fuel cells – the japanese experience · 7 direct methanol fuel cell 58 (dmfc) systems 7.1...

GLOBAL WATCH MISSION REPORT

Fuel cells – the Japaneseexperience

JULY 2004

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Global Watch Missions

The UK government Department of Trade andIndustry (DTI) Global Watch Service provides funds toassist small groups of technical experts from UKcompanies and academia to visit other countries forshort, fact finding missions.

Global Watch Missions serve a number of relatedpurposes, such as establishing contacts withoverseas organisations for purposes of collaboration;benchmarking the current status of UK industryagainst developments overseas; identifying keydevelopments in a particular field, new areas ofprogress or potentially disruptive technologies; orstudying how a specific industry has organised itselffor efficient operation or how governments, plannersor decision makers have supported or promoted aparticular area of industry or technology within theirown country.

Disclaimer

This report represents the findings of a missionorganised by Synnogy Ltd/Fuel Cells UK with thesupport of DTI. Views expressed represent those ofindividual members of the mission team and shouldnot be taken as representing the views of othermembers of the team, their employers, SynnogyLtd/Fuel Cells UK or DTI.

Although every effort has been made to ensure theaccuracy and objective viewpoint of this report, andinformation is provided in good faith, no liability can beaccepted for its accuracy or for any use to which itmight be put. Comments attributed to organisationsvisited during this mission were those expressed bypersonnel interviewed and should not be taken asthose of the organisation as a whole.

Whilst every effort has been made to ensure that theinformation provided in this report is accurate and upto date, neither DTI or Synnogy Ltd/Fuel Cells UKaccepts any responsibility whatsoever in relation tothis information. DTI shall not be liable for any loss ofprofits or contracts or any direct, indirect, special orconsequential loss or damages whether in contract,tort or otherwise, arising out of or in connection withyour use of this information. This disclaimer shall applyto the maximum extent permissible by law.

Fuel cells – the Japanese experience

REPORT OF A DTI GLOBAL WATCH MISSION JULY 2004

Contributions fromCelia Greaves – Synnogy Ltd/Fuel Cells UK

David Hart – Imperial College LondonStuart Jones – Accentus plcDave McGrath – siGEN Ltd

Alan Spangler – Rolls-Royce Fuel Cell Systems LtdJames Wilkie – Johnson Matthey Fuel Cells Ltd

Edited byCelia Greaves & David Hart

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CONTENTS

Acknowledgments 3Message from mission leader 4 Executive summary 5

1 Introduction 101.1 Mission context 101.2 Aims and objectives 121.3 Participants 131.4 Itinerary 131.5 About this report 14

2 Japanese policy and research 15context

2.1 Introduction 152.2 A brief history 152.3 Policy context 162.4 Targets and goals 172.5 Legislation 192.6 International participation 192.7 Hydrogen and fuel cell funding 202.8 Research environment 212.9 Lessons for the UK 23

3 Japanese industrial context 253.1 Introduction 253.2 Size profile of the industry 263.3 Investment return issues 273.4 Target sectors 283.5 Importance of R&D in 29

underpinning production3.6 Funding levels and approach 293.7 Importance of field trials 303.8 Perceptions of safety risks and 31

public education3.9 Lessons for the UK 31

4 Hydrogen production and 33 storage

4.1 Introduction 334.2 Hydrogen production and 36

storage activities4.3 Lessons for the UK 40

5 Solid oxide fuel cell (SOFC) 43systems

5.1 Introduction 435.2 SOFC activities 445.3 SOFC commercialisation 455.4 Common experiences and issues 47

for SOFCs5.5 Lessons for the UK 48

6 Proton exchange membrane 49 fuel cell (PEMFC) systems

6.1 Introduction 496.2 PEMFC activities 496.3 PEMFC commercialisation 546.4 Common experiences and issues 55

for PEMFCs6.5 Lessons for the UK 56

7 Direct methanol fuel cell 58(DMFC) systems

7.1 Introduction 587.2 DMFC activities 597.3 Lessons for the UK 61

8 Molten carbonate fuel cell 62(MCFC) systems

8.1 Introduction 628.2 MCFC activities – the Kawagoe 62

Thermal Power Plant8.3 MCFC commercialisation 638.4 Lessons for the UK 63

9 Phosphoric acid fuel cell 64 (PAFC) systems

9.1 Introduction 649.2 PAFC activities 649.3 Lessons for the UK 64

10 Major outcomes of mission 6510.1 Introduction 6510.2 Conclusions – key lessons for UK 6510.3 Recommendations 70

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FUEL CELLS – THE JAPANESE EXPERIENCE

AppendicesA Mission participants 72B Profiles of organisations 73

participating in the missionC Contact details for Japanese 77

organisationsD Attendees at seminar hosted by 79

British Embassy TokyoE Mission discussion topics and 82

questionsF Fuel cell technologies 83G Fuel cell system components 85H List of tables and figures 88I Glossary 89

ACKNOWLEDGMENTS

Many organisations and individuals contributedto the success of this technology mission toJapan. The mission organisers and participantswish to extend particular thanks to:

• The DTI’s Global Watch Service

• The British Embassy in Tokyo

• The nine Japanese companies,government agencies and otherorganisations that hosted and met with the mission team

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MESSAGE FROM MISSION LEADER

It was a real pleasure for me to lead this DTIGlobal Watch Mission on fuel cells to Japan.The mission provided an excellent opportunityto gain valuable insights into the drivers forfuel cell commercialisation, and to see at firsthand how these are playing out in themarketplace.

The UK is facing considerable challenges interms of energy security, sustainabledevelopment, and energy infrastructurerenewal and modernisation. Fuel cells canplay a key role in addressing thesechallenges. Moreover, fuel cell technology has a wide range of applications, and isanticipated to have an enormous impact on all aspects of energy deployment and useacross the developed and developing world.Over the next few years, many new businessopportunities, markets and jobs will emerge.There is a window of opportunity for the UKto benefit from these developments.

The Japanese government recognises thatfuel cells are a key enabling technology for aneconomy with greatly reduced dependenceon fossil fuels as a primary energy source.The very substantial government support (inboth policy-making and funding) and the highdegree of structure in the government’s fuelcells and hydrogen programme appear to beproviding a secure base within whichJapanese companies can develop long-termplans and hence minimise their risk.

It is clear that Japan views fuel cells as anarea in which it could become dominant. Thecombination of high technology with complexmaterials requirements and very varied end-use applications fits well with Japanese

industrial strengths. The very strong Japaneseposition in the consumer electronics industry, in particular, could enable access to the keyearly markets in fuel cells – in laptops orPDAs (personal digital assistants).

With the global fuel cell industry poised onthe verge of commercialisation, there aresome interesting lessons for the UK from theJapanese experience. This report and themission seminar in October have beendesigned to highlight these and other keymessages.

Finally, I would like to express my thanks tothe many individuals and organisations whohelped to make the mission such a success.These included: the many companies andother organisations who met with us in July,all of whom were unfailingly enthusiastic andhospitable; the British Embassy in Tokyo; andthe mission team, who made the whole trip amemorable and hugely enjoyable experience.

I hope that you enjoy the report and findvalue in its contents.

Celia GreavesChief Executive, Synnogy LtdCoordinator, Fuel Cells UK

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EXECUTIVE SUMMARY

David Hart Imperial College London

The developing Japanese fuel cell industry is impressive, consisting primarily of majorcorporations with a strategic market focus,backed by strong government support. The overall status of development isconsiderably higher than the UK, althoughclear opportunities exist for UK companieswith good technology to partner with orsupply the Japanese.

Deployment of fuel cell systems in Japan isvery strong. Numerous stationary systems ofdifferent fuel cell types are in operation, andvehicles using PEMFCs (proton exchangemembrane fuel cells) are operating overnetworks of hydrogen fuelling stations.

Support for R&D (research and development)is very strong, both within companies, whereresearch is viewed as a necessity for long-termcompetitiveness, and in academia, where thegovernment provides considerable funds. The expertise and technology developed herecovers almost all aspects of hydrogen and fuelcell technology, and contributes to building theJapanese industrial base.

The very high level of Japanese participation infuel cell development, together with missiontimescales, made the visiting of more than asmall cross-section of the industry impossible.However, this cross-section was carefullychosen to include some of the technologyleaders and to allow the majority of differentsectors and applications to be covered. This included detailed discussions withgovernment, research organisations and majorcorporations. Without exception, the receptiongiven to the mission team was open andwelcoming, and clear interest in appropriatecollaboration was expressed.

The Japanese government has a clear andstrongly supportive policy position towardsfuel cells and hydrogen energy. Energy is afundamentally important part of Japanesepolicy-making, as the country is close to 96%dependent on imported sources. This resultsin strong dependency on certain regions andsupply chains, notably oil from the MiddleEast. Technologies that can reduce energydemand, through greater efficiency, or thatcan use fuels derived from resources otherthan oil, and hence allow diversity, aretherefore of great interest.

In addition to energy security, other veryimportant drivers are emissions – particularlyCO2 (carbon dioxide), but also regulatedpollutants – and industrial development. It isclear that Japan views fuel cells as an area inwhich it could become dominant. Thecombination of high technology with complexmaterials requirements and very varied end-use applications fits well with Japaneseindustrial strengths. The very strong Japaneseposition in the consumer electronics industry,in particular, could enable access to the keyearly markets in fuel cells – in laptops or PDAs.

Japanese government support for fuel cellsis of the order of ¥33 billion (~£165 million),of which the majority is currently dedicatedto the PEMFC programme. The focus hasshifted from PAFCs (phosphoric acid fuelcells) and MCFCs (molten carbonate fuelcells) a decade ago, to PEMFCs and SOFCs(solid oxide fuel cells) today. The spend isacross all sectors, from fundamentalresearch through to demonstrations, whichJapan is able to fund to 100%. This is instark contrast to the UK, where EU state-aidrules preclude this.

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Japanese government involvement is led byMETI (Ministry of Economy, Trade andIndustry), with NEDO (New Energy andIndustrial Technology DevelopmentOrganisation) administering the bulk ofresearch funding. However, cross-governmental links are clear, with ministeriallevel support for regulatory reform, and othergovernment departments and agenciesactively involved. Japan does not have a veryactive defence sector, so R&D in fuel cells iscarried out for commercial organisations, innotable contrast to much of the funding inNorth America.

Unlike its US and Canadian counterparts infuel cells, Japanese industry historicallyprefers to produce as much of its ownequipment as possible, and ‘own’ the supplychain. The large conglomerates are wellsuited to doing this, often coveringindustries from materials development toautomobiles, and white goods to banking.The Japanese financial system has for a longtime been tied to these conglomerates, withthe result that finance for entrepreneurialcompanies is in short supply. Negligibleindustrial technical development is doneoutside of the large corporations.

The Japanese model is therefore not one ofdeveloping industry ‘clusters’. Arguably,each large corporation acts as its owncluster. However, in the R&D area, clustersare more common. An industrialorganisation will frequently team with aspecialist company and a researchinstitution to address a particular problem.Equally, several research institutions may dowork together. This appears to allowstrength in depth to be developed.

Japan is pursuing R&D of all of the main fuelcell chemistries. Funding and interest inPEMFCs and SOFCs have grown markedlyrecently, while PAFCs have been receivingreduced funding for some considerable time,and MCFC funding is also dropping off.

PAFCs and MCFCs are viewed as being closeenough to commercialisation that they shouldbe supported by industry, though few otherthan Fuji Electric are pursuing the PAFCoption. Japan has arguably the greatestoperating experience with PEMFC systemsworldwide. SOFC development, thoughimpressive, is still at a stage where significantcontributions can be made.

Hydrogen funding is also both broad anddeep. Although the focus of the mission wason fuel cells, a significant amount of researchinto hydrogen production, storage and usewas evident, and many of the fuel cellapplications were using hydrogen directly. The Japanese government views the two asseparate, but strongly connected.

Both Japanese companies and governmentseemed quite clear that fuel cells andhydrogen would be important, and thatindustries and applications would develop.The government targets were admitted to be aggressive, and both industry andgovernment appreciated that technicaldevelopment and time would be requiredbefore fuel cells could be viewed ascommercially applicable. Even the automotivesector, facing arguably the toughest challengein trying to provide a near-perfect substitutefor a highly homogeneous existing technologyand infrastructure, was positive.

Codes and standards development in Japan is very advanced, and supported byorganisations such as Japan Gas Association(JGA) and Japanese Automobile ResearchInstitute (JARI), each of which has large-scaletesting facilities available. Severalorganisations commented on the usefulnessof such a facility for testing that could not bedone in-house. Widespread testing andcomparison of different manufacturers’technologies has enabled the identification of common problem areas and keyrequirements for standards.

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The UK is viewed with some fondness, but isno longer seen in Japan as one of the keyplaces to be active. Japanese companies didnot particularly expect to target the UK forsales, although some interest in collaborationwas evident, and the use of the UK as a localmanufacturing centre was also discussed. TheUK academic system and some specificaspects of both corporate and researchstrengths are highly regarded.

In terms of technology development, anumber of points emerged from the visit:

• The Japanese approach to productdevelopment in general, with largenumbers of incremental changes to aproduct rather than radical steps, alsoappears to apply to fuel cells. This offersvery good opportunities for learning andincorporation of improvements to adeveloping technology; it is also expensive.

• Fuel cell technology development isgenerally based on collaboration betweenindustry, institutes, end users andgovernment. This provides access to allstakeholders and enables problems to bethought through and dealt with in arobust fashion.

• Japan has world-leading capabilities inmost areas of fuel cell and hydrogentechnology. In MCFC systemsdevelopment, however, evidence was notseen that Japanese corporations havemore to offer than western companies. The operating plant at Kawagoe has,nevertheless, enabled Japanese industryto gather significant amounts of valuableperformance data and to configure itssystems accordingly.

• Japan’s strengths in consumer applications,and the high level of support the technologyis receiving, have enabled it to develop PEMtechnology to a very high level in terms ofsystems. However, underlying problems

relating to cold start, platinum loading,membrane lifetime and temperature remain,and partners able to help with these issueswould be welcomed.

• SOFC development is wide-ranging, with a focus on small-scale and intermediatetemperature systems. Again, althoughsome impressive results have beenobtained, opportunities exist forcooperation with external organisations.

• Japanese companies are developing avariety of approaches to hydrogenproduction, including some excellent novelapproaches using hydrocarbon sources.The Tokyo Gas membrane reformer is onesuch example. Production of hydrogenfrom renewables, although of interest, wasnot a major focus of the organisationsvisited by the mission.

• Hydrogen storage was not a focus of themission, though some developments wereseen. These were at an incremental ratherthan breakthrough level, but covered animpressive breadth of technologies. Giventhe increasing international importance andpolitical relevance of hydrogen, a dedicatedmission in the area of hydrogen energycould be of great value.

• DMFC (direct methanol fuel cell)developments are almost entirelyindustrially-led, with the exception of somefundamental R&D in membranes andcatalysts. While performance can still beimproved upon, the Japanese corporationsin the area of DMFC see a clearopportunity to commercialise productsfrom 2005 onwards.

• Routes to greater internationalcooperation and a framework forexchanging basic research outcomes,whilst retaining competition in thecommercialisation phases, were viewedas strongly beneficial.

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In meeting with the wide range ofcompanies, research and governmentorganisations during the course of thismission, the team developed a number ofrecommendations for the UK fuel cell andhydrogen industries, the UK government andits agencies, and UK academic institutions:

• Fuel cells and hydrogen should be givengreater prominence as part of the UK’soverall energy and climate strategy. Giventheir potential to address energy security,fuel flexibility, industrial development andenvironmental quality concerns, theyshould play a key and growing role overthe coming years. This is particularlypertinent given that the UK will become anet importer of energy in the near future.

• The UK should develop a clear policyframework for fuel cell development anddeployment. Such a policy should allow allaspects, including technology, codes andstandards and infrastructure to beaddressed simultaneously. It would providea coherent framework for future evolution,and engender confidence across the UKfuel cell community. To optimise outcomes,the policy should play to UK strengths. Itshould also be flexible; priorities andopportunities will change as the industryevolves, and the UK must remainresponsive to these changes.

• UK government support for key fuel celland hydrogen technologies should beincreased significantly. This support shouldaddress: short to long term R&D activities(eg materials development, testingfacilities, etc); demonstration programmes(ie to address the importance of productvalidation, customer and publicawareness, etc); and market stimulationmechanisms (eg through publicpurchasing, tax credits, etc).

• Full commercialisation of fuel cell systems will take considerable time and

investment, but very large rewards couldbe gained, including some in the short tomedium term. Policy-makers and fundersshould consider the timeframes carefullywhen setting strategy.

• Deployment of demonstration and trialsystems has significant benefits. It allowsgreat experience to be gained, and furtherR&D to be focused, while training supportstaff and publicising the technology. TheJapanese have funded fuel cell systems to their advantage. The UK shouldconsiderably increase its support for fuelcell demonstrations.

• UK government support should betargeted through a specific fuel cells andhydrogen programme, with clear prioritiesdeveloped in collaboration with the UK fuelcell and hydrogen industry (Fuel Cells UKcould play a significant role in this). Thesubsuming of the DTI’s targeted butmodest ‘New and Renewables’Programme into the wider ‘TechnologyProgramme’, which has no ring-fenced or sustained allocation for fuel cells andrelated hydrogen technologies, is ofparticular concern.

• Existing routes for cooperation andpartnership between the UK and Japanshould be strongly promoted andexploited and new ones sought, to enableUK companies to participate fully in theemerging opportunities. The missionfound enthusiasm among theorganisations visited to work with UKcounterparts. An ongoing opportunityexists for potential suppliers in the UK todevelop long-term relationships.

• Research into PEMFC membranes andcatalysts, and SOFC materials for operationat intermediate temperatures, are areas ofvery strong interest to Japanese industryand academia alike. Funding is availablefrom NEDO, amongst others, for overseas

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organisations with suitable skills. UKorganisations should strongly considerapplying for this.

• Consideration should be given tomechanisms to enhance thecohesiveness and reduce fragmentationof both support for and implementation offuel cell and hydrogen research in the UK.At present, funding derives from a widerange of government departments andquasi-autonomous bodies such as theCarbon Trust. There is no over-archingpolicy or coordination. A more integratedapproach, covering concepts frominception through to commercialisation,would build on UK strengths andsynergies, minimise duplication, andmaximise return on public investment.Fuel Cells UK could play a key role ininforming government policy in this area.

• The UK government should begin theprocess of addressing national and locallegislative barriers to fuel cell deploymentin the UK.

• A mission to Japan focusing specifically onhydrogen should be implemented.

1 INTRODUCTION

Celia Greaves Synnogy Ltd/Fuel Cells UK

1.1 Mission context

This DTI Global Watch Mission needs to beviewed in the context of new challengesfaced by the UK’s energy system.

The UK, along with most other industrialisednations, faces a number of key challenges interms of its energy supply and use in thenext 20 years:

• The challenge of security of supply• The challenge of environmental

stewardship• The challenge of energy infrastructure

renewal and modernisation

However, these challenges also presentsignificant opportunities:

• The prospect of higher living standards • The opportunity to develop, deploy and

export world-leading energy technologies• The chance to take a leadership role in

promoting competitive, reliable andenvironmentally acceptable energysolutions to a world with rapidly increasing energy demands

International opinion and experience ispointing to the fact that there is no singlewinning technology or measure – no ‘silverbullet’ – that will provide the answer to thesethree challenges. Rather, a wide range ofapproaches is likely to be required. Such aportfolio approach will certainly embraceimproved and reduced energy use on thedemand side, plus, on the supply side, higherefficiency of electricity generation, the greateruse of low carbon fuels, cleaner use oftraditional fossil fuels, expanded renewableenergy, and possibly new nuclear capacity.

The resulting energy system in the UK 20years – even 10 years – from now, will besignificantly different to today.

Fuel cell technology, and – in the broaderpicture – hydrogen production, delivery,storage and utilisation technologies, willundoubtedly form an important part of thefuture energy system. The view in leadingcountries is that fuel cells will find increasingapplication within the 10-year timeframe (inniche markets certainly within the next fiveyears, in premium markets within the next 10 years, and in mass volume marketsbeyond that), and a steady transition to ahydrogen economy is likely within the 20-yeartimeframe. An acceptance of this view isdriving energy policy, basic research, appliedR&D and demonstration activity, particularly in Japan, the USA and Canada, but alsoincreasingly in Germany and other Europeancountries, Iceland and elsewhere.

The challenge of security of supply

As indigenous energy supplies dwindle, theUK is shifting from being a net exporter tobeing a net importer. This makes the UKpotentially more vulnerable to interruptions in supply (due to regulatory failure, politicalinstability, conflict, etc) and price fluctuations.

Supplies of gas, which currently account for39% of the UK’s primary energy demand, are dwindling, and the UK will become a netimporter by around 2006. In the case of oil,which currently accounts for 35% of primaryenergy demand, the UK became a netimporter in June of this year. The UK alreadyimports around half of the coal consumed(currently 15% of primary energy).

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The best way of maintaining reliability is byhaving energy diversity – many differentsources, suppliers and supply routes, egrenewables, smaller-scale distributed energysources (including fuel cells), etc.

The same is true of Japan, which currentlyimports 96% of the energy it consumes,making the country very dependent on othercountries for its oil supplies. Technologyoptions which reduce this dependence, whileproviding reliable energy supplies, are clearlyof great interest.

The challenge of environmentalstewardship

In industrialised nations, motor vehicleexhaust emissions cause more air pollutionthan any other form of human activity.Vehicles account for nearly half of allemissions of oxides of nitrogen, two-thirds ofcarbon monoxide and as much as half of allhydrocarbon emissions. These pollutants area major cause of photochemical smog andlow-level ozone concentrations.

Furthermore, there is a clear consensus ofopinion amongst the world’s leadingscientists that climate change is happeningand that it is directly linked to human activity.Although this link is not fully understood, itseems clear that climate change is associatedwith increased concentrations of greenhousegases in the atmosphere, the most significantof which is carbon dioxide (CO2). Atmosphericconcentrations of man-made CO2 have beenrising steadily since the Industrial Revolution,the rate of increase accelerating from themiddle of the 20th Century. The main cause of this increase has been the combustion offossil fuels for power generation,

transportation and industrial use – togetheraccounting for more than 85% of CO2

emissions worldwide.

The UK currently emits approximately 0.55 Gtof CO2 annually, with about 0.2 Gt comingfrom power generation and a further 0.2 Gtfrom the transportation sector.

While the UK may have set itself on a path ofemissions reduction, the situation globally isvery different. The world’s population is set togrow from the current level of about six billionto over eight billion by 2030, and globalprimary energy demand is likely to increaseby more than 60% over the same period(based on current policies). Much of thispopulation growth and increased demand forenergy will take place in developing countriesin Asia, Africa and South America, whereabundant resources of coal and other fossilfuels will continue to dominate global energyuse to 2030 (and well beyond). As a result,emissions of CO2 will increase by 70%compared to current levels, with two-thirdscoming from developing countries.

Japan’s Ministry of Economy, Trade andIndustry (METI) cites reducing environmentalimpact as one of five key drivers forintroducing fuel cells (see Section 2.3).

The challenge of energy infrastructurerenewal and modernisation

Much of the UK’s energy infrastructureneeds to be updated in the next 20 years.Apart from in relation to renewable energy,interest in building new power plant hasdeclined since the ‘dash for gas’ in the 1990s.With impending European measures to limitcarbon emissions and improve air quality,

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modernisation, and possibly closure of mostof the UK’s coal-fired plant, looks likely.Furthermore, without either new build or lifeextensions, nuclear power’s share ofelectricity generation will shrink from itscurrent level of around 23% to somethinglike 10% by 2020.

Against this background, substantialinvestments will be needed in the UK’senergy infrastructure to enable a move fromtraditional, centralised power operationsfeeding the electricity distribution network toa system more suited to renewable energysources (often in peripheral areas of thecountry or offshore) and smaller scaledistributed energy generation. Additional gas transmission infrastructure will also beneeded as the country moves from being a net exporter of gas to a net importer. Asthese changes occur, the need for reliableand ‘good quality’ energy will remain.

Japan’s energy market is currently in theprocess of deregulation (see Section 2.3) withdistributed generation and CHP (combinedheat and power) growing rapidly. New typesof businesses (eg on-site energy servicebusinesses) are emerging, and new playersare entering the market. These developmentsgive rise to both challenges and opportunitiesfor Japan.

A significant future role for fuel cells andhydrogen

Fuel cell technologies, and the wideropportunities associated with a hydrogeninfrastructure providing a part of the UK’senergy system within the next 10-20 years,directly address each of the three criticalchallenges describe above. For thesereasons, leading countries, particularlyJapan, the USA and Canada are investingsubstantial resources within the public andprivate sectors to develop andcommercialise these technologies.

1.2 Aims and objectives

The potential market for fuel cells and relatedproducts is extremely large; global demand isexpected to reach $38 million (~£21 million)by 2011, and could exceed $2 trillion (~£1.1trillion) by 2021. This mission will help the UKto optimise its position in the global fuel cellmarket by improving UK understanding ofdevelopments in Japan and facilitatingtechnology transfer.

