown that fuel cells have thepotential to achieve the following significant reductions in emissions:

    Combined heat and power (CHP) systems: More than 35% to more than 50% reduction inemissions over conventional heat and power sources (with much greater reductions possibly morethan 80% if biogas is used in the fuel cell)1

    1 Assumes fuel cell CHP with 42% HHV electrical efficiency and 74% HHV overall efficiency; used EPA CHP analysis model atwww.epa.gov/chp/basic/calculator.html .

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    - DRAFT - Light-duty highway vehicles: More than 55% to more than 90% reduction in emissions overtodays gasoline vehicles 2

    Specialty vehicles: More than 35% reduction in emissions over current diesel and battery-poweredlift trucks 3

    Transit buses: Fuel cell buses have demonstrated more than 40% higher fuel economy than dieselinternal combustion engine (ICE) buses and more than double the fuel economy of natural gas ICE

    buses;4

    these very high efficiency improvements could lead to substantial reductions in emissionseven greater reductions in emissions are possible if hydrogen from low- or zero-carbon sources isused.Auxiliary power units (APUs) : More than 60% reduction in emissions over truck engine idlin g5

    Reducing Oil Consumption Fuel cells offer a virtually petroleum-free way to provide power for applications that are currentlyresponsible for a large portion of the petroleum consumed in the United States today, such as automobiles,buses, backup generators, and auxiliary power generators. DOE analysis has shown that fuel cell vehiclesusing hydrogen can reduce oil consumption in the light-duty vehicle fleet by more than 95% when comparedwith todays gasoline internal combustion engine vehicles, by more than 85% to more than 95% whencompared with advanced hybrid electric vehicles using gasoline or ethanol, and by more than 80% to morethan 95% when compared with advanced plug-in hybrid electric vehicles. 6

    Advancing Renewable Power Using Hydrogen for Energy Storage and Transmission Hydrogen can be used as a medium for energy storage and transmission, which can facilitate the expansionof renewable power generation. Hydrogen can store electrical energy when it is produced throughelectrolysis using surplus electricity, when generation exceeds demand. This stored energy can be used forother high-value applicationssuch as CHP systems, passenger vehicles, and busesor it can be convertedback into grid electricity, using fuel cells or turbines, for peak-power when demand exceeds generation.Hydrogen can also be moved over large distances through pipelinespotentially at higher efficiency andless expense than conventional long-distance electricity transmissionenabling transmission of energy fromrenewable generation facilities in remote locations.

    High Efficiency Fuel cells directly convert the chemical energy in fuel into electricity, with very high efficiency and withoutcombustion. Fuel cells using hydrogen can achieve nearly 60% efficiency in vehicle systems (more thantwice the efficiency of gasoline internal combustion engines. Fuel cells using natural gas or propane canachieve 45% electrical efficiency in stationary power systems, with the potential to achieve more than 70%electrical efficiency in hybrid fuel cell/turbine systems and more than 80% overall efficiency in CHPsystems.

    2 DOE Hydrogen Program Record #10001, www.hydrogen.energy.gov/program_records.html . The range of emissions for FCVs is based on a range of pathways for producing hydrogen, with hydrogen from distributed reforming of natural gas resulting in the most emissions, to hydrogen from biomassgasification resulting in the least.3 L.L Gaines, et al., Full Fuel-Cycle Comparison of Forklift Propulsion Systems, Argonne National Laboratory, October 2008,www.transportation.anl.gov/pdfs/TA/537.pdf . Result cited for battery-powered lift trucks assumes batteries are charged using conventional combustion-basedgenerators.4Technology Validation: Fuel Cell Bus Evaluations, DOE Hydrogen Program 2010 Annual Progress Report,http://hydrogen.energy.gov/annual_progress.html .5L. Gaines and C. Hartman, Energy Use and Emissions Comparison of Idling Reduction Options for Heavy-Duty Diesel Trucks, Center for TransportationResearch, Argonne National Laboratory, November 2008; lacking validated experimental data at this time, it was assumed that fuel cell APUs would consume0.2 gallon/hr, the same as the conventional APU in Gaines study (current modeling suggests fuel cell APUs would consume even less). This would result inoverall CO 2 emissions comparable to those of a diesel ICE APU. Actual CO 2 emissions by fuel cell APUs are likely to be lower, and improvements in theefficiency of diesel reformers and fuel cells will result in further reductions.6 DOE Hydrogen Program Record #10001, www.hydrogen.energy.gov/program_records.html . The ranges of oil consumption reductions cited all assume thathydrogen from centralized biomass gasification is used; since this is the most petroleum-intensive pathway for hydrogen production, potential reductions fromother pathways will be even greater.

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    - DRAFT - Fuel FlexibilityUse of Diverse, Domestic Fuels, Including Clean and Renewable Fuels Fuel cells can use a diverse variety of fuels, including hydrogen, methanol, methane from biomass, naturalgas, propane, and even diesel. Certain renewable, zero- or near zero-emissions fuels including hydrogen,methanol, and methane from biomass are well suited for use in fuel cells. Hydrogen, in particular, can beproduced from diverse and abundant domestic resources through direct conversion of renewable energy such

    as sunlight and biomass, or through electrolysis using renewable power. Many of these production pathwaysresult in minimal carbon dioxide (CO 2) emissions.

    Reducing Air Pollution Fuel cells emit negligible criteria air pollutants [i.e., carbon monoxide, nitrogen oxides (NOx), ozone,particulate matter (PM), sulfur dioxide, and lead], regardless of the fuel they use. When using hydrogen,fuel cells emit only water.

    High Reliability and Grid Support Capabilities Fuel cells can provide high quality, reliable power for critical load applications such as hospitals, datacenters, and emergency shelters. They can also be monitored remotely, reducing actual maintenance time

    and cost, especially in isolated installations like telecommunications backup-power sites. Fuel cells canoperate as stand-alone systems, without any need to be connected to the grid. This can offer flexibility andenergy security. Large-scale fuel cells can also provide early disparate grid support to help alleviatetransmission issues nearer to the point of use.

    Suitability for Diverse Applications Fuel cells can provide power for a wide range of applications, such as: consumer electronics (50100 W),homes (15 kW), backup power generators (15 kW), forklifts (520 kW), vehicles (50125 kW), andcentralized power generation (1200 MW or more).

    Quiet Operation

    Since a fuel cell stack has no moving parts, it operates quietly and with minimal vibration, unlike traditionalcombustion engines such as diesel generators. This offers benefits for defense applications that requirestealth and low noise signature capabilities, as well as for residential and commercial locations where noiseand vibration are undesirable.

    Low Maintenance Needs With fewer moving parts, fuel cells require less maintenance than traditional technologies such as internalcombustion engines and other emerging technologies such as microturbines. Compared to batteries, fuelcells are less sensitive to harsh environments and require less space to address maintenance, storage andenvironmental disposal needs.

    Opportunities for Economic Growth and Leadership in an Emerging High-Tech Sector The domestic hydrogen and fuel cell industry is poised to become a major high-tech sector, with thepotential to help strengthen the domestic economy and provide high-skilled jobs in diverse areas includingmanufacturing, installation, maintenance, and service sectors. The United States has long been the worldleader in hydrogen and fuel cell technologies, but worldwide interest and investment in these technologies isgrowing.

