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Presentation held by Arno A. Evers at the
15th
World Hydrogen Energy Conference
(WHEC15)
Venue: Pacifico Yokohama Conference Center
Yokohama City, Japan
Abstract:
Technical papers dating back to the 1960’s state that
the chance for the use of Hydrogen to power Fuel Cells was
promising, but that there was still a lot of R&D work
to do. Today, many achievements have been made, however, the
questions: “Where is the Hydrogen coming from?”
and “Why should I buy a Fuel Cell?” remain unanswered.
Perhaps for obvious reasons: the consumer is not used to the
use of Hydrogen and furthermore, will never buy a Fuel Cell
simply just to have one. There must be a purpose to deal with
an unknown fuel and to use a new device to create additional
benefit and convenience for the consumer’s daily life.
In examining various market strategies, this presentation
demonstrates the possible driving factors and necessary elements
needed to move Hydrogen and Fuel Cells (H2/FC) to commercialisation.
Rather than focusing on the technology itself, the presentation
looks at the “bigger picture” comparing how certain
trends have impacted the progress of new technologies developments
in the past and how these models can be applied to our present
day situation. In this process, the needs of the consumer
have played and will continue to play the key and leading
role. History shows that in the beginning, the “replacement
of existing technologies” was, in most cases, a struggle.
It was only due to the elite consumer with the financial resources
available and desire for exclusive products, the so-called
“first movers”, that drove the progress of new
applications. Due to such strong influence, the average consumer
will then ultimately fuel the future of H2/FC mass commercialisation
impacting the coming Hydrogen Economy.
Keywords: commercialisation, revolution, evolution,
consumer demand
1.1 On Probation or Ready for Take-Off?
Fuel Cell technology has been on worldwide probation
for the last 30 years. Billions of US $ – both from
Private finance and Governmental funds - have already been
invested. In many countries, adoption was announced several
times, but often postponed. There are two critical issues
to bear in mind. First, how long will it take for H2/FC to
become commercial? Second, will H2/FC be on probation for
another 30 years?
2.1 The Customer can Decide
Figure 1: FC Car and Experiment Kit –
cost $149 USD. There is a limited, but growing supply (and
demand) of Hydrogen and Fuel Cell experimental kits worldwide.
These kits can be used for various important experiments,
like measuring current, efficiency, etc. Also, these kits
are of high academic value. They have regrettably, no payload,
range, or anything “useful” for daily life. The
latest offer I saw was a Fuel Cell Car and Experimental Kit
featured in the SkyMall mail order catalogue (Spring 2004)
for $149 USD. Figure 2: 350 Watt electric scooter –
cost $175 USD. On the other hand, in the US and other countries,
one can buy “off the shelf” electric scooters.
Here the smallest unit I know is available for $175 USD. It
has the payload of 225 lb (102 kg), range of 20 miles (32
km) and maximum speed of 15 mph (24 km/h). However, it is
battery driven and a rechargeable battery is included in the
price. Figure 3: What should the consumer do next?
3.1 Implementation Time of New Products
Figure 4: Chart illustrating
implementation time of new products. According to Siemens
AG, new appliances have taken different time spans to reach
100 million U.S. customers. The radio, for example, took 90
years to reach 100 million U.S. customers; telephone, 70 years;
television, 50 years; cable TV Network, 25 years; computer,
20 years; mobile phones, 15 years; Internet less than 5 years.
The speed of implementation continues to grow faster and faster
with every new product invented. I am convinced that the introduction
of Hydrogen and Fuel Cells applications, products and services
will take even less time; maybe just a few years.
4.1 Driving Force: Not Technical possibilities but
Consumer Demand
The future of an H2/FC economy will not be dependent
on the replacement of existing energy-powered products, but
rather in products and/or services unknown today which will
benefit our daily life tomorrow. Because of the “added
value” benefits of these new products and/or services,
this development is going to happen sooner than many “experts”
think today. All new appliances in the past were luxury goods
in the beginning. They had their breakthrough due to the fact
they improved the consumer’s daily life by added convenience.
4.2 Home appliance ownership in every 100 Shanghai,
P.R. China, families
As the Chinese economy grew fast in recent years,
the income of Chinese people had increased largely. As China’s
overall economy is expected to continue its growth over the
next years, the income level of Chinese residents will also
continue to grow. This will be further accelerated by the
higher levels of education obtained. For example, there are,
at present, 300,000 electrical engineering graduates leaving
Chinese university ever year. The rise of the income will
ensure the purchasing power needed for unexpected expansion
of daily-use electrical appliance market. This demonstrated
by the demand for highly efficient new products bought by
the average Shanghai family as shown in Figure:5.
4.3 Evolution of Cellular Phone 1983-2004
Figure 6: Evolution of the Cellular
Phone 1983-2004. The progression of the telecommunications
industry is immense; for example, a 3,000 USD Dynetek cellular
phone from 1983 with a weight of 3 lbs without display has
less performance than a 299 USD Samsung cellular phone from
2004 with a weight of 3,6 oz. with color LCD. Worldwide, this
progress is not driven by any governmental subsidy; it is
only driven by the demand of the consumer who is looking for
added value. The increase of quantities per time producing
these units leads to a sharp decrease in the price per unit.
