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Minnesota Technology Magazine - Fall 2003

Lighter than Air

What happens when everything goes black, and stays that way? Most of us don’t spend much time thinking about power, but last August we got a big reminder of how much we depend on its easy ubiquity. In the space of a 29-hour blackout, millions of New York City residents and visitors slept on sidewalks, threw out tons of spoiled food, and waited to be rescued from stranded subways. The blackout cost the city an estimated $1.05 billion, or $36 million an hour, not counting lost tax revenues or increased overtime pay. It also offered a stark illustration of the vulnerability of our nation’s energy infrastructure. Based heavily on imported, .nite sup- John Goodman, president, Entegris plies of fossil fuels, and stretched across an aging infrastructure, the system is susceptible to further mechanical breakdown or even terrorist attack.

By: Sara Aase
Contributing Writer, Minnesota Technology magazine

If we can H2: Hope versus hype

Citing these concerns, policymakers from the Bush administration on down are touting an old new solution to the energy conundrum: hydrogen-powered fuel cells. And at .rst glance at least, it does appear to be a compelling idea. Fuel cells turn hydrogen and oxygen into water, heat, and electricity, with no harmful emissions. Because they have no moving parts, they are at least twice as efficient as internal combustion engines; theoretically they could one day power cars, appliances, portable electronics, and the heating and cooling systems for our homes. Proponents say that when harnessed, hydrogen— the universe’s most abundant element—has the potential to create an unlimited, unpolluting, and unimported supply of energy. In short, fuel cells would solve the obstinate political and environmental problems surrounding fossil fuels.

Joint Efforts

State fuel cell efforts boosted by regional, municipal, and private initiatives

Minnesota isn't alone in its efforts with renewable hydrogen; other pilot projects, if funded, could also further the goal. The state, for example, hopes to help build a hydrogen corridor along Interstate 35, drawing on its ethanol gas stations and biomass resources, as part of the Upper Midwest Hydrogen Initiative (UMHI), says director Rolf Nordstrom. UMHI joins Minnesota, the Dakotas, Iowa, and Manitoba, Canada, through the Minneapolisbased nonpro?t Great Plains Institute for Sustainable Development. Ethanol looks particularly promising as a transitional catalyst to hydrogen, Nordstrom says. Production of the gasoline additive now exceeds 2.7 billion gallons annually and is growing; in 2002, production grew 20 percent over 2001, and more states are mandating ethanol-blended gasoline. Minnesota alone has some 67 gas stations that carry an 85 percent ethanol-gasoline blend, he says, and Ford and other auto manufacturers already make ?exible fuel vehicles that can run on ethanol or gasoline. "If ethanol could be used as base fuel-and it can be used in a fuel cell now-you could have the infrastructure more quickly than if we went to pure gaseous hydrogen right away," Nordstrom says. "If you could reform that [fuel] right on site, you can offer gasoline, ethanol and hydrogen right at the same station."

Lake City, Minn., a town of less than 5,000 on Lake Pepin, would like to go entirely "off-grid" using renewable energy, says John Howard, president of Distributed Generation Solutions. Lake City has tapped Howard's 18-month-old energy consulting company to submit a proposal for federal funding to build a wind generator. The generator would electrolyze water to create hydrogen. Then a 3M-built hybrid conductor that carries twice the capacity of hydrogen electrons as a normal transmission line would pipe hydrogen to a fuel cell at a school, which would provide electricity and hot water to the building. A second hydrogen stream would go to a fueling station to be mixed with natural gas to power a fuelcell vehicle, probably a bus. A second project Howard has submitted for federal funding would create a straw board production facility and a ?eet of hydrogen-powered vehicles in Fargo, N.D. Straw board, made from wheat stalks, is used to produce a furniture-grade plywood- like material. "It'll look like an ethanol plant," Howard says, drawing its energy by pulling hydrogen out of the biomass waste streams to produce the straw board.

“If we can make the potential of hydrogen real, it becomes an extraordinary energy source in a way that is about as environmentally superior as you can get,” says Edward Garvey, deputy commissioner of the Minnesota Department of Commerce. Minnesota recently became one of 18 states to jump on the hydrogen bandwagon, announcing a plan to create a bio-based hydrogen production and distribution system by 2010, and dedicating $10 million to the University of Minnesota for hydrogen research. The state has abundant wind, water, and biomass sources—all of which could be harnessed to extract hydrogen. It also has about half a dozen companies that make components for fuel cells, as well as various consulting .rms, utility companies, food companies, and nonpro.t organizations interested in “‘green”’ energy. “We’re going to see an infrastructure develop around the production of hydrogen in this state,” says John Goodman, president of Chaska-based Entegris, a make the potential of hydrogen real, it becomes an extraordinary energy source in a way that is about as environmentally superior as you can get.” company that makes components for semiconductors and, of late, for fuel cells. “We have the resources to become a mini- Saudi Arabia of hydrogen someday.”