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    - DRAFT - The DOE Hydrogen an d Fuel Cel ls Program The DOE Hydrogen and Fuel Cells Program conducts comprehensive efforts to overcome the technological, economic, and institutional barriers to the widespread commercialization of fuel cells and hydrogen technologies. The Program is aligned with the DOEs strategic vision and goalsits efforts will help to secure U.S. leadership in clean energy

    technologies and advance U.S. economic competitiveness and scientific innovation.The Program integrates activities across four DOE officesEnergy Efficiency and Renewable Energy, Science, Fossil Energy, and Nuclear Energyand works with partners in state and federal agencies, foreign governments, industry, academia, non-profit institutions, and the national laboratories. The Program will also coordinate with other relevant DOE efforts as they develop, such as DOEs Energy Frontier Research Centers,Innovation Hubs, and the Advanced Research Projects Agency-Energy (ARPA-E).

    Mission To enable the widespread commercialization of a portfolio of hydrogen and fuel cell technologies throughbasic and applied research, technology development and demonstration, and diverse efforts to overcomeinstitutional and market challenges.

    Key Goals The Programs primary goal is to advance hydrogen and fuel cell technologies to be competitive in themarketplace with incumbent and other emerging technologies. Although fuel cells are becomingcompetitive in a growing number of markets, to achieve widespread commercialization they must enterlarger markets and be able to compete in terms of life cycle cost, performance, durability, and environmentalimpact. Success in these markets will also depend on non-technical factors, such as user confidence, ease of financing, the availability of codes and standards, and investment in a refueling infrastructure for certainapplications.

    The Program has defined its key goals based on the technical advances that are needed, which have beenidentified through discussions with technology developers, the research community, and all relevantstakeholders. These key goals are to develop hydrogen and fuel cell technologies for:

    1) Early markets such as stationary power (primary and backup), lift trucks, and portable powerin the2010 to 2012 timeframe;

    2) Mid-term markets such as residential CHP systems, auxiliary power units, fleets and busesin the2012 to 2015 timeframe; and

    3) Long-term markets including mainstream transportation applications with a focus on light dutyvehiclesin the 2015 to 2020 timeframe.

    The Program has also set goals for developing technologies for the production, delivery, and storage of

    hydrogen, which will help spur commercialization of fuel cells and maximize their environmental andenergy security benefits. These goals are to 1) reduce the cost of producing hydrogen from renewableresources, nuclear energy, and coal with carbon sequestration; 2) reduce the cost of delivering, storing, anddispensing hydrogen; and 3) improve the performance and reduce the cost of hydrogen storage systems.

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    - DRAFT - Achieving the Programs goals will mean that fuel cells will have competitive performance and durability;that it will be technically feasible to manufacture fuel cells at a competitive cost (when produced at volumescommensurate with other technologies in the marketplace); and that it will be possible to produce hydrogenat a competitive cost (assuming high volumes and widespread market penetration). Meeting the Programscost targets will not guarantee when the actual cost of fuel cells or hydrogen technologies will becomecompetitivethis will depend on adequate investment by industry and a commitment to commercialize thetechnologies and produce hydrogen at sufficient volumes needed to achieve cost reductions. Policies and

    incentives will also be required to spur the necessary market pull and industry investment.

    A full discussion of detailed targets and milestones for all Program activities appears in Chapter 2.

    The Role of Federal Research, Development , and Demonst ra t ionAs shown in the diagram below, the Program is focused on highrisk/high impact R&D. These activities are aimed at achieving critical breakthroughs and advancing pre competitive technologies. Due to the high risk nature of this research, these areas would not be sufficiently funded by private industry in the absence of government support.

    The Program is fulfilling the role of federal research, development, and demonstration (RD&D) (shown

    below), pursuing advances in fuel cell technologies in the early stages of development for a variety of applications. As the technologies reach maturity and full commercialization, the federal RD&D efforts will transition over to efforts by industry to make ongoing refinements and improvements. A longer term effort in RD&D for hydrogen fuel technologies is envisioned to enable the fullest realization of the benefits of fuel cell technologies.

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    - DRAFT - Strategy The Program pursues a strategy (Figure i.1) that balances a comprehensive, technology-neutral approachwith focused efforts in specific technical areas and applications. The Program supports activities to broadlyadvance the state of the art of hydrogen and fuel cell technologies, including basic and applied researchcommon to various types of fuel cells and a wide range of applications. As technical and market analysesidentify specific areas where fuel cells can be competitive, the Program initiates and pursues focused efforts

    to make advances needed for these applications, using the most appropriate technical approach andcomplementing private sector activities.

    Figure i.1: Program Strategy. The Program integrates diverse efforts to overcome the full range of barriers to the widespread commercialization of hydrogen and fuel cells.

    To achieve the necessary technological advances, the Program integrates a full spectrum of RD&D activities,including: Basic research efforts, which use experimentation and theoretical models to uncover the fundamental

    properties of materials and reaction mechanisms; Applied research and technology development efforts, which employ existing theory and knowledge to

    design and develop materials, components and prototype systems to meet performance targets; and Demonstration and validation of new technologies, integrated in systems, and operating under real

    world conditions.

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    - DRAFT - Communication and feedback among all these areas (Figure i.2) allows the Program to rapidly identifychallenges and roadblocks as they emerge and effectively allocate and rebalance resources to optimize R&Defforts. To ensure that advances in technology development can be realized in the marketplace, the Programalso works to address the economic and institutional challenges facing hydrogen and fuel cells. Extensivecommunication with stakeholders enables the Program to identify these challenges, conduct analyses of themwhere appropriate, and initiate effective measures to overcome them.

    Figure i.2: Integrating Basic and Applied Research and Technology Development and Demonstration. The Program places a high priority on integrating efforts across the full spectrum of RD&D.

    Figure i.3: Total Requested DOE Funding for Hydrogen and Fuel Cells Activities in FY 2011. In addition to Hydrogen and Fuel Cells Program funding, this chart includes funding for high-temperature, utility-scale fuel cells in the SECA program (see sidebar in section 2.2.1).*Funding for basic science research includes Program activities in the Office of Basic Energy Sciences (BES) as well as other activities in hydrogen production in the Office of Biological and Environmental Research (BER).** FY11 funding for nuclear hydrogen by the Next Generation Nuclear Plant Project as a process heat application is still to be determined.

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    7

    - DRAFT - 1. Hydrogen and Fuel Cell Applications

    B en e f i t s & Ch a l l e n g e s Hydrogen and fuel cells can play an important role in our national energy strategy, with the potential for usein a broad range of applications, across virtually all sectorscommercial, industrial, residential, portable,and transportation. This section highlights examples of applications, associated benefits and remainingchallenges.

    Hydrogen and Fue l Cel l Marke t s & Demons t ra t ions Today 7

    There are more than 50 commercially available hydrogen and fuel cell productson the market today.

    The global market for fuel cells grew to $498 million in 2009. Approximately 15,000 fuel cells were shipped in 2009more than 40% growth

    over 2008 (total units shipped exceeded 24,000 if portable educational units areincluded).

    In 2009, annual stationary fuel cell shipments more than doubledto 9,000 units. There are more than nine million tons of hydrogen produced in the United States

    today, and more than 1,200 miles of pipelines. In the transportation sector, demonstrations in the United States include:

    More than 200 fuel cell vehicles(FCVs) Approximately 15 fuel cell buses, with at least 20 more planned About 60 hydrogen fueling stations

    Looking Forw ard

    Global sales are expected to grow from $598 million in 2010 (projected) to $1.22billion by 2014.