High level aim

The key aim of the mission was to foster thedevelopment of the UK fuel cell industry by:

• Improving UK awareness of fuel cell andhydrogen developments in Japan

• Developing opportunities for collaborationand technology transfer to help developthe UK fuel cell industry, for stationary,automotive and portable applications

• Highlighting opportunities around fuel cellsand hydrogen for Japan

• Enhancing awareness of new markets and applications

There is considerable interest in the UK inunderstanding the commercial status of fuel cells in Japan and in building mutuallybeneficial alliances. The mission aimed to helpachieve both of these goals.

Specific objectives

The specific objectives were to:

• Facilitate new relationships of potentialvalue to UK industry

• Support the development of the UK fuelcell industry through dissemination of themission findings

• Expose UK organisations to leading edge thinking and activity around fuel cell commercialisation and the hydrogen economy, thus supporting their own development

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1.3 Participants

The mission was organised and managed by:

Celia Greaves Synnogy Ltd/Fuel Cells UK

Other participants comprised:

Stuart Jones Accentus plc

David ScottDTI Global Watch Service

David HartImperial College London

James WilkieJohnson Matthey Fuel Cells Ltd

Alan SpanglerRolls-Royce Fuel Cell Systems Ltd

Dave McGrathsiGEN Ltd

Further details of the participants are given inAppendices A and B.

1.4 Itinerary

The mission took place during 3 –10 July2004. During that period, the group metformally with nine private and public sectorbodies, along the full length of the fuel cellsupply chain. Other interaction comprised aseminar organised by British Embassy Tokyowhich was attended by 87 representativesfrom Japanese organisations.

The schedule is shown in Table 1.1

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Figure 1.1 Mission team and representatives fromToyota in front of Toyota’s fuel cell powered bus: fromleft to right – David Hart (Imperial College London),Alan Spangler (Rolls-Royce Fuel Cell Systems), DavidScott (DTI Global Watch Service), Stuart Jones(Accentus), Celia Greaves (Synnogy/Fuel Cells UK),James Wilkie (Johnson Matthey Fuel Cells), IvanMeakin (British Embassy Tokyo), Shigeru Kukuchi(Translator), Dave McGrath (siGEN) and hosts at Toyota

Date Location Visit/meeting

5 July Kawasaki NEDO (New Energy and Industrial Technology Development Organisation)

Kawasaki Toshiba International Fuel Cells Corp (TIFC)

6 July Ochanomizu Hitachi LtdTokai Mitsubishi Materials Corp (MMC)

7 July Tsukuba AIST (National Institute of Advanced Industrial Science and Technology)

Tamachi Tokyo Gas Corp

8 July Mishima Toyota Motor CorpKuwana Kawagoe Thermal Power Plant

9 July Tokyo ANRE (Agency for Natural Resources and Energy – part of METI)Tokyo Seminar

Table 1.1 Mission schedule

Contact details for these organisations canbe found in Appendix C. A schedule ofattendees at the seminar and a list of thetopics for discussion at the various visits andmeetings are presented in Appendices Dand E respectively.

1.5 About this report

This report summarises the findings of themission, and considers the implications forthe UK. The chapters which follow have beenproduced by individual members of the group(sometimes working together), in line withspecific areas of expertise.

The material is based on discussions with andlearning from the organisations visited duringthe mission. As such, it can only give a flavourof the level and scope of activity in fuel celland hydrogen technologies within Japan.

Chapters 5-9 address various fuel celltechnologies. Background information onthese technologies and details of how fuelcell systems are assembled are provided inAppendices F and G respectively.

An exchange rate of £1 = ¥200 is usedthroughout this report.

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2 JAPANESE POLICY AND

RESEARCH CONTEXT

David HartImperial College London

2.1 Introduction

Japanese support for hydrogen and fuel cellresearch, development and deployment (RD&D)has developed over the last several years from alarge but relatively compartmentalised effort intoan impressively coherent set of projects.

The magnitude of the governmental budgetis large. METI (the equivalent of the UK DTI)has a budget of ¥32.9 billion (~£164 million)for fuel cells in 2004, an increase of about6% on 2003. The vast majority of this (¥20.5 billion or ~£102 million) is spent onthe PEMFC programme.

METI spends funds both directly, ondemonstration projects, and indirectly throughNEDO. NEDO concerns itself more withresearch. It funds work at laboratories andworks directly with the Japanese AutomobileResearch Institute (JARI) and the EngineeringAdvancement Association of Japan (ENAA). Theformer is developing standards and testingprotocols, while the latter is conducting researchinto hydrogen infrastructure. Significant work isalso conducted at government laboratories,primarily under the aegis of AIST.

The Japanese government clearly viewshydrogen energy and fuel cells as a highstrategic priority. Not only do they offer thepotential for relieving some of the Japanesedependence on imported energy, but they doso in a way that will assist the meeting ofenvironmental goals and, potentially, providea new sector for industrial development.

Further specific details of the policy andresearch context for individual technologyareas are provided in the sections which follow.

2.2 A brief history

Until around 1999, Japanese fuel cell andhydrogen energy support, though significant,was managed in separate blocks and focusedmuch more on research than deployment. TheWE-NET (World Energy Network) Project onhydrogen energy, which began in 1993, wasoriginally intended to last for 28 years andmove through feasibility and research phases,each of five years, through industrial R&D anddeployment of technology.

Although far-sighted at its inception, the paceof development in other countries (notablyCanada, where Ballard began to demonstratefuel cell buses) led to the project beingstopped after two phases. Much of theactivity under those phases was used asgroundwork for the subsequent fuel cell andhydrogen programmes, and the consortia andunderstanding that had developed during theWE-NET project certainly enabled Japan toreach its current leading status far quickerthan would have been possible otherwise.

The establishment of the Policy Study Groupfor Fuel Cell Commercialisation in late 1999was important in changing the course ofJapanese funding from a largely academic,long-term and research-focused programmeinto a much more focused project with near-term industrial goals. The Group wascomposed of members from academia,industry and government, and produced‘Study Group Report on Commercialisation ofFuel Cell Technology’ in January 2001, and‘Polymer Electrolyte Fuel Cell and HydrogenEnergy Technology Development Strategy’ inAugust 2001. Japanese government policy isbased directly on these reports.

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The Fuel Cell Commercialisation Conferenceof Japan (FCCJ) was formed In March 2001.This private initiative has approximately 140 members, and membership is primarilycorporate. It offers advice on policy measuresthat will assist its members to commercialisetheir fuel cell technologies.

2.3 Policy context

Energy and environment policy

Japanese energy policy is dominated bysecurity of supply of energy. Althoughenvironmental issues are important to thecountry (which has a high rate of recycling,and is home of the Kyoto Protocol ongreenhouse gas emissions reduction), its96% dependence on imported energy is ofmore fundamental importance in settingtoday’s policy. 50% of this dependence is onimported oil, 86% of which comes from theMiddle East. While becoming self-sufficient inenergy is unlikely, at least in the mediumterm, diversification of energy supply sourceswould enable Japan to significantly reduceboth the risk of major energy price changesdue to fluctuations in oil price, and the risk ofsupply disruption.

Hydrogen can be produced from a widerange of raw materials and energy sources,including natural gas, oil, biomass and nuclearpower. It can be produced in situ fromimported materials, or, potentially, it can beimported as an energy carrier in its own right.This means that hydrogen and its precursorscan be bought from politically stable regionsand from diverse sources, potentiallyensuring both reasonable pricing andconsistent supply.

Japan is in the process of liberalising itsenergy markets, primarily electricity and gas.In many ways this is similar to othercountries’ programmes, although themarkets are not yet fully open. Large-scaleconsumers have been the first to gain choice

of supplier, while at the domestic level localmonopolies remain. One aspect of this inparticular may affect the fuel cell industry.While electricity liberalisation is intended toencompass the market across all levels,including the residential scale, gasliberalisation will not. In theory, therefore,gas companies will have access to electricitycompany residential markets, but not viceversa. This may provide a greater incentivefor gas companies to develop residential fuelcells than electricity companies.

Industrial policy

Japan has frequently taken a lead in theindustrialisation of new technology, and thepotential of hydrogen technologies toprovide a major new industry focus is beingviewed very seriously. Japan’s automakershave a strong presence and majorinvestment in fuel cell vehicles, with Toyotaclearly one of the world leaders. Themicroelectronics manufacturers also have astrong position in the field of fuel cells forbattery replacement in laptops and otherconsumer electronics devices.

Guided to some extent by the FCCJ in thearea of stationary and vehicledemonstrations, Japanese policymakers areassisting the emerging fuel cell industry byfunding much R&D, and financingdemonstration projects at levels of up to100%. The latter is unusual worldwide, withthe majority of countries requiring some formof industrial cost-sharing. It may be arguedthat this gives the Japanese a particularadvantage over the UK and the rest ofEurope, which are bound by state-aid rules asto a maximum government contribution.

Given the focus above, it is clear that much ofJapanese government interest in fuel cellsand hydrogen energy falls necessarily withinthe remit of METI. However, the Ministry ofLand, Infrastructure and Transport and theMinistry of Environment each play a part.

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Highly efficient (energy conservation)

Reducing impact onenvironment

Distributed energy resources

Diversification of energy supply

Creation of new industry and jobs; enhancement ofindustrial competitiveness

Significance of

introducing fuel cells

Figure 2.1 summarises the METI view on theimportance of fuel cells (and hydrogen) interms of energy policy.

2.4 Targets and goals

The Japanese government has set the mostchallenging targets of any nation in terms ofspeed and quantity of fuel cell technologypenetration. 50,000 fuel cell vehicles onJapanese roads is the target for 2010; 5 million in 2020, and 15 million in 2030. In the stationary power sector, 2.1 GW, 10 GW and 12.5 GW are the respectivetargets for PEMFCs.

The targets for automotive and stationary fuelcell introduction presented above areconsidered by many to be optimistic, and areacknowledged by government as aggressive.The philosophy behind setting high targets is,however, simple. Coupled with high levels ofgovernment funding support, the targetssend a message that the government is bothserious and positive about this newtechnology, encouraging researchers andcorporations alike to invest at suitably highlevels. It also forces innovation, to a certainextent, as in order to meet the target, novel

methods of production and support may haveto be developed. A lower target might,according to this philosophy, result in a‘business-as-usual’ development case.

Based partly on the erstwhile WE-NETproject, METI is targeting 1 millionhouseholds to be serviced by PEMFC-basedcogeneration plant by 2010 at an initialanticipated price point of ¥1-2 million ($9,000-18,000) a unit. In the short term, thegovernment will subsidise much of this coston a similar basis to photovoltaics (PVs)today; however, after 2010, by which time amarket should have been established, thesubsidy will cease. By then, supply costs willbe expected to have fallen to around $1,250for a 1-kWe PEMFC unit. Many Japanesecompanies are targeting this market.

An ongoing process is refining the fuel celland hydrogen R&D plan, in conjunction withthe policy measures surrounding it. NEDO’sFuel Cell and Hydrogen (FCH) TechnologyCouncil, chaired by Professor MasahiroWatanabe, has collaborated with KansaiResearch Institute (KRI) and Osaka Scienceand Technology Centre (OSTEC) to develop anFCH technology roadmap and set R&D

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Figure 2.1 Significance of introducing fuel cells for METI

targets for the next five years’ R&D projectsand project formation. Further developmentof the broader vision surrounding theroadmap was aided by a symposium to whicha broader cross-section of academia andindustry were invited. The results are notexpected to be finalised until towards the endof 2004

The Policy Study Group discussed above (seeSection 2.2) has laid out specific technicaltargets for both fuel cell vehicles andstationary systems, to be achieved during thesecond, diffusion phase (see below) ofdevelopment from 2010 onwards. These areshown in Table 2.1.

Demonstration projects

As part of the move towards meeting targetsfor the implementation of hydrogen and fuelcell technologies, the Japanese haveinstigated two major demonstration projects.The first focuses on stationary fuel cells, andis managed by the New Energy Foundation(NEF). It currently has 31 PEM fuel cellsystems from 11 manufacturers deployed indifferent environments around Japan, fromHokkaido to Kyushu. This project is collectingdata not only on the individual performance ofthe fuel cell systems, but also on theimplications for grid connection.

Emerging data show an improvement in bothelectrical and thermal efficiency of thedemonstration units from those set up in 2002to those set up in 2003. However, the number of equipment failures is still high,

with this largely arising at the component level.Policy learning from this project has been thatwhile Japanese companies provide goodsystem integration, they need to improve theirbasic technology. This is certainly a focus ofmany of the research projects.

The second demonstration project is similar inconcept to the California Fuel Cell Partnership.The Japanese Hydrogen & Fuel CellDemonstration Project (JHFC) involves 48 fuelcell vehicles, produced by both Japanese andoverseas manufacturers, operating primarily inthe Tokyo area. Ten hydrogen stations supplygaseous hydrogen at two different pressures,and one also supplies liquid hydrogen (seeFigure 2.2). The project is intended to test thehardware, provide education to the public, andfind suitable methods of hydrogen productionfor future infrastructure. Different methods of on-site and off-site production are beingused, with supporting analysis on theefficiency of each pathway and itsenvironmental implications.

As part of its policy support, METI itself has amobile fuelling station and fuel cell vehicles atits headquarters in Tokyo.

Development stages

To take forward the commercialisation anddiffusion of fuel cells, three primarydevelopment stages are viewed as essential:

• Introduction stage• Diffusion stage• Penetration stage

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Policy Study Group’s targets (for 2010 onwards)

FCV Stationary FC

Electrical efficiency of stack 65% (LHV) @ 25% rated output 55% (HHV) @ rated output

Cost of stack ¥4,000/kW (£20/kW) ¥80,000/kW (£400/kW)

Efficiency of system 60% (LHV); pure H2 40% (HHV); net

Economy ¥5,000/kW (£25/kW) ¥300,000/unit (£1,500/unit)

Table 2.1 Technical targets for fuel cell vehicles (FCV) and stationary systems

From 2005 to 2010 the introduction stage willbe used for promotion of vehicles by industryand the public sector, while fuel supplyinfrastructures are established.

From 2010 to 2020, in the diffusion stage, the fuel supply system will be establishedand market growth is envisaged to becomeself-sustaining. The private sector will beprimarily responsible for promotion.

2020 to 2030, the penetration stage, will becharacterised by 8,500 hydrogen fuellingstations across Japan (40,000 conventionalstations are currently in place), and thepractical use of combined cycle or hybridfuel cells.

2.5 Legislation

Japan recognises that hydrogen and fuel celltechnology deployment will require somesignificant changes to the existing regulatoryand legislative frameworks. These changesare being effected now in a parallel path tothe technical developments.

To help in removing legislative barriers, aspecial inter-ministerial level group was set upto review regulations pertinent to theimplementation of fuel cells and hydrogenenergy, and revise those considered to bebarriers by the end of March 2005. The group– the ‘Official Taskforce of Ministries andAgencies Concerned with Practical

Application of Fuel Cells’ – has identified 28 items for revision, and progress suggeststhat the 2005 target will be met.

Changes to legislation are driven by the needsof the technology and industry. A programmeaddressing standardisation and safety, whichcovers all hydrogen and fuel cell activity, isbeing 100% funded by NEDO, and draws onexpertise from industry. During the missionteam’s visit, NEDO stated that it is performingall of the data acquisition upon whichresponses to regulatory changes will be driven.

The Millennium Project (part of this process)aims to develop and establish a pan-industryresponse to the emerging needs of theindustry for a regulatory framework. Its focusis ‘Establishment of Codes and Standards forthe Market Introduction of PEFC Systems’,and project strands comprise:

• International standardisation• Fuel quality standard• Test method establishment• Safety and reliability evaluation• Rules and regulation

These strands are underpinned by technologydevelopment and verification tests. They areleading to the development of ‘softinfrastructure’ in the form of establishingcodes and standards.

2.6 International participation

Japan participates in many internationalinitiatives, and has supported internationalcollaboration in many ways, including its ownsponsorship of R&D carried out by overseasinstitutions. Policy initiatives include a jointministerial statement on hydrogen energy byMETI and the US Department of Energy(DOE) in January 2004, and Japan’sparticipation in the International Partnershipfor the Hydrogen Economy (IPHE). Japan isalso a member of the International EnergyAgency (IEA) Hydrogen Initiatives.

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[Location of Hydrogen Stations]

(FY2002 , FY2003 )

H2 Source Location

1 H2 from Soda Elec. Yokohama

2 LPG Reform Senju

3 Liquid H2 Ariake

4 Methanol Reform Kawasaki

5 Compressed H2 METI HQ

6 Naptha Reform Yokohama

7 Clean gasoline Reform Yokohama

8 Natural Gas Reform Ome

9 Alkaline Elec. Sagamihara

10 Kerosene Reform Hadano

Figure 2.2 METI-supported hydrogen filling stationsites in Japan

2.7 Hydrogen and fuel cell funding

As discussed above, R&D funding is primarilyprovided under NEDO, while METI fundsdemonstrations. Funding for fuel cells andhydrogen has gone through a number oftransitions, with particular technologiesfunded differently at different stages.

The majority of funding for fuel cells from1981 was for PAFCs, funded forapproximately 10 years. Starting in the mid-1980s, MCFC technology was funded inpreference to other fuel cell types, receiving

¥4-5 billion (~£20-25 million) per year at itspeak in the mid-1990s. SOFCs have beenfunded at a very small scale since the late1980s, but funding is now picking up tosignificant levels.

However, the primary focus since 2001 has been on PEMFCs, which receivedapproximately ¥8 billion (~£40 million) ofsupport in 2004. This is partly because oftheir importance in vehicles, but also reflectsthe numerous companies developing small-scale (~1 kW) PEM units for residential CHP use in Japan.

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Figure 2.3 Changes in funding for different fuel cell technologies in Japan (NEDO)

Fuel cells and hydrogen budget ¥bn (£m)

2000 2001 2002 2003 2004

PEM 4.45 (22.3) 7.52 (37.6) 11.10 (55.5) 13.31 (66.6) 10.44 (52.2)

MCFC 2.10 (10.5) 2.32 (11.6) 1.80 (9.0 ) 1.88 (9.4) 1.66 (8.3)

SOFC 0.40 (2.0) 0.71 (3.6) 1.50 (7.5) 1.72 (8.6) 2.67 (13.4)

H2 safety & utilisation **1.66 (8.3) **2.70 (13.5) **2.90 (14.5) 4.55 (22.8) 6.35 (31.8)

Total* 8.61 (43.1) 13.70 (68.5) 22.00 (110.0) 30.70 (153.5) 32.90 (164.5)

*includes related projects **WE-NET project

Table 2.2 Changes in METI/NEDO budget for fuel cells and hydrogen

Figure 2.3 indicates how NEDO’s funding haschanged accross the different fuel cell types.

NEDO’s budget also includes additionalhydrogen funding. Table 2.2 indicates thechange in research spend over the five yearsto 2004, in both yen and pounds sterling. The final total includes demonstration projectspending, direct from METI.

2.8 Research environment

To inform the research that is undertaken in both stationary and vehicle fuel celldevelopment, the JGA and JARI havecommissioned sophisticated test facilities.Nearing completion at JGA is a 4-year testproject involving 66 different PEMFC units.This has served to provide information onboth performance and safety issuesassociated with residential-scale PEMFCs.

The data have been used to developguidelines for standards and safetyprocedures for the introduction of suchsystems. For example, PEM systems of lessthan 10 kW, operating at less than 0.1 MPa ofinternal pressure of flammable gas, do notrequire a nitrogen purge. A Japaneseproposal on standards has also been putforward to IEC TC105, based on this work.

An enormous range of different researchtopics is being covered in the hydrogen andfuel cell areas, by organisations across Japan.PEM is, again, a primary focus. The mainareas of fundamental research includeelectrode catalysts, MEAs (membraneelectrode assemblies), intermediatetemperature PEMFCs, and separator plates.Hydrogen separation membranes, fuel celldeterioration mechanisms, DMFCs, andalternative fuels such as DME (dimethylether) are also being researched.

AIST

AIST research covers strategic areas ofindustrial relevance that address long-termchallenges requiring government support. It has a mission to enhance both internationalcompetitiveness and the creation of newindustries. Although AIST is no longer fullyintegrated with METI, and must increasinglyseek outside funding, these missionrequirements remain.

AIST has wide interests, reflected in the largenumber of individual institutions (52 entitiesand sub-entities) and staff, 3,114 permanentand 4,200 visiting researchers from Japan andoverseas (see Section 3.5 for further details).The move from METI ownership is reflectedin an increasing emphasis on IP managementand exploitation, with 1-2 spin-outs per year,which is set to grow.

AIST has 170 researchers and 130 visitingtechnical staff at the Energy TechnologyResearch Institute (ETRI) in Tsukuba. Areas of interest include emissions control, gashydrates, clean energy (PVs, hydrogen),distributed energy (energy management and system evaluation), and energy devices and materials (fuel cells,thermoelectric generators, and energystorage and transport).

With regard to fuel cell work, Tsukubaconcentrates mainly on intermediatetemperature SOFC development (inpartnership with Mitsubishi Materials Corp(MMC) and Kansai Electric Power Co) andhydrogen storage technology, while AIST’sKansai centre concentrates on performanceevaluation of PEMFCs and DMFC research.Significant activity in alternative membranesfor PEMFCs is also under way.

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AIST has an annual budget of around ¥121 billion (~£600 million), and three areasof research focus:

• Energy-environment • Resources measurement and geo-science• Life sciences, including IT/nanotechnology

It has collaboration agreements with 15 organisations in 12 countries.

In the fuel cell field, research is focusedprimarily on PEMFCs and SOFCs. An ongoingMCFC project at AIST’s Kansai centre is dueto be terminated.

SOFC research (see also Chapter 5)

AIST’s current focus within SOFC rangesfrom materials analysis to systems modelling,including research into:

• Metallic interconnects• Lanthanum gallate materials• Direct oxidation of carbon• Alternative fuels, especially liquids

This last is important as the natural gasnetwork in Japan is limited. Further work isongoing in the fields of cell fabricationtechniques, cell and stack characterisation,and system analyses. SOFC work is mostlyconducted from the Tsukuba R&D centre.

PEMFC research (see also Chapter 6)

AIST’s PEMFC research is concentrated atthe Kansai research centre, and includes:

• Stationary plant performance evaluationand deterioration analysis

• Micro fuel cells, including both DMFCs andnovel types

• New electrolytes and catalysts

The latter work is conducted in many differentresearch centres, and also includes newmembrane materials.

Hydrogen energy research (see also Chapter 4)

AIST also conducts research into the long-term aspects of hydrogen energy. This includes:

• Safety, sensors and measurementtechniques

• Storage in metal and chemical hydrides• Production from photolysis and

photo-biological routes• Reversible fuel cells• CO2 capture from steam reforming using

calcium carbonate – the Hyper-Ring project

NEDO

During the mission team’s visit, NEDOexpressed clear views about the need andmeans for reductions in cost of hydrogengeneration and fuel cell equipment. An orderof magnitude reduction in costs was to beexpected from standardisation, modularityand mass production. But to reach this stage,more work was deemed necessary: basicresearch, reduction in components,technological breakthroughs, improvements inreliability, and establishment of fitness forpurpose. There was a realisation by NEDO(echoed by industry) that such improvementswould take time, measured in years.

NEDO funds research in many other areas offuel cell and hydrogen technology, including:

• Hydrogen diffusion and ignitioncharacteristics

• Safety evaluations of hydrogen dispersionin enclosed areas

• Low platinum catalyst loadings on MEAs• New MEA materials• Low-cost separator plates• High temperature PEM membranes

NEDO expressed a general view that liquidhydrogen was more appropriate as ahydrogen buffer (eg a large storage medium

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for filling stations) or for transporting to sitesrather than for use in vehicles direct, forwhich compressed hydrogen was consideredmore appropriate.

2.9 Lessons for the UK

Japan is almost entirely reliant on importedenergy and has a much stronger currentindustrial base than the UK. Industrial andfinancial structures tend to be less flexible,with large corporations dominating theindustrial sectors, and limited availability ofventure capital and other finance forentrepreneurial activity. It therefore has adifferent perspective and operates underdifferent constraints. Policy and researchinitiatives must be carefully considered inthat light.

Nevertheless, it seems clear that the highdegree of structure in the Japanesegovernment’s fuel cell and hydrogen energyprogrammes, and the very substantialgovernment support (in both policy-makingand in funding), is providing a secure basewithin which Japanese companies candevelop long-term plans and hence minimisetheir risk.

The structure of the Japanese fuel cell andhydrogen industry is different from the US andCanadian models examined on previousmissions in 2002 and 2003 (available atwww.synnogy.co.uk and www.fuelcellsuk.org).These were characterised by a large number ofstart-up companies in addition to majorindustrial organisations, and by some unusualtechnology options. Broadly, the Japanesemodel appears to adopt more conventionaltechnologies and concentrate on the systemsintegration and product development of these.

The USA and Canada also subscribed to theconcept of ‘clusters’, in which supportingindustry development was concentrated in arelatively small region, allowing supply chaincapability to develop for the industry.

The more concentrated industrial power inJapan makes this model more difficult tofollow. However, in the case of research, theJapanese do appear to consider this abenefit, although it is not referred to explicitly.

Some specific aspects of the Japaneseapproach are summarised below:

• Fuel cells appear to be an integral part ofthe Japanese vision for transition to anenergy economy with much greatersupply diversity during the 21st century.As the UK moves to becoming a netenergy importer, a focus on technologieswhich reduce energy demand is needed.This issue will be best addressed soonerthan later.

• A broad research base allows cross-fertilisation between both differenttechnologies and research groups, andshould therefore ensure a broader andstronger skills base than small amounts of –even highly targeted – technology funding.