Emphasis on someday. Skeptics and proponents alike admit that the hydrogen fuel cell economy has many hurdles to overcome, chie.y because its technologies are still in R&D infancy. A hydrogen economy was predicted as early as 1923, according to a draft report on hydrogen from the state department of commerce. But getting and transporting hydrogen has been the Achilles’ heel preventing it from widespread use. Hydrogen must be separated from water or other molecules, a process that requires a lot of energy. It is very light, taking up too much room in its gaseous state to be stored practically for vehicles, for example, and requiring special pipes to transport it. Compressing and storing hydrogen in liquid form requires a lot of energy, and according to a federal hydrogen report, about onethird of its energy evaporates when converted to liquid.

On top of these drawbacks, 95 percent of the 9 million tons of hydrogen the United States produces annually comes from reforming fossil fuels—chie.y natural gas. So even if fuel cells themselves eliminate emissions, current methods of producing hydrogen to run them won’t solve the greenhouse gas problem or our dependence on fossil fuels. The amount of energy required to separate hydrogen into a fuel makes some skeptical that a hydrogen-based economy will ever materialize. “When folks wake up to the fact that hydrogen production is not necessarily benign to the environment, they’ll wake up to the fact that we’re still a very long way, if ever, from a hydrogen-based fuel cell economy,” says David Kurzmann, an alternative energy analyst for H.C. Wainwright & Co., a Bostonbased investment banking .rm. Many demonstration fuel cells use natural gas to provide hydrogen, and the .rst fuel cell cars— already being modeled by major car makers—are likely to rely on reforming fossil fuels for hydrogen as a .rst step, since the infrastructure is already in place.

The other big hurdle is fuel cells themselves, which have been in research and development for decades. There are about nine different kinds, but most are bulky, rely on expensive components and metals such as platinum, and wear out too quickly to be practical. In cars, they cannot yet store enough fuel to last 300 miles before refueling. Also, hydrogen freezes at cold temperatures. For example, the latest fuel cell advance from Honda, according to an October Business AP report from Tokyo, says its prototype car can run at temperatures as cold as -4 F. Minnesotans aren’t likely to see one soon.

Short-term goals

Despite the drawbacks, proponents say the transition to a fuelcell world will happen slowly, step by step. Commercialization is tantalizingly close for at least some fuel cell applications. Goodman says one of the .rst will be portable electronics. Toshiba and NEC have developed fuel cell-powered laptop computers they plan to sell within the next two years that run on re.llable methanol (wood grain alcohol) cartridges. The technology curve will probably follow that of other portable technologies, Goodman says, where wider demand quickly follows after early adopters break it in.

The next viable markets will probably be distributed power generators, says Camille George, assistant professor in the engineering department of the University of St. Thomas. (George has started what she believes is the first fuel cell course in the nation aimed at undergraduates.) Called “distributed” because they operate at the site where power is used, these stationary fuel cells tap into a natural gas line or other energy source to produce hydrogen. On-site hydrogen generation solves the problem of transporting it, and these generators allow a company to draw less juice from the electrical grid, heat water, and remain “on” when the grid fails. Sometimes the fuel cell owner is even able to sell the power it generates back to a utility company. Entegris is running a 5-kilowatt fuel cell, powered by natural gas, at its Chaska plant. It provides a small portion of the building’s electricity, but also heats water for a kitchen and bathrooms and melts ice on the sidewalks in winter. The Hennepin County library in Eden Prairie will install a similar fuel cell next spring. At the University of Minnesota-Twin Cities, the architecture building is installing a fuel cell powered by solar panels on its roof, and Rochester Public Utilities is working with the University of Minnesota-Rochester to test a 1.2-kilowatt fuel cell it hopes to eventually integrate with geothermal systems.

Although the technology is still expensive and experimental, it already has a market for customers that always need power, such as hospitals, says George, and that market likely will expand. “Almost all [major car companies] have opened up distributed power research and development on fuel cells, or are forming partnerships with companies that are making these distributed units,” she says.

Within the next few years, say by 2010, those companies are betting on remote markets—for example, a lake cabin located beyond the electrical grid— and developing countries to become viable for fuel cells. “At what point will China, for example, start mimicking our electric grid model or start looking at distributed power?” George says. “A lot of these big car companies are betting they’ll go to distributed power, because it’ll be more cost effective than creating a big power plant with electricity lines.” Camille George, assistant professor of engineering, University of St.Thomas

The big leap: fuel-cell cars

If distributed power has challenges, they pale next to those of fuel cell cars. Technical limitations of today’s fuel cells along with the lack of a fueling infrastructure will force the gradual introduction of automotive applications, experts say, with the .rst applications on buses, where roof-mounted fuel cells wouldn’t hamper storage space, and in government and commercial .eets, which are brought back to a central facility each night for refueling. Experts say they don’t expect signi.cant numbers of cars on the road before 2012.