    In 20102014, the rate of fuel cell shipments is projected to significantly increase,with annual shipments expected to exceed 1.5 GW by 2014.

    Several major car manufacturersincluding General Motors, Daimler, Toyota,Honda, and Hyundaihave re-affirmed near-term commercialization goals forfuel cell vehicles:

    A survey of automakers estimates deployment of approximately 4,000 FCVs in California by 2014 and 50,000 by 2017 to meet Zero Emission Vehicle mandates.

    Germany and Japan have announced aggressive plans for deployments of fuelcell vehicles and refueling infrastructure:

    Germany has announced 1,000 stations by 2017 and formed an industry consortium to address infrastructure needs.

    Japan has announced an industry consortium to enable deployment of 1,000 hydrogen stations and 2 million FCVs by 2025.

    7Sources: 2009 Fuel Cell Technologies Market Report , DOE, December 2010; Fuel Cell Technologies Worldwide , SBI Energy, September 2010; Butler, J.,Green Job Creation in the Fuel Cell Industry: The Next Ten Years, presentation at National Hydrogen Association Webinar, March 24, 2010; Hydrogen and Fuel Cells: The U.S. Market Report , National Hydrogen Association, March 2010; 2009 U.S. Hydrogen Vehicle Database, Hydrogen Analysis ResourceCenter, Pacific Northwest National Laboratory, accessed September 29, 2010; U.S. Fuel Cell Bus Projects, National Renewable Energy Laboratory, accessedSeptember 30, 2010; Hydrogen Fueling Station Database, National Hydrogen Association, accessed September 30, 2010; Automobile Manufacturers Stick up for Electric Vehicles with Fuel Cells, Daimler News, September 9, 2009; California Fuel Cell Partnership, Hydrogen Fuel Cell Vehicle and Station

    Deployment Plan: A Strategy for Meeting the Challenge Ahead (Action Plan), February 2009; Germany commits $2 billion for at least 1,000 hydrogenstations, Autoblog Green, April 15, 2010; Sato, Y., Overview of Scenario, Roadmap and R&D Projects of Hydrogen and FCV in Japan, presentation byNew Energy and Industrial Technology Development Organization (NEDO), June 4, 2010.

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    - DRAFT -

    Figure 1.1. Criteria Pollutant Emissions from Generating Heat and Power. Fuel cells emit about 75 90% less NOx and about 75 80% less particulate matter (PM) than other CHP technologies, on a life-cycle basis.In addition, similar to other CHP technologies, fuel cells can provide more than 50% reduction in CO 2 emissions, when compared with the national grid. 9

    9 Wang, MQ; Elgowainy, A; and Han, J. Life-Cycle Analysis of Criteria Pollutant Emissions from Stationary Fuel Cell Systems, 2010 DOE Annual MeritReview Proceedings

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    Figure 1.2: Levelized Cost of Energy from Fuel Cell CHP. Expected advances in CHP fuel cells may make them a cost-competitive option for providing light commercial and residential heat and power. 10

    B a c k u p P ow e r

    Fuel cells are emerging as an economically viable option for providing backup power, particularly

    for telecommunications towers, data centers, hospitals, and communications facilities for emergencyservices. Compared with batteries, fuel cells offer longer continuous run-times (two- to ten-timeslonger) and greater durability in harsh outdoor environments under a wide range of temperatureconditions. Compared with conventional internal combustion generators, fuel cells are quieter andhave low to zero emissions (depending on fuel source). Because fuel cells are modular, backuppower systems that use them can be more readily sized to fit a wider variety of sites than those usingconventional generators. They also require less maintenance than both generators and batteries.

    In a study for DOE, Battelle Memorial Institute found that fuel cells can provide more than 25%savings (when compared with batteries) in the life-cycle costs of specific backup power installationsfor emergency response radio towers (excluding additional savings due to existing tax incentives forfuel cells). In the United States, there are currently about 200,000 backup power systems for wirelesscommunications towers. 11 If potential new regulationsrequiring longer run-times for these

    systemsare put in place, fuel cells might be a competitive option for all of these sites. In addition,many developing countries are experiencing explosive growth in new installations of cell phonetowers. For example, the number of towers in India is expected to grow from a current base of 240,000 to 450,000 in just three years. 12 As the worlds leading supplier of backup-power fuel cells,the United States stands to benefit greatly from growing worldwide demand.

    10 Based on analysis conducted by NREL, and Annual Energy Outlook 2009 , Energy Information Administration.11 Fuel Cells in Distributed Telecomm Backup, Citigroup Global Markets, August 24, 2005; Identification and Characterization of Near Term Fuel Cell

    Markets , Battelle Memorial Institute, April 2007.12 T. Worthington, India Telecom Towers, Build em High, Reuters, September 1, 2009, http://in.reuters.com/article/idINIndia-42120920090901 .

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    Storage and Transmiss i on for Renew able Energy

    Producing hydrogen may provide a cost-effective means of storing and transmitting energy fromrenewable electricity generation, with minimal or zero emissions. In locations where compressed-airand pumped-hydro energy storage are not feasible (where sufficient underground storage or nearbyreservoirs are not available), hydrogen may be a less costly option than other available energystorage technologies. Preliminary analyses have shown that fuel cells using stored hydrogen havethe potential to produce electricity for peak demands on a cost-competitive basis with current peak power generation from natural gas combustion engines. Furthermore, because hydrogen is atransportable fuel that can be used in a variety of applications, it can improve the economics of renewable energy generation, providing additional revenue when previously curtailed energy isconverted into hydrogen and sold for use in fuel cell vehicles, stationary fuel cells, or otherapplications. Hydrogen also can be transported over large distances through pipelines, which mayinvolve significantly less expense and siting issues than interstate electricity transmission lines.Since many of the renewable resources in the United States are far from the major load centers, alower-impact, less costly means of energy transmission may be very helpful in enabling increasedrenewable energy generation. By playing a valuable role in advancing the use of renewable energy,hydrogen can indirectly contribute to the resulting reductions in greenhouse gas emissions, and helpto reduce the need for natural gas consumption for peak power generation.

    P ORTABLE P OWERPortable fuel cells are beginning to enter the consumer marketplace, and they are being developed for arange of applications including cell phones, cameras, PDAs, MP3 players, laptop computers, as well asportable generators and battery chargers, particularly of interest for military applications. Fuel cells can havesignificant advantages over batteries, including rapid recharging and higher energy densityallowing up totwice the run-time of lithium ion batteries of the same weight and volume. An independent research firmestimated portable fuel cell shipments could reach 214 million units per year, resulting in the creation of 107,000 new jobs. 13

    T RANSPORTATIONAuxi l iary Pow erTruc ks , Airc raf t , Rai l , and Ships

    Fuel cells can provide clean, efficient auxiliary power for trucks, recreational vehicles, marinevessels (yachts, commercial ships), airplanes, locomotives, and similar applications that havesignificant auxiliary power demands. In many of these applications, the primary motive-powerengines are often kept running solely for auxiliary loads. This is an inefficient practice, resulting insignificant additional fuel consumption and emissions.

