My very first Something Ventured column in April 1998 was a breathless description of how the future of BC’s technology industry would be on the back of Ballard Power Systems. I had an insider’s view of Ballard at the time because I was sitting at BDC Venture Capital and we were still on the Board (BDC and Ventures West were the original institutional investors in Ballard Research in 1987… there is a very good story on how their funding dragged and dragged and closed on Friday October 16th, 1987. For those of you in the Nintendo generation, that was one business day before the crash).
At the time, the fuel cell hype had not quite hit maximium levels. But there were gobs and gobs of money being thrown at Ballard from Daimler and Ford and hundreds of very smart engineers working to make Proton Exchange Membrane (PEM) fuel cells cost effective for automotive, among other applications. The federal government was being lobbied to make Vancouver the “fuel cell” centre of excellence. Baby Ballards, as the companies that sprouted up in Vancouver to take eager VCs money became known, were everywhere (Cellex, QuestAir, Greenlight Power, Angstrom etc.). Indeed, Vancouver became a source of fuel cell frenzy at the turn of the century.
It is with interest then, that we read about Ballard today: selling tax losses to raise money, completely out of the car business and recently getting out of standalone power generation. A shell of its former self. What happened? Why are fuel cells out of favour?
Officially, if you speak to car manufacturers and industry pundits, the fuel cell is not dead. It’s main drawback boils down to two points: 1) the cost/performance and weight/performance has not yet achieved “automotive grade” and 2) the net energy cost of creating hydrogen in the first place negated the efficiency of the fuel cell at generating electricity. Companies like Ballard continue to work to make the fuel cell stack more efficient and a viable “clean” alternative to ethanol, direct electric and diesel gasoline powered transportation.
At the core of a hydrogen powered bus, lift truck or car is an electric drive train. The fuel cell is simply creating electricity to drive the engine. The “fuel” is hydrogen, or as some other clever companies figured out, propane, butane or methane that could be converted on-board into hydrogen. Although Ballard was not in the business of creating the electric drive train that made these vehicles move, it did develop expertise around the whole idea of an electric vehicle. The new, new thing in automotive transportation is of course, the electric vehicle. A quick simplified primer for you:
Hybrid (e.g. Prius) – The 1st generation of these vehicles is a gas engine car with an electric assist, so that the gas engine can be shut off. But still an internal combustion engine car at its heart.
Next Gen Hybrid (e.g. 2010 Camry etc.) – The new generation of hybrids will be electric “engines” with a gas/ethanol/fuel cell motor that assists the propulsion of the car when needed and charges the batteries. The batteries are always charged by the assist engine as opposed to:
Plug – In Hybrid (e.g. Chevy Volt) – This much hyped version will plug in to the grid and charge the batteries overnight. It is an all-electric vehcile. It will have a small gas or fuel cell engine on board that is not involved in propulsion at all. It is simply there to charge the batteries as they run down, referred to in the business as “range extension”.
Battery Electric Vehicle (e.g. Tesla, Fisker) – these are truly all-electric vehicles that rely entirely on the storage capacity of the batteries. They obviously plug-in, but are not hybrids. This is what the hydrogen powered fuel cell cars were designed for, only with a lot less batteries and storage of hydrogen as fuel.
The future of fuel cells in transportation is initially thought to be for Plug-Ins or next gen Hybrids where the fuel cell electricity generation will charge the batteries and extend the range. The latest estimate for a true all hydrogen powered mass produced auto is 2015. Alas, I remember in 1998 when Daimler told the world that that date was 2003. Hey, things slip in engineering once in a while.
In the end, fuel cells will have their place. But the “hydrogen future” that we all envisioned in 1998 has been replaced by the “electric future” for transportation. Even that is a bit of a stretch as ethanol and clean diesel will more than likely make up the mix of fuels that power us around over the next 25 years.
Don’t cry for BC, by the way. Just because fuel cells are not in favour doesn’t mean that the clever enterepeneurs from Ballard and other electronics and transportation companies in the area aren’t innovating and succeeding in the transportation market. From Westport Innovations, Azure Dynamics, Advanced Lithium Power and Delta-Q Technologies we are benefitting from the knowledge and experience of the recent past and putting it towards next generation transportation.
There is no silver bullet solution. I should have known that 11 years ago when I espoused that there might be.