Speeches

Keynote Address

Arthur J. Carty

Hydrogen and Fuel Cells 2004 Conference

Toronto

27 September 2004

[ PDF Version ]

Good morning everyone. It is a pleasure to participate in this key event within the world’s hydrogen and fuel cell communities.

As Canada’s National Science Advisor, I consider the advancement of the hydrogen and fuel cell industries to be vital to the future of our country.

I am very pleased therefore to have this opportunity to speak to you about some of the ways we can speed up the commercialization of these new technologies. As some of you will know, part of my mandate is to provide advice on how to move ahead in improving Canada’s commercialization performance.

The hydrogen age promises to bring substantial economic, environmental, health and social benefits to every nation around the globe.

Developed and developing nations alike will have the means to secure their own energy supply. And for the most part, it will be clean, efficient and renewable energy. Widespread adoption of hydrogen technologies will improve the air we breathe in our congested cities and help slow the pace of climate change.

Canada is fortunate to be early out of the gate on hydrogen and fuel cells. Canadian companies like Ballard, Hydrogenics and Stuart are global leaders in the search for new energy solutions. And there are a growing number of small and mid-sized firms behind them, poised to take the world by storm in various niches of the hydrogen and fuel cell business.

Industry Canada, in partnership with Fuel Cells Canada and PricewaterhouseCoopers, have today released a sector profile which demonstrates Canada’s hydrogen and fuel cell industries are growing and generating high quality jobs. Revenues in the sector reached $188 million in 2003, up by 40 percent over the previous year. More than three-quarters of that revenue came from product sales. Employment in the sector stands at close to 2700, with growing industry clusters not just in Vancouver, but in Calgary, Toronto and other parts of the country as well.¹

But we must recognize that Canada will have to work hard if it is to maintain this position.

And we will need to work closely with our counterparts and partners around the world – in industry, government and academia – if we want the dream of the global hydrogen economy to become a reality.

In my view, Canada has a responsibility to work internationally not only to remain competitive in its own right but also to ensure that the benefits of hydrogen and fuel cell technologies – as well as other clean energy solutions – become available and accessible across the developed and developing world alike.

So, if the hydrogen economy is our destination, how do we chart our course to get there?

To my way of thinking, the answer to that question must focus in large part upon commercialization – or getting the knowledge and technologies we need into the marketplace.

Indeed if new technologies are to have a transformative impact on the public good they must achieve widespread use.

Yet the hydrogen and fuel cells industries worldwide are at a crossroads.

Governments everywhere are recognizing the strategic significance of both of these industries, and some countries such as the United States, Canada, the European Union, Japan and China – have recently announced significant new investments in research and development.

Last year, for example, Washington declared that it would spend some $1.2B in U.S. funds over five years on the development of hydrogen-powered cars and the infrastructure to support them.

At the same time, the European Union earmarked $2.1B Euros (or $2.6B U.S.) for hydrogen-related research under its 6th Framework program. China and Japan, two very large potential markets, have invested 100 million and 300 million US, respectively.

For its part, Canada has allocated $215M in new funds over five years to the development of the hydrogen economy.

This new funding is being used to strengthen basic research in Canadian universities and federal government labs – through organizations such as the National Research Council and Natural Resources Canada -- as well as to launch several important commercialization initiatives.

Among these are:

• The NRC Institute for Fuel Cell Innovation’s clustering activities in the Vancouver area, which are helping to build a critical mass of fuel cell-related research, infrastructure, business expertise and skilled workers in British Columbia. The Institute has an $ 8M per annum budget for R&D and commercialization-related initiatives.
• Sustainable Technology Development Canada’s $50M fund for projects aimed at developing and demonstrating technologies for the hydrogen economy.
• $10M in funding for the Canadian Transportation Fuel Cell Alliance to showcase refuelling demonstration projects and develop a supporting framework for fuelling infrastructure, among other objectives.
• And Technology Partnerships Canada’s Hydrogen Early Adopter’s Program which will spend $50M over the next five years on demonstration projects and other initiatives to help increase public acceptance of hydrogen technologies.

Going back to the global scene for a moment, a wide range of industrial players have started to invest in hydrogen and fuel cell technologies. And not just automakers like Ford, Daimler-Chrysler and Honda, but equipment manufacturers like John Deere, and IT firms and telecommunications providers as well.

The creation of the International Partnership for the Hydrogen Economy last year is a significant step forward for the entire sector. Fifteen countries, including the U.S. and Canada, have agreed to work together towards the global deployment of hydrogen technologies and a fueling infrastructure to support them.

Ambitious demonstration projects are also starting to gain momentum around the world. These range from Europe’s CUTE program⁴ , which will place 27 fuel-cell-powered buses on the road in nine cities, to Canada’s Hydrogen Highway in British Columbia, a Hydrogen Village in Toronto and a proposed Hydrogen Airport in Montreal.