    For the approximately 500,000 long-haul Class 7 and Class 8 trucks in the United States, emissionsduring overnight idling have been estimated to be 10.9 million tons of CO 2 and 190,000 tons of NO xannually. 14 The use of auxiliary power units (APUs) for Class 78 heavy trucks to avoid overnight

    idling of diesel engines could save up to 280 million gallons of fuel per year and avoid more than92,000 tons of NOx emissions. 15

    13 World Auxiliary Power Pack Market, Frost and Sullivan, September 30, 2008.14 Nicholas Lutsey, Christie-Joy Brodrick & Timothy Lipman, Analysis of Potential Fuel Consumption and Emissions Reduction from Fuel Cell AuxiliaryPower Units (APUs) in Long Haul Trucks, Elsevier Science Direct, Energy 32, September 2005.15 L. Gaines and C. Hartman, Energy Use and Emissions Comparison of Idling Reduction Options for Heavy-Duty Diesel Trucks, Center for TransportationResearch, Argonne National Laboratory, November 2008; and Idle Reduction Technology: Fleet Preferences Survey , American Transportation ResearchInstitute (prepared for New York State Energy Research and Development Authority), February 2006.

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    - DRAFT - Pollution from commercial cargo ships has also become a matter of concern, as these vessels relyalmost exclusively on diesel generators for their power while in port. According to the U.S.Environmental Protection Agency (EPA), commercial ships are responsible for more than 15% of the ozone concentration and particulate matter in some port areas. In addition, EPA has stated thatmarine diesel engines are significant contributors to air pollution in many of our nations cities andcoastal areas, emitting substantial amounts of NO x and PM. 16 Idling of commercial aircraft enginesis also responsible for excessive emissions, as the use of these engines at low power settings results

    in incomplete combustion, which produces carbon monoxide and unburned hydrocarbons.17

    While aircraft that have APUs rely less on main engine idling, the gas turbine APUs that are usedoperate at low efficiency and emit criteria pollutants, contributing significantly to local pollution atairports. Additionally, the high auxiliary power loads required during flight operationsup to 500kW on larger commercial aircraftare responsible for a significant portion of in-flight emissions.APU fuel cells installed on aircraft can reduce emissions during flight as well as gate and taxiingoperations. Analysis of Air Force cargo planes found that the use of fuel cell APUs could result in a2% to 5% reduction in the total amount of aircraft fuel used by the Air Force, 18 saving 1 million to 3million barrels of jet fuel and avoiding 900 to 2,200 tons of NOx emissions per year. Fuel cells alsoproduce usable water, which could reduce the amount of water an aircraft needs to carry, reducingoverall weight and resulting in further fuel savings.

    For providing auxiliary power, fuel cells may be a more attractive alternative to internal combustionengine generators, because they are more efficient and operate much more quietly, while still beingable to use the vehicles existing supply of diesel or jet fuel (in addition to other fuel options thatinclude hydrogen, biofuels, propane, and natural gas). Also, because fuel cells produce no NOx orparticulate emissions, they can help improve air quality in areas where there is a high concentrationof auxiliary power usesuch as airports, truck stops, and ports, and they can be used in EPA-designated nonattainment areas, where emissions restrictions limit the use of internal combustionengine generators. Fuel cells may also offer an attractive alternative to batteries, because they arelighter and do not require long recharge times.

    Emissions from idling and auxiliary power are likely to be the subject of increasing regulations inthe future. Idling restrictions for heavy-duty highway vehicles have already been enacted in 30states; 19 in 2008 the EPA adopted new requirements for limiting idling emissions fromlocomotives; 20 also in 2008, the EPA finalized a three-part program to reduce emissions from marinediesel engines, with rules phasing in from 2008 through 2014; 21 and regulations could also emerge tolimit emissions from aircraft while they are on the ground. Fuel cells have the potential to play animportant role in all of these applications.

    16 Ocean-going Vessels, U.S. Environmental Protection Agency Web site, accessed October 7, 2010, www.epa.gov/otaq/oceanvessels.htm . 17 Safeguarding Our Atmosphere, National Aeronautics and Space Administration Glenn Research Center Web site, accessed October 7, 2010,www.nasa.gov/centers/glenn/about/fs10grc.html .18 DESC Fact book 2009 , U.S. Defense Logistics Agency, www.desc.dla.mil19 Nguyen, T., U.S. Department of Energy, Market for Fuel Cells as Auxiliary Power Units on Heavy Trucks, 2009 NHA Hydrogen Conference Proceedings ,National Hydrogen Association, www.hydrogenconference.org/proceedings.asp .20 Control of Emissions from Idling Locomotives, U.S. Environmental Protection Agency Web site, accessed October 7, 2010,www.epa.gov/otaq/regs/nonroad/locomotv/420f08014.htm .21 Diesel Boats and Ships, U.S. Environmental Protection Agency Web site, accessed October 7, 2010, www.epa.gov/otaq/marine.htm .

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    Figure 1.3. Emissions of Criteria Pollutants from Auxiliary Power for Trucks. Fuel cell auxiliary power units (APUs) can achieve significant reductions in criteria pollutant emissions over diesel internal combustion engine APUs and truck engine idling, while still using the trucks existing supply of diesel fuel. A key benefit of fuel cells is that they only emit negligible NOx and particulate matter at the point of use (at the truck) which can have substantial benefits for local air quality. In addition, fuel cell APUs can achieve more than 60% reduction in CO 2 emissions over truck engine idling.22

    Moti ve Pow er Specia l t y Vehic les , Light -duty Vehic l es , and Buses

    Fuel cells powered by hydrogen and methanol have become a cost-competitive option for sometransportation applications. The specialty vehicle marketwhich includes lift trucks, airport tugs,etc.has emerged as an area of early commercial success for fuel cells. Specialty vehicles usuallyrequire power in the 5- to 20-kW range, and they often operate in indoor facilities where air qualityis important and internal combustion engines cannot be used. Lift trucks (including forklifts andpallet trucks) powered by fuel cells are currently in use in commercial applications by several majorU.S. companies.

    Fuel cells offer advantages over batteries for specialty vehicles. While both can be used indoors,without emitting any criteria pollutants, fuel cells can increase operational efficiencyand raiseproductivitybecause refueling them takes much less time than changing batteries. While changingforklift batteries can take from 15 to 30 minutes, refueling a fuel cellpowered forklift withhydrogen takes less than three minutes, and fuel cell forklifts using methanol can be refueled evenfaster. This makes fuel cells a particularly appealing option for continuously used lift trucks runningtwo or three shifts per day, which require multiple battery change-outs and incur significant laborcosts. Furthermore, the voltage delivered by a fuel cell is constant as long as fuel is supplied, unlikebattery-powered forklifts, which lose power as the batteries are discharged, significantly reducingoverall performance and productivity. And, since fuel cells do not require storage space, batterychange-out equipment, chargers, or a dedicated area for changing batteries, less space is required.

    22 L. Gaines and C. Hartman, Energy Use and Emissions Comparison of Idling Reduction Options for Heavy-Duty Diesel Trucks, Center for TransportationResearch, Argonne National Laboratory, November 2008; fuel cell APUs on freight trucks are expected to emit an insignificant amount of criteria pollutants atthe truck, even when diesel is assumed to be the input feed to the on-board reformer. The upstream emissions (from activities preceding the use in APU or truck enginei.e., crude oil extraction, transportation and refining, diesel transportation, etc.) of diesel are the same for each unit volume used by the fuel cell or bythe conventional APU. Furthermore, it was conservatively estimated that a fuel cell APU would consume a similar amount of diesel as an ICE APU, resultingin comparable overall CO 2 emissions. Actual CO 2 emissions by fuel cell APUs are likely to be lower, and improvements in the efficiency of diesel reformersand fuel cells will result in further reductions.