• Japanese industrial policy does not appearto be to develop fuel cell industry‘clusters’. The Japanese companiesinvolved in fuel cell and hydrogen researchare typically very large and could almost beclassified as clusters in their own right.Due to the different financial structure,entrepreneurial activity is limited.

• ‘Research clusters’ are in evidence, withspecific links made between differentgroups in many areas of the ongoing fuelcell and hydrogen work. A regional spreadof suitably large research clusters enablesexpertise to be dispersed to some extent.Given a suitably large amount of funding,this should also assist regionaldevelopment efforts.

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• Comparatively large and sustained fundingstreams allow for greater depth ofresearch, as (a) some project proposalsthat might not be considered ‘perfect’ willbe funded and may yield excellent results;and (b) funding is less likely to be ‘lumpy’and so continuity of research and expertisecan be expected. This is extremely valuableexpertise which takes time to develop andis quickly and easily lost.

• AIST is invaluable in terms of breadth ofcoverage and mission, with a largeinterdisciplinary workforce. Horizons areboth short and long (>7 years) term,covering basic through applied research.Real technology transfer to, andpartnership with, Japanese industry isevident. Unlike universities, specificdirection is given to AIST by government.This ensures focus on longer-term horizonsof strategic relevance to the country.Nothing like this exists in the UK.

• The Japanese have a strong emphasis on regulatory reform, specifically toremove obvious barriers to fuel cellcommercialisation. This links with thefinancial support and well-definedtechnology planning to produce a level of cohesiveness in hydrogen and fuel cell planning that probably exceeds other countries.

• Japan has several centres of excellencewhere aspects of fuel cell deployment andhydrogen safety can be investigated andproblems resolved. The UK currently hasno such centres; this omission could inhibitthe rate at which these new technologiescan develop and diffuse.

• Japanese targets for fuel cell penetrationare ambitious. The government feels that in setting high targets, and supporting the industry strongly at the same time, it is sending the right messages andspeeding commercialisation.

• Japanese industry is very well networked,aided by strong trade associations andpartnerships (JGA, FCCJ, etc). Japaneseindustry associations help support thrivingindustry rather than aiming to build upindustry from a small base.

• The absence of state-aid restrictions isextremely valuable in enabling the fundingof demonstration projects in particular. TheJapanese government is prepared to dothis to 100% in cases where industry cancontribute in other ways (eg by providingvehicles to a filling station).

• The Japanese government recognises thatfuel cell development is a key enablingtechnology for an economy with greatlyreduced dependence on fossil fuels as aprimary energy source. As such,cumulative spending over the past fouryears alone has been at least ¥108 billion(£540 million). This is in stark contrast tothe approximately £8 million expended bythe UK DTI on fuel cell development overthe same period. (Even after allowing forthe relative sizes of the two economies,Carbon Trust and other Governmentsupport, as well as gearing by industry, the contrast remains marked.)

• Whilst there may be debate as to thetiming of fuel cell market penetration,there can be no doubt that this disruptivetechnology offers significant high value-added business opportunities. In Japan,the government is investing for a longerterm than most companies are able to do.The UK government appears less willing tobridge this gap. The ultimate commercialbenefits which accrue are likely to bestrongly related to the amount ofdevelopment support provided. The UK, by providing substantially lower support, islikely to see consequently lower benefits.

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3 JAPANESE INDUSTRIAL CONTEXT

Dave McGrath siGEN Ltd

3.1 Introduction

Whilst the nine companies and organisationsvisited during the mission (see Section 1.4)cannot be considered as a statisticallysignificant sample of the approximately 140companies and organisations active in thefuel cell space in Japan, the relativelyhomogenous nature of the Japanese industrysuggests that this sample will reflect the bulkof Japanese industrial activity and priorities.

Consideration of the structure of theJapanese industry and its priorities are causefor very considerable encouragement for fuelcell and hydrogen development. They couldalso be a major cause for concern for westerncountries which either are developinghydrogen and fuel cell industries or haveambitions to do so. This concern is particularlyin relation to where the balance of technicaland IPR power will reside, with itsconsequential impact on where the world’smanufacturing power base, or control thereof,will ultimately be. If Japan is successful in itsscientific/technical ambitions anddemonstration deliverables, and convertsthese to production, its manufacturing powerbase could become overwhelming.

Japan has recognised hydrogen and fuel celltechnologies as being a high strategic priority,particularly in relation to energy security andenvironment, with strong commitment acrossindustry and government:

• They recognise that it will take someconsiderable time to achieve desiredoutcomes, with decisions being made nowon a 20-40 year time horizon

• They are backing up strategic interest withvery significant investment budgets

• They are taking synchronised andcoordinated actions across the entireindustrial spectrum to achieve their goals

• Simultaneously they are addressing safety,codes and standards, and legislation

The Japanese fuel cell industry structure,like most Japanese industry, appears to befundamentally different to its counterpart inthe western world (see below for moredetails). Whilst Japan shares similar highlevel targets and objectives with the west,its approach seems less rushed and moremeasured. The investment frameworkseems to be fundamentally different, easingthe very short term pressures generallyexperienced in the west (particularly for near-market projects).

There are important lessons for the west,particularly the EC (in relation to state-aidrules), in the way the technology is supportedby both industry and the state. EC state-aidrules could become a factor in determininghow the EC and the UK are able, or not, torespond to the threat the Japanese industrymay pose. (This is explored in more detaillater in this chapter).

The observations below place particularemphasis on the different industrialstructures observed during this mission toJapan and two earlier missions to the USAand Canada. They relate to the fuel cell andhydrogen industry only, and not to industryas a whole. The implications for fuel cellcommercialisation are also explored. Thechapter expressly excludes detailedobservation of the automotive industry,which is following its own path and settingits own agendas.

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3.2 Size profile of the industry

Key themes identified during the Canadianmission comprised great entrepreneurialactivity, concern about losing ground to theUSA, and integrated activity across nationaland state government and industry. A common observation was of smallentrepreneurial companies, most of which arestruggling to some degree with cash.

During the US mission it became apparentthat the drivers in the USA are different. Inthe USA there is greater emphasis onproduct development, generation of revenue,and urgency in getting product to market. TheUS industry appears to be becoming aware ofthe issues of supply chain sourcing andmanagement, the need for design formanufacture and field service. Althoughrelevant skills are lacking, they have beenrecognised as an issue. Furthermore, investorexpectations are a major driver. Like Canada,the fuel cell space is predominately occupiedby a large number of relatively smallcompanies, with a relatively small number ofthe major corporations involved (eg SiemensWestinghouse, UTC, General Motors).

Many of the pressures experienced andreported by Canadian and US companieswere either not evident or appeared relativelyunimportant in the Japanese context. It is thevery large and fully integrated manufacturingcompanies that are leading development andinvestment in the Japanese fuel cell industry.There is little evidence of an SME sector inthe industry. That which exists tends to focusmore on contract manufacturing rather thanIPR based development and manufacturing.

Consider the corporate structure of Toshibashown in the following paragraph. Thisillustrates how the company’s DMFCtechnology has immediate relevance forexisting product streams; this could givesignificant competitive advantage to itsproducts. Toshiba also has extensive

experience of volume production andproduct design for volume production;these are applied throughout all stages ofproduct design.

Toshiba Corp• R&D centre (DMFC plus other

technologies)• Mobile communication company• Digital media network company• Personal computer and network company• Semiconductor company• Social network and infrastructure systems

company• Industrial and power systems and services

company- Toshiba International Fuel Cells Corp - Several other divisions

Whilst Toshiba’s approach to DMFC productsreflects its experience and understanding ofhow they would be deployed in the portableelectronic products which the companymanufactures, its approach to PAFC andPEMFC products reflects its experience infield deployed power generation systems,which it manufactures and installs. Toshibahas its entire R&D, manufacturing,distribution and customer experience todraw upon in its fuel cell productsdevelopment programme. This is in contrastwith SMEs in the sector operating in thewest. For example, an SME seeking to get aproduct into volume production is unlikely tohave existing high volume productionfacilities or relevant experience. If theproduct is not optimised for production, thencosts will be higher than they need to be,giving the advantage to those companiesthat have this skill.

Achievement of volume production is likely tobe much easier for large integratedcompanies. In Japan, the integratedcompanies are fully engaged in productinnovation and development.

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In Canada, in particular, most productdevelopment activity (beyond MEAs) iseffectively conducted by SMEs. This patternis repeated in the USA but with a largernumber of slightly larger companies.However, beyond Plug Power, few westerncompanies have significant collaboration withvolume manufacturers. The consequence isthat fuel cell developers outside the MEAsector are unfamiliar with the requirementsfor design for volume production, design forfield support and, in many cases, how bestto deploy the product. In addition, supplychain management has emerged over thepast few years as a significant issue in USmanufacture. These are skills the UScompanies are now importing – as reportedin the US mission report.

In Japanese manufacturing companies,regardless of sector, a full and completeunderstanding of what it takes to get aproduct into volume production appears tosupport fundamental R&D.

In the west, the prevailing sentiment seemsto be that the small companies develop newtechnologies which are then acquired bylarger players. From a capital efficiencyperspective this may work well for theacquiring corporation but only if there issufficient volume of small entrepreneurialcompanies. The cost is likely to be a highattrition rate of SMEs. Could it be that thedifference between Japanese and westerncompanies is that the western ones areoutsourcing their new product innovation (asdistinct from existing product innovation),whereas Japanese ones do this themselves?On this basis, established westerncompanies would tend to adopt a ‘wait andsee’/technology following approach.

3.3 Investment return issues

The Japanese companies visited during themission did not appear to be engaged in therush to market observed in the USA and

Canada (western venture capital companiesseek extremely high rates of return overrelatively short periods – typically 30% perannum over a five-year period). There was nosense of urgency around market introductionrates among funding agencies, despite havingambitious market penetration targets. Itseemed that the prevailing view was thatproducts will commercialise when they areready, with everything in place to do so.Given the ‘industrial muscle’ within Japanesecompanies, when they do have a productready for market they will undoubtedly launchit swiftly and efficiently.

The reasons for the Japanese ability to takea long term view of fuel cellcommercialisation were explored duringmission visits. It was apparent that there isno overwhelming shareholder pressure togenerate revenue quickly or to begin toshow a return on investment in the verynear future. This is partly due to the natureof shareholdings in the large Japanesecompanies and partly to their collectiveapproach to investment generally. Toshibastated that it had invested some ¥1 billion(£5 million) over the past 30 years.

This ability to take a long term view couldhave adverse implications for fuel cellproducts coming to market from the west.Because Japanese companies do notappear to be under intense shareholderpressure to generate revenue, they can taketheir time to fully refine the technology. Thisraises the question of whether, given shortterm shareholder pressure to generaterevenues in western companies, thesecompanies are getting product to marketsooner than they should for the good oftheir own companies and their customers.Some of the product failures that have beenevident in some ‘early commercial sales’suggest that this may be the case.

On the question of how historical investmentcosts are factored into product costs, both

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METI and the MCFC developers met at theKawagoe Thermal Power Plant advised thatthey are not. Historical investment isconsidered a sunk cost. Industrial R&D isconsidered a fixed and accepted cost. Whilstthis is also true of most large westerncorporations, the Japanese appear to take alonger term view and are less fearful offailures than counterparts in the west. Thiscan be a weakness when they continue witha technology for too long, and a strengthwhere short returns do match productdevelopment timescales.

R&D typically takes at least 5-10 years, andoften much longer, to generate results.Western businesses measure returns oninvestment in three-year periods at best,driven by stock markets. This could be one ofthe most fundamental differences betweenJapanese and western businesses. It couldbe argued that this is a systemic weakness ofwestern industry, including the UK.

The counter argument which is sometimesput forward is: ‘why invent it ourselveswhen we can buy it some time in thefuture?’ This short-term perspective isreflected in some part of both UK industryand stock markets. For example, UK utilitiesare, they say, prevented from makingsignificant investment in long-term R&Dbecause of the constant drive for capitalefficiency and to keep costs low.

In contrast, however, Johnson Matthey FuelCells and Rolls-Royce Fuel Cell Systemscontinue to support R&D developmentswhich have very long term return oninvestment expectations. These twocompanies, a tribute to UK manufacturing,seem to be following the Japaneseinvestment approach. (It is worth noting thatboth are part of much larger corporations.)

To conclude, Japanese Investment in R&D inthe fuel cell space is funded by the largecorporations with very heavy support from

government. Western investment ispredominantly made by private investors andthe stock market.

An interesting anecdote heard during themission was that whilst there is 1 accountantper 1,000 people in Japan, there are 9 per1,000 in the UK. It was suggested that a resultof this is that UK companies have a highernumber of accounting professionals in seniorpositions than Japanese companies. What arethe implications of this? The anecdotecontinued by describing how a senior UKcompany representative, an accountant bytraining, had surprised delegates at aconference by describing how he hadrationalised the entire R&D programme.

3.4 Target sectors

Target sectors for development in Japan (inno particular order) are:

• Micro fuel cells• Transport• Domestic CHP

Energy security is driving interest intransport and CHP applications, whilst themicro fuel cell development seems to bedriven by potential market demand andmanufacturing opportunity.

There appears to be little interest amongJapanese companies in commercialstationary systems for use in back-up powersystems and uninterruptible power supply(UPS) systems (these are cited as theimportant early markets in the west). Thereason stated by NEDO was that this sectoris not considered worth pursuing as thevolumes are relatively low, especially incomparison with the target sectors.

In the west, interest in these early marketopportunities is driven by the need togenerate revenues whilst the industrydevelops, and production costs come down.

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Because the Japanese industry is lessconstrained by short-term imperatives, itappears to be bypassing this processcompletely. Hence, expectations of bringingproduct to market in 3-4 years are the norm.

In order to achieve volume production forany product there should be an extendedprogramme of product proving – driving outproduct weakness, minimising the potentialfor product failures, and concentratingparticularly on product safety andcertification. The higher the potential marketvolume, the more rigorous this process.Toyota advised that it in its experience thisprocess can be considerably more costlythan basic R&D. It can cost ten times thebasic R&D to get a product to market.

3.5 Importance of R&D in

underpinning production

Research and development underpin theentire Japanese industrial process. Japanesecompanies expect to become completemasters of the fundamental science of theirproducts, as they do not outsource that partof the process. Toyota, for example, explainedhow it must fundamentally understand everyaspect of the fuel cell device (although atsome point it may outsource themanufacture). The company bought in theinitial technology and then made it its own.Similarly, Hitachi described how it initiallypurchased MEAs but has now developed itsown mix, with materials to its specificationsupplied by chemical suppliers. The companyhas also developed its own catalyst.

Japanese R&D covers the entire spectrum,from fundamental electrochemistry throughto final product testing and characterisation,with equal priority given to every step. Finalend-user product testing can often highlightstrengths and weakness in the fundamentaltechnology as it is deployed in the field. Thecosts of this testing are considered part ofthe R&D costs.

The depth of the commitment tounderstanding the fundamental science of thetechnology is perhaps illustrated by the level ofinvestment seen in fundamental researchfacilities. For example, during the missionteam’s visits, over 20 fuel cell test stationswere seen at Hitachi’s facilities, with around 30at Mitsubishi Materials. It was also noted thatNEDO and METI can help to fund thepurchase or development of test equipment atlevels of up to 100% of the costs.

Japan has attracted engineers and scientistsfrom around the world. For example, AISTemployment levels at April 2004 were asshown in Table 3.1.

The organisation employed over 175 full timescientists from Japan and a further 300visiting researchers from around the world infuel cell activity alone. These researchers arein addition to those in Japanese universities,and those working in the private sector. Thereare no figures available from the privatesector, but it is reasonable to assume thatJapanese companies are also attractingexpertise from overseas.

By attracting researchers from around theworld, Japan is in a position to access, assessand absorb leading-edge experience.

3.6 Funding levels and approach

The levels of Japanese government andindustry investment in fuel cell and hydrogentechnologies are impressive. Whilst levels ofgovernment spending were readily identified,

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AIST staff Visiting researchers

Tenured researchers 2,016 Postdoctoral 800

Fixed term researchers 379 From private sector 800

Admin staff 719 From universities 1,700

Total 3,114 From overseas 900

Total 4,200

Table 3.1 AIST employment levels at April 2004

neither METI nor NEDO could quantify thetotal funding from industry or the numbers ofpeople employed. Nevertheless, it appearsthat Japanese companies are investingconsiderable amounts. Toyota, for example,stated that it received little financial supportrelative to its own investment programme.Whilst it was stated that they prefer to avoidthe paperwork associated with externalfunding, a desire to avoid revealing IP mightalso be a factor.

State support is provided in the form of non-returnable grants. NEDO stated during itspresentation that it typically provides fundingto a level of 50-100%. Ownership of theresultant IPR, unless specifically defined byNEDO, resides with the company executingthe R&D. More interestingly, funding fordemonstration projects (from METI) canattract 100% funding. This recognises thatdemonstration projects are part of thedevelopment process for this newtechnology. Beta units being trialled in thefield provide essential data on systemperformance, which is crucial in thedevelopment of marketable products. Thisexperience contrasts with EC state-aid rules,which limit the amount of governmentsupport available for demonstrations of fuelcell and hydrogen technology. Together withother factors, this may account for why thereare so few demonstration projects in the fieldin the UK.

At AIST, the mission team was advised thatcriteria for funding are almost solely limited tothe technical achievability of the technology.This allows for a wide variety of technologiesto be tested; it is often through such researchthat technical breakthroughs are made andnovel products and processes emerge. Thiscontrasts with the UK approach, wheredecisions for funding of non-academicresearch are generally predicated onperceived market appeal, with ‘commercialattractiveness’ cited as a key funding criterionin many cases.

METI is specifically investing ‘to develop thenational skills base’ as part of its objectives.Thus, a project that does nothing more thanequip and skill a team of engineers orscientists might be considered a validexercise in its own right. If the only route todeveloping skills and experience in industrialengineers were through university(undergraduate and postgraduate education),industry would take a long time to respond tonew technological developments. Support fora company’s effort to develop skills andexperience in fuel cell technologies canenable that company to understand morecomprehensively the context of thetechnology for their business. This does notappear to be part of the national UK agenda.

3.7 Importance of field trials

For purposes of clarification, the differencebetween field trials and demonstrationprojects can be defined as:

• A field trial installs a product into the fieldwith the specific purpose of gatheringproduct performance data on a number ofvariables, and feeding them back intoproduct design. The product may beexpected to fail and perform less thanoptimally. Field trials are not very likely tobe in the public gaze.

• A demonstration project demonstrates toits target audience the performance of theproduct/system. Failures should not occur,and the product is largely optimised. Thepurpose of the demonstration is to gainpublic recognition and public acceptance.

This discussion centres specifically uponJapan’s approach to field trials. In everyorganisation visited during the mission, fieldtrials were a recurring theme. It is recognisedin Japan that field trials are a crucial andintegral part of the product developmentcycle. The full range of performance elements,from system performance to impacts on the

30


MEAs, are affected by how systems aredeployed and used in the field in conditionsthat cannot be duplicated in the laboratory.These field trials are crucial in driving outsystem and component weaknesses.

Note that the demonstration projectsdescribed in Section 2.4 exhibit many of thefeatures of field trials. In the absence offurther information, they could be consideredas lying somewhere between the two.

Table 3.2 summarises current and plannedtrials by a selection of companies visited (seeSection 6.3 for further details).

Some of these trials may be included in thegovernment-funded programme described inSection 2.4.

During field trials, end users are unlikely to beprepared to pay for the capital costs of thehardware, particularly as there is likely to besignificant inconvenience duringsystem/product failure (as there will be).Whilst large corporations can afford thesecosts to some degree, this process is oftenconsiderably more expensive and timeconsuming than fundamental R&D; this wasconfirmed by Toyota. It is in recognition of thisproduct development requirement and thehigh cost of the process that the Japanesegovernment provides 100% funding for itsinitial ‘demonstration’ programmes. Such anapproach is substantially different from that inthe UK, where field trials are perceived as

near-market activities rather than crucial andfundamental aspects of productdevelopment. This puts UK manufacturers ata relative disadvantage.

3.8 Perceptions of safety risks and

public education

To date, not much effort has been put intopublic awareness and education. However,METI indicated that this has been identifiedas a significant area and is attracting someimportant work. This is beginning withschools and the public. In this respect, METIconsiders the UK, EC and North America asoffering some very useful insights andlessons for Japan.


• In contrast to the situation in the USA andCanada, the Japanese fuel cell andhydrogen industry appears to bedominated by large corporations. Thesecorporations are generally much lesssusceptible to pressures relating to shortterm return on investment and are,therefore, able to take a much longer-termview of their development activities. Alikely impact of this is that products willnot be launched onto the market untilfully refined. Funding by industry is beingmade on the premise that a real andfinancially lucrative fuel cell industry willemerge, and that companies engaged inserious pursuit of this industry will realisesignificant sales. The geographical scopefor such sales is not limited to Japan;indeed, export opportunities areanticipated, including to the UK.

• As a result of having a longer termperspective than western counterparts,Japanese companies appear to be lessinterested in short-term niche opportunities,such as back-up power. Instead, they arefocusing on the applications and marketswhere substantial sales are to be expected.

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Organisation Current trials (2004) Anticipated

TIFC 30 units on trial 1,000 units in 2005

Tokyo Gas 100 units each year for

four years

Osaka Gas 200 units per year

to 2008

Hitachi 100 units by 2007

Table 3.2 Current and planned stationary fuel cellsystem trials among selected Japanesecompanies

• As well as being larger than their NorthAmerican counterparts, Japanese fuel celland hydrogen companies are able to drawon extensive in-house experience in R&D,manufacturing and distribution. Thisappears to be helping to ensure that therequirements of volume production, aswell as those of the market, areaddressed at an early stage in thedevelopment of the technology.

• Several of the companies visited by themission team have an emphasis onmaintaining full control of their coretechnology as it is developed. As theymove to production, certain aspects maybe outsourced.

• Japan has successfully attracted engineersand scientists from around the world,thereby accessing and fostering leadingedge experience. Furthermore, it is evidentfrom the mission that the longer termfunding horizon pertaining to Japan isyielding world-class fundamental andapplied research. The lack of long-termR&D support in the EU (limited to five-yearcalls with mainly political rather thantechnical or commercial direction), and thelack of a secure career path in the UK forbright researchers, can only exacerbate a‘brain drain’ to Japan and elsewhere. Toaddress this, significant structural changesto the UK institutional and industrialframework are required.

• The development activities of majorJapanese corporations, combined withsubstantial government support, couldhave a significant impact on Japan’scompetitive position as commercialproducts emerge. The overall process issupported by legislative revisions and workto address areas such as standardisationand safety, providing a linked and cohesiveframework for fuel cell and hydrogendevelopment and deployment.

• Assuming fuel cells are produced involume, this would create large value-added manufacturing opportunities. As thetechnology is commercialised, the UK islikely to have increasing opportunities toaccess core technology from Japan forpackaging into domestic products andservice. This, in turn, could stimulate thedevelopment of supporting installation andservicing infrastructure.

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4 HYDROGEN PRODUCTION

AND STORAGE


4.1 Introduction

Fuel cells run best on hydrogen.Unfortunately, the high reactivity and lowdensity of hydrogen precludes its availabilityin unbound form terrestrially. Consequently,hydrogen needs to be extracted from othervectors, such as water (by electrolysis) orhydrocarbons (by chemical reformingprocesses). The extraction process can beintegrated with the fuel cell stack or can beperformed remotely, the hydrogen beingstored for subsequent utilisation; in thiscase, weight and volume-efficient storagebecome paramount.

Fuel processing

Electrolysis is attractive where electricity costsare low or where renewables (such as solar,wind or tidal power) are mandated. While thelatter situation may develop as fossil reservesare depleted, the greatest effort currently isbeing directed at the conversion ofinfrastructure fuels, such as natural or towngas, liquefied petroleum gas or transportfuels, into hydrogen. The complexity ofconversion is dependent on the nature of thefeed (diesel being more difficult than naturalgas) and the stack type, with highertemperature fuel cells being tolerant to CO,for example. Figure 4.1 illustrates the genericsteps required to convert hydrocarbons.

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Liquid fuels

Natural gas

Evaporation

CO selectiveoxidation

PEMFC (CO<10 ppm)

SOFCThermallyintegratedreformer

500to

1000ºC

Fuel-cell types

650ºC

200ºC

80ºC

MCFCThermallyintegratedreformer

PAFC(CO<5%)

Sulphur removal

Conversion to H2

and CO500 to800ºC

300 to500ºC

<40% H2

(CO2, H2O, etc)Decreasingefficiency

Increasingcomplexity offuel processing

Shift reaction H2

and CO2

Figure 4.1 Fuel processing reactions (Source: BCH Steele, ‘Running on natural gas’, Nature, 1999, v 400, p 619-620)

As can be seen, more processing steps areneeded for the PEMFC than other fuel celltypes. The greater complexity andassociated cost of PEM fuel processingmust be balanced against the longer start-up time and exacting materialsrequirements of the MCFC and SOFC. The more complex fuel processing andgreater relevance of hydrogen storage tothe PEMFC is reflected in more emphasison the PEMFC in this section.