4.4 Evolution of the Aircraft Industry 1903-2005
Figure 7: Evolution of the Aircraft
Industry comparing Wright’s Flyer with today’s
Airbus A380 over the past 102 years. When Orville and Wilbur
Wright left their plane after the first powered flight (lasting
57 seconds) in Kitty Hawk, North Carolina, December 17th,
1903, they, and nobody else, would ever imagine that only
100 years later there would be an aircraft built with a range
of more than 8000 miles carrying 550 passengers in peace and
comfort. Today’s Hydrogen and Fuel Cell industry status
compares with the time of the Wright Brothers. There are more
dramatic developments coming than anyone can imagine, hopefully,
in less than 100 years.
5.1 Four Steps to an Energy Supply based on Hydrogen
and Fuel Cells
Figure 8: Illustration of steps
towards a cleaner, reliable, decentralised energy supply.
In my opinion, cars could be the key for a new Energy Supply
based on H2/FC. All components to implement this idea are
ready and available. All it takes is four steps. Step 1 –
Renewable energies (like wind, solar, hydroelectric and/or
biomass energy) produce Hydrogen. Step 2 – The cars
drive on Hydrogen using Fuel Cells and electrical motors.
(The first two steps are readily available worldwide. However,
at this time, there’s no public demand for use of these
options. To get the repeatedly promised Hydrogen economy on
its wheels, two more steps must follow.) Step 3 – While
parked, these vehicles drive idle and supply electricity to
the buildings where they are parked. Step 4 – Car owners
earn money based on the electricity/heat supplied by their
cars.
The incentive for car owners driving and using vehicles equipped
with Hydrogen and Fuel Cells systems is twofold. They can
either save (at their home) or earn (at the neighbour, drugstore,
post office, airport) money while their cars are parked and
plugged into buildings via a smart docking station. For example,
your car parked at home in your garage will supply electricity
to your home and additionally, replace the function of your
existing boiler and even all air conditioning units, thus
saving money. Users of this system can earn money by selling
the electricity generated, but not used at home at that time,
to the utilities and feed it into the existing electricity
grid.
5.2 Revolution in the Garage
Figure
9: Illustration of Personal Power Car taking over the
role of the boiler & delivering electricity to house &
electrical grid whereby creating a “revolution in the
garage”. Looking at today’s so-called “western”
countries, if all registered cars would be equipped with a
Fuel Cell system, they could (all together) easily take over
the function of today’s existing stationary power plants
(which all have to be replaced one day anyway). This is due
to the fact that the total power installed in the cars’
engines exceed the capacity of existing stationary power plants
by 20-35 times.
In the first stage, the Hydrogen needed to power this system
will come from natural gas which is currently widely available
in most countries. The individually produced Hydrogen will
be stored in a personal tank inside the garage or the cellar.
The Fuel Cell in the cars produces DC, which will be converted
in the house into AC. DC must be used directly with nearly
all advanced appliances like computers, plasma screens, mobile
phones anyway. The heat generated by the fuel cell in the
car will warm homes in winter, and in summer, the heat will
be converted by means of special heat exchangers to eventually
replace all residential air-conditioning units. This idea
has many “fathers”, Amory B. Lovins to mention
one, and is just one example of where we could apply this
technology in combination with other existing systems.
6.1 Market Outlook: China - World Motor Vehicle Production
figures and forecast
Figure 10: World motor vehicle
production with forecast for P.R. China. The regional motor
vehicle production of the world from 1900 to 2004 shows that
in the beginning, car production was shared between North
America and Europe. After 1950, other players appeared on
the market like Japan and South Korea. China stared their
domestic car production in 1985. However, the production of
cars doubled from 2002 to 2003, and it’s forecasted
to reach 6 million new cars produced annually by 2010.
6.2 Market Outlook: China - New Players on the Chinese
Automotive Market
According to various sources, in addition to the
already existing 35 domestic car manufacturers in mainland
China, there will be at least 5 more enterprises entering
car production within the near future. These companies are
investing vast amounts of money. The biggest single investment
known will be made by the AUX Group Co., Ltd. It will spend
USD$966 Million within the next 4 years. Surprisingly when
having a closer look at these 5 new companies entering the
Chinese car production market, it gets even more interesting:
AUX Group Co., Ltd. Is a privately-owned home appliance maker;
Lifan Group Incorporated is China’s largest private
motorcycle producer; Ningbo Bird Co., Ltd. is a manufacturer
of Electronic communications (mobiles); China National Bluestar
(Group) Corporation is a state-owned conglomerate and last
but not least, Wulianye Distillery Yibin is an alcohol producer.
All that said, we might as well change our slogan from “Go
to where the Market is!” to “Money is going to
where the consumers are!” Figure 11: Chinese market
impressions – 1.3 billion potential customers.
7.1 Conclusion
This overview shows that the demand of the consumer
will play the critical role in the mass-market evolution of
H2/FC products and services. At first, H2/FC powered products/services
will be considered luxury items with only a handful of the
population being able to afford to buy them. However, over
time and as the technological awareness and knowledge about
the advantages grows, the consumer will become better educated
as to the many benefits offered by services powered by H2/FC
technologies. Increased convenience and awareness rather than
the price of the merchandise, will have an enormous impact
on the consumer and will compel them to buy H2/FC powered
goods, and furthermore, lead to the development of completely
new H2/FC products and services which are unknown and unobtainable
today. The Personal Power Car as described is just one example.
However, the current education, investment and economical
situation in China as presented are sure to further accelerate
the trend towards the coming Hydrogen Economy. Figure 12:
Diagram of growth and development - Hydrogen + Fuel Cells
Group Exhibit
Click here to start the presentation
Click here for impressions
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