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    - DRAFT - The Battelle study mentioned above found that fuel cells used in lift trucks can provide up to 50%savings in lifecycle costs over batteries.

    These applications have broader environmental and economic benefits as well. Using fuel cells(powered by hydrogen from natural gas) could reduce the energy consumption of lift trucks by up to29% and their greenhouse gas emissions by up to 38%, when compared with lift trucks usingconventional internal combustion engines. When compared with using batteries charged by grid

    power (average grid mix), the use of fuel cells could reduce the energy consumption of lift trucks byup to 14%and their greenhouse gas emissions by up to 33%. 23 The lift truck market is the UnitedStates involves sales of approximately 170,000 units per year and annual revenues of more than $3billion; it is expected to grow 5% per year through 2013. 24 It is estimated that more than 20,000U.S. manufacturing jobs would be created if U.S. fuel cell manufacturers could capture 50% of thecurrent global market for battery-powered lift trucks. Ongoing improvements in transportation fuelcell technologies will enable industry to further capitalize on the early success in these and othermarkets for specialty vehicles.

    Figure 1.4. Greenhouse Gas Emissions from Forklifts. Specialty vehicles (including forklifts, lift trucks, and others) have become a key early market for fuel cells, where hydrogen and fuel cells can offer substantial reductions in emissions and significant benefits to the end-user in terms of economics and performance. 25

    Fuel cells are also being developed for mainstream transportation, where they can be used in anumber of applications, including personal vehicles, fleet vehicles (for municipal and commercialuse), transit buses, and others. Most major automobile manufacturers around the world, and severaltransit bus manufacturers, are developing and demonstrating fuel cell vehicles today. The timelinefor market readiness varies, but several companiesincluding Daimler, Toyota, Honda, GeneralMotors, Hyundai, and Proterrahave announced plans to commercialize before 2015.

    23 ANL, Full Fuel-Cycle Comparison of Forklift Propulsion Systems, http://www.transportation.anl.gov/pdfs/TA/537.pdf 24 Identification and Characterization of Near Term Direct Hydrogen PEM Fuel Cell Markets Batelle April 200725 ANL, Full Fuel-Cycle Comparison of Forklift Propulsion Systems, http://www.transportation.anl.gov/pdfs/TA/537.pdf

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    Figure 1.5. Diverse Technologies for Transportation Needs. A diverse portfolio of vehicle technologies will be required to meet the full range of driving cycles and duty cycles in the nations vehicle fleet. Fuel cells play a central role, enabling longer driving ranges and heavier duty cycles for certain vehicle types (graphic adapted from General Motors).

    Due to the unique characteristics (including size, weight, and performance) required for motive-power systems, the type of fuel cell used in vehicles is polymer electrolyte membrane (PEM)variety, operating on pure hydrogen. In light-duty vehicles, these fuel cells have demonstratedsystem efficiencies of 53 to 58%more than twice the efficiency that can be expected from gasolineinternal combustion engines (ICEs), and substantially higher than even hybrid electric powersystems. In transit buses, fuel cells have demonstrated more than 40% higher fuel economy thandiesel ICE buses and more than double the fuel economy of natural gas ICE buses. 26 Fuel cellvehicles operate quietly and with all the performance characteristics that are expected of todaysvehicles. Most significantly, there are no direct emissions of CO 2 or criteria pollutants at the pointof use.

    Analysis of complete life-cycle emissions (or well-to-wheels emissions) conducted using modelsdeveloped by Argonne National Laboratory (Figure 1.6) indicate that the use of hydrogen fuel cellvehicles will produce among the lowest quantities of greenhouse gases per mile of all conventionaland alternative vehicle and fuel pathways being developed. 27 Even in the case where hydrogen isproduced from natural gas (which is likely to be the primary mode of production for the initialintroduction of fuel cell vehicles), the resulting life cycle emissions per mile traveled in 2020 will beabout 40% less than those from advanced gasoline internal combustion engine vehicles, 15% lessthan those from advanced gasoline hybrid electric vehicles, and about 25% less than those fromgasoline powered plug-in hybrids.

    When hydrogen is produced from renewable resources (such as biomass, wind, or solar power),nuclear energy, or coal (with carbon sequestration), overall emissions of greenhouse gases and

    26 Technology Validation: Fuel Cell Bus Evaluations, DOE Hydrogen Program 2010 Annual Progress Report,http://hydrogen.energy.gov/annual_progress.html .27 DOE Hydrogen Program Record #10001, http://hydrogen.energy.gov/program_records.html .

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    - DRAFT - criteria pollutants are minimal. There are some emissions associated with the delivery of hydrogento the point of use, but these are relatively minor.

    Notes:Analysis based on a mid sized car.Assumes the state of the technologies expected in 2035 2045.Ultra low carbon renewable electricity includes wind, solar, etc.The lifecycle effects of vehicle manufacturing and infrastructure construction/decommissioning are not accounted for.

    Figure 1.6. Well-to-Wheels Analysis of Greenhouse Gas Emission and Petroleum Use. Substantial reductions in greenhouse gas emissions and petroleum consumption are possible through the use of a variety of advanced transportation technologies and fuels, including fuel cell vehicles using hydrogen from a variety of sources. Notes: (1) analysis based on a mid-sized car; (2) assumes the state of the technologies expected in20352045; (3) ultra-low carbon renewable electricity includes wind, solar, etc.; (4) the life-cycle effects of vehicle manufacturing and infrastructure construction/decommissioning are not accounted for. 28

    28DOE Hydrogen Program Record #10001, http://hydrogen.energy.gov/program_records.html

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    - DRAFT - 1 .2 Pot en t i a l Impac t s o f t he Widesp read Use o f Hydrogen andFuel Cel ls

    C LIMATE C HANGE AND A IR Q UALITY

    The most substantial environmental benefits from fuel cells will come from their use in the stationary powerand transportation sectors, where the markets are very large and a significant amount of energy is consumed.In the stationary power sector, the use of fuel cells in distributed applications can provide reductions inemissions over both distributed and central generation technologies. The high electrical efficiency of fuelcells will enable lower emissions when compared with conventional distributed power technologies such asinternal combustion engines or turbines. Emissions reductions can be even more substantial through the useof CHP for distributed energywhich can be greatly expanded by fuel cells, due to their clean and quietoperation. Fuel cells, like other distributed energy technologies, can achieve very high efficiencies whenused in CHP systems, far surpassing those of even the most advanced centralized generation facilities. Evengreater emissions reductions are possible when fuel cells use biogas, which has near-zero life-cycleemissions.

    In addition, hydrogen has the potential to contribute to reducing emissions from stationary power generation,by functioning as an energy storage medium that helps enable the expansion of power generation fromintermittent renewable resources, such as wind, solar, and ocean energy. Hydrogen functions as a storagemedium when it is produced through electrolysis, using surplus electricity (when generation exceedsdemand), and later converted back into electricity using fuel cells or turbines (when demand exceedsgeneration). In addition to helping balance generation and load, energy storage at the regional level can alsoincrease network stability and power quality and improve frequency regulation. In addition, hydrogenproduced by surplus renewable power may also improve the economics of renewable power installations, asthese facilities may gain a valuable revenue stream by selling their surplus hydrogen for use in fuel cellvehicles, stationary fuel cells, and other applications.