The Hydrogen Highway will showcase an integrated system of fuel cell cars, stationary generating applications, and hydrogen production and fueling stations around the Vancouver area leading up to and during the 2010 Winter Olympics and Para-Olympic Games.

The Hydrogen Village demonstrates similar technologies in the Greater Toronto Area and is already underway. It is supported by an extensive alliance of players from throughout the community. Montreal’s Hydrogen Airport project is expected to feature both fuel cell and hydrogen combustion engines in a variety of vehicles such as tugs and luggage carts, people moves, mobile auxiliary power units, H2 fueling rotations as well as training, compliance, maintenance and certification and other applications.

International collaboration is also growing – both amongst industry players and across government, industry and academia.

This gives us the lay of the land. But before we can chart a course to the future we must have a clear vision of where we want to go.

We also need to know who our traveling partners are going to be.

It will take a broad coalition of industry, government, communities, academia and non-governmental organizations -- all pulling together – these will be critical to our ability to achieve our goals.

But we must also move swiftly to bring the public on board, taking care to answer any environmental, social and safety concerns in an open and straightforward manner. These issues must be addressed right up front.

Based on the biotech experience, we can only reasonably expect one opportunity to earn the public’s confidence on these issues.

So where are we headed? And what would daily life in the hydrogen age be like?

I’m always a bit cautious about futuristic predictions because science has a habit of making fools of even the wisest prognosticators, but I’d like you to take a moment to try and paint a picture of your life 25 years from now.

Perhaps you are sitting out on your front porch in the evening having a beer. Don’t worry, we will have conquered West Nile disease by then, so it will be safe!

Your daughter arrives home from the cottage in her hydrogen-powered vehicle.

After disembarking, she plugs the fuel cell in her car into your residential hydrogen reservoir, which refills the car with hydrogen generated from excess solar and wind power throughout the day. This hydrogen also feeds your home fuel cell, which supplements on-site power generation for such things as lighting, appliances and air conditioning through the night. You and your daughter sit outside for a while, enjoying the air. The air quality is much improved over the old days, because the nearby industrial sector now runs on clean energy, hybrid engines and fuel cells.

As the evening progresses, you pull out your laptop to check the Internet. You read an article on the highly anticipated Kyoto Accord III and the progress that has been made in reducing global greenhouse gas emissions. Your laptop is of course powered by a fuel cell.

Well perhaps we’ve gazed in the crystal ball for a long enough. I’ve identified our destination where we want to be in 25 years -- now let me focus more specifically on commercialization.

What would the successful commercialization of hydrogen and fuel cell technology look like?

I’ll be speaking mainly to the Canadian situation here, but I’m confident that many of my observations can be applied more broadly. The sector faces many of the same challenges the world over.

For Canada, my vision of successful hydrogen and fuel cell commercialization looks like this:

• Lots of thriving Canadian companies exporting a spectrum of fuel cell and hydrogen-related devices – at every price point -- to the world.
• Several well-established industry clusters from British Columbia to Prince Edward Island, each with a full range of hydrogen and fuel cell technology developers, manufacturers and distributors.
• Lots of world-class R&D aimed at optimizing the benefits of the hydrogen economy, conducted by industry, government and university labs.
• An extensive hydrogen distribution system, with a long-term capability of producing hydrogen right at the fueling station.
• A fully integrated energy system with hydrogen firmly in the energy mix. In addition to making full use of all sources of hydrogen – including biomass, solar, wind, ocean and nuclear -- such a system would enable consumers to take advantage of distributed sources of power. The goal would be to provide a continuous and uninterruptible flow of energy.

• Extensive international cooperation in managing the global hydrogen economy, including the development and continuous greening of international codes and standards to guarantee technical interoperability and comparability, as well as the broad practice of rigorous safety procedures.
• A skilled workforce at all levels to serve the needs of the hydrogen economy.
• And lots of quality jobs for Canadians.

Sounds ambitious? It is. But we really do need to set our sights high if we are to realize the economic, environmental, health and social benefits the hydrogen economy can bring to Canadians and to the world.

Indeed, I have one more thing to add to this vision – and that is a role for Canada in demonstrating the potential of the hydrogen economy and fuel cell technology to the world.

Already we are moving in this direction with the Hydrogen Highway in British Columbia and Hydrogen Village in Toronto. Both are large-scale projects that will feature full systems of hydrogen technologies in action in real life settings.

But I believe we should challenge ourselves to go even further.

Why not spearhead the development of a West Coast hydrogen corridor – linking plans for B.C.’s Hydrogen Highway with California’s? And why not extend it up to Alaska? Or into Alberta?

Why not build on the opportunities offered by Canada’s hosting the Vancouver 2010 Winter Olympics to generate excitement to build a North American Hydrogen Highway?

