.gif) Presentation held by Arno A. Evers at the 15th World Hydrogen Energy Conference (WHEC15)
Venue: Pacifico Yokohama Conference Center, Yokohama City, Japan
Please download the presentation at the bottom of this page
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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
Arno A. EVERS
Founder, Arno A. Evers FAIR-PR
Achheimstr. 3, 82319 Starnberg - Germany - arno@fair-pr.com - www.fair-pr.com |