The fuel processors needed for the PEMFCmust be of low cost, possess as small afootprint as possible, and offer fast start-upand good load-following with overall unitdurability between 4,000-40,000 hoursdependent on application. This is far fromeasy. In Japan, climate variations (Sapporo isvery cold in winter) and the limitation of gasdistribution networks to metropolitan areasrequire fuel processors to handle fuels suchas city gas, LPG and kerosene for domesticapplications, together with naphthas for thegeneration of hydrogen at fuel cell vehiclefilling stations.

The costs of fuel cell systems can be splitroughly three ways between the front-endfuel processing, the stack, and the balanceof plant – BOP (controls, pumps, blowers,etc). Cost reductions and improvements indurability are needed in all three areas.Furthermore, hydrogen extraction andstorage processes need to be asenergetically efficient as possible if thebenefits proffered by fuel cells are to berealised. Until recently, most fuel processinghardware designs were derived from steadystate reactors usually used to producehydrogen at large scale; these are not ideallysuited to small scale plant running at variableload with frequent power cycles. The needfor innovation has spawned an intensedevelopment effort worldwide andparticularly in Japan.

Hydrogen storage

Because hydrogen is a gas, storage isdifficult, with only compression andliquefaction presently coming close topractical application. While a variety of otherstorage methods (metal and chemicalhydrides, carbons, alanates and othercompounds) are under active investigationand have identifiable niche applications,none yet hold a clear promise of universalapplicability with similar gravimetric andvolumetric densities to hydrocarbon carriers.Allowing for the containment vessel, a givenvolume of gasoline contains six times theenergy content of a similar volume of liquidhydrogen for example; this has clearimplications for power density or range (forvehicles). One pragmatic alternative ismethanol, which contains just over half theenergy content of gasoline; this featureunderpins the attractiveness of the DMFCfor portable applications.

Despite the reservations expressed here, ifa weight and volume efficient means ofstorage were developed, this might be themain key to unlock the ‘HydrogenEconomy’, and explains the significantefforts being directed in Japan andelsewhere to this issue.

Policy context for hydrogen

Hydrogen production and storage is largelya means to the end of commercialising fuelcell systems. Between 1993 and 2002,however, significant funds (around £140 million) were dedicated in Japan tothe WE-NET project; this covered the coretechnologies for the generation, supply,storage and utilisation of hydrogen fromrenewable sources. With an initial horizonto 2030, this ambitious project wasrefocused by METI in FY 2001 toconcentrate on fuel cell utilisation andhydrogen-diesel cogeneration.

34


To meet this need, Japan’s first hydrogenfilling station, based on steam reforming ofnatural gas, was constructed by Iwatani atthe Nishijima Technology Centre of OsakaGas Co. A further station, incorporating aPEM electrolyser, was built at Takamatsu inthe same year (2001). In the following year,an off-site hydrogen supply plant wasconstructed in Yokohama; the number ofhydrogen filling stations has since grownto ten (see Figure 2.2), largely under theauspices of the JHFC. This number offilling stations is second only to the US(currently with 25 operating or underconstruction) and is well ahead of the UK’s one station at Hornchurch, London.This is unsurprising in view of Toyota’sobservation that such demonstrationfacilities generally need to make use of a proximate supply chain.

Funds dedicated to hydrogen and fuel cellR&D have increased substantially in recentyears, to ¥32.9 billion (£164.5 million) infinancial year 2004, of which ¥6.35 billion(£31.8 million) is dedicated to the‘development of fundamental technologies inthe safe utilisation of hydrogen’. This coversthe essential codes and standards, safety,storage and handling activities that wouldsupport the practical exploitation of hydrogenin the market (see Figure 4.2), with a horizonextending to 2020. A complementary activity,designated the ‘Millennium Project’ (seeSection 2.5), deals with the establishment ofcodes and standards specific to PEMFCsystems, over the shorter 2000-2004timescale. This latter programme leads on tothe commercialisation of stationary fuel cellvehicles in line with the targets presentedearlier in Section 2.4.

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H2 Production

H2 Infrastructure(station etc.)

Hazard analysisImprovement efficiency of

production and transportationHigh pressure H2

station component

Assessment of deflagration, flame, diffusion. Fundamental data

Material characteristics under high pressure or low temperature

H2 Storage materials

ScenarioStandard, international

cooperationInnovative,

leading technology

Safety measure H2 Tank system component Stationary FC component

Vehicle systems

Stationarysystems

Basic R&D

H2 production/LH2,high pressure H2

LH2 or Highpressure

transportation

Storage +pressurisation H2 Production

H2 Refuelling FCVs, stationary FCs

H2 Transportation H2 Station, storage H2 Utilisation

Figure 4.2 NEDO-supported work in the development of safe utilisation and infrastructure of H2 (Source: NEDO)

4.2 Hydrogen production and

storage activities

Toshiba International Fuel Cells Corp (TIFC)

Toshiba is Japan’s second largestcomprehensive electrical machinerymanufacturer, servicing 60% of Japan’selectrical transmission and distribution market.TIFC is a joint venture between Toshiba andUTC Fuel Cells, which was announced in2001, and employs around 100 staff. Itfocuses on the development of PEMFCs forresidential applications. The company isdeveloping two small stationary units: a 1-kWsystem for home use and a 5-kWe system forcommercial use (convenience stores,restaurants, etc) (see Section 6.2).

The 1-kW (700-We) PEMFC utilises OsakaGas-developed steam reforming hardware,incorporating solid state sulphur sorbents.Larger units make use of HDS technologysourced from Tokyo Gas. At least sixreformer units at this scale were seen ontest at TIFC’s R&D facility, alongside 22PEMFC test rigs. Ongoing developmentwithin TIFC is being directed at resistance tocarbon corrosion, the application of high-temperature PEM membranes, and anodeand reforming catalyst durability.

Powered by city gas or LPG, the 5-kWe fuelcell system uses a partial oxidation reformerdeveloped by HydrogenSource. BOPcomponents (such as the cathode airblower) are being developed by Toshiba.

Predating the formation of TIFC, Toshiba hadalso been working with Cosmo Oil on thedevelopment of a further 1-kWe PEMFCsystem running off butane. The catalyst usedin the plant is also suitable for keroseneprocessing. Its electrical generatingefficiency is 25-30%, depending on the load.Marketing of this package is to begin laterthis year.

In its own right, independent of TIFC,Toshiba is developing DMFCs and isengaged in a joint programme with IHI forthe development of a hybrid (300 kWe/50kWe) MCFC-GT. Toshiba has also beensupplying PAFCs through its partnershipwith UTC Fuel Cells since 1980. Inconclusion, Toshiba’s activities in fuel cellsand hydrogen production are extensive (seeSections 7, 8 and 9 for further details ofDMFC, MCFC and PAFC developments).

Hitachi Ltd

Hitachi is the largest comprehensivemanufacturer of electrical machinery inJapan, with semiconductors and computersas mainstays, and over 1,000 subsidiaries invaried business sectors. Alongside Toshiba,Toyota and at least 11 other companies,Hitachi is participating in METI’s NewEnergy Foundation (NEF) project, in which 1-kW and 5-kW fuel cell systems are beingdemonstrated at 31 residential andcommercial premises in Japan.

Hitachi is developing PEMFC systems forresidential use in the 500 W to 3 kW range.The 1-kW unit being developed forhousehold use is driven by an autothermalreformer. Four catalysts are utilised in theoverall fuel processing system: an off-gasburner, the reformer, single stage shift, anda preferential oxidiser to reduce CO to <10ppm. The autothermal reformer yields aproduct with upwards of 42% H2. Followingshifting, this increases to around 48% H2.

Hitachi recognises that steam reformingcould give a reformate containing 70% H2.However, concerns over slow start-up andlimited load following have led the companyto the autothermal route, in common withmany other developers. Even with theautothermal reformer, a hydrogen buffer isrequired for immediate start-up, andbatteries are used to smooth out householddemand fluctuations. Hitachi commented

36


that the reformer technology is stillpresenting a number of challenges.

Details of the commercial evolution ofHitachi’s system are provided in Section 6.3.

Mitsubishi Materials Corp (MMC)

MMC is Japan’s top non-ferrous metalsmelter. Among its wide-ranging businessactivities, the four core areas are cement,aluminium, copper and fabricated productsbased around power metallurgy, andmaterials engineering generally. MMC’sactivities in SOFCs have originated from thisbackground, and from interests in hightemperature ceramics for the nuclearindustry. Other parts of the Group are alsoworking on fuel cells; for example,Mitsubishi Electric Corporation is developinggraphite-polymer composites for PEMFCseparator plates.

MMC is working on intermediate temperatureSOFCs running off natural gas at 1-kWe scale.These systems can run off natural gas, towngas, LPG, coal gas or biogas. Advantageously,the pre-reformer (converting higherhydrocarbons to methane) is built into thestack and operates at a steam/carbon ratio of3.3-3.4. This is followed by internal reformingwith interstage water injection. Unsurprisingly,much of MMC’s effort focuses on materialsdevelopment; nevertheless, impressivesystem control strategies were also apparentduring the mission team’s visit.

AIST

General information on AIST has alreadybeen provided in Section 2.8.

In the area of SOFC reforming, AIST’sEnergy Technology Research Institute (ETRI)is seeking to internally reform kerosenedirectly at minimal steam/carbon ratios usingCeO2 as an additive to the anode material tominimise coking.

AIST is active in hydrogen storage, fromsafety and measurement (sensor) technologyto issues of materials embrittlement, researchinto metal and chemical hydride storage, andliquid hydrogen boil-off studies. No evidenceof ‘earth-shattering’ discoveries in this areawas projected during the mission team’s visit.

Tokyo Gas Corp

Tokyo Gas is Japan’s largest city gascompany, serving over 8.8 million customers,mainly in Tokyo and five surroundingprefectures. It leads other gas companies inconverting feedstocks from petroleum toLNG and has renowned expertise indesulphurisation. In Japan, only Osaka Gashas a claim to an edge over Tokyo Gas inreforming hydrocarbons to hydrogen. TokyoGas is convinced of the commercial benefitsof the development of clean technologies,including fuel cells. With the deregulation ofboth gas and electricity, it sees fuel cells as ameans of both maintaining market share ingas and extending activity into the powergeneration business.

Tokyo Gas has been trialling and developingfuel cell systems since 1972. Work thenconcentrated on the PAFC, but concernsover cost and improvements to alternativescaused a shift in emphasis to the PEMFC forresidential cogeneration, and to hydrogenproduction for vehicles and for merchantsupply. Tokyo Gas also has an interest inSOFCs, starting 15 years ago; the companybelieves commercialisation of this lattertechnology is close.

To stimulate the ultimate growth of fuel cellvehicle (FCV) markets, Tokyo Gas began theconstruction of a hydrogen filling station atits Senju site in November 2002. The plantopened in May 2003, and was the first inthe Tokyo Metropolitan area. Thedevelopment was the result of a jointventure between Tokyo Gas and NipponSanso Corp through the JHFC project.

37


To complement this, Tokyo Gas has acquireda Toyota fuel cell hybrid vehicle (FCHV) on a30-month lease. Tokyo Gas plans to use thevehicle for corporate communications andpublicity campaigns at test-drive sessionsand other environment-related events, aswell as obtaining useful test data from thestation. The company has also beenevaluating an F-CELL A-class Mercedes FCVsince October 2003.

Tokyo Gas is responsible for all areas of therefuelling station operation except thehydrogen dispenser, for which Nippon Sansois contracted. The hydrogen refuelling stationuses LPG as a feedstock and deliverscompressed hydrogen. The plant,constructed by Mitsubishi Kakoki Kaisha, hasan output of 50 Nm3/h H2. Storingcompressed hydrogen at 35 MPa, thisoutput will permit fuelling of five passengercars or one bus per day. By July 2004, 256passenger car fills had been performed.

The plant incorporates a compact six-columnpressure swing adsorption (PSA) unit fromQuestair. With each column measuring 15 cm wide by 2.0 m high, these dimensionsare significantly smaller than those of thethree columns, each of 50 cm diameter and2.9 m height, utilised by Tokyo Gas in aprevious plant design at the same scale.

Regular practical use of the station will:

• Gauge and encourage social acceptance• Permit test data on environmental

impacts, energy efficiency, safety andeconomy to be obtained

• Assist in the promulgation of codes and standards

In the residential area, Tokyo Gas is focusingon 1-kW systems running off natural gas(see Section 6.2). The current fuel processorutilises the traditional steps of reforming,shift (single stage) and CO removal;however, this has been packaged into an

extremely compact design (measuring 600 mm high for an 18.8 litre volume) bysurrounding a burner-driven steam reformerwith concentric downstream stagesarranged according to temperature need.

With a product gas containing 75% H2 and 7 ppm CO, the overall fuel processingefficiency from this integrated design is 83%(higher heating value – HHV), delivering anestablished electrical efficiency of 34%(lower heating value – LHV) for the PEMFCsystem as a whole. Development of thisbasic design has improved part (30%) loadefficiency to 76% (LHV), at lighter weight (17 kg, as opposed to 30 kg for the initialfuel processor design).

The fuel processor unit is licensed to anumber of third parties.

To complement its reformer development,Tokyo Gas has used its heritage of city gasdesulphurisation to provide ambienttemperature high sulphur removal of theodorants within natural gas. With anincrease in capacity of two orders ofmagnitude over commercial zeolites, thismaterial delivers 4,000 hours of use for a300-ml volume and an inlet H2S of 35 vppm.An attractive feature of the newly-developedmaterial is an indicator change from white toorange as the bed becomes exhausted. Thematerial has also been licensed to a numberof fuel cell developers. In addition to thisthrow-away material, regenerable sorbentsare also being researched.

While the fuel processor described previouslyis an impressive feat in its own right, TokyoGas is also investigating the use of palladiumdiffusion membranes to pull across the steamreforming equilibrium without a need for shiftor preferential oxidation. This is beingresearched both for the residential PEMFCsystem and future H2 filling stations forvehicles. Operating at 0.9 MPa, with up-frontdesulphurisation to ppb levels, lifetimes of

38


nearly 10,000 hours have been realised in thelaboratory. Reformer temperatures drop to550°C when using this approach (comparedto the 800°C more associated with standardreformer tubes). The membrane concept isillustrated in Figure 4.3.

In collaboration with Mitsubishi HeavyIndustries, Tokyo Gas has built yet anothercity gas fuelled plant at its Minami Senju siteutilising the membrane reformingtechnology. With an output of 40 Nm3/h H2,the plant has a 67% smaller footprint thanan equivalent plant based on standardtubular reformers, shift section and PSAtowers. Subsidised by JGA and NEDO,99.999% purity H2 has been realised by thisapproach at high reliability, opening upopportunities for wider hydrogen supply.

The plant, illustrated in Figure 4.4, requires96 perforated steel hydrogen separationmodules bearing 20-µm palladium alloycoatings, holding nickel based reformingcatalyst. By adding an up-front pre-reformer,the same plant can utilise LPG feeds.Impressive in performance, perhaps themajor obstacle facing the plant is the highcost of the Pd alloy coatings.

In conclusion, the dedication of Tokyo Gas toa hydrogen future, pragmatically bridged byinfrastructure fuels, is impressive. Moreover,this dedication is predicated on goodtechnology, sound business principles andrealisable markets, particularly with regard tomerchant hydrogen supply.

39


Membrane reformer

Structure of membrane reformerThe membrane reformer can perform steam reforming andhydrogen separation processes simultaneously

Image of hydrogen refuelling stationFuel cell vehicles can be supplied with hydrogen producedfrom natural gas at a hydrogen refuelling station

Hydrogen refuelling station by natural gas

Figure 4.3 Tokyo Gas membrane reformer concept (Source: Tokyo Gas)

Figure 4.4

Tokyo Gas membrane basedreformer as heart of FCV fillingstation (Source: Tokyo Gas)

Toyota Motor Corp

Toyota is one of the world’s ‘Big 3’automakers, with a 40%-plus share of thedomestic market (excluding minicars) and apassenger car production base in the UK. In1999, the company entered a five-yearagreement with General Motors to shareinformation in hybrid electric vehicle (HEV)technology, mostly in codes and standards.By 2001, the relationship includedExxonMobil regarding fuelling issues.

Section 6.2 provides details of Toyota’s FCVtechnology and activities. Initially, thecompany concentrated on the Ti-V-Mn alloyas a compact storage medium, as used inthe FCHV-3 vehicle. Continuing barriers withthis material include weight, safety(flammability) and degradation on cycling.

Recognising the opportunities for theestablishment of fuel cells without (orahead of) establishment of a hydrogendistribution infrastructure and the ease ofmethanol steam reforming, Toyota instituteda research programme culminating in thedelivery of a compact (0.3 m diameter, 0.6m long) 25-kWe reformer. CO clean-up is bymethanation. However, the absence of anindustry-wide acceptance of methanol as aubiquitous transport fuel has caused a shiftto gasoline reforming, development ofwhich was described during the mission asbeing still in the basic research area. Start-up time is a major barrier. Consequently,Toyota has concentrated on compressedhydrogen storage for current FCVs, bothpassenger cars and buses (where the gas ismore readily accommodated in aheightened roof space).

Work on metal hydride storage continues, as70-MPa compressed hydrogen in apassenger car delivers an unacceptable 300-km range. Toyota is also exploring thefollowing storage options:

• Liquid hydrogen as a storage medium(issue: boil-off)

• Chemical hydride (NaBH4) storage (issue: handling)

• Decalin dehydrogenation (issue:complexity, but less so than withreforming)

• Carbon nanotubes (recognising that initialclaims were overly-optimistic)

In conclusion, Toyota is committed to theeventual development of FCVs but isconscious that a market will take someyears to develop unless significant stridesare made in cost reductions generally, and inhydrogen storage technology for passengercars in particular. Possible timescales forintroduction are discussed in Section 6.3.

Kawagoe Thermal Power Plant

(See Section 8 for more details on themolten carbonate activities at Kawagoe.)

Little discussion was had during the missionteam’s visit concerning the specifics of thereforming catalyst within the demonstrationplant. The plant employs an IHI platereformer to convert higher hydrocarbons inthe desulphurised natural gas feed. Tominimise heat load, the plate reformer islocated in the stack enclosure. After passingthrough a heat exchanger to preheat theincoming gas, the product gas is thenreformed directly over the anode, with COacting as a fuel rather than a poison.


There are a number of lessons for the UKthat were evident from the mission visitsand ensuing discussion. Many of theselessons go beyond technical matters to thewider business context, particularly withregard to government support:

• In the companies and institutions seen,the level of technical innovation was high.

40


Importantly, the business context forproduct placement has been wellthought through. Perhaps the mostimpressive instance of this was theresidential fuel cell, the design takinginto account the mode of operation(baseload), size (standardised), pricepoint and usability. The design benefitsfrom a Japanese-wide view under theaegis of the JGA/NEF project; moreover,this design is also suited to export, andthe companies working on this areanticipating sales overseas.

• The underlying fuel processing hardwarewas also innovative, as exemplified by theTokyo Gas membrane reformer, thedevelopment of sulphur sorbents notrequiring a hydrogen stream (as withHDS), single stage shifting, and small,compact packaging both for residentialand commercial applications.

• The mission team saw few majordevelopments in hydrogen storage. Thismay have been due to the limitednumber of institutions seen during themission, or the greater inherent difficultyin storing hydrogen, rather than poorquality research. The scope of researchwas wide and continues undeterred byintrinsic difficulties.

• As with the fuel cell systems as a whole,significant cost reductions are required tomake residential fuel processorscommercially realisable. Mass productionwould be expected to yield a tenfolddecrease in costs; further innovation isrequired to improve upon this. Cost isless of an issue for niche hydrogenproduction plant at small (20-50 Nm3/h)scale. Plant reliability remains an issue,but one which is being steadily dealt with.

• Innovation in hydrogen production andstorage is helped greatly by the businesscontext in Japan. The government,

through METI/NEDO, sets direction andfunding with focused long-term stretchhorizons. Policy is informed fromstakeholders. Funding is significant,recognising the potential of fuel cells forjob creation, innovation, manufacturing,trade and exports. The fundedprogrammes have ambitious targetsspecifically to ensure that, even if onlypart realised, significant strides will bemade. Buy-in to targets in fuel celldissemination goes right up to the PrimeMinister (this personal support being veryrare in Japan, underlying the seriousnessof commitment). Such commitment andresources contrast greatly with the UK.

• The commitment and engagement of theJapanese government to fuel cells mayalso be evinced from the drafting ofpermitting legislation (modification toPublic Utility Acts, high pressure gasregulations, equipment certification, firedefence law and architectural standards)for the location of hydrogen generatingequipment near to homes and withinfilling station precincts. Such legislation isexpected to be enacted in 2005.

• Even amongst the few companies andinstitutions seen, coverage of hydrogenproduction and storage was wide. Verticaland horizontal integration amongst largeconglomerates helped them to cover thefull spectrum of activities. Groups of thisscale are rare in the UK. Where gaps areevident, Japanese companies are keen towork with domestic and foreigncompanies offering solutions.

• The perspective of Tokyo Gas was totallydifferent from that of the former BritishGas. Faced with the possible loss of coremarkets under deregulation, Tokyo Gashas chosen to invest heavily in R&D infuel cells and in hydrogen production,with expectations of a positive return inthe future.

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To conclude, there are clear differencesbetween the UK and Japan with regard tothe strategic importance of hydrogen andfuel cells to government and industry. Withlimited exceptions, the bulk of the hydrogenand fuel cell research in the UK currentlytakes place within universities and SMEs(often themselves university spin-outs). Incontrast, Japan benefits greatly from havinga critical mass in hydrogen and fuel cells,with many large corporations, workingtogether where beneficial, with long-termhorizons and ongoing significant investment.

In a global economy, rather than leading, theUK is at risk of falling behind in an areawhich offers energy security, low local andgreenhouse emissions, and long-term jobcreation and protection prospects. For thosefew companies in the UK that are investingin the area, there are real opportunities forcollaboration with and exploitation in Japan,where world-leading innovation is evident.

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5 SOLID OXIDE FUEL CELL

(SOFC) SYSTEMS

Alan Spangler Rolls-Royce Fuel Cell Systems Ltd

5.1 Introduction

METI has stated that SOFCs play a key rolein the development of fuel cell technologiesfor the following reasons:

• SOFC technology addresses each of thefive key drivers for development of fuelcell technology (see Section 2.3)

• SOFC has specific potential for highefficiency in domestic (and smallcommercial) CHP

• The technology is suitable for scaling tolarger power blocks – some developmentis occurring for up to 50-kW blocks (againCHP), but this can be extended to mulit-megawatt applications

• There is optimism surrounding mediumtemperature operation to address fuel cellcost issues

The development priorities are 1-kWdomestic CHP – targeted at domesticsteady-state power requirement of 700 Wper household. METI believes that Japan hasa unique position in the development ofSOFCs based on its historical expertise inthe ceramics industry (arguably 100 years ofstate-of-the-art ceramics development).

Japanese government involvement inSOFC development

Japanese government support for SOFCdevelopment is a fairly recent phenomenon inthe context of its 15 years of support for thefuel cell and hydrogen development in Japan.The government has spent some time withindustry either establishing its agenda withindustry, or providing direction to industry, forSOFC R&D.

As priorities were discussed with each ofthe organisations visited, the target marketsfor SOFC were driven by governmentpriorities involving cars and domestic CHP.For SOFC developers, the target market wasclearly domestic CHP applications.Furthermore, the development emphasiswas on low to medium temperature SOFCoperation (and the subsequent cell materialrequirements), and establishing benchmarksfor cell durability.

METI, through its fuel cell developmentprogramme in NEDO, provides R&D fundingin support of SOFC development. Theamounts shown in Figure 5.1 give anindication of the funds allocated to R&D ofSOFC technology since 2000 (note that acomparison between spending on thevarious fuel cell technologies is presented inFigure 2.3).

In 2004, the government has allocatedapproximately ¥2.7 billion to SOFC research.In the broader context, high temperaturefuel cells account for about 10% of the fuelcell budget. SOFC funding is on an upwardstrend at a pace equivalent to that of

43


0.0

1.0

2.0

3.0

20042003200220012000

¥ b

illio

n

Figure 5.1 METI budget trend – SOFC research (Source: METI, 5 July 2004)

hydrogen transport and storagetechnologies. It is interesting to note thatMCFC technology appears to be receivingreduced amounts of funding. The ‘bet’ onhigh temperature fuel cells appears to bewith SOFC.

In addition to funding initiatives, thegovernment is supporting a collaborativeeffort between relevant stakeholdersregarding fuel cell infrastructurerequirements, codes and standards, andcore research initiatives (see Chapter 2).Various committees have been establishedto drive cohesion in development. Inparticular, for SOFC there is a Japan SOFCSociety. Its charter is to ensurecommunication and establish collaborativepriorities within the SOFC industry.

5.2 SOFC activities

AIST (see also Section 2.8)

With regard to SOFC development, the keycurrent activities of AIST are summarised as follows:

• Cell materials characterisation generallyfor low operating temperatures (less than800ºC) – there is also some work beingdone on less expensive manufacture ofhigh temperature tube technologies

• Fuel flexibility, experimentation withvarious hydrocarbon fuels includingmethane, kerosene and DME – thisincludes investigations of mechanismsleading to carbon deposition and masstransfer in oxides

• Cell and stack characterisation, includingimpedance spectroscopy and fuelefficiency – this is largely undertaken incollaboration with industry on specificplanar and tubular cell types

• Low level power systems analysis (1 kWto 10 kW), including heat and massbalances, hybrid systems, andinvestigations on standardisation

The researchers are generally globallyrecognised within their fields, and appear tobe making some progress with regard tocharacterisation of materials for lowtemperature operation. However, like mostfuel cell developments, proving thebehaviour and durability of materials takestime. AIST is particularly useful as an arm ofindustry looking at micro effects andinteractions of materials, fuel sources andsystem performance.


