January 15, 2018

Chinese demand drives fuel cell adoption

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A flurry of orders in late 2017 for rolling stock powered by alternative fuels are indicative of a trend that is set to continue in 2018. Kevin Smith looks at Ballard Power Systems’ contribution to this field.

GROWING interest in and applications of fuel cells in the rail industry is following in the footsteps of significant progress with the technology in the bus sector in the last 10-15 years.

Hydrogen-powered, compressed natural gas, and electric buses are increasingly common sights on city streets around the world, as municipalities strive to reduce harmful emissions and cut their carbon footprint.

One of the leading suppliers of hydrogen fuel cell technology is Ballard Power Systems. With headquarters in Vancouver, the company has worked in the zero-emission fuel cell market for more than 40 years, and has been at the forefront of the evolution of the technology that is set to power a new generation of clean vehicles.

As Mr Guy McAree, Ballard’s director of investor relations, revealed to IRJ, during the last 10 years the cost of the company’s proton exchange membrane (PEM) fuel cells has fallen by up to 70% as improved engineering has enhanced the durability and power density of the technology.

However, he does not think this is the end of the fall in cost, particularly with the size of opportunities on offer in China, which McAree describes as the “current growth engine for fuel cell technology.”

“One thing that we have not been able to do yet is to have the advantage of large-scale manufacturing,” McAree says. “Our orders tend to be for smaller batches. But this is likely to increase as we attract more customers and where China in particular offers us the opportunity to scale up the manufacturing process. We believe we can reduce the cost of our fuel cell engines by 25-40% in addition to what we have already achieved.”

Ballard expects the addressable heavy-duty motive market, which includes bus, rail, marine and trucking applications, to be worth $US 5bn a year by 2026, and the company is already experiencing dynamic growth: it reported total revenue of $US 85.3m in 2016, of which nearly half was in heavy-duty, and it expects to exceed this figure in 2017. Ballard reported sales worth $US 81m up to the end of the third quarter, including $US 37.1m from heavy-duty, and expected to manufacture close to 1000 fuel cell engines by the end of 2017. This compares with around 200 in 2016.

Ballard’s commitment to the Chinese market was reflected in the opening of a manufacturing facility in Guangdong Province, China, in partnership with Guangdong Nation-Synergy Hydrogen Power Technology in September. The plant is producing liquid-cooled fuel cell stacks and McAree describes Ballard’s position in the partnership as “capital light,” with Ballard holding 10% in the joint venture. The Chinese firm is taking the financial risk to establish and manufacture Ballard’s stack product although the Canadian company is continuing to produce certain components in Vancouver in order to protect its intellectual property.

The potential for the factory is vast. While about 13,500 fuel-cell buses are manufactured in Europe annually, McAree says China produces up to 400,000 each year. “It dwarfs everywhere else,” he says.

McAree reveals that it isn’t just buses pushing market development in China and elsewhere. He says there is increasing demand for fuel cells for utility and delivery vehicles as well as heavy-duty truck applications.

Fuel cells for trucks are similar in scale and principle to applications for rail and Chinese developments are also largely driving Ballard’s entry and expansion in this market. The company agreed partnerships with two subsidiaries of CRRC - CRRC Sifang and CRRC Tangshan - in 2015 and these are beginning to bear fruit.

Ballard and Sifang signed an agreement in April 2015 to develop a demonstration LRV fitted with an 85kW fuel cell, which is similar in scale to those used on buses.

With Tangshan, Ballard agreed a framework contract in June 2015 to develop a 200kW fuel cell, the supplier’s most powerful and largest unit to date. The first LRV was demonstrated in October on a three-section 70km/h LRV, which is set to be deployed on Tangshan’s new 14km light rail line. Sifang also placed an order for eight 200kW fuel cell-powered LRVs for Foshan’s light rail network, with delivery of these vehicles set to conclude in the first quarter of 2018.

As well as China, McAree says Europe is a major target for expansion for Ballard, followed by the North American market, which he admits is slower on the uptake of these technologies. Ballard already has a strong presence in the European bus sector, with notable clients including Transport for London (TfL) and OEMs such as Solaris and Van Hool, while it also expects to bid to supply for 291 fuel cell buses under European Joint Technology Initiatives Jive I and II.

Further foothold

For rail, Ballard is hopeful that an agreement with Siemens announced on November 13 will prove key to gaining a further foothold in the rolling stock market.

Under the partnership, Ballard will customise its 200kW solution for Siemens’ Mireo regional train platform. The deal is worth around $US 9m to Ballard and the first main line trains are expected to be ready by 2021.

Siemens said at the time of the announcement that the goal of the partnership was to replace diesel-powered rail vehicles with emission-free trains. And while the agreement appears to complement future partner Alstom’s Coradia iLint solution, McAree does not expect this tie-up to jeopardise development of the platform. “The merger is still at least a year away and we don’t expect this to change Siemens’ commitment to our programme,” he says.

The PEM technology underpinning Ballard’s solutions for CRRC and Siemens - as well as that supplied by Hydrogenics for the Coradia iLint - relies on hydrogen combining with ambient oxygen and the subsequent chemical reaction producing the electricity required to power the vehicle. McAree says the advantage of PEM for transport is that the solution can reach full power very quickly, behaving more like an internal combustion engine, therefore making it well-suited for demand-duty cycles used by rail vehicles which accelerate and decelerate, start and stop, very regularly. McAree says many hours of use and long distances makes battery applications unsuitable for these types of vehicles. The PEM solution also emits less heat than other fuel cell technologies.

“There are only a certain number of companies that deal with PEM and understand how to build engines with that technology,” McAree says, adding that Ballard’s work with road vehicle OEMs such as Daimler, Ford, Toyota, VW and Audi over the last 20 years, attracted Siemens to form their partnership.

While procurement of vehicles for public transport was typically carried out on an up-front-costs basis, increasing appreciation of the total cost of ownership in procurement is playing into the hands of fuel-cell providers like Ballard, according to McAree.

In particular, lower maintenance demands are a major selling point for the technology. Compared with combustion engines which have multiple moving parts, fuel cells only require maintenance of cooling and other balance of plant elements. Indeed, some of TfL’s fleet of eight fuel cell buses have operated for more than 25,000 hours in commercial service without any maintenance on the fuel cells.

Add to this the growing trend for legislation mandating emission-free public transport, and it appears that fuel cell technologies have unprecedented momentum in the market.

“In Los Angeles they are targeting a completely clean bus fleet in the next 15 years, and they are determined to achieve that target,” McAree says. “That shows the condition of the market today. For us a key focus for the next few years is to leverage the opportunities in China and Asia because the scale is so large.”

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