    For transportation applications, the greatest impacts will come from the use of fuel cells in light-dutyvehicles, which suffer from the least efficient use of energy by any major sector of our economy. TheNational Academies 2008 study Transitions to Alternative Transportation Technologies found that fuel cellvehicles could reduce CO 2 emissions from the light-duty vehicle fleet by 19% in 2035 and 60% (or morethan one billion metric tons per year) in 2050. Furthermore, the same study found that CO 2 emissions fromlight duty vehicles could be reduced by nearly 60% in 2035 and nearly 90% in 2050 using a portfolio of technologies including fuel cells, improved vehicle efficiency (for internal combustion engines and hybridsystems), and biofuels. Although plug-in hybrid-electric vehicles and biofuels have the potential to achieveimpacts sooner than fuel cell vehicles, the National Academy of Sciences has concluded that fuel cells wouldprovide the largest reductions in emissions by 2050, and that no single technology approach could achieve an80% reduction in CO 2 emissions alone.

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    Figure 1.7. Emissions from Fossil Fuels in the United States. Fossil fuels are major contributors to air pollution and greenhouse gas emissions. 29 Fuel cells can convert conventional fossil fuels and low- to zero-carbon renewable fuels into usable energy with significantly reduced emissions.

    29 Sources: U.S. Environmental Protection Agency, National Emissions Inventory (NEI) Air Pollutant Emissions Trends Data , 2008,www.epa.gov/ttnchie1/trends / ; Energy Information Administration, Annual Energy Outlook 2010 , Table 18: Carbon Dioxide Emissions by Sector and Source,www.eia.doe.gov/oiaf/aeo/aeoref_tab.html ; Energy Information Administration, Emissions of Greenhouse Gases in the United States 2008 , December 2009,www.eia.doe.gov/oiaf/1605/ggrpt/pdf/0573%282008%29.pdf

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    Figure 1.8. Reduced Greenhouse Gas Emissions Due to Widespread Use of Fuel Cells. Significant reductions in the nations greenhouse gas emissions could be achieved through the use of fuel cellsmaking substantial gains toward the goal of 80% reduction in CO 2 emissions by 2050. The three levels of impact shown here assume varying levels of market penetration of fuel cell vehicles (FCVs) and CHP systems. The percentage reduction is compared to a baseline of energy-related CO 2 emissions from Emissions of Greenhouse Gases in the United States 2008 , Energy Information Administration, 2009, www.eia.doe.gov/oiaf/1605/ggrpt .

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    - DRAFT - E NERGY S ECURITY

    The most serious threat to the nations energy security is our increasing use of petroleum (Figure 1.9).Because 67% of our petroleum consumption occurs in the transportation sector (with most of the remainderbeing used in various industrial processes) this will be where fuel cells will have the most substantial energysecurity benefits.

    NASs Transitions study projects that the use of fuel cell vehicles could reduce gasoline consumption by24% (or 34 billion gallons per year) in 2035 and 69% (or 109 billion gallons per year) in 2050. If a portfolioof technologies were employed, gasoline consumption could be reduced nearly 60% by 2035 and 100% by2050. As with their CO 2 reduction estimates, the National Academies found that fuel cell vehicles wouldprovide the largest reductions in gasoline use by 2050, and that no single technology approach could achievetotal elimination of gasoline consumption alone.

    Americas growing dependence on imported natural gas is also a concern, and one that fuel cells canalleviate as well. As discussed in section 1.1, the high efficiency of fuel cells, especially in CHPapplications, can substantially reduce the amount of energy used for stationary heating and electricity needs.

    Figure 1.9. Americas Widening Oil Gap. Americas reliance on imported oil is the key challenge to our energy security. While oil is used in all sectors and for a wide variety of uses, the large majority is used for transportationand a majority of that is used in light-duty passenger vehicles (cars and light trucks). 30

    30 Sources: Oak Ridge National Laboratory, Transportation Energy Data Book: Edition 29, ORNL-6985, July 2010,http://cta.ornl.gov/data/tedb29/Edition29_Full_Doc.pdf ; Energy Information Administration, Annual Energy Outlook , April 2010, www.eia.doe.gov/oiaf/aeo / .

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    Figure 1.10. Reduced Oil Consumption Due to Widespread Use of Fuel Cells. Significant reductions in the nations consumption of oil could be achieved through the use of fuel cellsmaking substantial gains toward the long-term goal of independence from imported oil. The three levels of impact shown here assume varying levels of market penetration of fuel cell vehicles (FCV) and CHP systems. The percentage reduction is compared to baseline petroleum consumption,using data from International Energy Statistics, 2009 Total U.S. Petroleum Consumption, International Energy Agency,http://tonto.eia.doe.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=5&pid=54&aid=2 .

    E CONOMIC C OMPETITIVENESS

    I n t e r na t i o n a l I n t e r es t & I n v es t m e n t

    Worldwide interest in fuel cell technologies is substantial and growingthis is reflected in a dramaticincrease in public and private spending since the mid-1990s. The U.S. government investment of approximately $1.5 billion for fuel cell technology RD&D activities over six years during fiscal years 2004to 2009, is on par with investments for similar activities by Japan, the European Commission and Germanyof approximately $383 million in 2009, $625 million over the next 5 years and $744 million over the nexteight years, respectively. The Japanese government is investing heavily in fuel cells, spending an average of approximately $295 million annually over the past five years. In addition to research activities, the JapaneseMinistry of Economy, Trade and Industry (METI) partnered with industry to demonstrate more than 60 fuelcell vehicles and over 3,300 stationary residential fuel cells. In March 2010, Japan announced plans for1,000 hydrogen stations and 2 million fuel cell vehicles by 2025. A consortium of 13 companies wasestablished to focus on a hydrogen infrastructure to support these goals.

    In October 2008, the European Commission launched a 1 billion ($1.3 billion), six-year public-privateinitiative, the Fuel Cell and Hydrogen Joint Technology Initiative, with the aim of making fuel cells and

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    - DRAFT - hydrogen one of Europe's leading new strategic energy technologies of the future. 31 And Germany recentlylaunched a National Innovation Program on Hydrogen and Fuel Cell Technology, which will invest over $1billion between 2008 and 2016. Germany has also announced plans to build 150 hydrogen stations by 2013and up to 1,000 stations by 2017. More recently, Korea announced its strategic plan to become a globalleader in fuel cell manufacturing, with key objectives of supplying 20% of global fuel cell shipments andcreating 560,000 jobs; to support this effort, the government announced a program to pay 80% of the cost of residential fuel cells.

    Private industry is also making investments to pursue what could ultimately be a major global market forstationary, portable, and automotive fuel cells. A survey of the fuel cell industry conducted byPricewaterhouseCoopers, LLC put global R&D spending in the private sector at nearly $830 million andemployment at close to 9,000 in 2006 (with just over 60% of key industry organizations reporting). 32

    Poten t i a l Employmen t and Marke t Growt h

    The potential for long-term employment growth from the widespread use of fuel cells in the United States issubstantial. A study commissioned by DOE found that successful widespread market penetration by fuelcells could help to revitalize the manufacturing sector and could add more than 180,000 new jobs to the U.S.economy by 2020, and more than 675,000 jobs by 2035. 33 A separate study, conducted by the AmericanSolar Energy Society to quantify the economic benefits of renewable energy and energy efficiencytechnologies, found that gross revenues in the U.S. fuel cell and hydrogen industries could reach up to $81billion/year by 2030, with total employment (direct and indirect) reaching over 900,000this is based on themost aggressive scenario, which represents what is technologically and economically feasible. The base-case or business as usual case of this study shows these industries achieving about $9 billion/year in grossrevenues by 2030, with more than 110,000 new jobs created.