MMC is working in collaboration with KansaiElectric Power Co on an intermediatetemperature SOFC that operates attemperatures between 600 and 800ºC. The reduced operating temperature isachieved by utilisation of a lanthanum-gallatebased electrolyte. The upper limit foroperating temperature is driven by collectorplate material selection (ferric stainlesssteel). The lower limit is selected to allow forinternal reforming of fuels such as naturalgas and town gas.

The fuel cell is in an electrolyte-supported,disk-type planar cell. It is 120 mm indiameter and has an electrolyte thickness of200 µm. The anode and cathode are eachapproximately 50 µm thick. The anode is anickel-based cermet, and the cathode issamarium-based.

The cell stack is in a vertical arrangementwith radial co-flow fuel and air. A 46-cellstack produces 1 kW gross. The integrationof stack and system is fairly innovative as itaddresses the fundamental planar SOFCissue of sealing the ends of the stack toprevent premature mixing of air and fuel.The seal-less stack design allows depletedfuel and air to exit the stack intosurrounding free space where the twogases simply mix together. The residual fuelis combusted over the side of the stack tomaintain cell temperature.

44


Tested cell performance was stated to be inthe range of 250 mA/cm2 with a stated fuelutilisation of 83.5%. However, there wassome uncertainty around these data amongmembers of the mission team, as nominalfuel utilisations demonstrated in SOFCdevelopment programmes such as the SolidState Energy Conversion Alliance (SECA) inthe USA have been in the range of 50-70% innon-recycle configurations.

In a 2,000 hour durability test, a degradationrate of 0.3% per thousand hours wasobserved. From a system perspective, at acell operating temperature of 780ºC, the 1-kWCHP system has an electrical conversionefficiency of 45% LHV (AC). The heatrecovery system provides hot water at 90ºC.The combined system efficiency is 55% inCHP (with water at 90ºC) and 81% (withwater at 60ºC).

Tokyo Gas Corp

Tokyo Gas has three developmentprogrammes on high temperature fuel cells:

• An electrolyte supported, planar fuel cellsystem which operates at 1,000ºC andutilises a ceramic interconnector – thisprogramme appeared to be of lowerpriority than others

• An anode supported planar fuel cellsystem – this was covered in some detailduring the mission visit and appears to bethe present focus

• A ceramic-based, flat-tube design – thiswas mentioned only ‘in passing’ and iseither confidential or in its early stages(or both)

The anode-supported planar SOFC hasmetallic interconnects, and adopts reducedtemperature operation (approximately750ºC). Each cell is square-shaped, with cellsizes varying from 11 x 11 to 14 x 14 cm.The electolyte is yttria-stabilised zirconia,the anode is nickel-based zirconia, and the

cathode is a lanthanum chromate. Acathode barrier layer is used to addresschromium poisoning. Cell manufacturingprocesses are pressing, dip-coating, screenprinting and firing.

Cell performance on methane fuel was statedas 0.75 V at a fuel utilisation of 80% (again afairly high number). This would translate to aDC electrical efficiency of approximately 50%HHV. Nominal current density appeared to bein the range of 200 mA/cm2. Degradationrates of the order of 5% were discussed; thetime period over which the measurementwas taken was unclear, although charts wereshown indicating 1,000 hours of operation.

Hitachi Ltd

Hitachi is largely focused on 1-kW PEMsystems in domestic CHP applications. Workwas ongoing in partnership with Toto todevelop 20-50 kW SOFC systems. The corestack technology is cathode-supported, LSMtubes with an operating region of 850-900ºC.It was mentioned that the tubes were‘smaller and thinner’ than the conventionalSiemens-Westinghouse designed tubes.

5.3 SOFC commercialisation

The Japanese government and industryhave been actively engaged in thedevelopment of SOFC technology since1989. There was an early recognition thatSOFC development would require time anda coordinated effort. As shown in Figure5.2, activity has been conducted in distinctphases. These phases were constructedsuch that core technology issues could beaddressed on an industry-wide basis, andthat subsequent system developmentscould take place on common, andsubsequently proven, technology platforms.

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According to Figure 5.2, by the end of 2004the industry should have developedcomponent platforms that are cost effectivewith high performance and reliability. Basedon discussions with the companies visited,meeting the timeline across all perspectiveswill be a challenge. While it is clear thatprogress is being made in development ofcell materials and that knowledge continuesto grow, it would be optimistic to assumethat the current SOFC stacks are costeffective and reliable, and are suitableplatforms for system development. As METI(and NEDO) review development prioritiesfor the next forward looking plan, it will beinteresting to see if component and moduledevelopment remain the focus, or if indeedthe development moves more towardsystem integration.

With regard to establishing cost and pricebenchmarks for SOFC development, it isinteresting to note that METI did not chooseto follow the US DOE targets for the SECAprogramme (ie $400/kW (~£225) for 5-kW

systems at a volume of 50,000 units peryear). The targets for commercialisation havebeen more clearly established for PEM fuelcells in terms of volume goals forautomotive systems and stationary power(driven by 1-kW CHP systems). It isexpected that SOFC targets will beestablished in the next forward looking plan.

If the current PEM cost issues are anyindication, industry is using current prices ofaround $50,000/kW for 1-kW systems in lowvolumes (less than 100 units per year). This isclearly acknowledged to be high, and unlikelyto be attractive for anything other thandiscrete demonstrations. All indications arethat commercial products will not be costcompetitive until 2010 and beyond.

Japan has a fairly clear path todemonstration of technology via industryand government collaborations. Industryincludes developers of core technology aswell as electric utilities and other potentialusers of the products. The government has

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1989-1991

Fabrication ofcells, several 100 W class

(planar)

Cell and cell assembly(1: planar) (2: cylindrical)

several kW class

Dev. of module with high performance, cost-effectiveness,

reliability

several kW – 20 kW

Planar type

Cylindrical (low cost) Cogeneration

MOLB type

Demonstration of durability

and reliability

Power plant

Large scale

Phase Icomponents

Phase II-1 cell and module

Phase II-2Phase IIImodule

System development(<several 100 kW)

1992-1997 1998-2000 2001-2004 2004-2007

Figure 5.2 Japan SOFC development and commercialisation programme (Source: NEDO, July 2004)

earmarked specific funding fordemonstrations which sits outside theresearch funding discussed in section 5.1.

5.4 Common experiences and issues

for SOFCs

There are a number of common themes inSOFC development in Japan. Whilst theredoes not appear to be a currently obvioussolution to creating a cost-effective fuel cell,Japan is probably uniquely focused in itsefforts to develop a competitive technology.It is very much a collaborative effort toachieve the best solution.

Market dynamics

Fuel cells are clearly seen as an enabler toachieve Japan’s energy goals. It is interestingto note that the environmental benefits areone of five primary drivers, and not the solereason to pursue fuel cell development.

Transportation and domestic CHP marketstend to be the focus for product entry. This ismost likely due to the impact that the fuelcells could have on energy security (diversityof fuel sources) and reducing CO2 emissions.

Cell and stack development

SOFC technology has historically created achallenge in development due to the hightemperatures required to enable efficientoperation. This has traditionally resulted inexpensive cell materials and interconnects.Arguably the only proven cell materials arethose based on the original Siemens stackdesign (ie YSZ-based electrolyte, LSM-based cathodes and Ni-based anodes).Every other cell material is still anexperiment. Japanese industry is, for themost part, focused on reducing operatingtemperatures to get the cost benefit ofstainless steel interconnects. The drive toreduce operating temperatures is not new.However, a few of the companies visited

have made some progress on alternativecell materials, particularly gallates as lowertemperature electrolyte.

The durability of cell materials is still underinvestigation. Generally, most materialcharacterisation is based on, at most, a fewthousand hours of operation. In stationarypower generation, it is generally recognisedthat cells will have to operate for tens ofthousands of hours. The same issue appliesto thermal cycling. Most data is limited toten or less thermal cycles. The practicality ofachieving hundreds of thermal cycles isunder debate.

Planar stack developers have made slowprogress in addressing the issue of sealingthe cell interfaces in stack configurationssuch that air and fuel remain separated. Themission team saw some innovative systemsolutions that allowed air and fuel mixing atthe edges of the stack, and effectivelycombusted the gases to maintain stacktemperatures. This was referred to as a‘seal-less’ design. In addition, mostcompanies were also developing tubulartechnologies as alternatives to planar –effectively eliminating the sealing problem.

Fuel cell cost challenge

There is a general acknowledgment that thesystem, or balance of plant (BOP), is a largecontributor to the cost of a fuel cell package.There remains a focus to improve both thepower density of the cells and the power toweight ratios of systems. It is likely thatsystem-related issues will receive increasedattention in the next round of government-funded programmes (2004-2007).

There is much talk around combined-cyclesystems, ie using gas turbines (GTs) inconjunction with fuel cell systems toimprove power densities. Most of this workappears to be at the study phase.

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Supply chain development

An interesting feature of SOFC technology isthat no two systems tend to look alike,especially from a core stack perspective. Thisnot only creates an issue around growingknowledge on cell materials, but also has animpact on building a supply chain (ie a supplychain generally needs to be developed inconjunction with the technology).

One issue to debate is that the companiesvisited generally use in-house technologywhere available, potentially to the exclusionof outside development. It raises thequestion as to whether this will result inoptimal solutions.


• Market dynamics. As North Sea resourcesare reduced, the UK faces decisions verysimilar to Japan in terms of energy security.Japan has made the decision that fuel cellsare a key enabler in the energy securitydebate. The UK Energy White Paper tendsto address fuel cells as an environmentaltechnology. The perspective may need tobe broadened.

• Focus and commitment. Whilst themerits of the SOFC developmentpriorities established by the Japanesegovernment – ie low (to medium)temperature SOFC for 1-kW domesticCHP application – may be debatable, theydo represent a clear commitment; thiscreates a focus for technologydevelopment. The government has statedits preference and is working withindustry to achieve the goals.

• Holistic approach. SOFC technologydevelopment is based on a collaborationbetween industry, institutes, universitiesand end users. This dynamic is probablydriven by the historical pattern ofcollaboration in Japan, and is particularly

useful in the development of newtechnology. Industry in the UK may wantto consider all facets of engagement toensure that the gaps that evolvebetween products and needs arecontinually being addressed.

METI draws an interesting matrix thatshows core technology development,codes and standards, and infrastructure asbeing three components of new technologythat are being addressed simultaneously.The efforts in these three areas are morefragmented in the UK and should beaddressed as interdependencies.

• Government funding. Through variousfunding routes, the Japanese governmentis supporting and, to a large extent,driving the development of fuel cells. It isplacing a bet that all five drivers, includingincubating a new industry, will be met.There is risk in that to date the high costsand low durability of fuel cells haveoutweighed the benefits produced. In anyevent, it is probably reasonable to assumethat Japan has created a foundation forcontinued participation in development,and if the balance can be reversed, ispositioned to be a beneficiary.

In the development of SOFC technology,the UK has placed nominal bets and islikely to see nominal returns. Only a fewdevelopers are pursuing the technology.However, it is likely that most of this gamehas yet to be played. It is not a matter ofthe UK catching up, but more a matter ofproviding adequate support to enablenominally equal competition. The UK canplay a sustained role in the developmentof SOFC technology and skill-sets, but itmust become globally competitive in itsinvestment of time and resources. If not,companies will migrate elsewhere.

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6 PROTON EXCHANGE MEMBRANE

FUEL CELL (PEMFC) SYSTEMS

James Wilkie Johnson Matthey Fuel Cells Ltd

6.1 Introduction

Proton exchange membrane fuel cells,PEMFCs (also known as polymer electrolytemembrane fuel cells), work by bringingcontrolled amounts of hydrogen and air intocontact with two sides of a platinum coatedplastic membrane. An electrochemicalprocess then generates electricity and heat,with water as the only exhaust product.These fuel cells usually work attemperatures below that of boiling water,typically in the range 60-90ºC. (SeeAppendix F for a summary of fuel celltechnologies under development.)

This technology was invented in 1960 andhas emerged as the most promisingcandidate for 70-100 kW transportationapplications, stationary power applications inthe range 1-250 kW, and portable devicesfrom 20 to 100 W. Compared to other fuelcell systems, it offers high power densitywith low temperature operation; thus,relatively simple balance of plant (BOP) isrequired to make it operate.

PEMFCs attract around two thirds of thecurrent ¥32.9 billion annual spend by METIwithin the ‘Programme on PEMFC andHydrogen Energy Utilisation Technology’. A consultation process, involving membersof the FCCJ, established the content of thisprogramme in August 2001. The existingprogramme is due to come to an end in thecurrent 2004 financial year, and the contentof the follow-up programme is currentlybeing debated.

A key learning point that has emerged inJapan during the course of the aboveprogramme is:

‘Mass manufacture and volume engineeringof existing materials and technology are notsufficient to meet technical demands andreduce the cost of PEMFC to levels at whichfull commercialisation can occur.’

Development of new materials andcomponents is required, and this willnecessitate substantial additional andinternational effort. Key Japanese PEMFCdevelopment themes are:

• New catalyst layers (reduction of costlyprecious metal content, better operation,higher power density)

• New membranes (durability, better operation, high temperatureoperation, cost)

• Non-graphite based bipolar plateseparators (higher power density, lower weight)

6.2 PEMFC activities

TIFC

TIFC has a 700-W output CHP producttargeted at a proposed residential housemarket where the fuel cell system runs onnatural gas or LPG feedstock. The unitreplaces the domestic boiler and provides700-1,000 W electricity as a baseload supplyto supplement the grid electricity feed. This essentially means operating theintegrated PEMFC cogeneration system as a‘power generating water heater’ rather thanprimarily as a source of electrical power. The electrical baseload of the dwellingcomes from the PEMFC and any peaks indemand are made up from the grid.

49


The business premise is that such a unit wouldbe less polluting, use fewer natural resources toprovide power and heat than alternativedomestic solutions and could be madeaffordable at a price of ¥500,000 (£2,500) each.It would also allow gas supply companies totake advantage of deregulation in the Japaneseenergy market to displace electricity suppliers.Present costs of the unit are far higher than this.

At least 12 such domestic systems arecurrently in test operation within Japan, withthe PEMFC stacks originating not only fromTIFC but also IHI, Ebara (Ballard), Kurita(Nuvera), Sanyo, Nippon Oil, Toyota, Hitachi,Marubeni (Plug Power), Panasonic andMitsubishi Heavy Industry. The number ofdemonstration systems is due to rise to 31(22 sites @ 1 kW plus 9 sites @ 5 kW) in thecurrent financial year.

The mission team was given a tour of TIFC’sPEMFC testing facilities, where there is thecapability to:

• Mass-screen fuel cell components at the 5 x 5 cm2 scale

• Test large single fuel cells and stacks up to ~1 kW

The team also saw the most recentgeneration 700-W TIFC system in testoperation; the target specification, typical forsuch systems seen at several manufacturers,is given in the following table:

This compact unit consists of two parts, one ofwhich contains the natural gas reformer andthe PEMFC stack whilst the other contains theheat management system and domestic hotwater boiler. With the reformer/stack unitboxed within an enclosure of approximately 30 x 30 x 90 cm tall (a standard package sizeagreed by Japanese companies servicing theresidential market), this system represents ahigh degree of space integration. (Other ‘1-kW’domestic cogeneration systems shown to themission team by other suppliers had broadlysimilar specifications.)

The key operational issue highlighted by TIFCwas system durability – state of the art forstationary power systems was reported to be~10,000 hours continuous operation against atarget of 20,000 hours. Data were shownonly extending out to 3,000 hours operation.Poisoning of catalysts by contaminants in thehydrogen feed reformed from natural gas, andmembrane durability, were cited as areas forimprovement. Performance degradation ofless than 2 µV/h is required to attain the40,000 hours target. Efficiency of the currentunit is substantially better than that ofpreceding models, having increased byaround 50% from year 2000 values.

TIFC also showed an older 5-kW system foruse by larger small commercial sites basedon catalytic partial oxidation reformertechnology. The start-up time of the systemis anticipated to be around nine minutes, theweight about 550 kg and the overallefficiency higher than 32%.

The most fruitful areas of researchsuggested were studies of membranedegradation, development of hightemperature membrane materials, andelimination of corrosion in the catalystcarbon support materials. Removal ofbarriers presently posed by existing laws,codes and standards for hydrogenequipment was cited as a key enabler formarket development.

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Capacity 700 W (net AC)

Output voltage 200 V/50-60 Hz

Electrical efficiency >35%

Thermal efficiency >45%

Waste heat temperature >60ºC

Fuel Natural gas/LPG

Operation modes Grid connected/autonomous

Noise levels <45 dB

Volume <210 litre

Weight <120 kg

Start-up time <45 min

Hitachi Ltd

Hitachi has several fuel cell groups. Presentfor the mission visit were representatives ofDMFC development (see Section 7),membrane development and PEMFCstationary power applications. The membranework shown was driven by a perceived needfor cost reduction in conventional PEMFCapplications and the requirement to reducemethanol ‘crossover’ for DMFC.

Some of the membrane work looked similarto that being undertaken at AIST (eg use ofnew polymers in membranes such as thoseformed by introduction of acid groups intopolystyrene), suggesting that Hitachi may beinvestigating the materials being developedby AIST in its applications. Data for 4,000 hof operation on hydrogen were shown forone new ‘hydrocarbon’ membrane.

Hitachi is also active in computationalmodelling of platinum catalysts on carbonsupports, and development of titanium clad bipolar plate separators. The companydesigns catalysts and then outsources their manufacture to an un-named catalyst company.

As mentioned in Section 4.2, Hitachi’sdomestic PEMFC product is targeted at the500-3,000 W power range. It uses ahydrogen generator for rapid start-up andauto-thermal reforming of natural gasthereafter. To limit stack size and cost, thesystem is not load following but operates ata steady load with a battery to smooth outhousehold demand fluctuations. Typical gasfeedstock would have 10 ppm CO in 48%hydrogen. The overall system efficiency,incorporating fuel processing, was stated at30%. Stack durability was claimed to be12,000 hours at present.

Areas for R&D were cited as low-costcatalyst with little or no platinum, andmembrane durability.

AIST

The team at AIST is actively involved indeveloping new membrane materials forPEMFC membranes. As the name suggests,the membrane is the heart of the PEMFC andis currently a significant cost element. It mustbe impervious to hydrogen and oxygen gas,yet allow positively charged hydrogen (protons)and water to pass through. It is typically 25 µmthick (thinner than ‘cling film’) and must lastthousands of hours in the harsh chemicalenvironment inside a PEMFC without failure.

All present PEMFCs use variants of a singleplastic, based upon the familiar ‘Teflon’ (PTFE)material. To make this normally water-resistantpolymer conduct protons and water, acidgroups are introduced to form a networkwithin the tough chemically inert Teflon.Substantial R&D effort is underway worldwideto create other polymers with this combinationof conductivity and inertness. None has beensignificantly successful to date.

The key drivers for these efforts are technical:

• Membrane lifetime in fuel cell service ispresently seen as one of the key hurdlesto commercialisation; thus, increasedresistance to mechanical failure andchemical degradation is of interest

• Being able to operate PEMFCs above100ºC would allow vehicles to useradiator and cooling systems similar tothose for internal combustion engines,thus greatly reducing costs – thisrequires membrane materials that willconduct protons in the presence of verymuch less water than at present

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Cost of current membrane materials is alsostill seen as a significant issue within theJapanese PEMFC community.

The group at AIST is investigating manycombinations of polymer materials in order tocreate a durable non-Teflon based materialwith appropriate proton-conductingproperties. These non-PTFE membranematerials are often referred to in the fuel cellindustry as ‘hydrocarbon’ membranes.Another area of AIST research is hybridmaterials containing both organic (carbonbased) and inorganic (silicon based)compounds for high temperature applications;to date the results have only shown protonconduction two orders of magnitude lessthan that of conventional materials.

The range of fundamental membrane workpresented during the mission team’s visitwas most impressive, with a wide range ofcandidate materials and synthesis optionsbeing evaluated, and function in fuel cellsbeing demonstrated.

The ‘hydrocarbon’ membranes discussedabove are being used by several of thecompanies visited; the mission teamconcluded that AIST is providing theseresearch materials to Japanese fuel cellcompanies for evaluation. It seemed willingto enter into collaboration with foreignparties on request and was proud of thelarge number of foreign researchers (seeSection 2.8) in its employ.

Tokyo Gas Corp

Tokyo Gas is one of the largest energysupply utilities in Japan. The driver for itswork is access to new markets byconversion of natural gas into eitherreformate fuel for domestic CHP (displacingelectricity) or pure hydrogen fortransportation (displacing vehicle fuels). Key activities undertaken are:

• Development of compact natural gasreformer technology and options forremoving sulphur from the feed gas

• Collaborations with both Panasonic(Matsushita) and Ebara (Ballard) to integratethe reformer with the partner PEMFCstacks into domestic 1-kW CHP systemswhich are then tested at Tokyo Gas

• Provision of technical data required forestablishing codes and standards toencourage market entry and wide use ofPEMFC systems

• Development of a palladium membranesteam reformer for transportation hydrogen refuelling

In the residential arena, as discussed forToshiba above, Tokyo Gas has shown baseloadgeneration to be the optimum operation modefor domestic PEMFC systems, with excessheat being recovered for the substantial hotwater requirement associated with Japanesehomes. This reduces grid connection issuesand also allows the fuel cell to operate in aless demanding stable output mode withfewer start-up and shut-down cycles. Incommon with other developers in Japan, thetarget scale is 1 kWe (1.3 kW gross) runningoff natural gas.

The target (yet to be realised) lifetime for thecomplete system is 40,000 hours over tenyears. This must permit one start-up andclose-down per day.

The mission team was shown the compactreformer and desulphurisation system and thetest facility which contained working 1-kWCHP systems from both Ebara and Panasonic.Net AC electrical efficiency was around 34%with these 1-kW units, which otherwise hadspecifications broadly similar to those for theTIFC unit above.

The cost of a one-off PEMFC systemincorporating the fuel processor technologydescribed in Section 4.2 is estimated to be¥20 million (£100,000).

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Tokyo Gas also runs two PEMFC vehiclescommercially leased from DaimlerChryslerand Toyota; to date, these have covered~11,000 km collectively.

In pursuit of its various activities, TokyoGas has around 50 staff allocated to thehydrogen and fuel cells area. This work isalmost wholly funded by the company,with just 10% being derived from NEDO.Added to this is a direct spend of ¥1 billion(£5 million) per annum, excluding thehydrogen filling station.

The major areas of technical concern wereimproving the stability of stacks whenintegrated in a system, and the overallreliability of CHP systems.

Toyota Motor Corp

Higashi-Fuji is the key technical centre forToyota’s development of new drive trains,such as the successful Prius gasoline-electric hybrid car and PEMFC vehicles.Toyota considers the hybrid technologydeveloped for the Prius to be a coreenabling technology for the ‘ultimate ecocar’, and has recently released a small fleet

of hybrid PEMFC vehicles in the US andJapan for evaluation and demonstrationpurposes. Overall ‘well to wheel’ efficiencyof these vehicles is now claimed to be 29%(compared to 14% for a conventionalgasoline car). However, Toyota’s ultimatetarget is 42%, based upon increasedefficiencies in all aspects of the vehicledrive train.

Toyota has been working on FCVs since1992, with in-house development of PEMmembrane electrode assemblies and stacks,hydrogen storage technology and fuelprocessing hardware. The philosophy of thecompany is to develop the key technologyalone where possible, but to collaborate inorder to learn.

As well as being used by Toyota, the currentgeneration PEMFC stack technology is alsobeing applied in:

• Buses developed in collaboration with Hino

• Small Daihatsu vehicles • 1-kW residential CHP system developed

in collaboration with Aisin Seiki

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Figure 6.1

Fuel cell powered bus at Toyota

In the context of residential systems, Toyotais taking part in the JGA/NEF demonstrationproject (see Section 2.4).

The standard fuel cell stack size for Toyota’svehicles is 90 kW; two such stacks are usedin the buses.

The visit of the mission team to the centreincluded an impressive drive around theToyota test track in one of the fuel cellpowered buses developed jointly with Hino.The team was also allowed to look insidethe ‘engine bay’ of the bus (see Figure 6.1),which revealed an extremely high standardof engineering.

Current technical challenges include:

• New catalyst and membrane materials toreduce cost, improve durability andoperate at below freezing point – thecompany has a target stack life of 5,000 h,depending on conditions

• Operation at higher temperatures toreduce radiator size and cost

• Increased vehicle range

Toyota collaborates with General Motors onareas of common interest, such as codesand standards, but not on technical aspectsof PEMFC development.

It was suggested that greater internationalcooperation and a framework for exchangingbasic research outcomes, whilst retainingcompetition among automotivemanufacturers in the commercialisationphases, would be beneficial.

6.3 PEMFC commercialisation

A key issue for all the companies visitedwas the need for continuing subsidy supportto cover the gap between the cost of theirsystems at near-term volumes and the pricethat the different market segments arewilling to pay. METI confirmed that although

demonstration and hydrogen safetyprogrammes continue to attract 100%subsidy, ongoing funding for large numbersof domestic CHP systems or vehicles wouldbe another matter altogether.

