How To Build A Clean Machine

Fuel cells are powering hospitals. Cars are down the road

At this summer's Democratic National Convention, the Chicago Transit Authority will showcase a vehicle that could forever change the grimy image of the urban transit bus. Powered by a fuel cell developed by Ballard Power Systems, based in Vancouver, B.C., its only exhaust is water so pure that CTA President Robert Belcaster actually drank a glassful straight from the tailpipe. "It tasted like the water my mother used to put in her iron," he says. No wonder Belcaster predicts fuel-cell buses could eventually take over Chicago's entire fleet and calls this "the power technology for the next century."

Ever since NASA put fuel cells in space capsules in the 1960s, futurists have had high hopes for the devices, which produce electricity through an electrochemical process that combines hydrogen and oxygen into water. Much of the excitement has centered on their use in cars, but the most important current applications are as electric-power plants. Widely used, they would let the world meet burgeoning demand without a suffocating rise in pollution. "They would take us beyond the age of fire," says Henry Kelly, a fuel-cell expert in the White House Office of Science & Technology Policy.

Unfortunately, getting beyond the age of fire has so far proved to be more than a little expensive. A fuel cell works a bit like a battery, producing electricity from a controlled chemical reaction. The main difference is that fuel cells can run indefinitely as long as their energy is replenished. That requires high-priced parts: catalysts of platinum, which is more expensive than gold, and electrolytes made of such exotic materials as molten carbonate or solid-oxide ceramics (table). And to enable them to run on fuels more readily available than hydrogen--such as natural gas--developers must add costly fuel processors. That's why, until recently, fuel cells have been used only where money is no object: outer space.

But the lure of fuel cells is so strong that making them affordable has become an obsession for researchers in the U.S., Canada, Japan, and Europe. Now they're on the verge of commercialization. The first big market--stationary power for use by utilities, hospitals, and the like--is emerging. In the coming decade, fuel cells should begin powering large vehicles from buses to submarines and replace some high-priced batteries. As early as 2010, optimists predict, a few fuel-cell powered cars might begin appearing in auto showrooms.

The one fuel cell already on the market--a 200-kilowatt phosphoric-acid unit made by International Fuel Cells Corp. (IFC)--is winning over hospitals and offices as a more reliable and far cleaner replacement for diesel generators. IFC, a South Windsor (Conn.) joint venture of America's United Technologies Corp. and Japan's Toshiba Corp., hopes to sell 40 of the units this year. In April, the largest fuel cell ever built in the U.S.--a 2-megawatt unit made by Energy Research Corp., based in Danbury, Conn.--began producing enough electricity to meet the needs of 1,000 homes in a Santa Clara (Calif.) demonstration project.

On May 14, Daimler Benz held a splashy press conference in Berlin to unveil a Mercedes minivan powered by a fuel cell. "The way we see it, the fuel cell is the most promising alternative" to today's car engine, declared Mercedes-Benz CEO Helmut Werner. His enthusiasm reflects surprising progress. Since 1989, Canada's Ballard has improved the compactness of its fuel cell tenfold. And Ballard and others have reduced the amount of platinum required from a prohibitive $33,000 worth in 1984 to less than $500 worth. All of the world's major auto makers are racing to develop fuel-cell cars.

To be sure, the Mercedes minivan, the most advanced fuel-cell car yet, has a top speed of just over 65 mph and goes only about 150 miles before needing a fill-up of compressed hydrogen. Next, the car must be equipped with a costly processor so it can run on methanol rather than bottled hydrogen.

Mercedes believes it may be able to begin limited production within 10 years and mass production possibly by 2020. But for that to happen, costs must fall toward $50 per kilowatt. Even by 2005, a Daimler fuel-cell system will cost at least $340 per kilowatt, estimates Jurgen K.H. Friedrich, the auto maker's fuel-cell project manager. Others are even more cautious. "Someday it's going to be needed, but I won't be alive. And I figure I have a good 30 years left in me," says Bradford B. Bates, 58, who oversees fuel cells at Ford Motor Co. as manager of alternative power sources.

That's why most fuel-cell companies are targeting other markets first. In the stationary-power market, size isn't so crucial, and builders can use bulkier, less costly designs. And there are plenty of niche markets that can sustain premium prices. Kaiser Permanente, for example, has installed four 200-kilowatt units from IFC in three of its California hospitals. One has run continuously for more than a year with no maintenance. And fuel-cell emissions "are cleaner than the ambient air in Los Angeles," says Kaiser energy specialist Thomas A. Damberger. What's more, the U.S. Energy Dept. offers a 33% subsidy that cuts the price to $2,000 per kilowatt. Kaiser hopes to install up to 160 fuel cells in California.

Next, IFC President H. David Ramm will target electric utilities that have localized shortages of capacity. It's so expensive and time-consuming to string new power lines that it may soon become cheaper for a utility to generate electricity with a fuel cell right at a new factory or office building.

Experts believe most power customers will sit on their hands until prices fall to $1,500 per kilowatt or less. IFC's Ramm calls it "a horrible chicken-and-egg problem." His solution is to target customers who are willing to pay extra, build volumes slowly, and work like crazy on cutting costs. He's aiming to cut the price of a bare-bones unit in half, to $1,500 per kilowatt by 1999. Since that's not much above some conventional alternatives, he figures he can sell "hundreds, up to 1,000 units, per year."

Other fuel cells are even further from affordability. Energy Research's Santa Clara plant cost $50 million to build, or $25,000 a kilowatt. ERC President Bernard S. Baker says he can cut the price by a factor of 20--to $1,200 a kilowatt--as volume picks up. Similarly, Westinghouse Electric Corp., the world leader in solid-oxide fuel cells, says its plants will cost just $1,000 per kilowatt by 2005. At that price, Westinghouse sees an annual market of $500 million.

Such talk is cheap. But even many utilities believe fuel cells are ideally suited to meet the growing demand for "distributed power" located much closer to the end user. Meanwhile, the U.S. military is convinced fuel cells could soon become a superior alternative to batteries in communications gear. The need for mobile electricity is so great already that Marines heading out on extended exercises sometimes ditch food in favor of more batteries. For civilians, Belleville (N.J.)-based H Power Corp. is developing fuel cells to replace batteries in portable computers and video cameras.

"A BREAKTHROUGH." As for the giant transportation market, fuel cells have big advantages over their principal clean-car rivals, batteries. The first commercial electric car--General Motors Corp.'s battery-driven EV1--has a range of just 70 to 90 miles and requires up to 10 hours to recharge. A fuel-cell vehicle could ultimately have the same range as a gasoline-powered vehicle, and be refueled as quickly.

Daimler may be ahead for now, but Toyota Motor Corp. promises that "it won't be long" before it unveils a vehicle of its own. In the U.S., the Big Three are developing fuel cells as part of their collaborative Partnership for a New Generation of Vehicles.

"I've never been as confident as now that fuel cells are going to make a breakthrough," says Johnson Matthey PLC Managing Director Graham Titcombe, whose company became involved with the technology before the Apollo program. Just as it took a quarter-century for the car to replace the horse as the dominant mode of transportation in America, it will take decades for fuel cells to realize their full potential. But while the car has fouled the air from Los Angeles to Tokyo, fuel cells should usher in an era in which growth doesn't necessarily mean pollution.

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