    A study of the near- to mid-term market potential of fuel cells, conducted by the Connecticut Center forAdvanced Technology for the Connecticut Department of Economic and Community Development,estimates that the global fuel cell/hydrogen market could reach maturity over the next 10 to 20 years. Withinthis timeframe, the report estimated that global revenues for the hydrogen and fuel cell markets would reachbetween $43 and $139 billion annually, including the following key market sectors:

    $14 $31 billion/year for stationary power $11 billion/year for portable power $18 $97 billion/year for transportation

    To achieve such growth and enable U.S. competitiveness, sustained funding is required for RD&D,increasing investments at the university level for developing human capital, and stimulation of early marketsto further develop manufacturing capabilities and help achieve economies of scale.

    31 Developing New Energy for the Future: Europe Launches a 1 Billion Euro Project to Get into Pole Position for the Fuel cells and Hydrogen Race,European Commission, October 14, 2008, http://ec.europa.eu/research/fch/pdf/1billioneuro_fch_race_14oct08.pdf .32 PriceWaterhouseCoopers, 2007 Worldwide Fuel cell Idustry survey: www.usfcc.com/resources/2007 worldwide_survey_final_low.pdf.33 Effects of a Transition to a Hydrogen Economy on Employment in the United StatesReport to Congress. U.S. Department of Energy, January 2008,www.hydrogen.energy.gov/pdfs/epact1820_employment_study.pdf . Key assumptions include: By 2035, fuel cell vehicles ramp up to 89% of light-dutyvehicle (LDV) sales (60% of stock) and 20% of LDV (7% of stock), for the aggressive and less aggressive scenarios, respectively. By 2035, stationary fuelcells ramp up to 5% and 2% of new electricity demand, for the aggressive and less aggressive scenarios, respectively.

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    Figures 1.11 and 1.12: Market Growth for Fuel Cells. As fuel cells become more competitive, shipments worldwide are increasing dramatically. Fuel Cell Today has estimated that there were more than 15,000 fuel cells shipped in 2009a more than 50% increase over 2008 shipmentsamounting to more than approximately 120 megawatts of power. 34 It is estimated that if fuel cells used for educational purposes were included, the number of units shipped would be significantly higher still.

    34 2009 Fuel Cell Technologies Market Report, U.S. Department of Energy, December 2010 ,www1.eere.energy.gov/hydrogenandfuelcells/fc_publications.html#fc_general .

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    - DRAFT - Total Jobs Created by Hydrogen and Fuel Cell Industries

    (includes direct and indirect employment )

    1,000 Advanced Scenario: 925,000 jobs

    800

    600

    400 Modest Scenario: 2006 Status: 2007 Status: 301,000 jobs 20,000 jobs 22,000 jobs 200 Base Case:

    115,800 jobs 0

    2000 2005 2010 2015 2020 2025

    T h

    o u s a n

    d s o

    f J

    o b

    s

    2030

    Figures 1.13 and 1.14: Employment Growth Due to Hydrogen and Fuel Cell Technologies. Studies by the American Solar Energy Society (ASES) (upper chart) and DOE (bottom chart) show the potential for substantial growth in employment due to the successful widespread commercialization of hydrogen and fuel cells. The ASES study projects up to 925,000 jobs created by 2030 35 and the DOE study projects up to 675,000 new jobs by 2035. 36

    35 Defining, Estimating, and Forecasting the Renewable Energy and Energy Efficiency Industries in the U.S. and in Colorado, American Solar EnergySociety and Management Information Services, Inc., December 2008, www.ases.org/images/stories/ASES/pdfs/CO_Jobs_Final_Report_December2008.pdf 36 Effects of a Transition to a Hydrogen Economy on Employment in the United States: Report to Congress, U.S. Department of Energy, July 2008,www.hydrogen.energy.gov/pdfs/epact1820_employment_study.pdf .

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    - DRAFT - 1 .3 Key Cha l lengesAlthough fuel cells are beneficial for many applications, they are currently competitive in only a fewmarkets. The range of these markets can be greatly expanded with improvements in durability andperformance and reductions in manufacturing cost, as well as advances in technologies for producing,delivering, and storing hydrogen. Successful entry into new markets will also require overcoming certaininstitutional and economic barriers, such as the need for codes and standards, the lack of public awarenessand understanding of the technologies, and the high initial costs and lack of a supply base that many newtechnologies face in their critical early stages.

    TECHNOLOGY REQUIREMENTS

    Fuel Cell Cost & DurabilityThe cost of fuel cells must be reduced and their durability improved, to becompetitive with current technologies. For automotive applications, PEM fuelcells will need to have a durability of 5000 hours, at a cost of $30/kW. StationaryPEM fuel cells will require 40,000-hour durability, at a cost of $750/kW.

    Hydrogen CostThe cost of producing and delivering hydrogen from zero or near-zero carbonsources must be reduced. Low-cost and environmentally sound CO 2 capture andsequestration technologies must be developed.

    Hydrogen Storage Capacity & CostCompact, lightweight, and low-cost storage systems must be developed. Forvehicles, technologies must enable greater than 300-mile driving range across allvehicle platforms without reducing performance or interior space.

    ECONOMIC & IN STITU TIONAL REQUIREMENTS

    TechnologyValidationTechnologies must bedemonstrated under real-world conditions

    Safety, Codes & StandardsData must be collected to enable development of codes & standards; domesticand international codes & standards must be made more consistent; and best-practices for the safe handling and use of hydrogen need to be established.

    H2 Supply & Delivery InfrastructureThe high investment risk of developing refueling infrastructure in absence ofstrong demand must be mitigated.

    Manufacturing Cost & Supplier BaseHigh initial manufacturing costs must be overcome and domesticmanufacturing and supplier base must be developed and expanded.

    Public Awareness & AcceptancePublic awareness and understanding of the technologies must bestrengthened, especially among code and safety officials, policy makers, andpotential early adopters

    MarketTransformationA sustained commitmentof policies and incentivesis required to aid in thegrowth of early markets;this will help overcomemany barriers, includingachieving significant costreductions througheconomies of scale.

    Figures 1.15. The Technology and Economic & Institutional Requirements for Widespread Commercialization ofHydrogen and Fuel Cells.

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    - DRAFT - F UEL C ELLS T HE P RIMARY T ECHNICAL C HALLENGESTHE COST OF MANUFACTURING . To be competitive in all sectors and meet consumer requirements, fuelcells will have to be less expensive than they are today without compromising performance. Although fuelcells are already becoming cost-competitive in a few applications (on a life cycle basis), their manufacturingcost will have to come down substantially to enable widespread commercialization. Stationary fuel cells inthe 1- to 100-kW range are estimated to cost from $3,000 to $10,000 per kW today. Reducing

    manufacturing costs to less than $1000/kW will enable fuel cells to be competitive, without incentives, in awider range of early markets. And for significant market penetration, costs will have to be reduced further,to about $450 $650/kW for CHP systems and $500 $700/kW for auxiliary power units. 37

    In the mainstream transportation sector, costs will have to be reduced significantly to compete with internalcombustion enginescosts are much lower here, due to the very high manufacturing volumes and theassociated economies of scale, as well as the efficiencies of well-established supplier bases and distributionnetworks. Current costs of conventional internal combustion engine transportation power plants are about$30/kW for light-duty vehicles.