Specifically in relation to domestic CHPunits, METI’s view was that to attain thetarget price per unit of ¥500,000 (£2,500),contributions are required from massproduction and technical breakthroughs,together with government subsidy to closeany small remaining price gap. At presentcost levels, support could extend todeployment of several thousand units undermonitored programmes but could not extendto mass subsidy. The timing and phasesproposed by METI for 1-5 kW CHP systemmarket introduction are:

• 2000-2004: deregulation, data collectionfrom field tests

• 2005-2009: introduction at rate of a fewhundred units/year with somegovernment price support

• 2010 onward: popularisation at ratesincreasing to 100,000 units/year withprices down to ¥300,000-500,000 (£1,500-2,500), and no government subsidy

This is based on an initial anticipated price of¥1-2 million (£5,000-10,000) per unit.

TIFC

TIFC expects to deliver 30 1-kW CHP units in2004 and a further 100 units in 2005. Itanticipates exploitation not only in Japan, butalso overseas, including the UK. The companyenvisages that ‘true commercialisation willstart after 2008’, and considers the mainhurdles to be cost, existing legislation, andelectricity deregulation in the Japanesemarket. Creation of a significant CHPopportunity requires collaboration withelectricity utilities on issues such as gridconnection, government financial support,public awareness programmes and risk

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sharing between utilities, PEMFC suppliersand the end users.

Hitachi Ltd

Hitachi’s view was that portable PEMFCapplications would attain high-volume marketlevels in 2010, with stationary powerfollowing in 2015 and transportation in 2020.

Hitachi hopes to release around 100 1-kWPEMFC units in 2006. For this, productionfacilities would need to be established atleast by 2005. Hitachi expressed a concernthat it may be behind companies such asOsaka Gas (partnered with Sanyo),Matsushita (Panasonic) and Tokyo Gas whichsupplies reformer technology to EbaraBallard for PEMFCs (the latter has plans torelease 1,000 units by 2005 and capture40% of the ultimate Japanese market). As aconsequence, Hitachi is now seeking topartner with players such as these to makeuse of their developmental and marketknow-how.

In contrast to the difficulties (and successes)in developing the reformer technology, theirPEMFC stack technology is delivering12,000 hours continuous operation on purehydrogen. This would provide an attractivebasis for negotiation with potential partners.

Tokyo Gas Corp

Tokyo Gas currently has ten complete 1-kWesystems of mixed Matsushita and EbaraBallard provenance. The company claimedthat it would undertake ‘market introduction’of its 1-kW domestic CHP units by early2005. Additional information regarding thedevelopment of domestic CHP suggestedthat Tokyo Gas would seek to place 200units/year, beginning in early 2005. The rateof deployment will be influenced by theavailability of subsidy to support thepresently high cost of systems.

Toyota Motor Corp

The Toyota view of market introduction forfuel cell vehicles has demonstrations leadingto fleet use in the period 2010-2020, andwidespread introduction in the period 2020-2030. Deployment targets are underconsideration, and will depend on costs.There are apparently fewer than 20 Toyotavehicles being demonstrated at present inJapan and the USA.

Key developmental issues forpopularisation of fuel cell vehicles weresaid to be further progress on cost, cruiserange, reliability, durability, servicing andrecycling. Both technological and socialbreakthroughs are necessary:

‘Close cooperation and enormous effortamong industries, government and societyis necessary to build a sustainablehydrogen society.’

Earliest market opportunities are seen to bein stationary applications.

Toyota expressed some concern with thegovernment’s stated targets for FCVdissemination in Japan, calling for muchgreater support for basic research. Shouldsales be mandated at current cost levels, aconsiderable subsidy would be needed pervehicle. Clearly, Toyota is concerned that theengineering and performance demands of avehicle platform will not be met by the endof METI’s present allocation of funds forvehicle fuel cell research to FY 2005.

6.4 Common experiences and issues

for PEMFCs

• All the companies visited had investedvery substantial amounts in theirparticular PEMFC application to get to thepresent point of development. Commonthemes amongst those visited were:

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• The view that, within the Japanesemarket environment, portable direct-methanol fuelled PEMFC applicationswould attain high volume market levels by2010, with stationary power following by2015 and transportation in 2020. TheJapanese consumer was cited as beingamongst the most demanding in theworld, and one organisation made thecomment: ‘if we can satisfy Japaneseconsumers – we can satisfy anyconsumer in the world.’

• Commercial adoption of PEM fuel cells isno longer an ‘engineering’ issue. Providedthat materials with suitable cost anddurability exist, fully engineered BOP andoperating systems are already availablefor all the applications being targeted.Common areas of research suggestedwere development of improved catalysts,and studies of membrane degradation andalternative membrane materials.Specifically mentioned were:

– Reduction of catalyst cost – Increase in the tolerance of catalyst

to trace impurities in the hydrogenreformate feed

– Improved resistance of the catalyst tocorrosion

– Replacement of existing membranematerials with cheaper alternativesthat operated at higher temperature

• Developing these lower cost and moredurable materials is an attainable task (nofundamental ‘showstoppers’ seen) butone that requires concerted internationaleffort beyond even the resources that‘Japan Inc’ can call upon. Thus, greatersupport and input from partners outsideJapan is being sought.

• PEMFCs are a key enabling technology forthe eventual transition away from fossilfuel usage; however, they still requiresubstantial investment by governmentand industry to attain the required level ofdevelopment.

• Removal of barriers presently posed byexisting laws and codes and standards forhydrogen equipment was frequently citedas a key enabler for market development.

• There are significant short-termcommercial opportunities for companieswho can develop the new materials andtechnology that solve the keytechnological issues above.


• Development of underpinningcompetence and infrastructure. Notable during the mission was theholistic approach to the above adopted byboth government and industry. Great carehas been taken in the planning of theJapanese five-year programme on PEMFCand hydrogen energy utilisationtechnology. Specific areas of expertise,where individual organisations should gaincompetence, were mapped out and closeattention was paid to management of theinteractions between them to producethe desired outputs.

Support is not only provided forfundamental R&D and productdemonstration but also for the removal oflegal barriers to small-scale use ofhydrogen systems presently embodied inJapanese legislation. Thus, all aspects ofproduct development andcommercialisation are learned about anddealt with in good time. This learningleads to identification of furtherfundamental research, and early removalof non-technical obstacles to successfulproduct deployment.

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Current UK fuel cell development supportand activity is fragmented across severalgovernment departments and privatecompanies, and would benefit greatlyfrom being brought together.

• Learning by doing. Japan has paid greatattention to the deployment anddemonstration of fuel cell systems overthe past few years. As a result, thecountry arguably has the largest amountof cumulative operational experienceworldwide for PEMFC systems in bothtransportation and stationary powerapplications. This extensive experience hasallowed the Japanese PEMFC collective tomove beyond the ‘hype’ surrounding thetechnology to truly understand thesubstantial effort still required to bringthese systems to market.

Nonetheless, there was little doubt withinJapanese government and industry thatsubstantial fuel cell markets will,ultimately, be realised. Japan is nowlooking to the international community foradditional collaboration to solve thechallenges of cost and reliability.

• Supply chain. The outcome of theJapanese experience with PEMFC offersa significant opportunity for UK fuel cellsupply chain companies both in the shortand long term. Currently, companies withthe competence to develop new PEMFCmaterials and technologies are beingactively sought to aid PEMFC technologydevelopment in Japan. Longer term, thereis a significant opportunity to create asolid base of PEMFC system supplierswhich would make the UK an attractivelocation for global fuel cell manufacturers.

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7 DIRECT METHANOL FUEL CELL

(DMFC) SYSTEMS


7.1 Introduction

The direct methanol fuel cell (DMFC) is avariant of the PEMFC. In the DMFC,methanol is directly fed to the anode,typically in a 1-2 molar solution (3-6% byvolume), without the intermediate step ofreforming the alcohol into hydrogen.

Methanol is an attractive fuel option becauseit can be produced from natural gas orrenewable biomass resources. It also hasthe advantage of a high specific energydensity (since it is liquid at operatingconditions), and is readily distributed alongthe lines of existing infrastructure fuels. Forportable, low power devices, there is alsothe opportunity to supply fuel through widerretail outlets.

With a market price point of $3,000/kW(¥330,000/kW, £1,650/kW) for batteries, asopposed to $1,000/kW (¥110,000/kW,£550/kW) for stationary plant and $50/kW(¥5,500/kW, £27.50/kW) for fuel cell vehicleprime movers, capture of a fraction of thisopportunity would greatly benefit thecountry. This is a large and readily accessiblemarket, with Allied Business Intelligenceprojecting a market value of $1.2 billion(£670 million) worldwide by 2011 for laptopbattery replacements alone.

The operating conditions of the DMFC aresimilar to that of the PEMFC, with identicaloxygen reduction catalysts. In order to becompetitive, the DMFC must be reasonablycheap and capable of delivering high powerdensities. Unfortunately, the DMFC has onlyone tenth the power density of the PEMFC.Developments are needed in several areasto improve power density:

• More active electrocatalysts withenhanced kinetics towards methanolneed to be developed

• Electrolyte membranes with high ionicconductivity and low methanol crossoverneed to be developed

• Methanol-tolerant electrocatalysts withhigh activity for oxygen reduction need tobe identified

As with PEMFCs, improvements inmaterials and design of cell housings,bipolar plates, gaskets and stack auxiliariesneed to be made (See Appendix G). All ofthese components contribute to theperformance, efficiency and cost of theoverall system. Most particularly, reductionsin precious metal loadings need to bemade, and cheaper alternatives to Nafionneed to be identified to be cost effective formass markets.

Despite these present limitations (whichreduce their attractiveness for applicationssuch as vehicles and larger power sources),DMFCs are now at a point where their powerdensity, coupled with the relative simplicity ofdesign, makes them attractive for remotepower generation and portable powersystems. Development effort in this latterarea, in particular, has increased over the lastthree years, notably in the USA and Japan,with DMFCs being targeted as batteryreplacements for PDAs, digital cameras andmobile phones, battery chargers, or as batteryhybrids for notebook PCs.

For such applications, cartridges containingseveral ml of methanol are being developed,with similar dimensions to existing batteriesbut potentially permitting longer periods ofoperation. Compared to batteries, this

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means that the energy vector is thecartridge rather than a mains recharge.

Policy context for DMFCs

As with PEMFCs, considerable corporateand private equity is being invested in DMFCdevelopment. However, the Japanesegovernment, through NEDO, is encouragingindustry as part of the ‘Research andDevelopment of Polymer Electrolyte FuelCell Systems’. As discussed in Section 2.7,the allocation to this in 2004 is ¥1044 billion(£52.2 million); a breakdown of the fundsspecifically for DMFCs was not given to themission team, but in financial year 2002, theamount was known to be ¥0.2 billion (£1million), and the figure for all activities inhydrogen and fuel cells has been increasedsubstantially since then.

It is also notable that much of thefundamental and applied R&D effortpertaining to PEMFC electrocatalysts andmembranes has direct benefits to DMFCdevelopment.

7.2 DMFC activities

Discussion is limited here only to Toshibaand Hitachi, from whom substantial levels ofdetail were evinced during the mission.

Toshiba

Toshiba is a world top-class manufacturer ofnotebook PCs, an ideal ultimate market forDMFCs. In common with many otherdevelopers, the company was only preparedto divulge limited information concerning itsDMFC activities. This is because manydevelopers, Toshiba included, are close to

market release, anticipating market testingin 2005 and full commercialisation by 2008.

In March 2003, Toshiba announced that ithad developed a DMFC for notebook PCs.Although the fuel supply to the DMFCanode is 3-6% methanol in water, captureand recirculation of the product watermeans the methanol store can be moreconcentrated, reducing the cartridge size,and thereby the overall power source size,by a factor of 10. With a maximum output of20 W (average 12 W), five hours run time ispossible from 50 ml fuel. For practicalapplication within notebooks, characterisedby rapid, large transients (such as diskaccesses), a hybrid configuration with alithium ion battery is currently required.

Toshiba anticipates commercialising thetechnology in 2005, initially throughcomputer retailers and subsequently throughconvenience stores. Toshiba’s initial targetprice is double that of batteries.

At the smaller end, Toshiba is also tailoringthe DMFC technology to mobile phonesconsuming 100 mW of power, and to PDAs.An indication of the compactness of thetechnology can be derived from Figure 7.1.

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Figure 7.1 Toshiba’s DMFC technology for a PDA(Source: Toshiba)

Hitachi Ltd

Hitachi is developing a 1-W DMFC as aportable laptop power supply. In contrastwith the difficulties encountered overPEMFC system development andcommercialisation in a crowded domesticmarket, Hitachi’s efforts in DMFCs areclearly world-leading. Indeed during themission team’s visit, 90% of Hitachi’spresentation dealt with the DMFC asopposed to the PEMFC.

The current cost of the 1-W DMFC unit is¥200,000 (~£1,000), materials comprising¥60,000 (£300) of this (and the MEArepresenting half of this amount, mostlyderiving from the platinum), the balancebeing fabrication costs.

Hitachi is working on all aspects of DMFC(and PEMFC) MEAs, including catalyst layersand binders, membranes and diffusionplates. In May 2004, for example, Hitachideveloped the world’s first titaniumseparator plate for DMFCs, yielding a 50-100times cost saving over conventional graphiteplates. Innovations include the use of acapillary effect to transport methanol, and airconvection, which obviates the need forpumps and blowers. A low crossovermembrane and improved binders specific toDMFCs are now the main targets for lowcost, high performance and durability.

Even after cost reductions, Hitachi does notsee the DMFC as wholly replacing thelithium ion battery in the average notebookapplication. This is for two reasons:

1 The response of the DMFC is too slow tomeet transient surges

2 The DMFC is seen as more appropriate tothe needs of high power devicesoperating over long periods, such ashandheld televisions, or to notebookusers with extended power requirementsof the order of 24 hours; in this instance,swapping a methanol cartridge isadvantageous compared to waiting for abattery to recharge

One problem with DMFCs is that excessheat is produced. This is especially difficult toaddress in small mobile devices requiringhigh power where electronic componentsare packed tightly together, and space,weight and volume are critical design criteria.While fluids within the DMFCs can assist incooling, the present state of development issuch that heat sinks and ancillary pumps/fansare required. These remove much of thespace advantage potentially engendered byDMFCs, as illustrated in Figure 7.2.

In view of these limitations, Hitachi has alsotargeted the PDA as a near-term applicationfor DMFCs. PDAs have low powerrequirements and small transients; moreover,they are larger than mobile phones, makingpackaging less demanding. With Japanholding 10% of the world market in PDAs,following the USA (5 million PDAs sold perannum), this seems a sensible move.

Hitachi is working with disposable-lightergiant Tokai Corp on the production of themethanol cartridges for DMFCs. Hitachi is incharge of basic design, and Tokai isresponsible for manufacturing issues. The partners are testing a prototype cartridgecontaining 50 ml methanol at 20%concentration. When inserted into a PDA, the

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Figure 7.2 PC with piggyback-type DMFC (Source: Hitachi)

fuel cartridge will provide power for up toeight hours operation. This brings the DMFCsystem as a whole into an equivalent powerdensity to current lithium ion technology.

A new system utilising cartridges containing30% methanol, which would bring theconcentration used by Hitachi to the samelevel as that deployed by Toshiba, is nowunder development. Reductions in methanolcrossover are also being sought to shrinksystem sizes still further. By astutemembrane development, Hitachi has reducedmethanol crossover from 1/7th to 1/10th. Theaim is to have a 40-hour unit available for saleby the end of 2005. Figure 7.3 illustrates tworecent prototypes of the device.


Many of the comments relating to thestrength and excellence of Japanese PEMFCR&D are equally applicable to the DMFC;however, here industry is taking the lead withminimal government support, buoyed by thehigh market value and imminence ofexploitation. Developments in electrocatalysts,membranes and separator plates are beingcombined with effective fuel and cellpackaging to deliver lightweight, portablepower supplies with an initial timeframe forcommercialisation over the next three years.

In time, DMFCs are set to become a strongcompetitor to batteries; however, forecasts(US Fuel Cell Council/ BreakthroughTechnologies Institute, ‘Fuel Cells forPortable Power: Markets, Manufacture andCost’, 2003) suggest only 6% penetration by2007, mostly in mobile phones. Whiletheoretically offering power densities 2-3times higher than those of current Li-ionbatteries (150-200 kWh/kg), by the timepackaging is taken into account, there ispresently little gain unless application timesare long; then the fuelling cartridge presentsan advantage.

Although impressive developments inDMFCs are taking place in Japan, there arecertainly satellites of excellence outside thecountry (MTI Micro of the USA, forexample) addressing fundamental issues.For the UK, the continuing need forimprovements in DMFC technology andpackaging, coupled with an ever-growingmarket demand for higher power levels inportable applications, represents asignificant market opportunity forcompanies wishing to invest in this area.

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Figure 7.3

Hitachi’s multi-viewer equippedDMFC (Source: Hitachi)

Methanol solution for ubiquitous application

Level gaugeConcept model Prototype

Eco Products 2003(at Big Site on 2003 Dec 11)

NANO TECH 2004(at Big Site on 2004

March 17)

Fuelcartridges

8 MOLTEN CARBONATE FUEL CELL

(MCFC) SYSTEMS


8.1 Introduction

MCFC technology has the potential for highefficiency electrical generation utilising awide variety of primary fuels, from coal tonatural gas and bio-gases. Potential electricalefficiencies are 50-60%; this could beextended by a further 10% by combinedcycle mode.

Development in Japan started in 1981,shortly after the second oil shock. At thattime, 10-cm2 single cells were beinginvestigated. This basic study representedPhase I of Japan’s effort in MCFCtechnology. By 1999, in Phase II of theprogramme, a 1-MW plant had beenconstructed, consisting of four 250-kWmodules running in co- or counter-flowutilising external reforming. A further, 200-kW class internal reforming stack with 1-m2

cell areas was also developed by this time.

8.2 MCFC activities – the Kawagoe

Thermal Power Plant

The Kawagoe demonstration plantrepresents Phase III of the programme andis due to complete at the end of financialyear 2004. The site is operated on behalf ofthe MCFC Research Association with staffdrawn from the 13 constituent institutions,including IHI.

Phase III aims to reduce costs and increasereliability by mass production of fixed-scalemodules and to minimise plant size byincreasing pressure. The current scale is300-kW pressurised stacks, with an aim toreach 1.2 MPa. Figure 8.1 illustrates the sizeof the modules. By October 2004, run timesof 7,000 hours will have been achieved.Although stacks of the current scale arelikely to uneconomic, there is an aim forsystems between several MW and a few

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Figure 8.1

A 300-kWe MCFC unitat Kawagoe

hundred MW to be commercialised in 5-8 years time at earliest.

An efficiency of 43% (HHV) powertransmission end efficiency has beenachieved to date. Reduction in cell voltagehas been <0.40% every 1,000 hours, with a potential for 40,000 hours operation being anticipated.

8.3 MCFC commercialisation

Drawbacks to MCFC commercialisation arecost, currently about ¥1 million/kWe(£5,000/kWe), with a target for masscommercial applications set at $1,000/kWe.At 6-MWe plant scale, it is believed that thecapital cost could be reduced to¥450,000/kWe (£2,250/kWe), which is closerto cogeneration with a turbine (at¥150,000/kWe, £750/kWe). A reduction tothis cost is believed, by many, still to be atleast ten years away.

Technical challenges for MCFC includeelectrolyte stability and cathode dissolution;these are being worked on by AIST, CRIEPIand the Japan Fine Ceramic Centre.


Since 1981, the government’s MCFCprogramme has been in receipt of ¥30 billion (£150 million), with a further ¥10 billion (£50 million) invested by privatecompanies. It was stated that the cost ofthe R&D to date had been written off to thebetterment of Japanese society. Whilefunding of this scale and timeframe wouldbe unlikely now in view of the slow (butsteady) progress shown over the last threedecades by MCFCs, it does mean thatJapan should be in a leading position toexploit the technology when it finallybecomes cost effective. Following thecessation, five years ago, of theNetherlands-led MCFC EU programme inwhich British Gas was a partner, the UK no longer has activity in this area.

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9 PHOSPHORIC ACID FUEL CELL

(PAFC) SYSTEMS


9.1 Introduction

The following observations are basedprimarily on mission visits to TIFC and TokyoGas Corp, both of whom have had somePAFC activity.

9.2 PAFC activities

While PAFC systems have been seen as partof a renewable future in cogeneration mode,their high cost (around ¥400,000/kWe, or £2,000/kWe) has limited their practicalapplication to premium power markets (such as computer centres for banks andhospitals). Some 200 PAFC systems havebeen placed within Japan, and severalsystems still operate.

TIFC has delivered about 50 PC25C (200 kWe) units to Japan, India and Chinasince 1996. The longest running time for oneof these units is now in excess of 40,000 hours. Hence, problems withperformance and reliability have beenresolved. However, the high stack cost andlimited instances of power outages in Japanmeans TIFC is only servicing existing unitsas opposed to actively marketing PAFCs.

PAFC systems can be economicallyappealing when the reformer driving themcan also supply hydrogen to a vehicle pool,such as a retail filling station, bus garage orwaste disposal operation. With this in mind,Tokyo Gas announced in May 2004 that itwill be pursuing such a cogeneration/FCVsystem, using a 100-kWe Fuji Electric-supplied stack.


The UK’s first significant fuel celldemonstration project is based on a US-supplied PAFC. The PAFC is unlikely tobe cost-effective compared to the PEMFC orthe SOFC (which is arguably more suited tolarge-scale cogeneration). While valuablelessons will be learned from the UK PAFCdemonstration, it might be argued thatlimited government support would be moreusefully applied to other fuel cell types.

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10 MAJOR OUTCOMES OF MISSION

The mission team

10.1 Introduction

This DTI Global Watch Mission had theprimary aim of fostering the development ofthe UK fuel cell industry by:

• Improving UK awareness of fuel cell andhydrogen developments in Japan andtheir relevance for UK industry

• Identifying opportunities for collaborationand technology transfer to help developthe UK fuel cell industry for stationary,automotive and portable applications

• Highlighting opportunities around fuelcells and hydrogen

• Enhancing awareness of new marketsand applications

Given the clear aim of technology transfer,the conclusions drawn by the mission teamhave been incorporated in the relevant partsof each preceding chapter. The purpose ofthis chapter is to pull these conclusionstogether and draw out a number ofrecommendations. These recommendationsare for the UK fuel cell and hydrogenindustry, the UK government and itsagencies, and UK academic institutions.

10.2 Conclusions – key lessons for

the UK

Japan is almost entirely reliant on importedenergy and has a much stronger currentindustrial base than the UK. Industrial andfinancial structures tend to be less flexible,with large vertically and horizontallyintegrated corporations dominating theindustrial sectors. There is limited availabilityof venture capital and other finance forentrepreneurial activity. Japan therefore hasa different perspective and operates under

different constraints from the UK. Policy andresearch initiatives must be carefullyconsidered in that light.

Nevertheless, it seems clear that the highdegree of structure in the Japanesegovernment’s fuel cell and hydrogen energyprogrammes, and the very substantialgovernment support (in both policy-makingand in funding), is providing a secure basewithin which Japanese companies candevelop long-term plans and hence minimisetheir risk. (In this environment, industry isdevoting significant corporate funds to fuelcells.) The Japanese government’s historicaland ongoing support for fuel cell andhydrogen technologies has been a significantfactor in the country’s current position asone of the world’s leaders in this area.

The Japanese government’s increasinglycohesive approach to support for fuel cellsand hydrogen incorporates mechanisms toallow the building of a consensus view onpriorities with contributions from allinterested parties. The development – andexecution – of strategic rolling five-yearplans provides essential continuity for thesector.

Japanese companies recognise thatinternational collaboration could have a keyrole in helping to overcome remainingchallenges around fuel cells and hydrogen.Some of the companies and other institutionsvisited during the mission would welcomecollaboration with partners in the UK.

As in the USA, Japanese fuel celldevelopment has benefited from top level‘buy-in’, having, as it does, the personalsupport of the Prime Minister. This personal

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support is very rare in Japan, underlying theseriousness of commitment. Suchcommitment and the resources alongside itare in contrast to the UK.

The structure of the Japanese fuel cell andhydrogen industry is different from the USand Canadian models. These werecharacterised by a large number of start-upcompanies in addition to major industrialorganisations, and by some unusualtechnology options. Broadly, the Japanesemodel appears to favour more conventionaltechnologies and concentrate on thesystems integration and productdevelopment of these. Innovation is mainlyexpressed in inventiveness in packaging;however, novel R&D is also taking place inmembrane electrode assembly fabricationand design, and in hydrogen storage, wherecurrent materials limitations pertain.

The USA and Canada subscribed to theconcept of fuel cell ‘clusters’, in whichsupporting industry development wasconcentrated in a relatively small region,allowing supply chain capability to developfor the industry. The more concentratedindustrial power in Japan makes this modelmore difficult to follow. However, in the caseof research, the Japanese do appear toconsider clustering a benefit, as exemplifiedby the activities of AIST.

