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Public finance can help resolve the "chicken and egg" situation for fuel cell technologies and green hydrogen: Financing fuel cell technologies now is key for Europe's sustainable energy future beyond Copenhagen


09 Dec 2009


Climate & Environment
Sustainable Dev.

[Brussels, 09 December 2009]

The way to a cleaner energy future that includes zero emission fuel cells and hydrogen technologies exists but it has to be paved by public funding. This will allow the initially required economies of scale in the production of fuel cells and therewith bring about the market demand for green hydrogen[1]. FuelCellEurope calls on Member States and public stakeholders gathering at the UN COP 15 Final Summit in Copenhagen to foresee large scale fuel cells and hydrogen demonstration projects in their plans, to help bring these new technologies to market entry level.

When combined with green hydrogen, fuel cell technologies in transport and stationary applications have zero Greenhouse Gas emissions, and zero NOx and SOx. To achieve this as a widespread reality there are two main hurdles to overcome: the price of the fuel cells and the availability of green or clean hydrogen. Those who are saying that fuel cells are uninteresting because there is no green hydrogen are wrong. Firstly eventually market demand for green hydrogen will stimulate production and availability. And second because even with grey hydrogen fuel cells already offer the most energy efficient technology available today and significant Greenhouse Gas emissions reductions compared to conventional technologies.

Fuel cells can be compared to batteries as they produce electricity that can be used in electrical applications of any kind. The difference with batteries is that fuel cells do not need to be recharged but can continue to operate as long as they are provided with fuel. This difference is a key advantage for a large number of both stationary and transport applications where operational downtimes for recharging and operating autonomy are essential requirements. The question however is not if one or the other technology will prevail. Both technologies will in a variety of hybridized forms deliver the best combination for advanced energy systems delivering the best operational outcomes. Fuel cells and batteries like each other, they do not bite each other.

Fuel cells are expensive today but will become a lot cheaper with economies of scale. Fuel cells nearly everywhere are still produced in small quantities for commercial applications where higher prices are compensated for by the much higher technical and user benefits. But many fuel cells are individually hand built for subsidized research and demonstration purposes. Larger orders will reduce the costs of fuel cells production in all areas and increase competition. The required investments for these larger orders have to be stimulated by public finance or regulation because market forces alone cannot make it happen. The technology is there, yet meeting the market entry targets will require substantial additional effort. In the United States for example it was demonstrated that thanks to the public support of the Department of Energy (DoE), the cost of automotive fuel cells has been significantly reduced from $275/kW in 2002 to $61/kW in 2009. But more can be done.  Another groundbreaking project highlighting the importance of public support for fuel cells and hydrogen is the "HyFLEET.Cute Project", which thanks to an EC grant of 19 M€ for a total budget of 43 M€, saw more than 8.5 million happy public transport passengers travelling all together more than 2.5 million Km.

Green hydrogen can today be produced without technical difficulty. However grey hydrogen made from fossil fuels is today the cheapest way of obtaining hydrogen. Hydrogen is a well established industrial gas that is produced and delivered every day all over the world for a variety of applications without any technical problems or dangers. Green hydrogen is equally safe but additionally can be totally CO2 free. Green hydrogen is today expensive to produce. With planned increases in available renewable energies such a wind, solar and biomass, for example, producing green hydrogen can in future become cheaper and more abundant. There will however be no commercial demand for green hydrogen if there are no fuel cells to use it in. Therefore the development of fuel cells and hydrogen technologies has to happen today even if green hydrogen can only be delivered tomorrow.

Janez Potocnik, EU Commissioner for Science and Research commenting the Communication on "Financing low carbon technologies"[2] said in October that "Up-grading investment in research in clean technologies is urgent if Europe is to make the road to Copenhagen and beyond cheaper". The referred to Communication says that "additional public and private funding needed for fuel cells and hydrogen technologies is currently estimated as 5€bn for the period 2013-2020." Thereby the Commission's estimate matches in fact the requirements made by the European Hydrogen and Fuel Cell Technology Platform (HFP) in 2007 in its then formulated Deployment Strategy.

In conclusion, investing and committing to fuel cell technologies today is critical to shape the future of a sustainable Europe.

Fuel cells work towards a clean, secure and de-carbonized energy future for Europe, while at the same time also creating economic growth and local employment. Fuel cell technologies fully integrate in clean cities of the future, as they improve health related air quality and considerably reduce noise. Supporting fuel cells first is the way to resolve the hydrogen issue and the answer to the "chicken and egg" problem.