In Minnesota, producing the fuel-cell car is not a priority like it is elsewhere, but there are niches that could prove profitable for Twin Cities-area firms such as Donaldson, ICM Plastics, TSI, Tescom, and 3M that make such products as filters, plastic plates, flow meters, pressure controls, and membranes for fuel cells. Transportation might be another key market for Cummins Power Generation (CPG), a Minneapolis-based generator-manufacturing division of Columbus, Ind.-based diesel engine giant Cummins. CPG has been awarded a 10-year, $74.9 million grant from the U.S. Department of Energy to develop a 10-kilowatt, solid oxide fuel cell module; it is currently at the end of its second year of development. Paul Plahn, CPG’s director of advanced product development, says his company may target a fuel cell at its $700 million annual market for marine and RV generating equipment. “We have some mobile markets that would pay a premium to get some of the attributes of fuel cells,” Plahn says. “They’re extremely quiet, with no vibration, so when you’re in your $300,000 mobile home, you don’t have to hear the generator pounding away while you’re making your daiquiris.”

Minnesota’s real ambition is to provide one of the key missing links in the hydrogen fuel cell equation—a hydrogen fueling infrastructure—by leveraging its agricultural infrastructure and investments in wind energy, biomass, and ethanol production. In late 2001, a coalition of business people, academics, nonpro.t groups, and state representatives formed what would later become known as the Minnesota Hydrogen Initiative, says Jeff Haase, state energy officer for the Minnesota Department of Commerce. In the 2003 legislative session, the group saw an opportunity to fund the effort. In exchange for allowing Xcel Energy to continue to store nuclear waste at its Prairie Island nuclear plant until 2014, Xcel agreed to fund hydrogen research at the University of Minnesota and increase other commitments to renewable energy sources, including biomass and wind power. Altogether, the U of M gets $10 million now and another $10 million over the next five years for hydrogen and other alternative energy research. (For the record, Garvey and Xcel spokespeople say that nuclear-generated hydrogen is not being considered, although this is a priority mentioned by the Bush administration.)

Compared to other states’ investments in fuel cells, Minnesota’s is relatively small (Ohio and Michigan have allocated $100 million over three years and $50 million over .ve years, respectively), and Garvey says he’s not sure where more funding will come from along the way. Efforts are also early stage. Despite the fact that wind energy is price-competitive at about $.03 per kilowatt hour and generates 3 percent of Xcel Energy’s energy stream, for example, utilities have no way of storing it, says Michelle Swanson, manager of policy analysis for Xcel. Hydrogen fuel cells could provide that mechanism, so a .rst state request for proposal aims to assess the costs and returns of building such a system. The state may also develop a number of“energy innovation” zones designed to spur fuel cell and hydrogen infrastructure development from renewable energy sources. Other state initiatives include developing a program for biocatalysis of agricultural or forest products for the production of hydrogen. But the hydrogen initiative is a long way from paying off, says Ron Wirtz, editor of the Fed Gazette newsletter for the Federal Reserve Bank of Minneapolis. “It’s very amenable to federal research dollars to learn more about turning hydrogen into a usable quantity,” he says. “Until you leap that, any other investments seem to be a little premature to me.”

The hydrogen economy?

Scientific reports estimate that annual U.S. hydrogen production would have to more than quadruple-to 40 million tons-to produce enough fuel for about half the cars on the road today, or to provide electricity to 25 million homes. Will environmentally benign sources such as biomass, wind, and solar power be able to meet the demand? A report from the Renewable Hydrogen Forum, held in October at the National Press Club and convened by the American Solar Energy Society, says current biomass stores could produce that much-as could the wind capacity of North Dakota, or 3,750 square miles of solar panels. But it also estimates that producing hydrogen from renewable resources-not including costs of compression, storage, or delivery-will not compete with fossil fuels until 2030. Some skeptics say these hurdles, combined with competing technologies such as hybrid gasoline/ battery-powered cars, mean that renewable hydrogen and fuel cells will never make up more than a small niche in the energy marketplace. "We should be worrying less about the hydrogen infrastructure and more about the feasibility," Kurzmann says. "If you run the numbers, you see that renewable hydrogen makes no sense on a mass-commercial scale, where we get 10 to 20 percent of our nation's energy needs from it. I just don't see it happening."

Hydrogen proponents agree that the timeline to commercialization of hydrogen fuel cells is long. And unless the public demands money and energy policies that make renewable energy a priority, it will be harder to get there. For example, say proponents, the current cost of a tank of gas doesn't re?ect its true costs on the environment and people's health due to carbon dioxide and other harmful emissions, or the political costs of imports from hostile countries. Throw in the cost of upgrading an aging infrastructure, and renewable costs become more competitive, they say. Costs are also hard to calculate accurately given that it's impossible to predict how fast technology will advance. Proponents say it's necessary to be patient, to expect that there will be many intermediate steps to a "green" hydrogen economy, and to keep an eye on short-term efficiencies as well as longterm developments. In the end, they say, it will cost more not to move to renewable hydrogen.

"The reality is we have only a limited amount of fossil fuel, and we're using it at increasingly faster rate," says George. "Ultimately we have to come up with new ways of getting power. Looking at society over the next 100 years, we have to start planting those seeds today." ¦ "We have to come up with new ways of getting power. Looking at society over the next 100 years,we have to start planting those seeds today."

—Sara Aase is a Minneapolis-based freelance writer.

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