Clear differences can be seen between theUK and Japan with regard to the strategicimportance of hydrogen and fuel cells togovernment and industry. With a fewnotable exceptions, the bulk of the hydrogenand fuel cell research in the UK takes placewithin universities and SMEs (oftenthemselves university spin-outs). In contrast,Japan benefits greatly from having a criticalmass in hydrogen and fuel cells, with R&Dundertaken by many large corporations,working together where beneficial, withlong-term horizons and significant ongoinginvestment. For those companies in the UK

that are investing in the area, there are realopportunities for collaboration with Japan,and potential access to Japanese markets.

Policy and research context

• A broad research base allows cross-fertilisation between both differenttechnologies and research groups, andshould therefore ensure a broader andstronger skills base than small amounts of –even highly targeted – technology funding.

• Japanese industrial policy does not appearto be to develop fuel cell industry‘clusters’. The Japanese companiesinvolved in fuel cell and hydrogen researchare typically very large and could almostbe classified as clusters in their own right.Due to the different financial structure,entrepreneurial activity is limited.

• ‘Research clusters’ are in evidence, withspecific links made between differentgroups in many areas of the ongoing fuelcell and hydrogen work. A regional spreadof suitably large research clusters enablesexpertise to be dispersed to some extent.Given a suitably large amount of funding,this should also assist regionaldevelopment efforts.

• Comparatively large and sustainedfunding streams allow for greater depthof research, as (a) some projectproposals that might not be considered‘perfect’ will be funded and may yieldexcellent results; and (b) funding is lesslikely to be ‘lumpy’ and so continuity ofresearch and expertise can be expected.This is extremely valuable expertisewhich takes time to develop and isquickly and easily lost.

• AIST is invaluable in terms of breadth ofcoverage and mission, with a largeinterdisciplinary workforce. Horizons areboth short and long (>7 years) term,

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covering basic through applied research.Real technology transfer to, andpartnership with, Japanese industry isevident. Unlike universities, specificdirection is given to AIST by government.This ensures focus on longer-termhorizons of strategic relevance to thecountry. Nothing like this exists in the UK.

• The Japanese have a strong emphasison regulatory reform, specifically toremove obvious barriers to fuel cellcommercialisation. This links with thefinancial support and well-definedtechnology planning to produce a levelof cohesiveness in hydrogen and fuelcell planning that probably exceedsother countries.

• Japan has several centres of excellencewhere aspects of fuel cell deploymentand hydrogen safety can be investigatedand problems resolved. The UK currentlyhas no such centres; this omission couldinhibit the rate at which these newtechnologies can develop and diffuse.

• Japanese targets for fuel cell penetrationare ambitious. The government feels thatin setting high targets, and supportingthe industry strongly at the same time, it is sending the right messages andspeeding commercialisation.

• Japanese industry is very well networked,aided by strong trade associations andpartnerships (JGA, FCCJ, etc). Japaneseindustry associations help support thrivingindustry rather than aiming to build upindustry from a small base.

• The absence of state-aid restrictions isextremely valuable in enabling the fundingof demonstration projects in particular.The Japanese government is prepared todo this to 100% in cases where industrycan contribute in other ways (eg byproviding vehicles to a filling station).

• The Japanese government recognises thatfuel cell development is a key enablingtechnology for an economy with greatlyreduced dependence on fossil fuels as aprimary energy source. As such, cumulativespending over the past four years alone hasbeen at least ¥108 billion (£540 million). Thisis in stark contrast to the approximately £8million expended by the UK DTI on fuel celldevelopment over the same period. (Evenafter allowing for the relative sizes of thetwo economies, Carbon Trust and othergovernment support, as well as gearing byindustry, the contrast remains marked.)Whilst there may be debate as to the timingof fuel cell market penetration, there can beno doubt that this disruptive technologyoffers significant high value-added businessopportunities. In Japan, the government isinvesting for a longer term than mostcompanies are able to do. The UKgovernment appears less willing to bridgethis gap. The ultimate commercial benefitswhich accrue are likely to be strongly relatedto the amount of development supportprovided. The UK, by providing substantiallylower support, is likely to see consequentlylower benefits.

Industrial context

• In contrast to the situation in the USA and Canada, the Japanese fuel cell andhydrogen industry appears to bedominated by large corporations. Thesecorporations are generally much lesssusceptible to pressures relating to shortterm return on investment and are,therefore, able to take a much longerterm view of their development activities.A likely impact of this is that products willnot be launched onto the market untilfully refined. Funding by industry is beingmade on the premise that a real andfinancially lucrative fuel cell industry willemerge, and that companies engaged inserious pursuit of this industry will realisesignificant sales. The geographical scope

67


for such sales is not limited to Japan;indeed export opportunities areanticipated, including to the UK.

• As a result of having a longer termperspective than western counterparts,Japanese companies appear to be lessinterested in short-term nicheopportunities, such as back-up power.Instead, they are focusing on theapplications and markets wheresubstantial sales are to be expected.

• As well as being larger than their NorthAmerican counterparts, Japanese fuel celland hydrogen companies are able to drawon extensive in-house experience in R&D,manufacturing and distribution. Thisappears to be helping to ensure that therequirements of volume production, aswell as those of the market, areaddressed at an early stage in thedevelopment of the technology.

• Several of the companies visited by themission team have an emphasis onmaintaining full control of their coretechnology as it is developed. As theymove to production, certain aspects maybe outsourced.

• Japan has successfully attracted engineersand scientists from around the world,thereby accessing and fostering leadingedge experience. Furthermore, it isevident from the mission that the longerterm funding horizon pertaining to Japan isyielding world-class fundamental andapplied research. The lack of long-termR&D support in the EU (limited to five-yearcalls with mainly political rather thantechnical or commercial direction), and thelack of a secure career path in the UK forbright researchers, can only exacerbate a‘brain drain’ to Japan and elsewhere. Toaddress this, significant structural changesto the UK institutional and industrialframework are required.

• The development activities of majorJapanese corporations, combined withsubstantial government support, could havea significant impact on Japan’s competitiveposition as commercial products emerge.The overall process is supported bylegislative revisions, and work to addressareas such as standardisation and safety,providing a linked and cohesive frameworkfor fuel cell and hydrogen development and deployment.

• Assuming fuel cells are eventuallyproduced in volume, this would create largevalue-added manufacturing opportunities.As the technology is commercialised, theUK is likely to have increasing opportunitiesto access core technology from Japan forpackaging into domestic products andservice. This, in turn, could stimulate thedevelopment of supporting installation andservicing infrastructure.

Fuel production and storage

• The underlying fuel processing hardwareseen during the mission was innovative,as exemplified by the Tokyo Gasmembrane reformer, the development ofsulphur sorbents not requiring ahydrogen stream (as with HDS), singlestage shifting, and small, compactpackaging both for residential andcommercial applications.

• The mission team saw few majordevelopments in hydrogen storage. Thismay have been due to the limited numberof institutions seen during the mission, orthe greater inherent difficulty in storinghydrogen, rather than poor qualityresearch. The scope of research waswide, and continues undeterred byintrinsic difficulties.

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• As with fuel cell systems as a whole,significant cost reductions are required tomake residential fuel processorscommercially realisable. Mass productionwould be expected to yield a tenfolddecrease in costs; further innovation isrequired to improve upon this. Cost isless of an issue for niche hydrogenproduction plant at small (20-50 Nm3/h)scale. Plant reliability remains an issue,but one which is being steadily dealt with.

• Even amongst the few companies andinstitutions seen, coverage of hydrogenproduction and storage was wide. Verticaland horizontal integration amongst largeconglomerates helped them to cover thefull spectrum of activities. Groups of thisscale are rare in the UK. Where gaps areevident, Japanese companies are keen towork with domestic and foreigncompanies offering solutions.

• The perspective of Tokyo Gas was totallydifferent from that of the former BritishGas. Faced with the possible loss of coremarkets under deregulation, Tokyo Gashas chosen to invest heavily in R&D infuel cells and in hydrogen production,with expectations of a positive return inthe future.

Fuel cell and systems commercialisation

• In the companies and institutions seen, the level of technical innovation was high.Importantly, the business context forproduct placement has been well thoughtthrough. Perhaps the most impressiveinstance of this was the residential fuelcell, the design taking into account themode of operation (baseload), size(standardised), price point and usability.The design benefits from a Japanese-wideview under the aegis of the JGA/NEFproject; moreover, this design is also suitedto export, and the companies working onthis are anticipating sales overseas.

• Japan has placed a strong ‘bet’ on fuelcells and hydrogen as a means to addressconcerns in energy security, industrialdevelopment and environment. Bycontrast, in the development of fuel celltechnology, the UK has placed nominalbets and is likely to see nominal returns.Only a few developers are pursuing thetechnology in the UK. However, it is likelythat most of this game has yet to beplayed. It is not a matter of the UKcatching up, but more a matter ofproviding adequate support to enablenominally equal competition. The UK canplay a sustained role in the developmentof fuel cell technology and skill-sets, but itmust become globally competitive in itsinvestment of time and resources. If not,companies will migrate elsewhere.

• Partly as a result of the substantialsupport provided to date, Japan arguablyhas the largest amount of cumulativeoperational experience worldwide forPEMFC systems in both transportationand stationary power applications.PEMFC systems which show thepracticality of using fuel cells, and theavailability of engineering solutions tomake them work effectively, are beingwidely demonstrated. This extensiveexperience has allowed the JapanesePEMFC collective to move beyond the‘hype’ surrounding the technology to trulyunderstand the substantial effort stillrequired to bring these systems to market(SOFCs are in a similar position).Nonetheless, there was little doubt withinJapanese government and industry thatsubstantial fuel cell markets will,ultimately, be realised.

• The outcome of the Japanese experiencewith PEMFC offers a significantopportunity for UK fuel cell supply chaincompanies both in the short and longterm. Currently, companies with thecompetence to develop new PEMFC

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materials and technologies are beingactively sought to aid PEMFC technologydevelopment in Japan. Longer term, thereis a significant opportunity to create asolid base of PEMFC system supplierswhich would make the UK an attractivelocation for global fuel cell manufacturers.

• Many of the comments relating to thePEMFC are equally applicable to theDMFC. However, here industry is takingthe lead with minimal government support,buoyed by the imminence of exploitation.Developments in electrocatalysts,membranes and separator plates are beingcombined with effective fuel and cellpackaging to deliver lightweight, portablepower supplies with an initial timeframefor commercialisation over the next threeyears. In time, DMFCs are set to becomea strong competitor to batteries.

• Whilst the merits of the tightly-focusedSOFC development priorities establishedby the Japanese government (ie low tomedium temperature SOFC for 1-kWdomestic CHP application) may bedebated, they do represent a clearcommitment; this creates a focus fortechnology development. The governmenthas stated its preference and is workingwith industry to achieve the goals.

• SOFC technology development, inparticular, is based on a collaborationbetween industry, institutes,universities and end users. This dynamicis probably driven by the historicalpattern of collaboration in Japan, and isparticularly useful in the development ofnew technology.

10.3 Recommendations

• Fuel cells and hydrogen should be givengreater prominence as part of the UK’soverall energy and climate strategy. Giventheir potential to address energy security,fuel flexibility, industrial development andenvironmental quality concerns, theyshould play a key and growing role overthe coming years. This is particularlypertinent given that the UK will become anet importer of energy in the near future.

• The UK should develop a clear policyframework for fuel cell development anddeployment. Such a policy should allow allaspects, including technology, codes andstandards and infrastructure to beaddressed simultaneously. It would providea coherent framework for future evolution,and engender confidence across the UKfuel cell community. To optimise outcomes,the policy should play to UK strengths. It should also be flexible; priorities andopportunities will change as the industryevolves, and the UK must remainresponsive to these changes.

• UK government support for key fuel celland hydrogen technologies should beincreased significantly. This support shouldaddress: short to long term R&D activities(eg materials development, testingfacilities, etc); demonstration programmes(ie to address the importance of productvalidation, customer and publicawareness, etc); and market stimulationmechanisms (eg through publicpurchasing, tax credits, etc).

70


• Full commercialisation of fuel cell systemswill take considerable time andinvestment, but very large rewards couldbe gained, including some in the short tomedium term. Policy-makers and fundersshould consider the timeframes carefullywhen setting strategy.

• Deployment of demonstration and trialsystems has significant benefits. It allowsgreat experience to be gained, and furtherR&D to be focused, while training supportstaff and publicising the technology. TheJapanese have funded fuel cell systemsto their advantage. The UK shouldconsiderably increase its support for fuelcell demonstrations.

• UK government support should betargeted through a specific fuel cells andhydrogen programme, with clear prioritiesdeveloped in collaboration with the UKfuel cell and hydrogen industry (Fuel CellsUK could play a significant role in this).The subsuming of the DTI’s targeted butmodest ‘New and Renewables’Programme into the wider ‘TechnologyProgramme’, which has no ring-fenced orsustained allocation for fuel cells andrelated hydrogen technologies, is ofparticular concern.

• Existing routes for cooperation andpartnership between the UK and Japanshould be strongly promoted andexploited and new ones sought, to enableUK companies to participate fully in theemerging opportunities. The missionfound enthusiasm among theorganisations visited to work with UKcounterparts. An ongoing opportunityexists for potential suppliers in the UK todevelop long-term relationships.

• Research into PEMFC membranes andcatalysts, and SOFC materials foroperation at intermediate temperatures,are areas of very strong interest toJapanese industry and academia alike.Funding is available from NEDO, amongstothers, for overseas organisations withsuitable skills. UK organisations shouldstrongly consider applying for this.

• Consideration should be given tomechanisms to enhance thecohesiveness and reduce fragmentationof both support for and implementation offuel cell and hydrogen research in the UK.At present, funding derives from a widerange of government departments andquasi-autonomous bodies such as theCarbon Trust. There is no over-archingpolicy or coordination. A more integratedapproach, covering concepts frominception through to commercialisation,would build on UK strengths andsynergies, minimise duplication, andmaximise return on public investment.Fuel Cells UK could play a key role ininforming government policy in this area.

• The UK government should begin theprocess of addressing national and locallegislative barriers to fuel cell deploymentin the UK.

• A mission to Japan focusing specificallyon hydrogen should be implemented.

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Appendix AMISSION PARTICIPANTS

72


Name Organisation Telephone/E-mail Address

Stuart Jones Accentus plc +44 (0)870 190 2921 Harwell International Business Centre, B551 Harwell,[email protected] Didcot, Oxfordshire, OX11 0QJ, UK

David Scott DTI Global Watch +44 (0)191 487 6691 Pera Innovation Ltd,Service [email protected] Melton Mowbray, Leicestershire, LE13 0PB, UK

David Hart Imperial College +44 (0)20 7594 6781 RSM Building, Prince Consort Road,London [email protected] London, SW7 2BP, UK

James Wilkie Johnson Matthey +44 (0)118 924 2044 Blounts Court, Sonning Common, Reading,Fuel Cells Ltd [email protected] RG4 9NH, UK

Alan Spangler Rolls-Royce Fuel Cell +44 (0)1332 260 343 PO Box 31, Derby,Systems Ltd [email protected] DE24 8BJ, UK

Dave McGrath siGEN Ltd +44 (0)1224 715 568 Mill of Craibstone, Craibstone Estate,[email protected] Bucksburn, Aberdeen, Aberdeenshire, AB21 9TB, UK

Celia Greaves Synnogy Ltd/ +44 (0)1832 720 007 1 Aldwincle Road, Thorpe Waterville,Fuel Cells UK [email protected] Northants, NN14 3ED, UK

Appendix BPROFILES OF ORGANISATIONS

PARTICIPATING IN THE MISSION

Synnogy Ltd/Fuel Cells UK

Synnogy

Synnogy is dedicated to helping all types oforganisations respond effectively to theopportunities and challenges around newtechnology. Synnogy's current technologyinterests lie in the areas of energygeneration, transmission and distribution,storage and end use.

The Synnogy team has been active in thearea of fuel cells for several years, duringwhich it has supported a wide variety ofboth public and private sector bodies inidentifying new business opportunities andoptimising their commercial strategies. In2000 and 2001, Synnogy organised twohighly successful missions on aspects offuel cell technology to the USA. Thesemissions have provided valuable insights intodevelopments around commercialisation inthe USA, and have led to collaborationbetween the UK and the USA.

In September 2002, Synnogy coordinated aDTI Global Watch Mission to Canada toexamine, first hand, the Canadian experienceof developing and commercialising fuel cellsand hydrogen production, delivery andstorage technologies. This mission, whichcomprised 11 organisations, was regarded ashighly successful. The results weredisseminated at a seminar in London thatattracted over 70 attendees.

Recommendations arising from that missionwere important and timely inputs into the UKgovernment's Energy White Paper, publishedin February 2003, which led to the creationof Fuel Cells UK and the instigation of a

number of other important initiatives insupport of the UK fuel cells industry.

Synnogy has extensive contacts with arange of organisations with an interest infuel cell commercialisation. Over the pastfive years, it has worked with organisationsas diverse as:

AdvanticaAir Products AMECBabcock BorsigBirmingham City CouncilBlack & DeckerBNFLBP DERA/DSTLInnogyIntelligent EnergyIrish Electricity Supply BoardJohnson Matthey Katalyst VenturesLandi RenzoMorgan MaterialsNational GridPorvairRolls-RoyceRWEScottish PowerShell HydrogenSiemenssiGENSulzer HexisUBS WarburgUK Department of Trade and IndustryUK Environment AgencyUK Health and Safety ExecutiveUK Ministry of DefenceW S Atkins (Viridian Power)

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Fuel Cells UK

Fuel Cells UK provides a focus for the UKfuel cell industry and works to foster itsgrowth. Activities include:

• Raising the profile of the industry both inthe UK and overseas

• Acting as a central liaison point fornational and international contact

• Catalysing partnering opportunitiesbetween UK and overseas organisations

• Improving the positioning of the UK fuelcell industry in the international arena

• Developing a pan-industry perspective onkey issues

At the time of writing, Fuel Cells UK waspreparing two key documents for the UKfuel cell industry:

• The UK Fuel Cell Industry: A Capabilities Guide

• A Fuel Cell Vision for the UK

Fuel Cells UK is managed by Synnogy Ltd.Following initial seedcorn funding from theDTI, it is expected to evolve into a self-funded industry organisation in early 2005.

Accentus plc

Accentus plc, a wholly-owned subsidiary ofAEA Technology, is a leading internationalgenerator, developer and exploiter of IP.Accentus develops and commercialisesinnovative new ideas through an in-houseteam of 80 scientists and engineers andthrough working with key strategic partnersthroughout the world.

Accentus is developing compact mini-channel steam reformers for hydrogenproduction and plasma reformers. Work hasbeen progressing in steam reforming fornearly a decade, the current unit deliveringsufficient hydrogen to power a 4-kWePEMFC at a volume less than 1 litre. Theunit can be readily scaled, with application tofuel cells, hydrogen plants and as a front endto gas-to-liquids processing. In plasmareforming, Accentus is investigating thepotential of plasma reactors to handle heavyfeeds with application to auxiliary powerunits and other mobile platforms.

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Imperial College London

Imperial College has both the largest fuelcell programme of any academic institutionin the UK, and one of the mostinterdisciplinary. Work on fundamentalmaterials science and electrocatalysis in theMaterials and Chemistry Departments iscomplemented by a range of engineering,economic and policy analysis and research.

Examples include reforming and fuel celldynamic modelling and control in ChemicalEngineering, flow dynamics, stress analysisand mechanical properties of fuel cells inMechanical Engineering, fuel cell networkintegration modelling and power electronicsin Electrical and Electronic Engineering, andeconomic, systems, environmental and policyanalysis in the Department of EnvironmentalScience and Technology. The Centre for IonConducting Membranes (www.cicm.ic.ac.uk)and the Centre for Energy Policy andTechnology (www.iccept.ic.ac.uk) coordinatethe research.

Imperial has particular strengths inelectrocatalysis, in high temperature andintermediate temperature SOFC (IT-SOFC)cells, stacks and systems, and in techno-economic and policy analysis of fuel cell andhydrogen energy systems. The latterincludes 'soft' analysis such as methods forunderstanding public attitudes to hydrogentechnologies, and modelling ofenvironmental implications of fuel chains.The IT-SOFC work has also produced a spin-out company, Ceres Power Ltd, which isdeveloping robust metal-supported SOFCcells and stacks.

Johnson Matthey Fuel Cells Ltd

This company is a UK based joint venturebetween Johnson Matthey plc (82.5%) andAnglo Platinum (17.5%). It is dedicated todevelopment and manufacture of catalysts,MEAs, fuel processors and catalysedcomponents for fuel cell systems.

Johnson Matthey Fuel Cells has research,development and operations in the UK, USAand Japan and sells fuel cell and reformercomponents worldwide to all the significantfuel cell systems developers. The companyspecialises in working closely withcustomers under joint developmentagreements, and recently opened one of theworlds' largest mass production facilities forMEAs in Swindon, UK.

Johnson Matthey Fuel Cells is a world leaderin fuel cell catalysts, and has committedmany years of R&D to catalyst developmentand optimisation to produce even higherperformance catalysts. The company alsoleads a significant UK government supportedprogramme to make proprietarymembranes, gas diffusion media, seals andother MEA components available from a UKbased supply chain. Exclusive supply anddevelopment agreements exist with anumber of key UK companies, enablingintegration of all the components of anMEA, giving very low cost manufacture on acommercial scale.

In fuel processor catalyst development andreactor design, the company also has world-leading expertise, supplying productsranging from catalysed components tosubsystems, depending on the applicationand customer requirements. JohnsonMatthey Fuel Cells continues to work closelywith full system integrators to optimise thefuel processor subsystem.

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Rolls-Royce Fuel Cell Systems Ltd

Rolls-Royce Fuel Cell Systems (RRFCS) ispositioning to design, manufacture, testand deliver fuel cell systems of 1, 5 and 10 MW for stationary power generationapplications. The systems will be based onits low-cost, patent-protected SOFCtechnology in combination with specialistturbomachinery, resulting in a SOFC'hybrid'. The SOFC hybrid will be compact,highly efficient, cost competitive andgenerate negligible emissions.

The RRFCS product is based on its use ofunique aerothermal knowledge togetherwith powerful systems integrationexpertise to provide cost-competitive fuelcell technology in stationary powergeneration applications.

RRFCS has fifteen years of developmentexperience, and is a prominent SOFCparticipant in the EC framework fundinginitiatives, with activities across various hightemperature fuel cell programmes. RRFCSalso has a close working relationship withthe UK DTI, which has provided funding forthe UK-based development efforts.

Rolls-Royce is applying advancedtechnologies and expertise to reduce fuelcell costs, including:

• Materials application in high temperatureenvironments

• Fluid flow in pressurised systems• Specialised turbomachinery• System integration capability• Power generation application expertise

siGEN Ltd

siGEN is one of the first and one of the veryfew fuel cell systems integration companiesin the UK. Based in Aberdeen, the Europeanoil industry capital, it draws on the extensiveengineering legacy of the oil industry and isapplying these skills to the nascent UK fuelcell industry.

As a system integrator, siGEN advises end-user customers on how fuel cell andhydrogen technologies can be deployed intheir application. The company will analysethe application needs, recommend the mostsuitable solution with respect to load, dutycycle, location and refuelling logistics. siGENwill then engineer, build and install thesystem on behalf of the customer at thecustomer site, and provide after salessupport and service.

siGEN does not build the stack nor the fuelcell system but deploys systems from theleading manufacturers including Plug Power,Relion and Ballard. Products fromHeliocentris have been used, and siGENoffers online sales for consumer type fuelcell product from a much wider range ofsuppliers. siGEN are able to offer PEM,SOFC and DMFC based solutions, and haveexperience of AFC systems in the past.