    Improvements in the technology have already provided significant cost reductions. In particular, theProgram has reduced the cost of automotive fuel cells by more than 80% since 2002lowering the projectedhigh-volume manufacturing cost to about $51/kW in 2010 38 (the 2008 cost-projection of $73/kW, using thesame methodology, has been validated by an independent panel, which found $60 $80/kW to be a validestimate). 39 Further advances are needed to achieve a competitive high-volume manufacturing cost. Inaddition, once these advances are made, to actually reach competitive pricing in the marketplace, sales willhave to grow enough to enable higher production rates and industry will have to make substantialinvestments to develop efficient manufacturing capabilities, high-volume production capacities, and larger,more efficient supply and distribution networks.

    DURABILITY . The durability of certain types of fuel cells is approaching levels that will enable viability insome markets, particularly the markets for stationary power. However, to achieve large scale marketpenetration, durability will have to be at least 40,000 to even 80,000 hours for stationary applications and5,000 hours (roughly 150,000 miles) for automotive applications.

    OTHER TECHNICAL CHALLENGES . Some of the other issues relating to fuel cell systems that will have to beaddressed concurrently with improvements in cost and durability are: the ability for fuel cells to operatereliably in ambient temperatures of -40C to +50C and in conditions of very high or very low relativehumidity; higher operating temperatures (for improved co-generation capacity) and improved efficiency forstationary PEM fuel cells; reduced size and weight for auxiliary power fuel cells; higher power density forstationary fuel cells; and higher energy density for portable fuel cells. In addition, to maximizeenvironmental benefits, fuel cell efficiencies should be high and materials and components should bedesigned to maximize total life-cycle sustainability.

    37 DOEs preliminary technical and cost targets for fuel cells used in CHP and APU applications,www1.eere.energy.gov/hydrogenandfuelcells/fuelcells/systems.html .38 DOE Hydrogen Program Records #5005 and #10001, http://hydrogen.energy.gov/program_records.html .39 Fuel Cell System Cost for Transportation2008 Cost Estimate, National Renewable Energy Laboratory, May 2009,www.hydrogen.energy.gov/pdfs/45457.pdf .

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    - DRAFT - F UELS AND INFRASTRUCTURE T HE T ECHNICAL C HALLENGES ASSOCIATEDWITH P RODUCING , D ELIVERING , AND S TORING H YDROGENTo achieve the broadest commercialization of fuel cells, it will be necessary to have an affordable andabundant supply of fuel that can be used in all sectors and for diverse applications. Of all possible fuels forfuel cells, hydrogen can be produced from the most diverse pathways, utilizing the most abundant resources,and it can be used in all fuel cell applications. However, hydrogen also poses the most significant technicalchallenges, including the high cost of production and delivery, and the need for improved performance andlower cost in hydrogen storage systems.

    THE COST OF P RODUCING AND DELIVERING HYDROGEN . The technologies exist today for hydrogen to beproduced cost-competitively with gasoline, from natural gas at the fueling stationfor a cost of $3 pergallon gasoline equivalent (or gge, roughly equal to 1 kg of hydrogen). 40 Even though this is not a zero-carbon fuel pathway, the benefits would be substantial.

    On a well-to-wheels (or life-cycle) basis, fuel cell vehicles using hydrogen produced from natural gaswould reduce CO 2 emissions when compared with vehicles using gasoline: by more than 60% whencompared with todays internal combustion engine (ICE) vehicles; by more than 50% when compared withadvanced ICE vehicles; by more than 15% when compared with plug-in hybrid electric vehicles (PHEVs);

    and by about 20% when compared with hybrid electric vehicles. In addition, fuel cell vehicles usinghydrogen produced from natural gas would reduce emissions by more than 35% when compared withadvanced ICE vehicles using natural gas. 41

    Cost reduction remains the key technological challenge in the production of hydrogen from zero-carbonsources. Currently, the technology exists to enable production of hydrogen from renewable liquids for about$4.40/gge (at the refueling site) and for the centralized production of hydrogen from wind power for about$3.50/gge (without accounting for the cost of delivery). The costs of these production pathwaysand otherssuch as solar thermochemical, photoelectrochemical, and biological production, as well as biomassgasificationneed to be further reduced.

    The costs of technologies for delivering hydrogen also need to be reduced: using current state-of-the-arttechnology and assuming widespread deployments, delivering hydrogen from a central production facility toa fueling station 60 miles away would cost roughly $3.25/gge using pipelines, $4.00/gge using high-pressuretube-trucks, and less than $3.00/gge using tanker trucks carrying liquid hydrogen. These costs, and thesignificant investment in delivery infrastructure that would be needed, can be avoided in the early stages of commercialization by producing hydrogen at the fueling site. However, production at larger, centralizedfacilities will be required.

    THE CHALLENGE OF S TORING HYDROGEN . Full commercialization of fuel cells using hydrogen will alsorequire advances in technologies for storing hydrogen. Developing systems to enable the lightweight,compact, and inexpensive storage of hydrogen will help lower the cost of delivery, allow for smallerfootprints of fuel cell installations and refueling sites, and enable longer driving ranges for a wider variety of transportation applications. While hydrogen has the highest energy content per unit weight of any fuel, it hasa very low energy content per unit volumethis poses a challenge for storage, because it requires either very

    high pressures, low temperatures, or material-based processes to be stored in a compact container. Thischallenge exists for all fuel cell installations that use hydrogen, but it is most acute in light-duty vehicles, asstorage systems for vehicles must operate within stringent size and weight constraints, enable a driving rangeof more than 300 miles (generally regarded as the minimum for widespread driver acceptance based on theperformance of todays gasoline vehicles), and refuel at ambient temperatures and at a rate fast enough tomeet drivers requirements (generally only a few minutes).

    40 Distributed Hydrogen Production from Natural Gas, National Renewable Energy Laboratory, October 2006, www.hydrogen.energy.gov/pdfs/40382.pdf ;assumes widespread deployment of 500 fueling stations per year and production of 1500 kg per day at each station.41 DOE Hydrogen Program Record #9002, http://hydrogen.energy.gov/program_records.html .

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    - DRAFT -

    Most of the hydrogen that is used today is stored as a compressed gas or a liquid (liquid storage requires verylow, cryogenic, temperatures). The majority of the fuel cell vehicles in use today in demonstration fleetsuse high-pressure tanks for onboard storage of hydrogen gas. These tanks are heavier and take up moreroom than conventional fuel tanks. And while they may be adequate for most stationary applications and forseveral types of vehicles, they may be too expensive and bulky for certain stationary sites and they wont beable to provide a driving range that meets consumer expectations for all vehicle platforms. Therefore, tomaximize the use of hydrogen as a zero-carbon fuel for fuel cells, advanced storage systems will be required,especially for automotive applications.

    C ROSSCUTTING T ECHNICAL C HALLENGESFor many of the key technical obstacles, there are advances that may be necessary or useful in several areasat once. These advances also involve overcoming a variety of technical challenges, from expanding thefrontiers of basic scientific knowledge, to developing advanced manufacturing technologies and processes,to