Why not be bold if we want to capture the world’s attention?

Bearing the various elements of this vision in mind, let’s turn our attention to how we can make it happen.

Let me start by emphasizing that Canada must continue to invest in the basic research and development needed to achieve industry wide commercialization. Fundamental advances in areas such as materials, catalysts, and modeling will improve design, efficiency and cost. When combined with developments in hydrogen production and storage, we can achieve the increased performance and decreased end-costs necessary for acceptance of this technology as a system. But at the same time, we need to move ahead with identifying specific barriers to commercialization in the sector and developing practical solutions to overcome them.

So what are some of the barriers that need to be addressed? Briefly, as shown in this slide they include:

• Cost and the need for further technological breakthroughs to make fuel cell technologies cheaper and more affordable. 
• Barriers relating to firms, including skills and management capacity, availability of venture capital, access to international markets, and the predictability of the regulatory environment.
• Public acceptance
• And government policy fragmentation-including regulations
-also needs to be addressed.

In my view, not just government but both industry and government must challenge themselves to address these issues – although fundamentally it is up to industry to take the lead in proposing solutions. Ultimately, it is individual firms that take technologies to market.

So how can government do more?

Any of us here would probably be happy to see government provide more funding for R&D or specific commercialization initiatives. For instance, government needs to work with industry to come up with innovative ways to improve access to market sources of capital.

But there are other important ways in which government can make a difference.

A key area is procurement. It’s time for governments at all levels – federal, provincial and municipal – to consider fleet purchases of hydrogen technologies. Government must show leadership on climate change and economic development by becoming an early adopter of hydrogen and fuel cell technologies.

Government has an essential role to play in the international arena as well -- working with other governments to develop international codes and standards, and facilitating the flow of pre-commercial information to ensure that all nations can share in the development of the hydrogen economy.

Again an idea like that of creating a West Coast hydrogen corridor could be a focal point to galvanize bilateral cooperation in this area.

And government can make a difference as a partner to industry – especially by drawing on its ability to bring key players together, to facilitate the sharing of information and to catalyze new initiatives.

The federal government, in particular, can use these advantages to coordinate and integrate R&D efforts across the country or to work with other levels of government, universities and colleges to launch or strengthen skills development and training initiatives.

Government’s credibility and reputation as a neutral evaluator can also help lend weight to demonstration projects. And its decision to invest in new initiatives can attract interest from outside players, including foreign investors.

But it’s time we moved beyond one-off demonstration projects of one or two fuel-cell cars or buses.

It’s time to develop “moon shot” quality schemes that can spark the imagination and demonstrate the capabilities of a full range of end-use technologies and the infrastructure that will provide the connections between them.

The key is for government to work to understand the various stages of industry development better and to identify points in the commercialization process where its involvement could make a difference.

Overall, more effort is required on the part all players involved with the sector – industry, government and academia – to develop a range of initiatives that will assist companies at all stages of the commercialization process.

Recent collaboration between industry and the federal government on road maps for both the hydrogen and fuel cell industries are a step in this direction. So too is the development of hydrogen and fuel cell strategies in several provinces across the country. However, we need to find a way to identify, evaluate and give priority to these concerns on an ongoing basis. And we need to have a better way of coordinating and integrating our efforts.

Before wrapping up, I’d like to emphasize three points. Again, these are aimed at the Canadian situation, but I believe they can be applied more broadly.

First, we must be aggressive in setting our targets for moving towards the hydrogen economy.

We need to have a clear and bold vision of where we want to go. And we must be creative in developing the means to get there.

Fundamentally, we must challenge ourselves to move out of our comfort zone. Success doesn’t come to those who stand pat or move only incrementally. H.G. Wells expressed this well in his novel The Time Machine:

Strength is the outcome of need; security sets a premium on feebleness.

Second, we must build on our strengths. In Canada’s case, we are currently a world leader in the development and production of fuel cell and hydrogen technologies.

Why not build on that leadership to model some of the economic, environmental, health and social advantages of a hydrogen-based economy to the world?

Real life testing would give us an opportunity to address emerging environmental and safety concerns, without creating undue hype. It would also give us the chance to ensure that others in the world share in the benefits of the technological progress we are making.

And third, as I’ve stressed throughout my remarks, collaboration and partnerships are going to be the key to success.

For what we are contemplating is not just the simple commercialization of a few new technologies, but a fundamental change in the energy base that underpins of almost every aspect of our economic and social fabric.

We must do all we can to leverage our partnerships to create all the support we can get.

In closing, make no mistake about it, the world is going to move towards a hydrogen economy.

My question to you -- no matter whether your business is in Canada or elsewhere – is do you want to help lead that transition? Or do you want to be left behind?

Thank you and I wish you well with your conference.