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Appendix CCONTACT DETAILS FOR

JAPANESE ORGANISATIONS

AIST

Dr Kunihiro Kitano Deputy DirectorInternational Affairs DeptTukuba Central 21-1-1 Umezono Tsukuba-shi Ibaraki 305-8568JAPAN

T +81 29 861 5239F +81 29 861 [email protected]

ANRE (Agency for Natural Resources and

Energy – part of METI)

Dr NagaoDeputy DirectorHydrogen & Fuel Cell Strategy Kasumigaseki 1-3-1Chiyoda-KuTokyo 100-8931JAPAN

T +81 3 3501 1512 76045F +81 3 3580 [email protected]/english

Hitachi Ltd

Mr Atsuchi Morihara HeadFuel Cell Business Promotion Division 6 Kanda-Surugadai 4-ChomeChiyoda-kuTokyo 101-8010JAPAN

T +81 3 4564 9506F +81 3 4564 [email protected]

Kawagoe Thermal Power Plant

Mr Yasui Technical DivisionMCFC Research Association

T +81 3 5833 0081F +81 3 5833 0084


Mr Kei Hosoi Advanced Project Promotion1002-14 MukohyamaNaka-MachiNaka-GunIbaraki-Ken 311-0102JAPAN

T +81 29 295 5802F +81 29 295 [email protected]/english

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NEDO

Mr Koji Nakui Director GeneralFuel Cell and Hydrogen TechnologyDevelopment Dept 20F Muza Kawasaki Building1310 Omiya-choSaiwai-kuKawasaki CityKanagawa 212-8554JAPAN

T +81 44 520 5260F +81 44 520 [email protected]/english

Tokyo Gas Corp

Mr FujisakiR&D Planning Group

T +81 3 5400 7569F +81 3 3432 7629 www.tokyo-gas.co.jp/index_e.html

Toshiba International Fuel Cells

Corp (TIFC)

Mr ManabeBusiness Planning and Marketing

T +81 3 3457 3622F +81 3 5444 9199www.toshiba.co.jp/product/fc/fce/index.htm

Toyota Motor Corp

Mr OtaniInternational Affairs DivisionHigashifuju Technical Centre 1200 MishukuSusonoShizuoka 410-1193JAPAN

T +81 3 3817 9932 F +81 3 3817 9017www.toyota.co.jp/en/index.html

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Appendix DATTENDEES AT SEMINAR HOSTED BY

BRITISH EMBASSY TOKYO

79


Family First Title Position Department OrganisationName Name

Kitano Kunihiro Dr Deputy Director International Affairs AIST

Tochihara Katsuhito Mr Senior Manager Mechatronic Devices Sales ALPS Electric Co Ltd

Arasawa Ryu Mr Chief Mechatronic Devices Sales ALPS Electric Co Ltd

Ando Haruhiko Mr Director Hydrogen & ANREFuel Cell Strategy

Takahashi Masakazu Mr Deputy Director Hydrogen & ANREFuel Cell Strategy

Nagao Jiro Dr Deputy Director Hydrogen & ANREFuel Cell Strategy

Mukoyama Atsushi Mr Principal Researcher Research Centre Asahi Glass Co Ltd

Wakizoe Masanobu Mr Chief Researcher PEM Project Asahi Kasei Corp

Iizuk Munenori Mr Staff R&D Bridgestone Corp

Ejiri Eiji Dr Professor Mechanical Engineering Chiba Institute of Technology

Nomura Yoshi Mr Investment Conduit Ventures LtdExecutive

Unnor Haruo Mr Marketing Manager Fluoro Products Dupon

Fujiwara Hidemichi Dr Manager Ecology & Energy Lab Furukawa Electric Co Ltd

Ishizawa Aiko Ms Ecology & Energy Lab Furukawa Electric Co Ltd

Hayashi Takeshi Mr Reporter Gas Energy News

Morihara Atsushi Dr Department Fuel Cell Enterprise Hitachi LtdManager Promotion

Sugimoto Masato Mr R&D Centre Hitachi Metals

Yamamoto Tsuyoshi Mr Manager PEMcoat Business Dev. Ineos Chlor Japan Office

Okamoto Fujio Mr Managing Director, Ineos Fluor JapanCAO

Ishiyama Hideo Mr Senior Research Engine Research Isuzu Advanced EngineeringEngineer Centre

Suda Seiichi Dr Senior Researcher Materials R&D Lab Japan Fine Ceramics Centre

Jono Kaori Dr Researcher Materials R&D Lab Japan Fine Ceramics Centre

Watanabe Takahito Mr Deputy General R&D Japan Gas AssociationManager

Takagi Yasuharu Mr Patent Examiner Metals & Electrochemistry Japan Patent Office

Yamauchi Tatsuto Mr Patent Examiner Metals & Electrochemistry Japan Patent Office

Wang Ting Ms Producer Centre for the Strategy Japan Research Instituteof Emergence

Nishimura Keita Mr Producer Centre for the Strategy Japan Research Instituteof Emergence

Takahashi Hiroshi Prof Programme Officer Special Coordination Japan Science and TechnologyFunds for Promoting AgencyScience & Technology

80



Mizuno Kenichiro Mr Deputy General Technology Planning & JFE Engineering CorpManager Cordination

Izaki Yasuo Mr Deputy General Energy System JFE Engineering CorpManager Engineering

Zeniya Yoshiyuki Mr General Manager R&D Johnson Matthey Fuel Cells Japan Ltd

Kobayashi Nobutoshi Mr Manager Business Development JSR

Ono Yoshihiro Prof Professor Electrical, Electronics Kanagawa University& Information

Kikuchi Koji Mr Researcher Technology Centre Kandenko Corp

Seki Kenichi Mr Researcher Technology Centre Kandenko Corp

Uchida Kenji Mr Manager Kansai Electric Corp

Kukita Shinpei Mr Manager Technical Training Centre Keiyo Gas

Momoi Kazumi Mr Engineer Technical Training Centre Keiyo Gas

Suzuki Akihito Mr Fuel Cell Kurimoto Ltd

Hirabayashi Toshihiko Mr Fuel Cell Kurimoto Ltd

Ogumi Zempachi Prof Professor Energy & Hydrocarbon Kyoto UniversityChemistry

Itoh Sumiko Prof Associate Professor Graduate School of Kyoto UniversityEnergy Science

Kaneko Masato Mr Group Manager Chemical Process Group Mitsubishi Heavy Industries

Watanabe Satoru Mr Chemical Process Group Mitsubishi Heavy Industries

Obuchi Akira Mr Deputy General Planning & Research Mitsubishi Kakoki Kaisha LtdManager Division

Chitose Norihisa Dr Engineer Advanced Systems Centre Mitsubishi Materials Corp

Ohashi Kidehiko Mr Group Leader Composite Materials Mitsubishi Rayon Co LtdDevelopment Centre

Shimura Yuichiro Mr Senior Consultant Energy Technology Mitsubishi Research Institute

Mizuno Masao Mr General Manager Gas Solution Division Mitsui Oil & Gas Co Ltd

Kubota Tsuneto Mr Senior Deputy Design Mori Building Co LtdManager

Omori Ichiro Mr General Manager Design Mori Building Co Ltd

Kobayashi Koji Mr Senior Manager Design Mori Building Co Ltd

Kaji Hiroyuki Mr Deputy Senior Business Development N E Chemcat CorpManager

Sone Junichi Dr General Manager Fundamental & NEC CorpEnvironmental Research Labs

Nakui Koji Mr Director General Fuel Cell & Hydrogen NEDOTechnology Development

Ikeya Tomohiko Dr Project Coordinator Fuel Cell & Hydrogen NEDO

Otokozawa Hiroy Mr Reporter Nikkan Kogyo Newspaper

Kato Ikuyasu Mr Project Leader Group 9 Nippon Soken Inc

Mizuno Toru Mr Senior Staff Group 9 Nippon Soken IncEngineer

81



Shukuri Kiyomi Mr Group Manager Engineering Divisions Nippon Steel CorpGroup

Arai Takayuki Mr Manager Technology Research Nissan Research CentreLaboratory

Kazaoka Manabu Mr General Manager Engineering Section Okazaki Manufacturing Co

Wakushima Yasushi Mr Senior Researcher New Fuels Petroleum Energy Centre

Fujisawa Satoshi Mr Section Chief Sales RICOH Elemex Corp

James Roy Mr Regional Director Rolls-Royce International Ltd

Kadowaki Masataka Mr Assistant Manager Fuel Cell Business Unit Sanyo Electric Co Ltd

Kobayashi Yohei Mr Researcher Research Centre for Shibaura Institute of TechnologyAdvanced Technologies

Iwasaki Hirokazau Mr Staff Manager Technology HQs Showa Denko KK

Yagi Fuyumi Ms Core Technology Sony CorpDevelopment Group

Hanji Katsumi Mr General Manager Responsible Care Office Sumitomo Chemical Co Ltd

Livesey Bryony Dr President Summit AEA Corp

Takamura Shigeki Mr Manager Summit AEA Corp

Morimoto Kazuhito Mr Deputy Staff New Powertrain Suzuki Motor CorpManager Development Division

Koyanagi Hidemitsu Mr Research Engineer Technology Centre Taisei Co Ltd

Furukawa Hisashi Mr Marketing Division Tanaka Kikinzoku Kogyo Co

Uchida Isamu Prof Professor Applied Chemistry Tohoku University

Ogasawara Kei Dr Senior Researcher SOFC Project Tokyo Gas

Ito Kentaro Mr Senior Researcher PEFC Project Tokyo Gas

Okamoto Genta Mr R&D Planning Tokyo Gas

Yamazaki Yohtaro Prof Professor Interdisciplinary Graduate Tokyo Institute of TechnologySchool of Science & Technology

Kato Naoshi Mr President & CEO Toshiba International Fuel Cells Corp (TIFC)

Sato Nobuaki Mr Technology Toshiba international Fuel Cells Executive Corp (TIFC)

Ikeda Shinichi Mr Senior Manager Business Planning Toshiba International Fuel Cells & Marketing Corp (TIFC)

Ozono Jiro Mr Senior manager Technology Development Toshiba Plant System & ServicesCorp

Hori Saburo Dr Senior Manager Fuel Cells Umicore Precious Metals Japan

Yamasaki Yudai Dr Research Associate Mechanical Engineering University of Tokyo

Kamiya Nobuyuki Prof Professor Energy & Safety Yokohama National UniversityEngineering

Appendix EMISSION DISCUSSION TOPICS

AND QUESTIONS

E.1 Markets

• What are the timescales forcommercialisation?

• Where will the early niche markets be?• Where will the medium/long term

markets be?• Are there opportunities for technology

transfer to accelerate commercialisation?• What are the key barriers to

commercialisation?• Are there barriers which are specific to

Japan?• Are there opportunities which are specific

to Japan?• What enablers will facilitate the

commercialisation of fuel cells?• What are the opportunities and challenges

around the evolution from an R&Dsituation to a mass productionenvironment?

• How can barriers be overcome?• How will non-Japanese markets

be supplied?• How will supply chains for different

markets evolve, and where are there gaps?

• What is the role for government?• How is the 'Hydrogen Economy' likely to

evolve and what are the implications?• How has funding for fuel cell related

technology been managed and is therenow sufficient funding available in Japanfor all levels of organisation? If not, howmight this be resolved?

• Do you see specific areas in whichinternational cooperation is required orwould greatly benefit all parties?

• How can non-Japanese companiessupport the Japanese fuel cell industry?

• How will fuel cells differentiatethemselves from competition?

• What is your perception of thestrengths/weaknesses of the UK and howcan these be improved?

E.2 Technology

• What alternative materials might help toimprove performance or reduce costs?

• Is materials research a large focus ofJapan's funding? Are there opportunitiesfor collaboration?

• What is the status of reformer technologyand how is this likely to evolve in theshort term?

• What is the status of legislation aroundthe storage of hydrogen?

• How are issues around safety andperceived risk being addressed?

• Can skills needs to be met? If not, whataction is required?

• How can the following be optimised?:- Power density- Manufacturability- Integration- Standardisation- Catalytic poisoning- Power quality- System configuration (eg size reduction)

• Who are you partnering with (bothcommercially and technically)?

• What technology gaps do you have?

E.3 Economics

• What economic instruments might beappropriate to stimulatecommercialisation?

• What might be their impact?• Will they be significantly different across

technologies? Or countries?• Where will fuel cells fit into the Hydrogen

Economy? How can they be optimised foruse in hybrid and combined situations?

82


Appendix FFUEL CELL TECHNOLOGIES

83


Technology Electrolyte Power range Description, operating temperature, Technology statusapplications

First generation fuel cells – mature

Second generation fuel cells – currently under development(ie concept – prototype – pre-production – early adoption – production)

Characterised by a liquid potassiumhydroxide (KOH) electrolyte. Main issueswith these are the possible contamination ofthe electrolyte by CO2.Operatingtemperature: 90-100ºC.Applications: military, space.

Mature technology.Expensive but used inniche applications. Fewmanufacturers currentlyactive. Technology maystill find applications.

A few watts totens ofkilowatts

Liquid alkaline,usually KOH

Alkaline fuel cell(AFC)

Moderate operating temperature precludesinternal reforming of hydrocarbon fuels, andso a separate reformer is required (true ofany low temperature fuel cell). Operating temperature: 175-200ºC.Applications: stationary/distributed power.

200-kW systems offeredbut not commerciallycompetitive with otherforms of generationwithout specialisedcircumstances.

200 kW - 11 MW

Phosphoric acidPhosphoric acidfuel cell (PAFC)

Traditional PEM direct hydrogen solidpolymer fuel cell. Whilst Ballard, Siemensand Babcock have delivered 200-kWsystems, generally they operate at around afew watts to 25 kW (except for vehicleengines at 75 kW and bus engines at 250kW). Operating temperature: 60-85ºC.Applications: transportation,stationary/distributed.

'Commercial' productsnow available, althoughpower output limited to 1-2kW. Many companiesare close to bringingstacks to market but feware offering generator orsystem products.

A few watts tomanyhundreds ofkilowatts

Solid polymerProton exchangemembrane (PEM)fuel cell

Low power PEM devices that will competedirectly with traditional batteries. Methanolfuel delivered to the PEM device as a liquid. Operating temperature: 60-100ºC.Applications: mobile electronic equipmentfrom phones to computers.

Advanced product trials,early commercialisationexpected.

< 50 WSolid polymerMicro directmethanol fuel cell(µDMFC)

Operating temperature: 60-100ºC.Applications: larger portable equipment.

Early product proof ofconcept.

50-150 WSolid polymer;can be alkaline

Direct methanolfuel cell(DMFC)

These have significant issues to overcomewith regard to efficiency and precious metalscontent. Operating temperature: 60-100ºC.Applications: large mobile equipment.

Early R&D effort seems toconfirm viability.

500 W - 2 kWSolid polymerDMFC

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Technology Electrolyte Power range Description, operating temperature, Technology statusapplications

Third generation technologies – R&D concepts only

Hydrocarbon fuels, including coal-derivedfuel-gas, may be reformed directly at theanode and an external reformer is notnecessarily required. However, sulphurtolerance remains a problem. Possibleapplication areas include power generation,CHP, ship propulsion and trains. Very smallMCFC systems are complex due torequirement to recirculate CO2 in the system.

Development programmesin Japan, the USA andEurope have producedmany small prototypeunits in the 5-20 kWrange. A 2-MW plant hasbeen demonstrated in theUSA and a 1-MW inJapan. 250-kW systemsare also beingdemonstrated but furtherR&D is required.

25 kW - 2 MWMoltencarbonatematerial

Molten carbonatefuel cell (MCFC)

Tubular and planar SOFCs employ similarmaterials, but differ in terms of fabricationtechniques. Natural gas is generally the fuelof choice. Operating temperature: 600-1,000ºC. Applications: stationarycentralised/distributed power generation,CHP, APUs, ship propulsion, trains.

SOFC systems of 250 kWhave been delivered fordemonstrations. Costsremain high.

100 W - 10 MWSolid oxidematerial

Solid oxide fuelcell (SOFC) -tubular design

100 W - 10 MWSolid oxidematerial

SOFC - planardesign

Taking H2S as the fuel, the heat of the anodedissociates the hydrogen and sulphur.

Conceptually proven,embarking on fund-raisingto commercialise (2-5years to market).

Hundreds ofkilowatts andabove

Solid oxidematerial

Direct H2S SOFC

Claims better technical performance overPEM DMFC devices but has drawback of aliquid electrolyte. Given it is a Kordeshtechnology its currency is coincident withAFC (1st generation) but has not enjoyedwidespread exposure, and deals withinherent problems with DMFC.

Early R&D work,theoretical characterisationleading to prototypingduring 2003, 2-3 yearsaway from pre-productionstage.

1 - 5 kWLiquid acidLiquid acid DMFC

Integrated µSOFC and micro-reformer on asilicon chip using some micro-electro-mechanical systems (MEMS) technologyfrom the integrated circuit industry.Extremely high energy densities theoreticallypossible. Targeting battery replacementmarket for next generation of portableelectronics.

Early R&D work,theoretical characterisationleading to prototypingduring 2003, 2-3 yearsaway from pre-productionstage.

<10 WSolid oxidematerial

Micro SOFC(µSOFC)

Uses micro-fabrication techniques to build upvery small PEM systems, hence high energydensities possible.

Early R&D work.<100 W atpresent

Solid polymerMicro PEM(µPEM)

Easier heat management, more useful heatoutput, more tolerant of contaminants in fuelstream. Operating temperature: 120-160°C.

R&D stage.Same as PEMSolid polymer High-temperaturePEM

Appendix GFUEL CELL SYSTEM COMPONENTS

G.1 Introduction

For each technology to be of value to anyend user, it must be manifested in an actualend-user product. Whilst the end-userproduct is a function of the productmanufacturer's chosen position in the supplychain, it is what the final customer willpurchase and use that defines what will besold throughout the supply chain.

The following sections describe thesubmaterials and components which arecontained within an end-user product. Forillustrative purposes, a PEM system isused. A similar pattern exists for other fuelcell technologies; the components willdiffer, as they will for differing technologies'power ranges.

G.2 Base chemicals/materials

The lowest level of component are the rawmaterials used in the chemical compositionof the membrane electrode assemblies(MEAs) as membrane materials andcatalysts, current carriers and frames,metals/plastics for flow-plate manufacture.Suppliers include Dupont, Johnson Mattheyand Morgan Crucible Group.

Subassemblies comprise a vast array ofchemicals used in differing compositions anddiffering parts of the MEA.

G.3 Membrane electrode assembly

(MEA)

The base materials above are fabricated intothe MEA product. MEAs are the individualcells which will produce electrical voltageand current, typically 0.5 - 1 V at current

densities of 0.1 - 2 A/cm2. They may befabricated by the suppliers of the chemicalsor by separate companies who purchasethe materials.

Subassemblies comprise:

• Raw materials formed into membranes• Catalysts

G.4 Fuel cell stack

MEAs are assembled into an arraycomprising a stack. Connected in a parallelor series combination depending on thetechnology, the configuration of the stackdefines the voltage and current capabilitiesof the stack. Stacks are configured toproduce milliwatts to megawatts dependingon technology and application needs.


• MEAs• Seals and end-plates• Connectors and manifolds• Assembly metal work

G.5 Fuel cell generator

At the generator level, the stack is thecentral component. The BOP is required tocontrol the flow of gases to the stack,manage the environment inside andsurrounding the stack, and manage the waterproduction. This typically will take gases todefined specification, hydrogen and usuallyair. Hydrogen and air to the fuel cell stack arerequired to have specific quality and humiditycharacteristics, and be presented to the stackports at defined pressures. Hydrogen isnormally delivered at pressure, requiring an

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electronically controlled pressure regulator;air needs to be pressurised, requiring acompressor and filter. The stack temperatureneeds to be maintained within defined limits,requiring combinations of heat exchangers,fans and humidifiers.

To control these conditions and managestart-up, shut-down, fault detection andcorrection requires a range of sensors, dataacquisition and process control hardware tomeasure the system and actuator devices toexecute control and actions. Power to run thecontrol system, sensors and actuators will beDC, requiring DC/DC converter and someform of start-up battery with trickle charger.

For an uninterruptible power supply (UPS),the first second's response is still by battery,and, for an engine, spike and peak loads arespread by batteries. Although batteriescontinue to be present in most systems, themarket for battery replacement is one ofreducing battery dependency. Good qualityrechargeable batteries will be needed. NewNi-Zn rechargeable batteries are competitorsto Pb-acid batteries. Replacement times forbatteries will become an issue when PEMmembrane life is longer.


• Gas and water pumps • Valves and regulators• Sensors (flow, temperature, pressure, H2)• Electronics and control (data acquisition

and output controls, processors, software)• Mechanical assembly (chassis, mechanical

components)• Electrical assembly (connectors, wiring,

fusing etc)

G.6 Systems

The system is the unit that will deliverpower to the end user, and is the minimumrequired for any useful work. The final end-user product employs the fuel cell generatorat its heart, with further BOP. A system isconfigured for an end-user application.

A system will comprise:

• Fuel source (including storage) • Fuel cell generator• Power conditioning (DC/AC or DC/DC)• Interface between fuel cell and power

conditioner (likely to include a battery,depending upon overall system duty

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Figure G.1 GM-DOE 10-kWconceptual power source

It may also include heat recovery when usedas part of a CHP system.

The fuel source may be direct hydrogen, inwhich case the application requireshydrgogen storage tanks, manifolding andpressure regulators taking pressure down tothe defined input pressure for the generator.It will also likely require an isolating valve. Forthe installation it needs to be mounted andcontained or, if in a mobile application, shockand vibration mounted. Alternatively, thesystem may require a hydrocarbon: naturalgas, LPG, methanol or others. These have tobe contained, delivering the fuel at definedconditions to the fuel cell input port. All musthave some form of refuelling capacity.

The fuel cell system can be considered as adefined purchased item as described above.This system delivers unregulated DC, whichwill require power conditioning. All loadshave defined characteristics and tolerancerequirements. This will impose limits onvoltage regulation, frequency regulation,transient response, fault tolerance etc. Thereis also likely to be a start-up buffer powerrequirement, and possibly a ride-throughpower need or a power surge requirementthat must be met by an auxiliary powerbuffer (battery, capacitor or other device).

All of this must be monitored and controlled,packaged, supplied with a control panel andsupplied with control systems, batteries,electrical bus, isolators and fault protectiondevices to protect the load, customers andinternal subsystem. Interface to the outsideworld will be through standard industryelectrical connectors. Depending upon theinstallation, additional safety devices may berequired, including gas sensors, which mayalso need to be either intrinsically safe or inan explosion proof container.

At this stage in the industry, there is a lot ofbespoke control coding, and a large amountof monitoring equipment. Remote monitoringand control of units in the field is common.

Specialist applications of fuel cells may ormay not have common BOP issues.


• Fuel storage system and controls• Fuel cell subsystem• Power electronics and fuel cell interface• Overall control systems and user interface• System packaging

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Appendix HLIST OF TABLES AND FIGURES

Table Page Caption

1.1 13 Mission schedule2.1 18 Technical targets for FCV and stationary systems2.2 20 Changes in METI/NEDO budget for fuel cells and hydrogen3.1 29 AIST employment levels at April 20043.2 31 Current and planned stationary fuel cell system trials

Fig Page Caption

1.1 13 Mission team and representatives from Toyota2.1 17 Significance of introducing fuel cells for METI2.2 19 METI-supported hydrogen filling station sites2.3 20 Changes in funding for different fuel cell technologies4.1 33 Fuel processing reactions4.2 35 NEDO-supported work in the development of safe utilisation and

infrastructure of H2

4.3 39 Tokyo Gas membrane reformer concept4.4 39 Tokyo Gas membrane based reformer as heart of FCV filling station5.1 43 METI budget trend – SOFC research5.2 46 Japan SOFC development and commercialisation programme6.1 53 Fuel cell powered bus at Toyota7.1 59 Toshiba's DMFC technology for a PDA7.2 60 PC with piggyback-type DMFC7.3 61 Hitachi's multi-viewer equipped DMFC8.1 62 A 300-kWe MCFC unit at KawagoeG.1 86 GM-DOE 10-kW conceptual power source

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Appendix IGLOSSARY

µm micrometreµV microvoltAC alternating currentAFC alkaline fuel cellAIST National Institute of Advanced Industrial Science and Technology (Japan)APU auxiliary power unitBOP balance of plantºC degrees CelsiusCeO2 cerium oxideCHP combined heat and powercm centimetreCO carbon monoxideCO2 carbon dioxideCRIEPI Central Research Institute of Electric Power Industry (Japan)dB decibelDC direct currentDME dimethyl etherDMFC direct methanol fuel cellDOE Department of Energy (USA)DTI Department of Trade and Industry (UK)EC European CommissionENAA Engineering Advancement Association of JapanETRI Energy Technology Research Institute (Japan)EU European UnionFC fuel cellFCCJ Fuel Cell Commercialisation Conference of JapanFCH fuel cell and hydrogenFCHV fuel cell hybrid vehicleFCV fuel cell vehicleFY fiscal yearGt gigatonne (= 109 tonne)GT gas turbineGW gigawatt (= 109 watt)h hourH2 hydrogenH2S hydrogen sulphideHDS hydrodesulphurisationHEV hybrid electric vehicleHHV higher heating valueHz hertz (cycle/second)IEA International Energy AgencyIEC International Electrotechnical Commission

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IP intellectual propertyIPHE International Partnership for the Hydrogen EconomyIPR intellectual property rightsIT information technologyJARI Japanese Automobile Research InstituteJGA Japan Gas AssociationJHFC Japanese Hydrogen & Fuel Cell Demonstration Projectkg kilogramKOH potassium hydroxideKRI Kansai Research Institute (Japan)kW kilowattkWe kilowatt (net electrical)LHV lower heating valueLPG liquid petroleum gasLSM lanthanum strontium manganatem metremA milliampereMCFC molten carbonate fuel cellMEA membrane electrode assemblyMETI Ministry of Economy, Trade and Industry (Japan)min minuteml millilitremm millimetreMMC Mitsubishi Materials CorpMn manganeseMPa megapascalmW milliwattMW megawattMWe megawatt (net electrical)NaBH4 sodium borohydrideNEDO New Energy and Industrial Technology Development Organisation (Japan)NEF New Energy Foundation (Japan)Ni nickelOSTEC Osaka Science and Technology Centre (Japan)PAFC phosphoric acid fuel cellPb leadPC personal computerPd palladiumPDA personal digital assistantPEFC polymer electrolyte fuel cell (aka PEMFC)PEM proton exchange membranePEMFC proton exchange membrane fuel cell/polymer electrolyte membrane fuel cellppm parts per millionPSA pressure swing adsorptionPTFE polytetrafluoroethylenePV photovoltaicR&D research and developmentRD&D research, development and demonstration

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SECA Solid State Energy Conversion Alliance (USA)SME small or medium enterpriseSOFC solid oxide fuel cellTi titaniumTIFC Toshiba International Fuel Cells CorpUK United KingdomUPS uninterruptible power supplyUS(A) United States (of America)V (1) vanadium; (2) voltvppm volumetric parts per millionW wattWE-NET World Energy Network (former project of Japanese government)¥ yen (£1 = ¥200)YSZ yttria-stabilised zirconiaZn zinc

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